"Global Economy Is Not Improving" - Anxious CEOs Blame Poor Data On Weak US Consumer

Tyler Durden's picture

Each week the CEO of Avondale Asset Management, Scott Krisiloff, publishes some of his observations from commentary provided by public company executives during earnings calls.  Despite expectations for the usual rosy outlooks, Krisiloff notes that he was surprised to find that "comments from consumer facing businesses were somewhat troubling."

In particular, among the large consumer-facing businesses, both McDonalds and Brinker (Chili's) warned of reduced discretionary expenditures by consumers on the back of "broader macroeconomic issues of consumer confidence" and a "slight squeeze" on consumer budgets with gas and healthcare costs rising.  Meanwhile, staffing giant Robert Half noted that seasonal upticks in hiring generally experienced in September and October failed to materialize this year.

Visa (Payments):  “On the negative side, the global economy is not improving. Geopolitical tensions are high. The U.S. election is a wild card, and we continue to watch the impact of Brexit. ”


McDonald's (Fast Food):  “I think there are broader macroeconomic issues of consumer confidence and just uncertainty of wage increases, the slight squeeze on discretionary spend with gas prices aging back up and healthcare costs going back up. So, I think those are sort of things that we see affecting customers and basically the spare cash they have in their pocket”


“In Canada…We now have dual point service and self-order kiosks in almost 90% of our traditional restaurants.”


Brinker (Casual Dining):  “Just as we said last quarter, these continue to be challenging times across casual dining. We’re already seeing some of the weaker players struggle with their viability in this choppy environment… there are some examples of concepts that are shrinking.”


DuPont (Chemicals):  “I mean, it looks like all forecasts say that housing is dropping off…not significant, but it looks like there’s a little bit of a rollover off of kind of that 1.1 million to 1.2 million starts…And then on the auto side of the business, it looks like auto builds are going to be down in the couple percent range going into next year.”


Catepillar (Equipment OEM):  “The decline for construction is particularly North America…The problem we find ourselves in, I think, is the larger projects, the infrastructure, the infrastructure spending is maybe not quite as robust as housing would be right now, and that’s a bigger sweet spot for us.”


Robert Half (Staffing):  “in September, we didn’t see the lift we typically get, instead, it was sequentially about flat. And then again, traditionally we get even more lift yet again in October and we didn’t see that lift either…clearly [clients] remain cautious with little sense of urgency. It’s in part due to macro uncertainty, in part due to election uncertainty. They cite budget pressures, they cite cost control measures… the general trends that I described also apply to tech…which is where we had seen most of our growth, that’s now where our growth is most under pressure…I’d say Accountemps we saw more softness in the accounting operations positions and those are the ones that are typically more client demand sensitive, more client volume sensitive. So it’s consistent that if you were to see softness in accounting due to macro conditions you’d see it in accounting operations”


Simon Property Group (Mall REIT):  “I think what unfortunately what I think a number of retailers, they’ve not invested in their product, okay. Or they’ve chased the holy-grail of internet sales to the determent of what they should be doing with the physical product, as still people want to go physical shopping. And when they go physical shopping, you’ve got to have a nice physical environment.”


UPS (Logistics):  “when you look at the ecommerce market, it could be one in five or one out of every six packages that are shipped to a consumer get returned…Those packages are highly profitable. First of all, many of those packages get dropped off and don’t have to be picked up because the consumer finds it more convenient to drop them off at UPS stores or UPS Access Points or hand them to a UPS driver. So there’s very little cost when it comes to pick-up. And then obviously, the deliveries are going back to businesses, and we could be delivering tens or hundreds of packages back to these businesses. So it’s a highly profitable B2B delivery with very little pick-up cost.”

Weak COnsumer


On the international front, Apple warned of the risks related to a the strong dollar, Lloyds dampened fears related to Brexit and both GM and United Technologies raised concerns about China.

Apple (Consumer Electronics):  "we’re a company that generates two thirds of our revenues outside the United States…at some point, the strong dollar becomes the new normal and we need to work with that."


Lloyds Banking Group (British Bank):  “In terms of our business trend see the referendum, there has been no significant impact in any of our consumer markets. In the corporate sector, we have seen some impact as businesses have deferred elements of their investment and borrowing both pre-and post-referendum, given the uncertainty. However, the aggregate volume effect has been relatively limited.”


General Motors (China tax incentives driving volume) (Autos):  “Obviously, this year the industry is running stronger than we expected, because of some uncertainty around the purchase tax incentive, if that was to end and the government was to announce an end to that, our planning assumption would be that – there could be some volatility in maybe the first quarter and second quarter of next year”


United Technologies (Conglomerate):  “new equipment orders on a sales basis in China were actually down 10% in the quarter. A tough market right now”

And, with that, we can once again confirm that the Obama "recovery" remains fully intact, as we continue to peddle fiction.

