Mullooly Asset Management
Mullooly Asset Management
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Consumer Discretionary is Not What You Think!
• 17 minWhen most folks think of "consumer discretionary" companies, the names they might think of are names you "could live without." And if we entered into an economic slowdown, you might "pass" on shopping with some of these companies. But when look under the hood, what the market considers to be consumer discretionary stocks might surprise you! As we begin the podcast episode, we start with a question. Could 6-7% mortgage rates become the new normal? And what kind of impact could higher mortgage costs have on how consumers choose to spend their money, and the impact on consumer discretionary areas of the economy. Join Tim and Tom as we explore this intriguing possibility in our discussion on the current state of mortgage rates, based on an insightful article by Bill McBride. We examine how Bill has become the yardstick for what's going on in the real estate industry and how his headlines have evolved over the years. Additionally, we compare the current situation to what happened in 1994 and the idea that history often rhymes, sharing our thoughts on the potential for refinancing mortgages in the future and how it depends on the economy. In the second half of our episode, we dive into the world of stock forecasting and market sectors, taking a close look at consumer discretionary stocks and how they are affected by changes in mortgage rates. Using examples of consumer discretionary companies like Tiffany's and American Express, we discuss how people might make cutbacks in their spending if their mortgage payments increased. We also explore the top 10 positions in the Vanguard, iShares, and SPDR Consumer Discretionary ETFs, to help you better understand what Mr. Market considers discretionary. Don't miss this informative and engaging episode!
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