Europe Capital Partners flags growing Wall Street–Main Street disconnect as consumer confidence sinks
SPY•Europe Capital Partners said in an Oct. 13 note that record equity markets are diverging from US consumer sentiment, which it said had fallen to new lows.
1. Markets and consumers diverge
Europe Capital Partners said its analysis found a widening gap between S&P 500 gains and weakening US consumer confidence, highlighting what it called a more visible K-shaped economy. The note said asset owners benefit from rising equities while households with limited financial assets face cost-of-living pressure and uncertainty. It questioned how long earnings and valuations can remain detached from consumer confidence, which it said underpins demand, and argued that the divergence cannot persist indefinitely.