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Creative_Destruct's picture

The poor fucker has been re-animated one too many times.


"Once you wake up the dead you've got a REAL mess on your hands"


" He's not dead, he's just resting. "

This is what happens when Corporate boot fucks the populace.

Everything gets flushed down the Toilet Of Greed.  

lonnng's picture
lonnng (not verified) SILVERGEDDON Oct 29, 2016 5:16 PM

Bull's eye comment.

We need to get back to the days of mom and pop businesses when everything was so much better.

yippee kiyay's picture
yippee kiyay (not verified) lonnng Oct 29, 2016 7:51 PM

Plus the fact that they've destroyed the "mighty" dollar, now the "wimpy" currency. https://goo.gl/IoiSjv

philipat's picture

Hey yippee kiyay (Soon to be banned and will then use the next new names letsit and lonnng) , including previously:

Aristotle of Greece


You are a serial spammer and a serial pain in the ass. Might I politely suggest that you go fuck yourself? And get a life.

Your MO, always the same, is to post a provocative comment which SEEMS to be relevant but you have no interest in joining the discussion (and NEVER do) and your sole objective is to mislead readers into clicking on your falsified links to your BS site. That wastes everyones time is blatant SPAMMING.

Apologies to regular ZHers because I do understand these posts of mine can be irritating also, but I am donating my time to expose this shithead for the benefit of the ZH community. Please just skip over my easily recognisable posts when you see them.

Creative_Destruct's picture

The consumer has been re-animated time, and time, and time -again with EASY MONEY in an ultimately vain attempt to offset the effect of globalized cheap labor and the repeated piling on of more and more DEBT to cover the lack of true organic economic and wage growth and the lack of REAL wealth formation.

It's all a Keynesian Flim-Flam...

Joyo Bliss's picture

@ team depends:

We're all Redcoats now!

But we could tap into sub space:

https Trek remix^

RaceToTheBottom's picture

Hard to find stuff to buy with negative money?

sun tzu's picture

That's why the bankers are allowed to borrow money from the Fed at 0.0025% interest. So they can lend it to consumers at 18.9%

Mena Arkansas's picture

You move your jobs to low wage countries.

You decimate the middle class who now have no money.

And now you're whining like a little bitch the consumer can no longer afford to buy your products and services.

Really ... from the bottom of my heart ... FUCK YOU.

edotabin's picture

You are expected to work like a dog to buy things you don't need with money you don't have and they won't even build a decent road to get you to your dumb job. You have to be stuck in traffic 2 hours there and 2 hours back. Some even have to pay tolls for the privilege.

RaceToTheBottom's picture

WS bonuses are up though, so I guess we all made bad choices?

mofreedom's picture

Roads and bridges don't vote.

Never, no, not a single time, never.

mofreedom's picture

Don't just sit there, bribe your congresswhore.

I do declare, it's time for some trust-bustin.

Nothin says lovin like givin your kids a better future.

I love the smell of revolution every day.

sun tzu's picture

Debt slaves don't have any money to bribe their masters.

JRobby's picture

It is not like they didn't know this day was coming.

Continuing consolidation (unfettered by pesky anti-trust) is the "squeeze until the last drop" strategy.

Is there an election or something soon? ("Laugh Track Deafening")

Expat1's picture

Right on. Sounds like you didn't fall for the "free trade" propaganda.

BabaLooey's picture


and let me add;


Redhotfill's picture

When I get sales calls from out of the country trying to sell me something I tell them how I used to sell things over the telephone, and I lost my job and no longer can afford to buy things.

Rainman's picture

Talk to the dairy farmers who dumped 43M gallons of unsold milk ... biggest dump in 16 years.


mofreedom's picture

I had gub cheese as a kid a couple of times when farmin was extra shitty. It was a good deli-style American.

But, if we were to allow any form of assistance that interfered with those corps sucking off SNAP, only then would heads roll.

Hell, most places cafeterias can't even donate their leftovers to a homeless shelter. So, they dump it in that same lagoon.

sun tzu's picture

Walmart, Apple, ESPN, and Hollweirdos all depend on SNAP and EBT for their sales

mofreedom's picture

I think these farmers need to back their manure spreaders and honeywagons up to their slurry/manure lagoons to take to capital city and spray it French-style down their throats

Sudden Debt's picture

Money velocity is down already for a pretty long time.

The cheap money kept the fire burning but all that money is stored in banks. It will be a lot more scary when money velocity would pick up.


