Walmart, Manufacturer's PMI, Jobless Claims, Consumer Sentiment, Demographics, AI, eVTOLs, and Who was Hilary Mary Allcroft?
The Economy
The headline news this week was Walmart.
The good news was they showed strong results and met their earnings target. The bad news is that they reduced their forecast estimates for the upcoming year, citing the increased stretching of customers’ wallets.
Walmart stock was down 6.5% on Thursday. Ouch.
Just by association, Target stock was down.
That dragged the stock market down 1%.
The manufacturer’s PMI – purchasing manager’s index – came in slightly higher than expectations: 51.6 vs. 51.5. Not much of an impact there.
Still, the purchasing managers are optimistic. As long as you're not getting your raw material from China,
Initial jobless claims were expected to be 215,000 and came in at 219,000. It would have been nice to have it lower, but not a huge miss.
Finally, the Michigan consumer sentiment index was down from 67.8 to 64.7, driven by an increased fear of inflation in the next 6 months. That is significant, given that much of our economy is consumer driven.
Keep in mind that this is what consumers feel, not what economists expect. I usually find that consumers have a pretty good feel of what is going on.
And the eggs aren’t helping.
Coming out this week: Consumer confidence (expected to drop to 102.4); initial jobless claims (expected to be 225,000); and the core CPE index – the Fed’s preferred measure of inflation – is expected to drop to 2.6%, down from 2.8%.
Watch carefully for that last one; it comes out on Friday.
Demographics Again
Remember the retiring boomers? Not only are they retiring, but the front end of those boomers is turning 80.
And they need a place to stay where they don’t have to lug the 75-gallon trash can down the 200-foot driveway at their rural ‘forever’ home.
That age is pretty much when you stop traveling.
And the decade where about a third of that $80 trillion wealth transfer occurs.
This means a few things:
Assisted living and SNF (pronounced ‘sniff’; if you are not familiar with the term, it’s just a matter of time) will be coming into play.
For 70 to 80+ year-olds, retirement communities will be growing.
For 60 to 70-year-olds, RV sales/rentals will be growing.
Someone will develop self-driving trash cans or some sort of electric hand truck that can be used to easily carry your trash can to the curb, come back, pick you up, and take you upstairs.
And then give you your Ensure.
More AI – Artificial Intelligence
Retail services are prime for using AI. Amazon, among others, is building that in.
Summarizing product reviews by combing through the thousands of reviews for a product and summarizing the findings. What could go wrong?
Tailoring product recommendations based on your requirements.
A recent survey shows that 80% of Gen Zers would be comfortable using AI-assisted shopping.
Boomers probably weren’t surveyed because they would just say, “If I need something, I just go to the store. Hey, get off my lawn!”
Meta stated that its AI-powered Facebook ads produce 22% better results than its conventional ads.
As measured by… AI??
We know that half of advertising works – we just don’t know which half.
At least that’s what I learned in my marketing class.
Jetsons, Anyone?
The FAA has issued a final rule on air taxis, or eVTOLs – electric Vertical Take Off and Landing.
They use rotors but fly like planes on fixed wings when cruising.
It’s the first new category of civil aircraft since helicopters in the 1940s.
And they run on batteries. That’ll give the energizer bunny a run for its money.
Hyundai and Toyota want to develop eVTOLs, and Delta and United Airlines have invested in the technology.
They are looking to transport passengers to and from airports in urban areas.
Hmm. What industries and services will be supporting eVTOLs? Something to think about.
Who was Hilary Mary Allcroft?
She was born on December 14, 1943, in Worthing, West Sussex, England. She and her sister were raised by her mom with no car and no television set.
She would stage plays in her backyard and charge neighbors a small entry fee.
Growing up in England in the early 1950s, she would stop at railway bridges on the way to school and wait for a steam train to arrive. Her quote:
“The wonderful sound of the trains, I loved that. There's a cadence to it. It's poetic: the wheels going round and the whistle.” There was a gleeful anticipation of what would come around the next corner.
She left school at 16, going into production and presenter roles on British TV.
In 1979, she met the author of “The Railway Series”, a set of children’s books.
She envisioned bringing those books to television.
Her words: “I had to mortgage the house, and I took a lot of gambles on my instinct that it was going to work.”
When the show was screen-tested with parents, it was universally panned. However, the parents weren’t the audience; the children were. At a preschool showing, the children were transfixed.
The show started in England in 1984 and arrived in the U.S. in 1989. It had no character voices and simply one narrator, the first being Ringo Starr. That’s probably a Jeopardy question.
And it featured a chipper, blue locomotive.
Hilary was known as Britt Alcroft, and her show?
It was “Thomas the Tank Engine and Friends.”, later known as “Thomas and Friends”.
And now you know the rest of the story.
In 2000, she relinquished control over the show and moved to Santa Monica, California, where she passed away on Christmas Day last year.
This administration is moving at unprecedented speed to bring about change. It doesn’t matter if you agree with it or not; the fact is that you have to somehow plan for it. If you rely on servicing the movement of goods from China, tariffs are not your friend, as imports will fall. If you rely on government programs for services you provide, you’d better think about other sources of income, no matter how “essential’ you think your service may be. For the first time in a long time, the private sector is looking better than the public sector. If your service supports electric vehicles, those might be impacted too. I will keep you posted.
Act like an Eagle Scout and be prepared!
