Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>Policy/tariff volatility, stock and bond market volatility, falling consumer and business confidence, stagflation fears, higher interest rates, tariffs, inflation concerns, and worries that the US may already be in a recession have dominated the headlines over the past week.</li><li>The WTR Commercial/Contract Furniture Index was up 0.4%, the Residential Manufacturers &amp; Suppliers Index was up 2.9%, and the Home Goods Retailers Index was up 1.5% as the broader markets rebounded as well, with the S&amp;P 500 and Dow 30 gaining 5.9% and the R2K up 2.6%</li><li><p>The Atlanta Fed suggests that the US may be in recession already (Figure 1), at least according to its GDPNow model, which aims to provide something closer to a real-time read on the state of the economy (1).</p></li></ul>

Policy/tariff volatility, stock and bond market volatility, falling consumer and business confidence, stagflation fears, higher interest rates, tariffs, inflation concerns, and worries that the US may already be in a recession have dominated the headlines over the past week.The WTR Commercial/Contract Furniture Index was up 0.4%, the Residential Manufacturers &amp; Suppliers Index was up 2.9%, and the Home Goods Retailers Index was up 1.5% as the broader markets rebounded as well, with the S&amp;P 500 and Dow 30 gaining 5.9% and the R2K up 2.6%The Atlanta Fed suggests that the US may be in recession already (Figure 1), at least according to its GDPNow model, which aims to provide something closer to a real-time read on the state of the economy (1).

Furniture/Furnishings Weekly Recession Fears, Higher Rates, Tariffs...

<ul><li>Equity markets fell sharply on the administration’s new tariffs as the magnitude and scope exceeded the market’s expectations.</li><li>Furniture and furnishings stocks, an industry with significant import exposure, were particularly hard hit.</li><li>The WTR Commercial/Contract Furniture Index (-5.3%), the Residential Manufacturers &amp; Suppliers Index (-12.0%) and the Home Goods Retailers Index (-14.0%) were all down as the S&amp;P 500 and Dow 30 (-9.6%) and the R2K (-9.2%) were also hard hit by the news. </li></ul>

Equity markets fell sharply on the administration’s new tariffs as the magnitude and scope exceeded the market’s expectations.Furniture and furnishings stocks, an industry with significant import exposure, were particularly hard hit.The WTR Commercial/Contract Furniture Index (-5.3%), the Residential Manufacturers &amp; Suppliers Index (-12.0%) and the Home Goods Retailers Index (-14.0%) were all down as the S&amp;P 500 and Dow 30 (-9.6%) and the R2K (-9.2%) were also hard hit by the news. 

Furniture/Furnishings Weekly - Double, Double, Tariffs and Trouble

<ul><li>Tariff uncertainty, inflation, and deteriorating consumer confidence all are weighing on the market and furniture and furnishings stocks.</li><li>The WTR Commercial/Contract Furniture Index was up 1.6% during a week, while the Residential Manufacturers &amp; Suppliers Index (-0.4%), the Home Goods Retailers Index (-7.1%), and the broader markets (-3.2% to -4.3%) were all down.</li><li>AI-generated code is playing an increasingly important role in software engineering according to YC CEO Gary Tan (1).</li></ul>

Tariff uncertainty, inflation, and deteriorating consumer confidence all are weighing on the market and furniture and furnishings stocks.The WTR Commercial/Contract Furniture Index was up 1.6% during a week, while the Residential Manufacturers &amp; Suppliers Index (-0.4%), the Home Goods Retailers Index (-7.1%), and the broader markets (-3.2% to -4.3%) were all down.AI-generated code is playing an increasingly important role in software engineering according to YC CEO Gary Tan (1).

Furniture/Furnishings Weekly - GenAI and Knowledge Worker Productivity

<ul><li>A relatively quiet week on the policy front as the markets (seemingly) continue to grapple with elevated uncertainty and work through the implications for the economy.</li><li>The WTR Commercial/Contract Furniture Index (-2.2%), Residential Manufacturers &amp; Suppliers Index (-1.3%), and Home Goods Retailers Index (-2.5%) trailed the broader market indexes.</li><li>Unsurprisingly, firms were front-running anticipated tariffs in early 2025</li></ul>

A relatively quiet week on the policy front as the markets (seemingly) continue to grapple with elevated uncertainty and work through the implications for the economy.The WTR Commercial/Contract Furniture Index (-2.2%), Residential Manufacturers &amp; Suppliers Index (-1.3%), and Home Goods Retailers Index (-2.5%) trailed the broader market indexes.Unsurprisingly, firms were front-running anticipated tariffs in early 2025

Furniture/Furnishings Weekly - Tariff Front-Running

<ul><li>Consumer discretionary stocks hard hit in recent market action (Figure 1) as economic and policy/tariff uncertainty continue.</li><li>The WTR Commercial/Contract Furniture Index (- 3.7%), Residential Manufacturers &amp; Suppliers Index (-1.2%), and Home Goods Retailers Index (-7.4%) all trailed the broader market indexes last week.</li><li>Consumer spending is trending down across all income levels as recession fears increase (1).</li></ul>

Consumer discretionary stocks hard hit in recent market action (Figure 1) as economic and policy/tariff uncertainty continue.The WTR Commercial/Contract Furniture Index (- 3.7%), Residential Manufacturers &amp; Suppliers Index (-1.2%), and Home Goods Retailers Index (-7.4%) all trailed the broader market indexes last week.Consumer spending is trending down across all income levels as recession fears increase (1).

Furniture/Furnishings Weekly - Consumer Spending Slowdown

United States

Sleep Number Corporation designs, manufactures, and markets a line of air bed mattresses. The Company provides a variety of beds, bedding, pillows, mattress pads and layers, sheets, duvets, bed skirts, bases, furniture, bed accessories, and kids blankets. Sleep Number serves customers in the United States.

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Select Comfort (SNBR US)

Furniture/Furnishings Weekly Recession Fears, Higher Rates, Tariffs...

Policy/tariff volatility, stock and bond market volatility, falling consumer and business confidence, stagflation fears, higher interest rates,...

Water Tower Research

Furniture/Furnishings Weekly - Double, Double, Tariffs and Trouble

Equity markets fell sharply on the administration’s new tariffs as the magnitude and scope exceeded the market’s expectations.

Water Tower Research

Furniture/Furnishings Weekly - GenAI and Knowledge Worker Productivity

Tariff uncertainty, inflation, and deteriorating consumer confidence all are weighing on the market and furniture and furnishings stocks.

Water Tower Research

Furniture/Furnishings Weekly - Tariff Front-Running

A relatively quiet week on the policy front as the markets (seemingly) continue to grapple with elevated uncertainty and work through the...

Water Tower Research

Furniture/Furnishings Weekly - Consumer Spending Slowdown

Consumer discretionary stocks hard hit in recent market action (Figure 1) as economic and policy/tariff uncertainty continue.

Water Tower Research

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