And the consumer? I pay my staff 30% above market prices. I don't think it's to much. Prices have gone up way more in the last 8 years on food and utilities. Most companies refuse to raise salaries and keep all their profits...

where do you think all those burnouts come from? People are depressed that they're working harder and don't get ahead.

But we're sitting on a demographic timebomb where good staff is getting really hard to find. Once the working people figure that one out that it's there where their power lies when they have skills, a lot of companies will be in serious trouble to keep their business going.

And computers? HA! Sure computers can automate a lot but they'll have have that special touch and intuition that is required to do a good job.

We'll need a revolution to improve our lives. We've got so much but so much is controlled by so few. I'm not talking about communinisme but a revolt against the creeping fascisme that is taking over. And if we're not carefull, it will be communisme that will take over.

Stanelli's picture

But doesn't the velocity need people's confidence in order to pick up? Not much of it left and people around me seem to rather loose it.

RaceToTheBottom's picture

Even with High End Consulting, cost cutting has gone into the dead zone.  Setting up Indian Consulting companies to have American fronts to back end cheap Indians.

Indian companies are the worst to work for.  Cheapest SOBs in the world.  No ethics. Treat their employees worse that cattle in their own country.  
The only thing they got working for them is a business model with low labor costs and time zone difference and a seemingly inexhaustible supply of stupid American firms outsourcing everything to Indian firms or partners who should not be managing a 711 much less a Consulting firm. 

Sandmann's picture

McKinsey is heavy into India.....but today most Management Consulting is devoid of insight and permeated with marketing claptrap

Sandmann's picture

Velocity won't lift. They have destroyed demand for deposits. They saved the banking system by destroying the real economy. The disjoint is now so clear that the Insiders have stolen the Deposits of the Outsiders and made it impossible to rebuild Capital  - like running up a down escalator with the fat cats safely at the top

besnook's picture

did these people really think they could destroy the usa middle class without affecting their bottom line in the long run? that it didn't matter because consumers from india and china would replace the usa consumer? they fucked themselves for short term gain thereby destroying their long term viability.

Sandmann's picture

Stupidity is pretty widespread in pigs that gorge at the trough

larz's picture

Politicians and their bureaucratic army,  family and friends have money cost of living raises and pensions rivalling wall street they can buy your shiite you whiny little whores

venturen's picture

Ignore that rents have risen 100% since the crisis....and all the properties are woned by the richest crooks around....who borrowed at Zero Interest Rates! Is it rinse and repeat time yet?

francis scott falseflag's picture


Of course, the global economy is not improving.


We're in a bottom-up depression and, thank God, don't see it.


When the world's having a bottom-up depression, you absolutely want to be the last to know. 

buzzsaw99's picture

that SPG statement was written by a retard imo.

1777's picture

I had to go back and actually read it! LOL you think that goof was smokin crack or something when he wrote that? Makes almost no sense!! By the way, love the posts buzzsaw99, keep em rolling....

Sandmann's picture

Funny to think Karl Marx has won - his analysis came true thanks to Wall Street and its puppets in Politics. If you read Lenin "On Imperialism" you have the script; if you read Marx on Commoditisation you have the workbook.......these idiots have driven wages below the point that sustains consumption

RaceToTheBottom's picture

But that quarters bonus was good so everything worked out for the best, right?  

GoldHermit's picture

Laugh my ass off – if they are still pulling for the US consumer they are in for a rude awakening. I could write for hours about this but, basically debt levels, demographics, and politics are screwing the American consumer into the ground. I will leave you with one little tidbit – 66% of the American population has less than $1000 saved

AmandaFawndel's picture

yep, I'm about tapped out after last DEC when AG could be delivered to your door for about $14.25 an oz. Tapped out I tell ya, bank acct about empty except for that monthly pension check!

AmandaFawndel's picture

The commander in chimp says 'those niggas be peddlin fixshun'

Iconoclast421's picture

It costs damn near $5 for a fricken big mac, which contains 90 cents worth of ingredients. Why is mcDonald's still in business? You can buy a Culver's burger for less and it is way better.

AmandaFawndel's picture

welfare checks mostly, then groids selling their foodstamps at fitty cemp two da dollah

actionjacksonbrownie's picture

With half the work force "retired", what do you expect?

south40_dreams's picture

The global economy is long overdue for a reset. Burn baby burn

0hedgehog's picture

Eggs in one basket....eh?

If this planet of 7+ billion people has to rely on 300 million Americans for it's livelyhood, then we are in more trouble than even I thought!

Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) Oct 29, 2016 4:46 PM

The Jews are angry that the whites have nothing left to steal.

besnook's picture

maybe the parasites will look for another host. wishful thinking anyway.