RBC’s Calvasina sees cracks in US consumer resilience ahead of earnings

Retail earnings season is about to offer a real-time stress test of the American consumer, and one of Wall Street’s most closely followed equity strategists is flagging warning signs. Lori Calvasina, who leads US equity strategy at RBC Capital Markets, says cracks are forming in consumer resilience, particularly in discretionary spending categories where tariff pressures and weakening sentiment are starting to bite. The twist: she’s still bullish on US stocks overall. Calvasina sees no meaningful impediments to the “buy America” trade and has set S&P 500 year-end targets between 7,750 and 8,150, a range that implies continued confidence in large-cap earnings power even as the consumer picture gets muddier. The consumer confidence gap Calvasina’s analysis draws a line between two versions of the American consumer. On one side, corporate earnings remain robust and large-cap equities continue to outperform global peers. On the other, consumer confidence surveys have been softening, and discretionary spending is showing signs of fatigue. Calvasina has flagged consumer discretionary stocks as higher-risk cyclicals compared to their more defensive cousins in consumer staples. This di...