Strategy in TECH...
It was a small thing really. I mean, any decline in revenue is not good, but a 3% decline doesn’t sound particularly troublesome. But when that small 3% revenue decline hit Moët Hennessy Louis Vuitton (LVMH), that slight shudder hit more like an earthquake that had the whole world of luxury shaking. You see LVMH is the world’s most valuable luxury company.
Or, I should say, LVMH was the world’s most valuable luxury company…
The University of Michigan (U of M) has released a preliminary reading of its Index of Consumer Sentiment (ICS) for April and it shows a continuing and startling slide in consumer sentiment, dropping another double-digit percentage from last month’s reading. In fact, this preliminary reading for April is the second-lowest reading in consumer sentiment in the entire 73-year history of the survey!
The latest reading on the current mood of consumers – the Consumer Confidence Index produced by The Conference Board – dropped by 7.2 points in March to a reading of 92.9. This is the fourth consecutive month of decline. The Expectations Index, consumers’ expectations for conditions within the next six months, dropped a startling 9.6 points to 65.2…the lowest level in 12 years.
More signs of a potential downturn in the economy are emerging almost every day now, causing red flag warnings to be popping up just about everywhere. The fact that there are multiple warning signs that come from different sources tends to reinforce the general thinking that the U.S. economy is quickly entering the danger zone.
Another sign of a deteriorating consumer outlook arrived last Friday in the form of the Index of Consumer Sentiment (ICS), another highly respected data resource from the University of Michigan that is widely followed by economists, financial analysts, Wall Street, the Federal Reserve Board, government officials, the media, and more. Widely viewed as a reliable indicator of how consumers are feeling about their current circumstances, as well as their outlook for the future, and their expectations for inflation – it is a leading indicator of future economic direction.
The preliminary result of the ICS for February registered a significant drop in consumer sentiment. What is spooking consumers?
The Consumer Confidence Index (CCI), one of two major indexes tracking consumer sentiment on the U.S. economy, dropped in January, following what appeared to be a turning point to the negative side in late December. The CCI, a monthly survey of consumers conducted by The Conference Board and widely followed by economists as a reliable gauge that probes consumers’ thoughts on the economy – both in a rating of their present conditions…and in their rating of the near-term future prospects.
What does this unexpected decline mean for the economy?
Much like the last few years, exhibitors at the Consumer Electronics Show (CES) in Las Vegas have largely focused on advances in artificial intelligence (AI). All major manufacturers spoke to it…none more deeply than LG, whose 45-minute press conference began with AI…ended with AI…and had a lot of AI in the middle.
This past Sunday, on the eve of this week’s launch of the Consumer Electronics Show (CES) 2025, the Consumer Technology Association (CTA) released updated projections for total Tech industry sales in the year, as is its custom. According to the trade association, total Tech industry sales are expected to reach $537 billion – the highest level in history.
When most of us think about the Fed (the Federal Reserve Board), we think about Chairman Jerome Powell setting bank rates that can have a major impact on the U.S. economy. But what you may not know is that the Fed is a prodigious monitor and relayer of economic data. New data points have come to my attention that show increasing pressure as consumer debt levels and delinquency rates continue to rise – a condition impacting the everyday average American consumer. I felt compelled to share this data with you so you can begin tracking it on your radar screens as well.
The Nikkei is reporting a robust revival in Japan of sales of prerecorded analog cassette tapes, a format once thought dead and gone. Now, the report says, the humble cassette tape “is experiencing a renaissance, charming a new generation of music enthusiasts with its nostalgic appearance and distinctly warm and rich sound.”
