The journey heats up, but the CE100™ keeps slipping

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Getting away is a priority for many consumers as the school year ends and summer approaches.

Optimism about airlines and online booking platforms helped these stocks last week, on the heels of positive earnings comments, boosting the CE100™ Category “Move”.

Delta Airlines led the industry and the CE100™ names, up 15% over the past week. The company said in its report that there had been a “rebound” in demand and also noted that March was its best selling month ever.

See also: Travel recovery supported by Delta, American Airlines revenue reports

This is the connected economy, after all, and it only makes sense that other getaway companies are also gaining traction. Airbnb gained 5% on the week and Booking Holdings rose 2.8%.

The upward movement in “movement” names was not enough to prevent the Global CE100™ Index from continuing its overall slide, slipping 1.7% for the week.

This negative was slightly better than the performance of the broader markets, where the Nasdaq was down just over 3%. Beyond this week of relative outperformance, the CE100™ is down 19.5% over the year.

CE100 Performance Vs. Broader Indexes

Source: PYMNTS

If people open their wallets to book flights and rooms (Marriott, a component of the “Have Fun” pillar, rose 10%), they could fall back other areas to do so.

Beware of consumer spending

Headwinds continue to weigh on consumer spending, for both online and offline retailers. A pullback here would give consumers the financial wherewithal to make, book and spend on planned summer vacations.

Macro headwinds continued to weigh on discretionary spending. As reported in this space for the past few days, in “Digital Economy Payments April 2022 US Edition How Consumers Pay in The Digital World,” P2P payments have come down quite a bit. And the share of consumers who shopped for groceries fell one percentage point to 88% and retail purchases fell two percentage points to 60% as prices rose across the board.

Our own data also revealed that travel services were purchased by 19% of consumers in March – a record since the monthly survey series began in December.

See also: Rising prices give consumers pause before accessing digital wallets and P2P apps

Connecting the dots here therefore shows that additional spending on travel comes at the expense of spending in other channels. By extension, the three worst performing names of the CE100 all depend on consumer spending. Last week, Sezzle, a name in the “Pay and Be Paid” pillar, fell more than 20%. Within the “Boutique” pillar, Vroom lost 10.3% and MercadoLibre lost 8.7% on the week, which helped to lower this connected economy by 35.8% on the year.

Retailers are of course hoping that inflation has peaked, but with anything more expensive, choices have to be made. Businesses related to leisure, vacation and travel are the beneficiaries, but whether the trend is sustainable remains to be seen.

Read more: Today in the Data: Inflation Affects Everything

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