“Never bet against the U.S. consumer, because they continue to spend.” – 01:37
Walter Todd, President and CIO of Greenwood Capital, joins Remy Blaire to discuss U.S. stock futures, which are poised for a higher open as they aim to break a three-day losing streak. This optimism follows the release of the latest PCE inflation figures, which align with economists’ expectations.
Remy prompts Walter to share his insights on the implications of the recent PCE report and GDP growth of 3.8% in the second quarter. Walter explains that while the stronger economic data has been interpreted negatively by the market—decreasing the likelihood of the Federal Reserve cutting interest rates—the American consumer continues to show resilience in spending. He highlights the dual risks that Fed Chair Jerome Powell has mentioned: persistent inflation and a slowing labor market.
The conversation shifts to the topic of stock valuations, with Walter drawing a parallel to Alan Greenspan’s famous “irrational exuberance” remark from 1996. He notes that despite significant gains in the market since April, there are several risks on the horizon, including a potential government shutdown and geopolitical tensions. Walter expresses concern that the market appears to be priced for perfection, suggesting that a pullback could be imminent.