The K-shaped economy is deepening, with delinquency rates on credit cards, auto loans, and student loans hitting all-time highs comparable to the global financial crisis, while top earners see stable income growth. Real wage growth for the bottom quartile of consumers slowed from 1.9% at the end of the Biden administration to 0.9% under Trump 2.0, while the top quintile's incomes stabilized around plus 2%. Companies like P&G and Target are increasingly catering to both ends of the consumer spectrum. Meanwhile, the 10-year Treasury yield is near 4.7% and at risk of breaking out toward 5%, which could spill over into equity markets if rates move too high too fast.
Procter & Gamble CompanyArticle notes P&G catering to both ends of consumer spectrum amid K-shaped economy, implying mixed demand.
Target CorporationArticle notes Target catering to both ends of consumer spectrum amid K-shaped economy, implying mixed demand.