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Exchange Briefing

Hey everyone! We did another RV Exchange Briefing with @Jaymes Rosenthal and @Weston Nakamura. Talking about what we learned in 2020 and how we are approaching 2021. Weston shared his P&L for the 2020 crash and how he thought through what was taking place. WOW! Be a good contingency planner!

Strong divergence starting to show in S&P realised (20day) & VIX (1month), VIX upticking, market expecting some fireworks in Jan

S&P and Consumer Spending Connection? Need Your Help

Hello all, I need your feedback and help. While look at a chart of consumer spending on the other day I noticed something very interesting and potentially scary. See the chart below. Obviously, there is a huge drop in consumer spending during March because of the lockdown but then we see two very interesting and sharp dips in consumer spending. When I look at the dates it looks like the S&P is leading these dips in consumer spending, see S&P chart. 

Here is the potential problem I see and want your feedback on: Could it be people have such a large portion of their money in the market that if it dropped then their lives would be materially impacted. I am sure this could be the case for older retired people who rely on their 401k and own more stocks than they should but what about everyone else? 

So I am asking for help on this one. Does anyone know of any quantitative metrics to support to refuse this idea? Opinion on sentiment would be helpful as well but let's keep in mind we need an idea of the overall consumer and not just the domain you operate in.  

Potential implication: If a lot of people have their regular spending money in stocks then a market sell-off could cause a negative feedback loop with consumer spending. 

All of this is in theory so what are your thoughts?