Whirlpool Out in the Cold Rhymes with Stagflation

The concept of history "rhyming" remains firmly intact even as the S&P and Nasdaq melt up every single (or perhaps because of it), insofar and the comparison to the early-1970s. Specifically, over fifty years ago we had the mighty NIFTY FIFTY market growth leaders melting up and eventually topping out, too, all the while stagflation (slowing economic growth coupled with sticky high inflation) was brewing below the surface. 

For the rest of that decade in the 70s we saw gold, oil, and their derivative stocks handily outperform the once-dominant NIFTY FIFTY all the way until August of 1982 when the new secular bull market in stocks began. 

One of the more overlooked aspects about stagflation from the consumer perspective was how poorly durable household goods performed. Durable goods are typically defined as those necessary household items folks plan on holding a minimum of three years. The old models could last for many decades in some cases. 

But with "smart" technology nowadays you are lucky to get more than eight-to-ten years out of a new refrigerator dishwasher, for example. 

On that note, Whirlpool, below on the month chart updated, is getting smashed after earnings. The iconic household firm reported a dividend cut coupled with a weak outlook. Whirlpool is associated with durable household goods perhaps as any other firm out there. And now we have concrete evidence on top of the stock sliding lower since it's 2021 to add to the idea of stagflation not abating. 

Mind you, we are talking about a stock which fell from $257 to a recent low of $73.72, yet the market still decided to sell it aggressively on this bad news. This reaction likely suggests the market sees further rough patches ahead for consumers holding off on new purchases even as they deal with struggling washers, dryers, dishwashers, refrigerators, etc. 

In other words, expect more tinkering at home with appliances than previously seen by Americans in recent decades. And expect an uptick in folks using laundromats again.