He joins us via Zoom. Brian Jacobson, Chief Economic Strategist at Annex Wealth Management. Brian, you're joining me for one for the history books here on the trading floor of the big board. As you look up, what do you see across these markets?
Yeah, thank you for having me. It's a really exciting time to be here and to be joining you. And it is really exciting to see the S&P hit that 7,000 and actually break through it. A lot of people would think that we'd be closer to 10% down as opposed to now, say, 2% up for the year. And I think a lot of it is just because the market did really realize that you can start looking through this conflict as to what's on the other side of it, as opposed to being so fixated on living through it. And I think that's really going to befuddle a lot of investors where they're like, how with all the chaos in the world, the conflict isn't even. How can the market be hitting new highs? And I think the simple fact is the market looks through it. We're going through earning season so far. The banks, yeah, it's been a little bit weak, but provisions for loan losses were actually better than what I was expecting. I think we're going to see an acceleration of merger and acquisition activity as the year goes on. So the market is just looking through the chaos right now.
Yeah, bit of downward pressure on Goldman Sachs, JP Morgan. Let me get your prognosis. What are you looking for through the rest of the slate of earnings reports? Got a few other consumer-facing brands set to hit the tape the next few days. We'll hear from Netflix. We'll hear from Pepsi. What will you be paying attention to as earnings season rolls along?
Yeah, what I'm really focused on is the health of the consumer. I think that's always the big focus, especially since I'm more of the economic strategist, right? What's on the econ side? It's so much that it's consumer driven. How much are businesses able to push costs higher and protect their margins? If we look at the beige book that came out today, it was eerily reminiscent of the beige book that came out a year ago, which was after Liberation Day with the tariffs. You know, a lot of it was talking about businesses being in wait and see mode, worried about input costs going up, compressing their margins. But businesses did a great job this last year protecting those margins. Now, what is that going to look like going forward? Because we know that the consumer is a little bit more winded this year than what they were last year. Wage growth is still above inflation, but it is only about 0.3% year over year higher than inflation than last year when it was a full percentage point. So consumer isn't in as quite of a ruddy shape as they were last year, but I'm still expecting that when we hear from a lot of these more consumer facing companies that they are going to talk about how maybe there are some clearer skies on the horizon.
Brian Jacobson, we got a lot going on down here today for the broadcast. We have to leave it there. Please come back and see us again. Brian Jacobson, Chief Economic Strategist at Annex Wealth Management.
