Tupperware and changing trends
14 April, 2023
What has the world come to? I can cope with recessions, pandemics, Trump, Truss and more. But the collapse of Tupperware?
In shocking news, Tupperware is on struggle street and may need to close its doors, citing a lack of engagement from a younger generation contributing to falling profits. Its share price yesterday was $1.46, down from $45 just 5 years ago.
Youngsters, what are you doing? Where do you keep your leftovers? What’s in your fridge? What sort of parties do you go to?! How else will we define social attainment and coming of age if not by having 5 different-sized Tupperware boxes in the cupboard, with all the lids still in place?
Changing trends
Our falling out of love with Tupperware is just one example of how changing trends shape both the economy and stock market.
In the release of the March inflation data, it was confirmed that e-bikes, surveillance cameras and frozen berries are now included in the basket of goods used to work out headline inflation. So we’re lazy, paranoid and into antioxidants. Whilst digital compact cameras and spirit-based drinks are out. Hmm. Smartphone addicts but at least a bit more sober.
Looking to other economic signs, the broader economy is stagnating. Again you don’t need to be a genius to work this out – who has lots of spare cash to throw around? Growth was a paltry 0.1% in the three months to February. Trundle trundle.
And as for stock markets, over this same three-month period, both the FTSE 100 and the S&P 500 have been pretty flat.
A sign of the times
If we dig into these indices, they paint a picture of our times. Back in the 1980s, and 7 out of the top 10 stocks in America’s S&P 500 were oil businesses. No wonder Dallas was the main show in town. IBM and AT&T were the only tech(ish) firms in sight. If you want a laugh, find the sound of the old AT&T type modem dial-up internet noise and play it to teenagers. Eeeee… grrrr… g-boing boing boing…
Gradually, consumer brands, fags and shopping made an entry in the 1990s as Coke, Philip Morris and Walmart moved in. By 1995, Microsoft had nudged its way in. And by 2010, it was joined by Apple and Google, with only 2 oil companies still in the top 10. And not a modem in sight.
If I had to summarise the change over the last 40+ years in a few words, it would be from companies which produce things you could touch or hold. To those which don’t.
And coming up next?
Interest rates remain thing to watch. The Bank of England – and I think all Central Banks – are interested in price inflation. If businesses are planning to increase their prices throughout the year, inflation will be stickier and harder to shift. If the economy is a seesaw with inflation and recession sitting at either end, the Bank of England is trying to work out which threat is heavier, and manage interest rates accordingly. The jury is out on whether we have one last (?) shift up ahead.
We’ve had a few more signs this week of cooling inflation in the US, which of course adds impetus to moves NOT to raise rates higher. And stock markets like this. The S&P 500 closed at its highest levels since February yesterday, and bigger tech stocks jumped about 3% - 4% on this news. What we don’t know is whether this trader “YAY!” is short-term, getting giddy about the prospect of lower rates, conveniently ignoring the mild recession lurking in the wings.
What do you guys think?
Retail investors are feeling a bit more upbeat. New research we collected this week shows that more fund investors think the FTSE 100 will go up in the next 6 months than think it will fall. This is the first time we’ve see the glass half-full brigade win out since March last year. You’re planning to buy more UK equity funds, more sustainable funds and more global shares funds. Corporate bond funds are the least popular.
All this optimism and jollity could just stage a late fight back for Tupperware parties, as we reassess our spending, head back to the 80s, down a bottle of Mateus Rose and realise that our lives are not complete without 12 different-shaped salad containers. But were I a stock picker, sadly I don’t think I’d be backing Tupperware. :0(
Two final notes about some upcoming events. Anyone interested in investment trusts might like to join our webinar on 18th April, looking at trends, income opportunities, the outlook, perennially popular trusts and more. And by reader request, we’re hosting a smaller workshop led by financial planner Lena Patel, focusing on financial and retirement planning for women with no kids – this is at lunchtime on 27th April.
Have a good weekend everyone. And good luck to all the brave people running the Manchester Marathon. Go for it!!!
Holly
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