Rather than stick your money under the mattress, invest in mattress companies. This seems to be the conclusion from Moody's credit rating agency, which rated mattress companies as the consumer-durables sector least vulnerable to a reduction in consumer spending due to a recession. Not surprisingly, recreational vehicle and products companies are the most vulnerable to a sustained slowdown in consumer spending.
How much will consumer spending decline over the next few months? That is the trillion-dollar question. Moody's recently downgraded several large home builder companies. Given the slowdown in the housing construction sector and the tightening of credit for home mortgages, such a downgrade was hardly surprising. Now Moody's is examining the debt maturies of consumer-durables companies in comparison to their revolving credit facilities for 2008-2009. Whirlpool Corporation (NYSE: WHR), Brunswick Corporation (NYSE: BC) and Dixie Group (NASDAQ: DXYN) all have substantial debt maturities in the near future, but Moody's did not downgrade those companies, as they have enough in their credit facilities to weather a slowdown. Other consumer-durables companies will not be so fortunate.
For a quick-read on the U.S. economy, check the price of gasoline
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