Why you can't blame the consumer for the market entering correction territory

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From Amazon to auto sales and new homes, the consumer is spending more and holding up better than the market selloff suggests.

The S&P 500 is on the verge of a correction and the Nasdaq already entered one, but many consumer earnings data points show a mostly bullish picture.

The picture they paint largely matches the economic data — generally positive, but with some warts. Here is some of the key evidence from from the biggest company earnings reports across the market that help explain how companies and the American consumer are making the best of a tough rate environment.

GM beat earnings expectations by 40 cents a share, but shares fell 3% because of investor worries about the strike, which forced GM to withdraw its fourth-quarter earnings forecast on Oct. 24. Ford, which settled with the UAW on Oct. 25, said the next day it had a"mixed" quarter, as, with truck and EV sales both up 15%.

, one of the few banks to make big additions to its loan loss reserves for consumer debt, driving a 33% drop in profit as Discover's loan chargeoffs doubled. As has been the case throughout much of 2023, richer consumers — who contribute the greater share of spending — are doing better than moderate-income families, Sundaram said.all saw their stocks tumble after reporting bad earnings, all of them experiencing sales struggles consistent with the macro data.

 

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