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Quarter-End Insights

Our Outlook for the Consumer Sector

Investors need to separate near-term business trends from valuation.

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The second quarter of 2008 was another difficult one for the U.S. consumer, and we expect ongoing weakness to persist through year-end. Strained by skyrocketing fuel prices, rising food inflation, and higher unemployment rates, today's consumer is forced to make choices. Companies such as  Wal-Mart (WMT) and  McDonald's (MCD) are gaining share of consumers' wallets in this challenging environment, and we expect those trends to continue in the near term.

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John Gabriel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.