3 Consumer Stocks, 3 Very Different Trade Setups

Higher interest rates are putting pressure on both the stock market and the consumer.

With Treasury yields above 5%, investors have a more attractive lower-risk alternative to stocks. At the same time, higher borrowing costs are squeezing household budgets.

That backdrop is affecting companies in very different ways.

During my latest appearance on Schwab Network’s The Big 3, I broke down McDonald’s, Capital One, and Procter & Gamble — three consumer-facing companies with three very different setups.

McDonald’s is facing pressure both fundamentally and technically.

U.S. comparable sales growth slowed, and management noted that lower-income consumers are cutting back on restaurant spending as fuel and other necessities take up more of their budgets.

The chart has also been weak. McDonald’s has been trending lower, and a support area around $245 failed to hold.

For this setup, I discussed a bear call spread using the November 2026 expiration:

Sell the $260 call
Buy the $270 call
Approximate net credit: $1.50
Approximate potential return: 15% based on the pricing discussed

The idea isn’t that McDonald’s has to collapse.

The trade is built around the stock staying below the $260 short strike, giving it some room to move without immediately working against the position.

Capital One presents a different issue.

Higher rates can benefit lenders because borrowers pay more interest. But that advantage starts to weaken when consumers become stretched and have trouble making payments.

During the segment, I highlighted rising credit card balances and broader concerns around delinquencies, even though Capital One’s own charge-off and short-term delinquency numbers had improved.

The stock chart was also showing weakness, including a break below the 200-day moving average and shorter-term moving averages beginning to cross lower.

For Capital One, I discussed a more directional bearish trade:

Buy the December 18, 2026 $210 put
Approximate cost: $20
Approximate breakeven: $190

I saw the potential for the stock to move toward the $180 to $175 area if the weakness continued.

Because this is a directional trade, I also want a clear “I’m wrong” level. A close back above the 10-day moving average would be a reason to reconsider the setup.

Procter & Gamble is different because its products are closer to necessities.

Consumers may cut back on eating out or borrowing, but they’re still likely to buy toothpaste, detergent, diapers, and toilet paper.

That’s part of what makes consumer staples more defensive during uncertain markets.

The stock itself has been largely rangebound, which matches the relatively flat business performance discussed during the segment.

For P&G, I discussed a potential January 15, 2027 $140 call.

But there’s an important condition:

I want to see the stock close back above the 200-day moving average first.

If it stays below that level, I would wait.

Sometimes the trade idea is there, but the chart hasn’t confirmed it yet.

These three stocks are a good reminder that the same economic environment can create very different trading setups.

McDonald’s is dealing with pressure on discretionary spending.
Capital One is exposed to the financial health of borrowers.
Procter & Gamble sells products consumers are less likely to cut from their budgets.

That’s why I don’t start by deciding which options strategy I want to trade.

I start with the company and the chart.

Understand the business, identify the important technical levels, and then choose the strategy that fits the setup.

The goal isn’t to force every stock into a bullish or bearish trade.

It’s to gather enough evidence to build a plan and know what would tell you that the original thesis is wrong.