Consumer confidence isn’t in the proverbial tank, but the Conference Board’s May reading was 93.1, below the 93.8 posted in April.
In fact, the Consumer Confidence Index isn’t far off some of the levels seen during the COVID-19 pandemic
Throw in the war in Iran, and it’s not surprising that some investors are leery regarding consumer discretionary stocks. The conflict in the Middle East is a major driver of resurgent inflation, and as consumers tighten their belts, some fast-food stocks are being pinched, including Chipotle Mexican Grill (NYSE: CMG). Actually, Chipotle’s tale of woe about inflation predates the war in Iran.
Last year, the stock was drubbed with the company acknowledging it was being hit on multiple fronts, including tariffs, higher beef prices (inflation), and diners in the critical sub-$100,000 income and 25 to 35-year-old age demographics reining in their burrito indulgence. Those are among the reasons the stock is down 44.2% over the past year. Chipotle feels like a “hold” Following that 44.2% tumble, Chipotle may feel like a falling knife to some investors and a value play to others.