As we enter September, many investors expect the Federal Reserve to begin cutting interest rates at its September meeting. However, questions remain about how consumers and markets (^DJI, ^IXIC, ^GSPC) will behave in the current rate environment and whether a soft landing is on the horizon.
To provide a deeper look at the economy, Victoria Fernandez, chief market strategist at Crossmark Global Investments, joins Morning Brief.
While the consumer has been described as resilient in this time of economic uncertainty, Fernandez questions whether that is really the case. While retailers like Walmart (WMT) are performing better, suggesting strong consumer spending, Fernandez is wary of overlooking the fact that Walmart is a budget retailer that caters to lower-income consumers.
“Is Walmart doing better because the consumer is spending more and is more excited about spending more, or is it because their customer base has expanded, because they’ve had to bring in people who normally have higher incomes and shop elsewhere, and are now coming to Walmart?” she asks. “I think that’s part of the reason.”
On the possibility of a soft landing, Fernandez said: “I think there’s a lot of uncertainty about a soft landing. I’m not saying we’re in a full-on recession, but I think we could expect a deeper pullback.”
For more expert insights and the latest market action, click here to watch this full episode of Morning Brief.
This post was written by Angel Smith
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