As September begins, many investors are anticipating the Federal Reserve to begin cutting interest rates at its September meeting. However, questions remain around how consumers and markets (^DJI, ^IXIC, ^GSPC) are faring in the current rate environment and whether a soft landing is on the horizon.
To give deeper insights into the economy, Crossmark Global Investments chief market strategist Victoria Fernandez joins Morning Brief.
While the consumer has been portrayed as resilient during this period of economic uncertainty, Fernandez questions whether this is truly the case. Although retailers like Walmart (WMT) are outperforming, suggesting strong consumer spending, Fernandez fears to overlook the fact that Walmart is a budget retailer catering to lower-income consumers.
“Is Walmart doing better because the consumer is out there spending more and excited to spend more, or is Walmart doing better because their base grew, because they had to bring in normally higher-income earners that shop other places are now coming into Walmart?” she questions. “I think that’s part of the story.”
Regarding the possibility of a soft landing, Fernandez states, “I think there’s a lot of uncertainties that we’d get a soft landing. I’m not saying we’d go full-on recession, but I think we could be waiting for a larger pullback.”
For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.
This post was written by Angel Smith