How to Profit in the K-Shaped Economy VIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - Black Friday spending in a K-shaped economy
- How this Social Heat Score helps you find the best retail stocks
- A bullish opportunity in this “ugly” shoemaker
- E-commerce stocks are white hot
- How to access the Social Heat Score and dozens of other tools as a Platinum member
Did you shop on Black Friday? If you’re like me and millions of other Americans the answer is, “Sort of.” You shopped… You just didn’t wake up at the crack of dawn to scramble for parking at the mall. You did it lazily peeking over the covers at the screen of your smartphone. Data from RetailNext shows that in-store foot traffic dropped by 5.3% over the last year. And while online shopping grew 10.4% from Black Friday of last year, in-store sales grew just 1.7%. (More on this later.) No matter how folks shopped, data shows they went big. The four-day Black Friday weekend set a new record. The National Retail Federation estimates sales of $44.2 billion from 203 million shoppers. With numbers like this, it seems as though the U.S. economy is in great shape. And maybe you’d be right. There’s an elephant in the room, though. And it’s doing most of the shopping. The U.S. economy has gone “K-shaped”… Imagine drawing the letter “K.” The upper arm represents the top earners and asset holders – folks who own stocks, property, and businesses. They’re doing great, with a surging stock market powering their wealth higher. The lower arm represents everyone relying mainly on wages. Their grocery bills are climbing faster than their paychecks. Their rents are rising. And they don’t benefit much from the uplift in stock prices, if at all. According to a recent report from Moody’s Analytics, in the second quarter of this year, the top 10% of earners in the U.S. accounted for 49% of total consumer spending. That’s the highest share on record since the data series began in 1989. Applying this lens to those Black Friday numbers, we can estimate that about 20 million wealthy shoppers spent $22 billion this Black Friday – for an average of about $1,100 each. While the remaining 180 million spent just $122 each. The economy hasn’t slowed or sped up – it’s split. Wealthy folks are propping up the consumer economy and spending at a rate close to 10 times that of everyone else. That’s a troubling trend, for sure. But you’re not reading TradeSmith Daily to hear me opine about the economy. You’re reading to find the best opportunities in the market, no matter what the economy is doing, based on our world-class data and analytics. And like it or not, the stocks that are set to thrive in this K-shaped economy are the ones that cater to the wealthier segment of society. | Recommended Link | | | | Breakthrough AI created by former Air Force nuclear missile coder can now forecast U.S. stock prices… and could help you make 252% gains over the next year – while also dramatically decreasing your risks. Here’s how to try it right now for free. |  | | Our Social Heat Score can pinpoint the best of these opportunities… It’s the brainchild of brothers Andy and Landon Swan. Most stock market analysts are preoccupied with price-to-earnings ratios, balance sheets, and the like. But the Swan brothers focus instead on website visits, app downloads, search trends, and a treasure trove of social media chatter for their edge. Their Social Heat Score distills all of this information into a simple 0-100 score. The higher the score, the more popular a company is with consumers. A low score means its brand is struggling or downright unpopular. It’s a pulse check on whether a brand is trending positively or negatively among users online. And the Swans have used it to give their subscribers the chance to close out gains of 145% on digital learning platform Stride (LRN)… 461% on nuclear pick Oklo (OKLO)… and even 556% on trading app Robinhood Markets (HOOD) in their MegaTrends advisory. For more on which brands are thriving in this K-shaped economy, look out for a transcript of an interview I just recorded with Andy. That will hit your inbox on Saturday. Meantime, here’s an opportunity Andy and Landon shared recently with their MegaTrends readers… One retail opportunity on their radar right now is Birkenstock (BIRK)… It makes sandals that went from “ugly chic” to global fashion staple – and that people are cultishly loyal to. And as you can see on the chart below from the Swans’ LikeFolio data engine, its stock price (gray dotted line) has fallen about 23% this year while website visits (blue line) have been surging after a massive Black Friday showing: 
