NewEdge Wealth chief investment officer Cameron Dawson joined Morning Brief to provide insights into how consumer resilience is currently influencing market dynamics.

"A strong consumer is confirming this idea of a risk-on market," Dawson explains. By comparing equal-weight consumer discretionary stocks with consumer staple stocks, she identifies a powerful indicator that offers "good predictive power of where the consumer is heading."

"Ever since the beginning of 2023, we've seen consumption forecasts go up, discretionary [stocks] outperform staples, and that ratio is really showing no signs of rolling over," Dawson noted. This trend suggests sustained consumer confidence and spending strength.

However, if staple stocks were to begin outperforming discretionary stocks, it would raise significant questions about consumer economic resilience. "But for now, we're not seeing that trend change, which just suggests that the equity market believes this consumer remains resilient," she tells Yahoo Finance.

Watch the video above to understand how Dawson believes the Federal Reserve's monetary policy path could impact markets.

To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.

This post was written by Angel Smith