Show Notes
In this week's episode of WSJ’s Take On the Week, co-hosts Miriam Gottfried and Telis Demos analyze the K-shaped economy, contrasting flourishing corporate capital expenditures—driven by massive AI investment from companies like Nvidia—with the struggling consumer economy. They discuss Nvidia's risks ahead of its earnings this upcoming week, including rising chip costs and the troubles of its key customer OpenAI. The discussion shifts to soaring wholesale prices rising faster than consumer prices all while pressuring corporate margins. They also look ahead to earnings reports from retailers Target and Walmart, and preview earnings for Home Depot and Lowe's, which face headwinds from high mortgage rates and a muted spring housing market. After the break, Adam Josephson, founder of consumer-focused research company Sakonnet Research, joins the show to explain the disconnect between Wall Street and Main Street. He argues that a buoyant financial economy, where large banks are seeing asset growth from lending to hedge funds and private credit, is masking a deeper consumer weakness. Josephson discusses the gap between corporate earnings and everyone else. He says that while real average weekly earnings have seen little growth, corporate profit margins are at all-time highs. He details how this economic pressure on the consumer is reflected in falling box shipments, the rise of discount retailers, and the growing share of spending on healthcare. He warns that the market is being propped up by excessive financial leverage, and suggests ways investors can think defensively. This is WSJ’s Take On the Week where co-hosts Telis Demos, Heard on the Street’s banking and money columnist, and Miriam Gottfried, WSJ’s investing and wealth management reporter, cut through the noise and dive into markets, the economy and finance—the big trades, key players and business news ahead. Have an idea for a future guest or episode? How can we better help you take on the week? We’d love to hear from you. Email the show at [email protected]. To watch the video version of this episode, visit our WSJ Podcasts YouTube channel or the video page of WSJ.com Further Reading OpenAI Misses Key Revenue, User Targets in High-Stakes Sprint Toward IPO Nvidia Is Buying the Chip Supply Chain Housing Market’s Spring Is Shaping Up as a Bust After April Sales Were Flat Elon Musk Testifies He Was a ‘Fool’ to Fund OpenAI Inflation Soared to 3.8% in April, Driven by Gasoline Prices Wholesale Inflation Shot Higher in April For more coverage of the markets and your investments, head to WSJ.com, WSJ’s Heard on The Street Column, and WSJ’s Live Markets blog. Sign up for the WSJ's free Markets A.M. newsletter. Follow Miriam Gottfried here and Telis Demos here.
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