US AND UK CONSUMER CONFIDENCE | 23 OCTOBER 2026
People got nervous. Money went boring.
When confidence drops, money hides in Walmart, railways and bonds. That is what real hedging looks like.
Hi {{first_name|there}},
Did you see the GfK number this morning? UK consumer confidence dropped 11 points in a month, from -13 to -24. Apart from Covid, you have to go back to the 2016 Brexit vote to find a drop that big.
GfK UK Consumer Confidence Index, monthly, 2008 to October 2026. Source: GfK Consumer Confidence Barometer powered by NIM (NIQ), released 23 Oct 2026. History via Investing.com. Analysis by FINK.
The US got there first though (and what happened next is the interesting bit). On 29 September the Conference Board said American consumer confidence had fallen 6.7 points to 81.9, its lowest level since April 2014. Today the University of Michigan confirmed its October sentiment reading at 48.0 and its measure of buying conditions for big-ticket items fell 18%.
University of Michigan Index of Consumer Sentiment, monthly, 2000 to October 2026. Source: University of Michigan Surveys of Consumers via FRED (UMCSENT), October final released 23 Oct 2026. The Conference Board (29 Sep 2026). Analysis by FINK.
So why are Americans this fed up? It's mostly prices, with US inflation hitting 3.7% in September (up from 3.4% in August) and petrol up 34% on a year ago. People in the Michigan survey expect prices to rise another 4.7% over the next year, the highest since May. With the midterms on 3 November that makes it political too, because 84% of voters in an AP-NORC poll said the cost of living is one of the most important issues for their vote.
It's the same feeling on both sides of the Atlantic. People are worried about the cost of living, so they put off the car and the sofa and they keep buying the basics. In the UK the big purchase index dropped 14 points to -22.
THE BIG POINT
When people get tentative, money hides in boring stuff
So what did money do in the US once confidence hit that 2014 low? From the end of September to yesterday's close, the S&P 500 went basically nowhere. It was up 0.2%.
Walmart rose 16.6% and Procter & Gamble rose 14.0%. Costco was up 11.8%, Coca-Cola 10.8%, Union Pacific 9.5% and McDonald's 9.4%. The whole US consumer staples sector (XLP) gained 11.7% and utilities (XLU) gained 8.7%.
These are some of the most boring companies in America. People buy groceries and toothpaste whatever mood they're in and Union Pacific's trains haul a lot of that stuff around the country. When people feel shaky, investors want to own that kind of steady demand.
Bonds went up too. The US 10-year Treasury yield fell from 5.29% to 4.95% and long-dated Treasuries (TLT) rose 5.5%. UK gilts edged up about 1.3%. Money was stepping back from risk across the board, which is what a broader defensive rotation looks like.
That is true hedging.
It's worth being straight about the limits though. This is three weeks of data. Over the whole year Walmart is still behind the S&P 500 (up 9.4% against 12.9%) and long Treasuries are still down about 3%. It doesn't always play out either. FactSet found defensive sectors beat the market in 80% of down months between 1995 and 2016, which is a lot but not every time.
Most people only spot this after the move. They read a headline like this one, feel the fear and then sell whatever just fell or pile into whatever just went up. The feeling makes the decision, not a plan.
So when confidence drops, do you know what money is actually doing, or are you just reacting to how you feel?
Price rebased to 100 on 30 Sep 2026, to 22 Oct 2026 close. Source: Yahoo Finance daily closes (dividend adjusted), The Conference Board (29 Sep 2026), University of Michigan Surveys of Consumers (Oct 2026). Analysis by FINK.
IN THEIR WORDS
Conditions for purchasing durable goods plummeted amid high prices and borrowing costs.
WHAT THIS MEANS FOR YOU
When people get tentative, money tends to move towards boring businesses and bonds. Over the last three weeks in the US it did exactly that.
Defensive does not mean safe. Johnson & Johnson rose just 1.1% over the same stretch and McDonald's is still down about 16% this year. Knowing why matters more than the label.
Money that nobody manages still makes a choice. It just makes the crowd's choice, usually late.
Is your money run by your process or by your mood?
The Process Score quiz takes a few minutes and shows you where your decisions are really coming from.
Confidence will bounce at some point. It always has. The question is whether you're the one making the decisions when it does, or that niggling weirdo in your head who reacts to every headline.
Members of FINK OS learn a rule and understanding for every situation, so they follow what money is actually doing rather than how they feel. When the mood turns, they act from a place of control, not emotional instability.
Not financial advice. Nothing here is a recommendation to buy or sell Walmart, Union Pacific, bonds or anything else.
Speak soon,
David
Founder, FINK
P.S. UK confidence was -25 as recently as April and hit a record low of -49 in September 2022. Every one of those lows felt like the end at the time. If you want to know how you'd handle the next one, take the Process Score quiz here.
Not financial advice. FINK provides education only. Nothing in this email is a recommendation to buy or sell any investment. Always do your own research.