What social media knew before this stock fell 35%... Reaffirming the K-shaped economy... The market is optimistic... Mortgage rates just broke below 6%... Signs of a housing 'thaw'... A 'bad to less bad' opportunity...
It was a 'trip into a gold mine'...
On this week's Stansberry Investor Hour podcast, we looked at the consumer.
As we've written in these pages before, consumer spending is in many ways the heartbeat of the U.S. economy. You can learn a lot about the state of the U.S. by looking at what people are – and aren't – spending money on.
But you can also use consumer behavior to learn a lot about the stock market...
That's why Dan Ferris and I (Corey McLaughlin) sat down with Andy Swan, co-founder of LikeFolio.
Andy and his team employ proprietary investing tools that, in part, use social media platforms (like X, Facebook, and Reddit) and indicators (like Google Trends) to create insights about consumer-facing businesses and the demand for their products and services.
One "aha moment" led to this approach...
About a decade ago, Andy and his team noticed there had been a dramatic decrease in social media mentions for Ugg boots – those fuzzy things with no ankle support that were all the rage... until they weren't.
When the parent company of Ugg, Deckers Outdoor (DECK), reported disappointing earnings for its holiday-season quarter in fiscal 2015, the stock fell roughly 35%. Andy and his team saw it coming.
"We tripped into a gold mine there," Andy said, "but we recognized what we had and pivoted [LikeFolio] into a kind of social-data-analysis company."
Today, Andy and his team incorporate AI mentions and tools into their analysis, along with other creative indicators – like visits to a particular area of a company's website – to pick up on investing trends, concerns, or opportunities.
Andy shared a few tickers of companies he's interested in today. You can check out the entire podcast episode here.
Going back to the economy...
We've written before about the "K-shaped economy" and the widening wealth gap between the top and bottom (with the middle class trying to keep up). We continue to see this play out every day.
So I was curious what LikeFolio's data might be saying about the economy today, given that consumer spending drives about 70% of U.S. economic activity. Andy offered this answer...
If we had to say one thing that is true about the entire set of 500 consumer-facing companies that we truly cover, I would say that for the past six to eight months, the one thing that's probably true about all of them is that if they sell their goods or products to people that have a lot of money, they're doing very well. And if they sell their goods or products to people that don't have much money, they're probably not doing well. That reaffirms the K-shaped economy.
While that's been bad news for businesses that sell to lower-income Americans, Andy pointed out that the upper end of the income spectrum has been underestimated. That makes sense when you consider that overall consumer spending hasn't fallen off – despite many expecting it to over the past few years. As Andy said...
The whole market [has] underestimated how powerful the top portion of [the] economy is, how much money that demographic has to spend, is willing to spend, and is almost forced to spend because there's no real return in saving. That's extremely powerful... So that's the story of the K-shaped economy, and it kind of keeps slapping us in the face.
Sometimes, we need to get hit in the face with simple truths.
Where we go from here...
As we wrote yesterday, if you focus only on AI businesses and their latest "victims," you'll see only one story. But that obscures everything else going on in the market.
If you look at the "smart money" in the bond market, few are expecting an imminent full-blown credit crisis. And despite the headlines and volatility since late December, the stock market is looking good too.
The market-cap-weighted S&P 500 Index, which leans heavily toward tech stocks, is still near a record high. The equal-weight S&P 500 – which more accurately reflects the "rest" of America's largest companies – is also close to a new high. It has outperformed the benchmark U.S. index by about four percentage points this year.
A couple weeks ago, our Publisher Matt Weinschenk wrote in these pages: "It's a fact that stocks are priced based on their future earnings."
If you consider this, investors have a positive outlook about the future right now, despite the K-shaped economy and a lot of consumers' struggles.
We're also seeing a positive outlook from the housing market. Nick Koziol has that story to close us out today...
What's happening in housing...
Home-improvement giant Home Depot (HD) is a bellwether for the U.S. economy. It's the fifth-largest retailer in the U.S. by revenue, bringing in $165 billion in sales last year. So when the company speaks, we listen. And that's especially true when it comes to the housing market.
In its fourth-quarter earnings released yesterday, Home Depot reported that its comparable store sales (which strip out newly opened stores) grew just 0.5% in 2025.
