Here's why one strategist says the consumer and related stocks might get a second wind

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It's a tough time for the consumer, but not all is lost, says Jefferies, which is touting some potential good news in the pipeline.

The Bank of England has halted, at least for now, soaring gilt yields via some temporary bond buying. Stock futures pared some losses, but are still in the red, with the S&P 500 SPX in the grips of its longest losing streak since February 2000.The Bank of England has halted, at least for now, soaring gilt yields via some temporary bond buying. Stock futures pared some losses, but are still in the red, with the S&P 500 SPX in the grips of its longest losing streak since February 2000.

Rising costs of living have disproportionately hit consumer sentiment, with global surveys at record levels. But as those household costs start to reverse, “there still may be some capacity for marginal spending, particularly drawing into the all-important Christmas season,” said Darby. In short, they still favor the consumer, but caution that hotel and leisure stocks in the S&P 500 could be a “double-edged sword.” Darby notes that the hotels, restaurant and leisure segment is especially sensitive to changes in wealth effects and share of income growing. It’s also one sector the Fed would like to see cool off, he adds.

Apple AAPL stock is down after reportedly backing off plans to boost production of its latest iPhones this year due to weak demand. Shares of suppliers Taiwan Semi 2330 and Hon Hai 2317 took a hit in Asia.More Fed speakers are en route, with Chair Jerome Powell at 10:15 a.m. Eastern, followed by Gov. Michelle Bowman, Richmond Fed President Tom Barkin and Chicago Fed President Charles Evans. Data ahead includes advance trade in goods, followed by pending home sales.

 

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