Delta Air Lines ( DAL) raised their guidance for the quarter, saying they expect to have the most profitable quarter in their history, while the drug store company Walgreens Boots Alliance ( WBA) cut their revenue forecast for the same period. This morning, traders and investors woke up to two amendments to forward guidance from two well-known companies, and the message they sent about the economy and the consumer could not have been more different. That is something that market analysts share with economists, and the current situation is a case in point. Harry Truman once famously asked that someone find him a one-handed economist, having become tired of economists saying ".on the other hand." That frustration is understandable to anybody who has ever heard an economist analyze data and attempt to make a prediction, but there are times when the only honest answer to the question “What's going to happen next?” is “I don’t know,” no matter how smart or well-educated the answerer may be.
Seemingly conflicting reports from two companies this morning, however, suggest that the concept of a 'richcession' was simply not true, or if it were true in February, it was extremely short-lived. That idea caught on in some circles, but it always felt a bit like the whining of privileged people who felt that reduced inequality was unjust and that they were somehow its victims.
In February of this year, a group of journalists at the Wall Street Journal posited that what we were experiencing with markets having fallen for most of the second half of last year was something they termed a “richcession,” where wealthy people were getting squeezed but lower income households were doing just fine.
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