Capital Calls: The $2 trln toybox

, its fastest growth in 25 years. Consumers kept buying Barbies through the pandemic. The bigger picture is that for providers of discretionary goods and services, the consumer is now the plaything.

During a year of enforced parsimony, American households amassed excess savings Goldman Sachs analysts reckon could exceed 10% of GDP by mid-year. Several banks say credit-card spending is now above pre-pandemic levels. The likely result is a non-essential spending spree, from vacations to concert tickets to Mattel’s American Girl dolls.

Makers of discretionary goods in the S&P 500 Index now trade on almost the same year-ahead price-to-earnings multiple as producers of staples like toothpaste and breakfast cereal. True, it's not quite free money. Mattel said input costs were rising, and firms risk boosting investment to meet a demand surge that’s only temporary. Still, the toybox is open, and there’s $2 trillion to play with.

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