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When Banks Go Bust: Exploring the Effects of Recent Bank Collapses

April 27, 2023 No Comments

The back-to-back failures of Silicon Valley Bank (SVB) and Signature Bank, as well as lingering uncertainties about the viability of First Republic Bank, have subjected regional lenders to heightened scrutiny. As others have chronicled, the confluence of three elements made for the perfect run-on-the-bank storm: 1) a backdrop of banks with significant asset-liability duration and liquidity mismatches (bond-heavy portfolios held against demand deposits); 2) a backdrop of multiple banks where a large fraction of deposit balances were in excess of FDIC coverage limits; and finally, 3) the Fed’s tardy and therefore unusually aggressive attempts to control inflation with rate hikes. Below, we query occam to evaluate how the resulting bank runs have affected consumer sentiment towards banks and preview what might lie ahead for the industry.

Work in Progress: Labor Force Participation’s Slow But Sure Climb

April 20, 2023 No Comments

In early December, occam’s “looking for work” metric correctly predicted a coming increase in the Labor Force Participation Rate (“Not Safe For Work – Understanding Lag in American Labor Force Participation,” December 8, 2022), despite the fact that the LFPR had remained stubbornly below pre-COVID levels. We believe our looking-for-work metric (sampled daily) is a leading indicator for the LFPR. Specifically, we observed the following sequence: 1) a crisp upward inflection in the occam looking-for-work metric in late November / early December, followed by 2) a similarly crisp inflection in the LFPR in the early months of 2023, as those who were seeing work towards the end of the year found the employment they sought. Below, we once again consult occam™ for trends in job seeking behavior and find reassurance that wage growth will continue to be moderated by an increasing supply of labor.

Ozempic Goes Straight to Your Thighs: Perspectives on Weight-Loss Drugs

April 13, 2023 No Comments

America’s obesity problem has only worsened over the last two decades. From 1999 to 2020, the CDC reports that the incidence of adult obesity in the US has steadily climbed from 31% to 42%. Despite numerous attempts by the weight-loss industry to capitalize on this alarming trend through promoting faddish nutrition plans and flashy fitness regimens, few of these approaches seem to generate a lasting impact. The landmark approval of GLP-1 agonists Wegovy and Saxenda for weight management, along with the increasingly common off-label use of Ozempic and Mounjaro, have created an unexpected bright spot for the pharmaceutical industry. Fueled by viral news of celebrities using these drugs for weight management, interest has surged in recent months. Leveraging occam™ data, we investigate consumer awareness of these medications.

Rise of the AI Titans: The Generative Revolution Continues

April 3, 2023 No Comments

Generative AI platforms have quickly captured our collective imagination by demonstrating a capacity to revolutionize areas such as search, customer service, and a diverse range of content creation endeavors. It’s become clear that we will see a disruptive impact in certain labor markets, with generative AI simultaneously boosting productivity radically in some cases, while entirely supplanting human efforts in others. Grappling with ethical and moral questions such as bias, privacy, and the responsibilities of AI developers to society will become increasingly necessary. In this blog post, we examine reactions of the public to early encounters with generative AI, briefly touching on its growth, disruptive potential, job market impact, and ethical implications.

Cast-Iron Appetites: Consumer Resiliency and Dining Out in America

March 26, 2023 No Comments

Though the restaurant industry managed to mostly survive the pandemic years by tacking away from in-person dining towards deliveries, drive-through, and curbside pickups, persistent inflation now poses a growing challenge. Although American consumers have thus far adapted to the rising cost of dining out better than many anticipated, persistent inflation has investors wondering whether restaurant growth might begin to be affected more substantially. Using occam data, we explore the delicate balance between the industry’s desire to transfer cost increases to customers and the need to maintain and grow demand.

A Thin Line Between Love and Hate: The Story of Crocs

March 10, 2023 No Comments

Crocs, Inc. has had a dramatic impact on the footwear market over the last two decades, even if it hasn’t always been smooth sailing. Founded in 2002 and going public just a few years later, Crocs withstood vicious criticism of its signature shoe, dubbed the “world’s ugliest,” and almost collapsed during the 2008 financial crisis. However, its long-term success is undeniable, with sales now exceeding 100 million pairs per year. Not only did the company rise to the challenges of the pandemic, it actually thrived both during and after. Making use of occam data and analytics, we delve into Crocs’ remarkable brand recognition, loyal customer base, and diverse buyer demographics. We conclude with an examination of its recent Gen-Z-oriented acquisition, HEYDUDE.

Episode II: Jobs Number Above Expectations and Wages In Line

March 9, 2023 No Comments

occam’s ML engine uses AI to predict changes in the labor market. Our data suggests job growth dropped from the high January number, but not as much as expected by consensus, and wage growth remains elevated, but in line with expectations.

Incredible: The State of Consumer Debt

March 2, 2023 No Comments

After the economic stimulus packages of the pandemic years, consumer debt has grown progressively to a record-setting level. This unprecedented level of debt has yet to slow consumer spending, which jumped a seasonally adjusted 1.8% in January from the prior month, the largest increase in almost two years. With such high levels of debt, can these levels of spending continue? To better understand the current situation, occam dives into the anatomy of delinquent accounts as well as consumer spending preferences in an inflationary environment to provide a look at the reality of consumer debt.

The Year of Ulta and Sephora: What to Make of Cosmetics in 2023

February 18, 2023 No Comments

Ulta Beauty (ULTA) continues to trade near all time highs and has some investors wondering what have been the keys to its success. By evaluating the beauty retailer’s customer base and main competition, occam™ provides a snapshot of the beauty industry, where Ulta is getting it right, and what might be in store for the industry in the coming months.

Generative AI and its Implications on Search

February 11, 2023 No Comments

ChatGPT marks the first time in history where a large percentage of the population is knowingly interacting with artificial intelligence. AI has been embedded in our interactions for years, but now it is more overt, and this is already changing the ways in which we interact with technology. occam™ has taken a closer look at how Americans are responding to the moment.