In This Article:
White House officials found there to be a "strong divergence" between the stock market (^DJI, ^IXIC, ^GSPC) and "animal spirits" — or the sentiments held by investors and businesses, typically attributed to the role emotions play in investing and market trends.
MacroPolicy Perspectives Founder and President Julia Coronado responds to the idea of whether a slowdown in Corporate America is taking place, coming as Delta Air Lines (DAL) even cut its outlook over "macro uncertainty."
Also catch Julia Coronado weigh in on February's Consumer Price Index (CPI) inflation expectations and the kind of labor market trends that could push the Federal Reserve to cut interest rates.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
And Julia, to that end, I want to bring up a quote we have from the White House yesterday, is an official saying, we're seeing a strong divergence between animal spirits of the stock market and what we're actually seeing unfold from business and business leaders. So, the White House saying, hey, we're hearing from corporate executives that things aren't that bad. And then later on, that same day, you hear from Delta Airlines lowering their profit guidance, hearing similar commentary from small businesses in the small business survey this morning and also from the likes of Verizon. Are we seeing signs of the beginning of a corporate America slowdown in this economy?
Absolutely. Um, what what they're doing, you're you're you're hearing a lot of sort of damage control and spinning, um, out of the policy officials that have produced this uncertainty. But when we look at measures of business sentiment, when we talk to, uh, business executives, when we scrape earnings reports and see what companies are talking about, it is not a growth friendly environment. Um, and so you can call it detox or whatever you want to however you want to frame it in a positive light. Um, this is a tough environment for companies to make hiring decisions, to make capex decisions, to plan for the future. A lot of the actions we're seeing were not the ones we expected going in. Yes, we expected tariffs on China. We did not expect a trade war with Canada and Mexico. Um, these are our biggest trading partners. This is significant for US businesses. So, um, and unfortunately, we don't see any clarity in sight. It seems like we're still going after our neighbors and, uh, that's going to, you know, that's starting to affect travel. We hear people canceling plans to come visit the United States. That's going to affect education, students' willingness to come study here. There's a range of sectors that are going to be impacted by this, um, that again, weren't the ones that we were really focused on starting at the start of the year.
