Remy is joined by Brian Jacobson, Chief Economic Strategist at Annex Wealth Management. Brian discusses the mixed economic data that has emerged recently, including a modest increase in retail sales and signs of labor market softness. He emphasizes that while the Fed is divided, the balance of evidence leans more toward a rate cut rather than a pause.
As the holiday season approaches, Remy and Brian examine consumer sentiment, which has turned increasingly negative according to the latest Conference Board data. Despite expectations for U.S. holiday sales to surpass $1 trillion for the first time, Brian points out that this figure represents only a modest growth rate of three to four percent compared to last year. He highlights that consumers are becoming more selective in their holiday spending, focusing on fewer gifts while still seeking bargains.
The conversation then shifts to the stock market, where the S&P 500 has seen a significant gain of about 14% this year. Remy notes the historical trend of a “Santa Claus rally” during the last few trading sessions of the year and the first two of the new year. Brian shares insights on this phenomenon, suggesting that as long as the Fed does not disrupt the market with unexpected decisions, there could be positive momentum heading into the new year.
Finally, Remy and Brian address the relationship between the stock market and the broader economy, particularly in light of the recent AI investment boom. Brian explains that while the stock market is heavily influenced by AI developments, the overall economy is not as dependent on this sector. He provides a compelling analysis of how shifts in the AI landscape could impact market dynamics without necessarily jeopardizing economic stability.