🗎 Is a prenup a smart move or red flag?

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What’s on the Menu 🍴

Happy Labor Day!

Today we’ve got some insights into recent earnings, markets, and upcoming news.

Also, we’re taking a look at one of the worst financial mistakes you can make:

Marrying the wrong person!

Let’s go:

• Why Avoiding a Prenup Is Bad Advice 🗎

• What to Watch This Week 👀

• Retail Earnings: The Highs & Lows 📈

Today’s newsletter is a 5 minute read.

Why Avoiding a Prenup Is Bad Advice 🗎

Let's get one thing straight: telling people to skip a prenup because it's a "red flag" is bad financial advice.

Every marriage already comes with a prenup—you just don’t know it.

• It’s called the legal system, and it’s not tailored to your specific needs.

• When you don’t set your own terms, the government steps in and decides for you.

• Those terms aren’t designed to protect your hard-earned money.

A prenup isn’t about betting against your marriage; it’s about being realistic and responsible with your finances.

It’s no different than getting insurance for your car or health—it's about protecting your assets and having a plan for the unexpected.

If you or your partner are coming into a marriage with significant assets, debts, or even just a business, a prenup lets you both lay everything out on the table and agree on how things will be handled in the unfortunate event of a split.

And it’s not just about the rich folks.

Imagine you start a business after getting married, and it blows up into a massive success.

Without a prenup, your spouse could be entitled to a big chunk of that business if things go south, even if they weren’t involved in its growth.

That's not just risky; it’s a potential financial disaster.

Prenups can also protect against future debts your spouse might incur. Without one, creditors could come after your joint assets, leaving you on the hook for bills you never signed up for.

It’s about protecting your future, not planning for failure.

Bottom line: a prenup is just a smart move.

It’s not about saying "I love my money more than you," it’s about saying "I respect our future enough to make sure we’re both protected."

So don’t buy into the hype that prenups are a red flag—consider it one of the best financial decisions you can make together.

What to Watch This Week 👀

The market got through Nvidia earnings last week without too much heartburn, and most of the major indices are hovering near their highest levels year to date.

This week starts slowly with a market holiday in the US on Monday, but as summer winds down a busy fall season will kick into gear.

Historically September has been a weaker month for stock market returns on average:

Earnings season is winding down, with just a few more retailers and software companies left to report this week including Broadcom, Dollar Tree, Dick’s, Asana, and Docusign.

For Q2, retailers in aggregate have reported an average of 1% better sales growth than last year, with larger retailers such as Walmart and Amazon faring better than others.

Investors will be watching unemployment reports on Friday for more clues about the overall economy.

Here are the major macroeconomic releases we’re tracking this week:

• US ISM manufacturing PMI (Tues)

• Bank of Canada rate decision (Wed)

• US JOLTs job openings (Wed)

• US ISM services PMI (Thurs)

• Canada unemployment (Fri)

• US unemployment (Fri)

• Canada PMI (Fri)

• Germany trade balance (Fri)

• China inflation rate (Sun)

Risk taking appetite seems to be stronger in stocks than in crypto at the moment.

Bitcoin keeps flirting with the $60K level but hasn’t been able to convincingly push higher in recent weeks.

We’re also keeping an eye on meme stocks such as GME this week given heavy volume and constructive price action late last week.

In addition, we’ll be keeping an eye on the following assets & sectors:

📈 Rising Recently:

• Small Caps (IWM)

• Financials (KBE / KRE)

• REITs (XLRE)

• Health Care (XLV)

• Industrials (XLI)

• Utilities (XLU)

📉 Falling Recently:

• Crypto (BTC / ETH / WGMI)

• Homebuilders (XHB)

• Retail (XRT)

• Cleantech (TAN / PBW)

• Energy (XLE)

Retail Earnings: The Highs & Lows 📈

It’s been a busy few weeks of retail earnings, helping us get a better feel for how worried we really need to be about a recession.

Home Depot (HD):

No surprises here, Home Depot management is continuing to be pressured by higher interest rates (and likely a pull forward of many home projects during 2020-2021).

Interest rates are expected to start lowering in September, which is a reason investors are probably comfortable staying the course.

TJ Max (TJX):

TJ Max has been a standout in its comps and stock performance for years.

They pulled out a decent quarter with 5.6% revenue growth, and a 4% comp (not a homerun, but, solid base hit).

TJX has always been a beneficiary of consumers looking for deals. They tend to do well with resilient revenue in all types of economic environments, even through recessions.

Management has noted that they think consumers will continue to keep seeking this value out.

Macy’s (M):

Macy’s report left a lot to be desired, but, we can’t say it’s surprising.

The retailer has been struggling to keep customers in their mall-based locations.

It was interesting to hear Macy’s blame… the news?

With revenue growth continuing to be negative, management is seeking to bring in younger consumers. Here’s what they had to say on this:

“Earlier this month, we soft launch a new private brand targeting the under 40 consumer to support our growth aspirations.”

We’ve seen much better comps at other retailers, so the weakness at Macy’s is more likely to be their overall brand and offerings as the larger issue.

Cava Group (CAVA):

Let’s look at a retailer that is serving food vs. clothing!

CAVA was a standout and proves consumers are still spending on food away from home.

With revenue growth holding steady around 35% and their store count growing, there’s probably a lot to be seen from this rising star going forward (although, not a cheap stock to own).

Target Corporation (TGT):

Target had huge insight into consumer spending via their sheer size & their discretionary category data.

Things weren’t looking good through 2023 into 2024, but it appears they’ve turned it around with a positive comp.

Price cuts likely helped them pull out a better quarter and they’re calling their consumers “resilient”.

Lululemon (LULU):

Lululemon’s report came in a little weaker than expected. Their guidance for the full year came down as well (not ideal).

We expected that comps couldn’t stay double digit forever, but, it seems LULU fell short here because of trouble in the U.S.

International comps look great and continues to be the bright spot for growth, but, U.S. consumers are looking for more “newness” in their merchandise.

Lululemon management took the blame for this (which was great to see) and mentioned the issue isn’t foot traffic. They’re getting plenty of foot traffic and interested buyers, but their merchandising fell short to convert.

They’ve reorganized the company so that designers and the merchandising team work more closely to get more styles and colors out to the stores quicker.

The good news, is LULU is not an expensive stock if management can continue to take responsibility for their failures and turn things around. Especially if they’re still getting healthy foot traffic!

Ulta Beauty (ULTA):

Ulta Beauty was another former market darling that disappointed. Skincare is still in high demand with double digit comps, however, high end beauty products (prestige) and makeup continue to disappoint.

Their consumers are clearly watching their pocketbooks: “consumer behavior is starting to shift as consumers increasingly focus on value and become more cautious with their spending.”

Again, ULTA is not an expensive stock on the basis they could see a healthier consumer in the future as interest rates begin their trek lower.

Abercrombie & Fitch (ANF):

ANF management is firing on all cylinders and this is one of the best performing retails out there right now.

Their Abercrombie brand grew a whopping 26% and Hollister grew 17%. So, it’s clear, their customers are doing just fine and spending money.

ANF management has broken out into more categories like maternity, wedding & they have a deal with NFL and college teams for merch.

Conclusion:

Overall, it’s a mixed bag out there. In retail, we’ve always had winners and losers through every kind of environment as style and taste changes over time.

Retailers doing the best are listening to their customers and keeping things fresh & new. You can clearly see this by just looking at ANF vs. LULU vs. M.

It doesn’t appear that the consumer is falling off of a cliff and the right merchandising at the right price seems to still lead to a sale.

Food For Thought 🧠

“What we see depends mainly on what we look for.”
- John Lubbock

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.