To The Moon

Recession, Coming !

On Thu, 05 Jun 2025, amid Musk and Trump’s mudslinging, $Tesla Motors(TSLA)$ CEO said the Trump’s tariffs will cause a recession in H2 2025.

Musk could be right and on to something.

Other executives have had the same idea, ever since President Trump instituted sweeping tariffs in early April 2025.

Although Trump later put the highest rates on pause, risks remain.

Survey results released by Chief Executive in May 2025, showed 46% of CEOs forecast a recession or slowdown in the next 6 months.

Financial Gurus Weigh-in.

$Goldman Sachs(GS)$ also forecasted in May 2025, it expects there is a 35% chance of a recession. 

In April 2025, Bridgewater Associates, Founder, Ray Dalio warned that US could see something “worse than a recession.”

• Right now, we are at a decision-making point and very close to a recession.

• I’m worried about something worse than a recession if this isn’t handled well, he told NBC.

• We have something that’s much more profound, we have a breaking down of the monetary order.

Everyday Indicators.

While executive predictions and investment bank analysis can be a more reliable way to predict an economic downfall, there are several oddball recession indicators that come straight from consumers themselves. 

Campbell’s soup

In its earning call in early June 2025, Campbell’s CEO Mick Beekhuizen said:

• There is a “growing preference for home-cooked meals” adding it was the highest level since early 2020.

• That could be a bad sign for the economy. 

• Consumers dining out less and opting more for cheaper alternatives like Campbell’s soup signal a tightening budget.

• Meanwhile, spending on discretionary items like crackers and chips declined in tandem, said the CEO. 

Snacks

Campbell’s is already starting to see a decline in discretionary spending on snacks, so did other major snack food companies.:

• In February 2025, Nestle posted its weakest sales growth in more than 2 decades.

• Pepsi, maker of Lay’s & Tostitos, also reported earlier in 2025 that net sales had dropped by -2% and volume for savory snacks fell -4%. 

Consumer conditions in many markets remain subdued and have an uncertain outlook, said PepsiCo CEO Ramon Laguarta.

Pizza 

Still in the food-related realm, pizza purchases can serve as an indicator of economic conditions.

A Bloomberg analysis published on Fri, 06 Jun 2025 showed low-income consumers are being “priced out of pizza,” and same-store sales were down during the first quarter at Pizza Hut, Papa John’s, and Domino’s. 

A Bloomberg report on Fri, 06 Jun 2025, found that pizza has become too expensive for low-income consumers, and sales at Pizza Hut, Papa John’s, and Domino’s dropped in Q1 2025.

According to market research firm Technomic, Analyst, Richard Shank:

• Since 2019, the average price of a large pizza at the top 5 chains is up +30% to $18.19.

• Meanwhile, Nestle reported frozen pizza is one of its “underperformers” due to pricing, according to Bloomberg. 

Lipstick

The lipstick index was popularized during the 2008 recession.

It stemmed from Estée Lauder heir Leonard Lauder who noted his company’s sales of lipstick rose after the 2001 terrorist attacks.

The concept is when an economy is struggling, sales of affordable luxury items like lipstick, nail polish, and perfume tend to increase.

Although consumers may be tightening their belts, they want something affordable to feel a sense of normalcy—eg. a $5 lipstick from the convenience store. 

Case in point:

• E.l.f. Beauty, which recently acquired Hailey Bieber’s makeup company Rhode, reported on 28 May 2025 that net sales jumped +28%.

• L’Oréal reported in April 2025, its lip products “fueled its strong innovation lineup,” and helped its consumer products division outpace the market.

• Ulta Beauty also had a strong earnings report in late May 2025, seeing net sales jump +4.5%.

Men’s underwear

Another odd recession indicator is the men’s underwear index.

Alan Greenspan (former Fed Chair from 1987 to 2006), followed this index, that assumes people treat men’s underwear purchases as discretionary spending and they’ll purchase less of it during recessions. 

Calvin Klein, one of the most ubiquitous men’s underwear brands, saw fourth-quarter revenue drop -5% due to a “a tougher than expected macroeconomic backdrop,” according to CFO Zac Coughlin. 

Champagne 

While consumers may buy affordable luxuries during a recession, they tend to shy away from more expensive treats, like champagne.

According to Wine Searcher - bubbly sales dropped dramatically in 2024, and provisional February sales data shows sales continued to decline in 2025,

According to Champagne Syndicat Général des Vignerons (SGV), President, Maxime Toubart:

• Champagne is a true barometer of consumer mood.

• Currently, this is no time for celebration, with inflation & global conflicts taking place.

• In addition to economic and political uncertainty in some of Champagne’s largest markets, such as France and US.

As share with Fortune magazine by Swiftly, Hd of Alcohol Business, Emma Versaw:

• As costs continue to rise, people have less disposable income to splurge on champagne.

• So maybe there aren’t less celebrations, but less extravagant celebrations.

Storage units

As housing becomes increasingly expensive, people turn toward storage units to house their goods when they’re not able to downsize.

A Financial Times analysis published in April 2025, found the number of storage units is growing, which could serve as a recession indicator. 

My Viewpoints: (mine only)

From the 7 consumables discussed that ranged from soup, snacks, pizza, lipstick (affordable beauty), men’s underwear, champagne, storage units, I see investment opportunities.

Did you also ?

Consumer staples and affordable luxuries stand out as resilient during economy downturns.

Below are 3 US stocks that are likely to stay strong even if the US economy goes into a recession.

$Wal-Mart(WMT)$

• This is the largest discount retailer in the US, providing groceries, household essentials, and affordable goods.

• When consumers cut spending, they turn to Walmart for value and everyday necessities.

• 2025 YTD Performance: despite market volatility and economic contraction in Q1 2025, Walmart’s stock has remained resilient, outperforming the S&P 500. (see below)

• Its steady sales growth and robust operating income show strong demand for low-cost essentials, proving its defensive qualities

$Procter & Gamble(PG)$

• PG is a global leader in daily-use products like detergents, diapers, toothpaste, and personal care items.

• These are necessities consumers buy even when tightening budgets.

• 2025 YTD Performance: Procter & Gamble has delivered steady returns in 2025, maintaining stable sales and earnings while the broader market faced turbulence. (see below)

• Based on past month performance, P&G has gained +1.02% with stock price at $162.56.

• Its long history of uninterrupted dividends and strong brand loyalty have made it a safe haven for investors in 2025.

$Pepsi(PEP)$

• PepsiCo owns top brands in snacks and beverages (Lay’s, Quaker, Gatorade etc..).

• Even as consumers cut back on discretionary items, they continue to buy affordable snacks and drinks, especially when dining at home increases.

• 2025 YTD Performance: PepsiCo’s stock has shown stability and modest gains in 2025, outperforming many cyclical stocks.

• Its diversified portfolio and consistent dividend growth have helped it weather economic uncertainty, with only minor dips in sales despite the downturn.

These stocks have demonstrated resilience and stability so far in 2025, sealing their reputation as recession-proof choices during turbulent times.

Do you think Technology stocks are recession-proof when an economy flounders ?

Remember to check out my other posts that Tiger thinks are sub-standards. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• Goldman : Buy Wells Fargo & Bank of America. Wed, 11 June. Ideal post.

• Palantir’s Week of Ups and Downs. Still a Buy ? Tue, 10 June. Ideal post.

• CPI Inflation drives US Markets this week ? Mon, 09 June. Ideal post.

• Do you think Mr CEO, Musk is correct about US slipping into recession in H2 2025?

• Do you think Consumer staples’ stocks is the solution during an economic downturn ?

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