To The Moon

Recently, Morgan Stanley published a research report saying that in today's economic environment, consumers are under great pressure, and listed stocks that deserve attention under the changing consumption habits.

Consumer electronics, consumer apparel and footwear, and non-essential e-commerce were the most sensitive in the analysis.

1) E-commerce Sector

$Peloton Interactive, Inc.(PTON)$  and $Rent the Runway, Inc.(RENT)$  are considered the "high-risk" as both companies are geared toward high-end consumers, and the trend that underpins their business during the pandemic is rapidly fading.

"If high-end consumer spending slows, or consumers start buying affordable products, none of the retailers in the mall are likely to be spared," the report states. "

Nevertheless, retailers with higher average selling prices (ASPs) typically have more vulnerable to high-end consumer demand, therefore, companies like $Allbirds, Inc.(BIRD)$ , $Capri Holdings Ltd(CPRI)$, $Nordstrom(JWN)$ , $Lululemon Athletica(LULU)$ , $On Holding AG(ONON)$, $Tapestry Inc.(TPR)$  and $Urban Outfitters(URBN)$ may be at greater risk.”

2) Restaurant Sector

Like $Starbucks(SBUX)$, $Sweetgreen, Inc.(SG)$ , $Shake Shack(SHAK)$ , $Bloomin(BLMN)$ and $Cheesecake Factory(CAKE)$ etc., the sector is considered more accessible to high-end consumers than its peers.SBUXwas singled out for "showing marked cyclicality in the recent recession," which could exacerbate the company's management turmoil.

3) Payment companies are seen as a mixed sector

Analysts say, "Payment companies like $Visa(V)$ and $MasterCard(MA)$ are generally reliable inflation hedges because their income accounts for a portion of overall consumer spending, which rises as prices rise. However, if inflation and rising interest rates lead to an economic downturn, consumer and commercial card spending will inevitably be challenged, which will put pressure on the sector's corporate growth."

Faucette added that $PayPal(PYPL)$ , $Global-E Online Ltd.(GLBE)$  and $Global Payments(GPN)$ could also be hit as they have higher exposure to discretionary and luxury spending.