US Middle Class Is Shutting Down As Spending By The Rich Remains Robust• https://www.zerohedge.com by Tyler Durden
What was behind the divergence? Simple: as JPMorgan writes in its trading desk market recap, JWN earnings highlighted the divergence among consumer spending by income brackets.
Picking up on this, Bloomberg's Felice Maranz writes that the latest earnings and comments from big-bank executives reinforce the view that while spending by lower and middle America may be falling off a cliff, spending by well-off US consumers is still robust, with scant sign of a pull-back.
Bloomberg also points to department store Nordstrom which is jumping after the bell after boosting its revenue and earnings outlook. The company, unlike so many of its peers who have seen their stocks crater following Q1 earnings, said core categories in 1Q -- including men's and women's apparel and shoes - saw strong growth with shoppers "refreshing" wardrobes for social events, travel and going back to offices.
And since the wealthy are far less impacted by rising prices in the core staples basket, there were no signs of a hit from inflation either, as merchandise margins for the likes of Nordstromg improved due to pricing and lower markdowns. That followed an earlier beat from that other upper/aspirational-class targeting retailer, Ralph Lauren, which was also able to raise prices, helped by resilient, affluent customers, as well as from electronics retailer Best Buy.