Home Depot CEO Ted Decker said two of the main challenges the company faces are "ongoing consumer uncertainty and pressure in housing."
In an interview on CNBC, Home Depot Chief Financial Officer Richard McPhail added that the economy has "been in a frozen housing environment for three years." He also said that the company has seen no signs of a thaw just yet.
Marvin Ellison, the CEO of competitor Lowe's (LOW), has shared similar sentiments, saying that home improvement "remains tepid."
We've written about the "frozen" housing market many times over the past several years. Relatively high mortgage rates and record-high home prices have kept prospective buyers on the sidelines.
New home sales fell 1% in 2025. And existing home sales (while they rose about 1% in 2025) are still about 20% below where they were prior to the pandemic.
But relief is on the way...
In October 2023, mortgage rates hit a high near 8%. With high mortgage rates over the past few years, homeowners haven't been incentivized to move. Home prices have been rising, and high mortgage rates have kept financing costs high.
But over the past few days, the average 30-year fixed mortgage rate has fallen below 6% for the first time since 2022. As our colleague and True Wealth editor Brett Eversole has written, that's the level we need to see to thaw the housing market.
You see, according to Realtor.com, 21% of homeowners are currently paying 6% or more on their mortgage.
Now, 20% of homeowners could make the case that affordability is back in their favor for a new home (or at the very least a refinance).
Still, more than two-thirds of homeowners have a mortgage rate below 5%, and more than half have a mortgage rate below 4%. So mortgage rates will have to continue heading lower to unlock more prospective buyers. But the wheels are in motion.
More signs of a housing thaw...
In the December issue of True Wealth, Brett explained why the housing market is healthier than many folks think. For one, inventory is coming back up to normal levels. From Brett...
We can see this by looking at the total number of homes for sale. That figure has been rising in recent years. Inventories are up – but they still aren't high. Take a look...
Housing inventory collapsed during the pandemic. That was an unhealthy seller's market. Now, inventory is starting to return to normal. And it's doing so in a healthy way – not spiking like we tend to see in a housing crash.
When you look at inventory another way, we have about four months of supply on the market right now. Brett says that's still below the long-term average of 5.2 months. But it's a strong improvement from the two months of supply that we saw in 2022 when interest rates moved higher.
That recovering inventory, plus lower mortgage rates, is pulling buyers back into the market. As Brett explained...
As mortgage applications rise, the Purchase Index rises. That means buyers are entering the market and demand is high... which is exactly what we've seen in recent months. Take a look...
Two months later, this trend is still in place. In this morning's mortgage-applications release, the Mortgage Bankers' Association said that applications to purchase a home were up 12% from the same week last year.
Putting it all together...
The housing market is nowhere near the "boom" we saw during the pandemic and its aftermath, when super-low rates supercharged home-buying and -selling activity.
But we're beginning to see signs of improvement in the frozen market we've had over the past several years – with lower mortgage rates and a healthy return to normal inventory.
That makes housing a classic "bad to less bad" opportunity for investors. Plus, this idea isn't being widely talked about in the mainstream media.
In the December issue of True Wealth, Brett told subscribers about a "best in class" business that's in a great position to benefit as housing activity ramps back up. And it's still in buy range today.
Existing True Wealth subscribers and Stansberry Alliance members can read that issue right here... and if you're interested in joining them, click here to learn how to get started with a subscription to True Wealth today. You can get access to this pick and a handful of other exciting opportunities... all for 84% off.
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In today's mailbag, more tariff talk... What do you think? As always, e-mail us at feedback@stansberryresearch.com with your comments and questions.
"While I mostly agree with Richard E's conclusion ('Small or big business will both pass the cost [of tariffs] to us, the consumers.'), his insinuation here appears to be that the dramatic rise in the price of gold is attributable to 'this President'... Not so... The impact of 'printing dollars' is not immediate. A very large part of the inflation problem began following the monetary/fiscal policies of his predecessor..." – Subscriber Mike M.
"Corey, [while] tariffs are an inconvenience to us all, actually I have not noticed much that affects me, but the trade imbalance and incentives for other countries to comply [with tariffs] are important... We should embrace them. They will pay us greatly in the future. Too many of us suffer from immediate need syndrome. Today's sacrifice is tomorrow's harvest..." – Subscriber Tim L.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
February 25, 2026
