00:00 Speaker A
Brian, we did just get some numbers on consumer confidence from the University of Michigan. This was the July preliminary numbers. So the the first look here at July and it came in a little stronger than economists had forecast and stronger than June. 61.8 was the reading here. Um so seeing and seeing the sort of expectations for inflation ticking a little bit lower than they had been, what do you make of of that consumer sentiment? We also, of course, had retail sales this week. So what’s that picture looking like?
00:53 Brian
Sure. So if you think about the June data for industrial production and retail sales, stronger than expected, but some of that was just a bounce back. Now, the sentiment data, I think is really important, especially the inflation expectations component, because I think that’s one of the things that Chair Powell has been hanging his hat on in terms of justifying a pause, is that inflation expectations had been moving up, they’re kind of high, and he wants to fight against that. And so if those are now drifting lower, uh really the argument for the Fed staying on pause kind of goes to the side and maybe they should get to more of a neutral stance instead of a restrictive stance. And it’s understandable why sentiment would have improved because really, I think we’ve become a little numb to the tariff talk, realizing that this is going to play out. Maybe it’s not going to be as bad as what it was originally presented back on April 2nd in the Rose Garden. If we settle somewhere between 10 and 15%, it’s not great, but it could be worse.
02:37 Speaker A
So Brian, as you look at all of these various elements, what do you think is the the biggest risk for the market right now?
02:51 Brian
Yeah, well, I think that the biggest risk right now is the valuations. When we look at the fundamentals, think that those will be improving, but how much are you paying for those fundamentals? So, as we go through earning season, I expect that we’re going to be seeing a lot of volatility in terms of the companies that are meeting expectations, probably fine, but the misses are probably going to get punished a lot more than usual. I don’t think investors have the patience to really deal with companies that are missing with any of those estimates.
03:49 Speaker A
Um, really interesting. Good to watch if companies are are missing and what happens then. Brian, good to see you. Thanks so much.
04:02 Brian
Thank you.
