21/30 Subsectors Decel / Attention Economy Winners & Losers … December Consumer Discretionary Briefing Book

Please see the full attached 44-page Briefing Book.

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Softer discretionary trends continue in December … we note overall softness as monitored in our Monday Macro and real-time decel in 21 of 30 proprietary Optimal subsector tracking (versus decel in 19/30 last month): positive inflections in discretionary subsectors cruises, golf, apparel… versus broad negative inflections in the largest subsectors of broadline retail and e-commerce… see pp 11-22​

Optimal’s Attention Economy monitor callouts: we screen over 1000 companies across consumer and note non-normal mindshare inflections, highlighted by positive social/news sentiment growth at LULU and SBUX. Gen-Z mindshare growth continuing to increase for apparel brands (Comfrt, Aéropostale, Alo Yoga) … see pp 5-9​

Optimal Multifactor Macro Market Model, incorporating 12 lagged consumer macroeconomic factors we track … pp 30​

Our macroeconomic consumer callouts include: (a) Continuing unemployment claims running up y/y as job postings running down for the majority of US industries pp 38 (b) Consumer Sentiment and current conditions are down significantly y/y, lower income especially pessimistic pp 40-41 (c) National home prices continue to run up, but cracks showing in some key markets as 5/10 Case Shiller 10 home price index now down y/y… pp 42