With Tesla’s earnings call, we got a better understanding of why production has remained firm despite the lapse in the $7500 EV tax credit. (See our prior reports on Q3 production / demand here and here .) Elon Musk, “I think that Tesla has the highest intelligence density of any AI out there in the car, and that is only going to get better. And we’re really just at the beginning of scaling at quite massively full self-driving and Robotaxi and fundamentally changing the nature of transport.

Tractor Supply (TSCO) reported solid top- and bottom-line results for Q3. (TSCO’s Q3 ended on September 27th.) Comp-sales increased +3.9%, driven by comp-transactions +2.7%. Adding in the contribution from new stores, sales increased +7.2%. That increase, plus slightly higher margins, lifted gross profits by +7.7%. The mid-point of guidance puts the Q4 comp in the range of +3.0%. In terms of the quarter cadence, CEO Hal Lawton shared, “We saw a strong start to the quarter with spending trends moderating into September.

Last week, we had the opportunity to present our views and data on the US consumer at the National Association for Business Economics’ Annual Meeting (the Chair Jerome Powell event). We shared that the “right upward arm” of our K-shaped economy had picked up sharply since early August (presentation here ) and we expected that to continue through year-end should the stock market carry on strongly. (Our loyal readers will know that the high-end is why we believe that September retail sales were stronger as well.

The 6th issue of The Advan Buysider is now available. We’ve changed up what we are presenting and approaching it more as sector coverage. #6 added packaging (AMCOR / SEE / AVY), metals (NUE / STLD), and food distribution (SYY / USFD). As a reminder, The Buysider is designed to provide timely, novel, and impactful insights on specific names and topics using Advan’s data. The takeaways from all the updates:

Two developments of importance this week to the eating / food industry that we wanted to weigh in on, Albertsons’ quarterly results and General Mills’ investor day. The net-net is that the underlying cyclical and secular headwinds are intensifying for both the grocery and the limited-service restaurant industries. Albertsons Companies delivered a +2.3% comp-sales increase for all its banners. However, excluding inflation and GLP drugs (weight loss), grocery sales on a “real” basis fell -2.

As we previewed last week, high-end consumer spending in the US accelerated during Q3, which drove better retail sales for September and which we see in LVMH’s much better organic revenue growth for the quarter. Moreover, we also take Dollar Tree’s reiteration of its guidance and **Domino’**s very strong Q3 US Comps (+5.2%) as added evidence that there has not been a material degradation in spending by the less-affluent (despite market fears that there was and some data pointing to degradation).

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In last week’s note on Tesla’s better-than-expected deliveries, we shared that observed activity at Fremont and Austin showed no slowdown, despite an expected air pocket in demand following the expiration of the $7500 tax credit in September. We described that as “unexpected and curious.” Well, now we have an answer; yesterday, Tesla announced lower-priced models for the Model-Y ($39,900) and -3 ($36,990), which are about 12% lower than the prior entry-level trims (not including the $7500 tax credit), and $5K less than the next level up in trim.

The Census Bureau was to release its report of September retail sales on October 16th. That is on pause now given the shutdown; as a result, folks will have to look at alternative data to understand how the US consumer is doing – a popular concern these days given the weakish new hiring and net job growth. With that, we are pleased to report that we believe retail spending (as defined by the Census’ report ) during September accelerated from August’s healthy pace, with the incremental driver being stronger spending by affluent households and continued improvement in housing-related demand.

As previewed , Tesla’s Q3 global deliveries (+2%) were far ahead of expectations and Q2’s rate (-13%). Reported deliveries of 497K where 12% above the sell-side consensus of 443K. Given 3rd party reports of sales being down in Europe (-20% ish) and China (-HSD ish), the US was up strongly as Advan’s manufacturing and showroom data suggested. September domestic sales are estimated to be +6% per Morgan Stanley’s analyst. As shown, visits remained robust into the end of the month and the expiration of the $7500 tax credit.