Obsidian Market Update 12/16/23
Economic Update
Holiday Spending
Will consumers spend as much this year on holiday-related purchases as they did in 2022? The answer seems to depend on whom you ask!
According to The Conference Board, U.S. consumers plan to spend an average of $21 dollars less than they did last year: $1,006 in 2023, and $985 in 2023. A survey by Deloitte puts consumer holiday spending at an average of $1652—a 14% increase over 2022. PwC expects consumers who make at least $120,000 to spend an average of $3,000 on gifts.
Paying for Popular Gifts
When asked which types of gifts they are likely to buy, consumers chose gift cards, vacation/travel, and toys and games. Less popular are gifts related to home décor, beauty products and books/music/DVDs. Buyers of all ages choose to pay for their holiday purchases by credit cards followed by debit cards and cash. Interestingly, 54% of the Gen Z respondents in a McKinsey poll will choose buy-now,-pay-later arrangements.
Mixed Messages from Retailers
At the beginning of the holiday shopping season, several major retailers were cautiously optimistic. Seeing its customers spend more on staples and less on discretionary items, Walmart’s chief financial officer said the company “was more cautious on the consumer” as it looked ahead to the fourth quarter.
Target also reported a decline in spending on discretionary items. The company noted that two-thirds of the toys in its stores will be priced under $25, and it expected sales to fall during the last quarter of 2023.
High-end retailers like Saks are adding “experiences” to secure sales. Fifteen hundred dollars will buy you a private holiday shopping trip and, for $30,000 you can host a party on the private rooftop of Saks’ flagship store in New York City. Nieman Marcus is sellng the opportunity to appear in a short Disney video as an animated character for $510,000, a trip to the Olympic games in Paris—with access to the Team USA House—for $210,000 and a walk-on role with the American Ballet Theater for $195,000.
Whether you plan to give experiences or items to your loved ones, we hope the holidays give you precious time to spend with family and friends.
Lifestyle
Where’s the Beef?
Those of us of a certain age can remember when Walter Mondale used Wendy’s slogan, “Where’s the Beef?” in a presidential debate. Our question today is: What’s so special about the Wagyu and Kobe beef?
Wagyu means “Japanese cattle,” and there are four official breeds, one of which is the Japanese Black. Over 90% of Japan’s cattle are Japanese Black, and within that breed are three families, one of which is Tajima. The only cattle that qualify as Kobe beef are Tajima which are born, raised and slaughtered in the Hyogo Prefecture. Beyond nature and nurture, strict regulations control whether beef can be classified as Kobe, including that it come from an animal that weighs approximately 1,036 pounds and that the animal has been fed for a minimum of 26 months.
Japanese Waygu beef was only approved for export from Japan in 2012 and is available today through multiple online sellers including Costco (where a 12-pound boneless ribeye roast, A5 grade, goes for $849.99—after a $250 holiday discount!) and Sam’s Club (two 10.5 oz, grade A5 New York strip steaks sell for $199.98).
If you want to learn more about the facts and myths related to American and Japanese Wagyu, check out this blog post from Crowd Cow, a company that “connects consumers to small farms, co-ops and independent producers of beef, pork, chicken and sustainable seafood.”*
*This reference is for information only. It is not an endorsement or recommendation.
How We Help
Helping Young Adults to Build Strong Financial Foundations
Once children are launched and have been working for a year or so, it’s the perfect time to help them establish a strong financial foundation. Here are a few ways we’ve helped many do just that.
- Budgeting: We can help them 1) develop one and 2) figure out how much they should save for emergencies.
- Debt: We can help them avoid or manage it.
- Housing: We can help them figure out how to save for a home and when they might be financially prepared to buy one as well as understand the types of mortgages available.
- Saving: We can help them understand the value of participating as fully as possible and their employers’ retirement plans.
- Health Insurance: If they leave a job, we can give them information about possible options, among them continuing coverage through COBRA and, if they are under age 26, joining a parent’s plan.
- Health Care: We want nothing but the best for our kids, but injuries, sicknesses and accidents happen. If an adult child is unable to make decisions, a medical durable power of attorney can authorize parents (or other trusted adults) to make healthcare decisions for them. Keep in mind, living wills deal only with end-of-life decisions, not temporary incapacitation.
- Controlling their Assets: Without a will, a person has no control over who inherits their assets or takes care of their pets The dollar-amount threshold for an estate that is too small to be subject to probate varies from state to state.
If we can help with any of these issues, please don’t hesitate to give us a call.
Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member