A year ago, we saw the opposite dynamic in action. Web visits plunged in November well ahead of the stock price cratering into March. This is what Andy and Landon call a “bullish divergence opportunity” – where the stock price action isn’t matching up with the underlying demand they see in their system. Speaking of which… Let’s take a look at some stocks with the highest Social Heat Scores… I’ve been analyzing and writing about markets for almost a decade. I’ve seen darn near every valuation ratio, growth measure, and technical indicator under the sun. But the Social Heat Score covers a whole different base. Unlike earnings or retail-sales reports that come out only quarterly or monthly, the Social Heat Score gives a near-real-time view. For us as investors, that means spotting winners (or losers) ahead of the crowd. So it’s important to keep an eye on stocks that are trending higher on the Social Heat Score – especially the week after Black Friday. Here are five highest scoring stocks right now – all of them retail: 
Up top are two premium outerwear brands, Canada Goose (GOOS) and Wolverine (WWW). They’re followed by collectibles company Funko (FNKO), educational streaming service CuriosityStream (CURI), furniture maker La-Z-Boy (LZB), and Midwest convenience store chain Casey’s General Store (CASY). I’d heard of only about half the brands on this list. And I didn’t know that two of them – Funko and Curiosity Stream – were publicly traded. But just this quick glance has given me a wealth of ideas to research further. Let’s also circle back to a point I made right at the top of today’s issue: ecommerce Black Friday sales are surging nearly 10 times faster than in-store sales. And I’d like to call out one specific example. It’s not a “retailer” the way those five stocks are… but it is the largest ecommerce platform: Shopify (SHOP). That platform is built for everyone from small businesses, to startups, to major corporations like Tesla, Pepsico, and Whole Foods. It also has a 99 social heat score, indicating the brand’s popularity: 
You can think of Shopify as a smaller and much more popular cousin to Amazon. And while AMZN is considered a popular company on our Social Heat Score, it doesn’t rank quite as highly as SHOP. 
This upstart ecommerce player is less than one-tenth the size of Amazon, and its brand is clearly quite a bit more popular. That could make it a smart bet on a more diverse future of ecommerce. And it’s not the only holiday play the Swans are tracking in their MegaTrends advisory. Just a few hours ago, MegaTrends members got access to three stocks topping the Swans’ holiday winners list… names that Wall Street has left for dead but that are experiencing record-breaking digital demand right now. And these divergences give investors like you the ultimate edge… a chance to get in early on a stock that could surprise higher in 2026. Ideas like these are why we were so excited to bring Andy and Landon Swan into the TradeSmith fold earlier this year. Their Data Engine is a perfect fit for TradeSmith’s ever-growing suite of elite analytics software. And if you liked what you saw today and want to gain access, listen close. TradeSmith just celebrated its 20th anniversary. And to celebrate, our CEO Keith Kaplan is doing something unprecedented. With a limited time offer to join Platinum – our top tier of membership that includes everything we’ve ever published and ever will – Keith is handing out effectively free access to the dozens of tools and strategies we’ve launched since he took the helm. You’ll get access to the Swans’ most powerful work – including their Social Heat Score that distills web traffic, app data, search interest, and social chatter into one simple signal you can use to find the brands gaining momentum. (And avoid the ones quietly rolling over.) We’ll also send you their Earnings Season Pass advisory, so you can navigate the market’s most volatile weeks with clear, rules-based trades. Plus, you’ll get exclusive model portfolios like Lucas Downey’s Alpha Signals… And literally everything else we do (or ever will do) here at TradeSmith. You’ll unlock the full collection of tools, indicators, and research our team has built over the past 20 years to help you find opportunities, manage risk, and act with confidence. But with our 20th year coming to a close, so is our best-ever anniversary price for Platinum access. Go here for a free glimpse at TradeSmith Platinum in our CEO Keith Kaplan’s latest presentation. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily Disclosure: Michael Salvatore holds shares of Tesla (TSLA) at the time of this writing. | 
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