The 'critical' consumer shift that could define stock market performance in 2024 🔀

'The goods-to-services rotation looks complete' 🛍️

It might seem like a long time ago. But there was a point when everyone seemed to be baking bread at home, exercising at home, working at home, and even vacationing at home. That meant buying a lot of goods to support these activities.

“Goods spending surged during the pandemic to well above trend levels,” Deutsche Bank’s Binky Chadha wrote on Monday. “In what we described as the best-case scenario then, it went sideways for a year and a half before reverting to trend and then growing in line with it this year.”

With the availability and uptake of vaccines, people demonstrated they were ready to get out of the house and quickly make up for lost time by taking vacations, going out to eat, getting married, and watching Taylor Swift live. This has meant spending on a lot of services.

“Services spending has been rising to the prior trend channel from below and growth slowing as it comes back in line with the trend,” Chadha observed.