Consumer Discretionary

US existing-home sales fell in October to their lowest level since 2010, as mortgage rates near 7% kept buyers away. Fewer purchases mean fewer people moving and furnishing a new place. That may weigh on Williams-Sonoma's furniture sales and project spending at Lowe's, though both were still growing and how much depends on movers is not yet known.

Spain's first general strike in 14 years, on November 11, was driven by anger over rents. On November 12, Congress passed a decree that taxes tourist-rental flats, which could hurt Airbnb's Spanish business. The People's Party says it will repeal it if it wins on November 29. How much is at stake is not known.

The US added 165,000 jobs in October, far above forecasts, and unemployment fell to 4.1%. That makes lower interest rates less likely, which keeps mortgage rates high. This hurts homebuilder D.R. Horton, whose buyers borrow to purchase.

Economists expected September US inflation, due on October 14, to jump 0.6% in the month, mostly from pricier energy. Faster inflation keeps Fed rate-hike odds and mortgage rates high, which hurts homebuilder D.R. Horton.

US September inflation figures are due in the week of October 12. Fed officials hope to avoid a late-October hike, but a troubling price rise could force one. Bond yields react first. Homebuilders Lennar and D.R. Horton come next, because higher mortgage rates shrink what buyers can pay.

US consumer sentiment slipped to a 5-month low on October 9, near record lows, as frustration grew over higher costs. Walmart gained while other retailers fell. If the gloom turns into cutbacks, it could reach sellers of purchases households can delay, such as Home Depot and Best Buy.

Trump said the US will not strike Iran before the November midterm elections. Oil fell on the news. The direct effect is on energy producers. The further reach is to cruise lines and airlines, whose largest single cost is fuel derived from crude.

US stocks fell for a second day on October 8 as oil jumped and Treasury yields rose. Oil producers and refiners gained, and airlines lost. The rise in long-term yields also keeps mortgage rates high, which squeezes buyers of new homes from builders like D.R. Horton.

Mortgage rates near 7% cut home sales, and they also keep owners with low fixed rates from moving. Many spend on renovation instead. Investors are selling housing stocks broadly, but home improvement retailers like Lowe's and Floor & Decor and paint maker Sherwin-Williams could gain from that spending.

Lennar reported homebuilding revenue of $7.76B, down 6.0% from a year earlier, and new orders down 9% to 20,879 homes. Builders FirstSource's annual report names Lennar as a top customer. Fewer Lennar starts and closings mean Builders FirstSource sells less building material, and its shares have not yet reacted.

Casey's fuel gross profit rose 19.6% from a year earlier to $446.9M, on a margin of 47.8 cents per gallon. Murphy USA relies mainly on fuel margins at more than 1,700 convenience stores. The same conditions point to upside for Murphy USA's fuel profit, which its stock does not yet reflect.

July shed 23,000 jobs — a hard data miss that dents the 'resilient labor market' consensus and reopens the Fed rate-cut debate. The 10Y yield already slipped 1.8% this week. The non-obvious trade: large-cap US homebuilders, where every 25bps of mortgage rate relief directly unlocks pent-up demand. Long large-cap homebuilders into a potential Fed pivot narrative.

US-Japan joint yen intervention weakens the dollar (DXY already -1.6% this week to 99.8). US multinationals with Japan revenue exposure have been sandbagging guidance against a weak yen. A sustained yen recovery triggers positive earnings revisions that the market hasn't priced — long large-cap US consumer discretionary names with material Japan/Asia revenue.

VW's reported 100,000-job cut signals deep structural contraction in European auto manufacturing. Fewer new vehicles means aging fleets stay on the road longer, driving demand for repair parts and services. Long US auto aftermarket retailers and parts distributors — the quiet beneficiaries of European OEM distress.

GameStop reported a 14% Q1 sales gain driven by collectibles and announced a $2 billion share buyback program. The stock had sold off following an eBay-related catalyst. The buyback signals management confidence and provides a price floor.