Axios Closer

May 20, 2022
Hello Friday! The S&P 500 flirted with a 🐻 market, but it scampered off in the final hour of trading.
🚊 We're headed home today after a great company retreat (without Zoom!), and we'll be back to regularly scheduled programming on Monday!
Today's newsletter, edited by Pete Gannon, is 411 words, a 1½ -minute read.
🔔 The dashboard: The S&P 500 closed nearly flat, up 0.01%.
- Biggest gainer? VF Corp (+6.1%), driven by the performance of its North Face brand and confidence in its margins.
- Biggest decliner? Ross Stores (-22.5%), the discount retailer, after quarterly results Thursday afternoon short of expectations.
1 big thing: Consumers adjust to inflation
Illustration: Brendan Lynch/Axios
Higher prices are changing consumer behavior, prompting people to rethink what they’re buying, Hope and Pete write.
Why it matters: With much investor attention this week focused on the increasing costs for businesses and their effect on corporate earnings, a pair of recent surveys shows that consumers too are struggling. It’s easy to see why some companies are wary of passing their own higher costs on to customers.
The big picture: Nearly 60% of U.S. consumers surveyed by Jefferies last month said they have reduced the number of items they typically buy.
- And 47% of those surveyed this month by The National Retail Federation (NRF) said they were switching to cheaper alternatives — some of the same trends that Walmart noted earlier this week.
By the numbers: 38% of those surveyed by Jefferies said they're delaying big purchases, such as cars, homes and furniture.
- 29% told Jefferies they're reducing the quality of the items they typically buy.
- And 2 in 5 people in the NRF survey said they were cutting back in certain areas.
Threat level: Nearly 3 in 5 people surveyed by NRF said they were having to go into debt, borrow money or tap savings to afford their expenses.
Yes, but: Several companies have yet to see a drop in demand.
- In some cases, like Deere & Co., their own supply chain constraints have left them having no trouble finding buyers for whatever they can produce.
- Meanwhile, Home Depot and Lowe's both told investors that they didn't see signs of customer pullback last quarter.
What we're watching: Macy's, Dollar General and Costco will all report earnings next week.
2. Bonus chart

3. What's happening
🐻 The S&P 500 briefly entered bear market territory Friday for the first time since the 2020 pandemic downturn. (WSJ)
🤝 Tinder owner Match Group reached a deal with Google over its App Store payment policies. (TechCrunch)
⚽️ American investors keep scoring European soccer teams. (Axios)
4. It’s us!
Photo: Axios
A picture of the Closer team from this week's Axios retreat!
Our thought bubble: Being in person still matters, and gosh did it feel so good to see so many of our colleagues from all over the country this week.
- Hope has asked Axios CEO Jim VandeHei if we could do the retreats twice a year. We’ll update you when we hear back.
From left to right: Copy editor Sheryl Miller, Axios Business Managing Editor Javier E. David, Hope King, Pete Gannon (on FaceTime), Closer creator Courtenay Brown (she’s back at Axios!!) and Nathan Bomey.
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Catch up on the day's biggest business stories and look ahead to important trends. Led by Nathan Bomey.

