As Goldman's top consumer trader, Scott Feiler writes, last week when we saw the bulk of the S&P report, there were some modest consumer/discretionary winners that eked out beats (DPZ, EAT, W, TXRH, SHAK, MNST), but it was the more challenged reports stood out, with some really negative single stock price action, including SBUX (-16%), EL (-13%), SYY (-4%), YUM (-4%), TAP (-10%), NCLH (-15%), DRVN (-20%), VSTS (-45%) and others.
Here the good news according to Feiler, is that while it feels that while certain stocks are being punished harshly on their own individual misses, so far it is having less of a knock-on effect to the whole consumer discretionary group, with more challenged consumer trends now known and somewhat pre-traded, as "investors are selling stocks on the long side when they miss badly, but we are not seeing increased shorting of peers. That is a recent change."
The not so good news is that as Goldman's Thematic Baskets trading desk writes over the weekend, "our desk is getting bearish on consumer and our soft landing basket. We think it’s the most vulnerable area of cyclicality and cyclicals/defensives is priced very optimistically and we are starting to see a defensive rotation" (full note here for pro subs).
