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LVMH says no one's buying champagne, Lamb Weston sites softening demand for frozen potatoes, and Comcast is seeing a slowdown in its theme park business. So how much concern should there be about broadening consumer weakness during now with Scott Chris, editor of the transcript. Scott, it's good to see you. You know, obviously you looked at the markets today, Scott, investors have new questions about this economy. You know, I think a lot of people had bought into J. Powell kind of stuck this, you know, the soft landing, Scott, as rare and unusual as that is. And now, all of a sudden, investors seem to have questions about that. Maybe this economy is not cooling, maybe it's turned cold. I'm interested, Scott, as you kind of read through the earnings reports, you read through those earnings transcripts. Was that a theme, a question you heard executives bring up?

I don't think that really executives were bringing up recession quite yet. I think that's a question that we'll see more next week. I think we've gotten a lot of negative high level economic indicators this week between the employment report and also the ISM report earlier this week that have started to, you know, impact people's confidence in the economy to the extent that now people are asking the question that you're asking, are we headed for a recession? Uh, but really before that, what we had been seeing is broadening consumer softness, uh, slowdown in growth. Um, and so these were the precursors to things that we're seeing today. I think it just has spilled over into much higher level, larger question this week.

And broadly when when you looked at those earnings calls, Scott, and they talked about consumer weakness, was it was it specific consumers they would highlight?

Well, you know, for the past probably 18 months, almost two years, we had been seeing that lower income consumers were showing a lot more weakness than higher income consumers. And I think that's the big thing that we've noticed has been a change in the last couple of weeks is that higher income consumers are starting to show weakness too. So you mentioned that champagne comment from LVMH, that was one that really stood out to me, uh, because it was talking about, you know, a luxury purchase, something that higher income consumers might be purchasing, as well as the theme park comment from Comcast is one that I think was really important showing that across the income spectrum you may be seeing some consumer weakness.

Right, so some signs there are some broad consumer weakness, but you also, I thought it was just got to see some reasons for optimism, optimism, maybe a rebound in cyclicals. You were highlighting?

Yeah, I mean, I think the reason for optimism is actually kind of a counterintuitive one. It's that uh underlying these trends of slowness that are starting to emerge and broadening consumer areas, you actually have had weakness within the economy for a much longer period of time, up to eight quarters in areas like transports, um, in areas like capital markets, where capital markets have been more or less frozen IPO markets for a long time now. Um, and those have all been symptomatic of higher interest rates. And so you've actually had this like quasi recession going on underneath the hood of the economy that as the Fed is starting to lower interest rates, that provides a springboard for more interest rate sensitive sectors uh to start to rebound. So we may actually be towards the bottom. Actually, a lot of the pain may have been taken in the economy on a more quiet basis, uh, under the radar basis. And so as the Fed lowers interest rates, it may may allow us to have a rebound.

And let's dig into one specific name, Scott, as well. Tesla, I know you had some thoughts on that one.

Yeah, I mean, I think Tesla, uh, I mean, going back, I guess, to the consumer and the this under the hood slowdown, I think the thing that has really prevented it from being a headline basis recession is that there's been AI has been a theme for the markets as everybody knows for the last 18 months or two years even. Um, and I think that that theme has been starting to slow a little bit as well. That the surprise in terms of how powerful large language models are is something that's not quite as shocking to investors today as it was a year and a half or two years ago. And so one of the things that we did notice in the Tesla earnings call that was really interesting though was Elon talking about the progress that they've made in in full self-driving cars. And, uh, you know, his bullishness on that uh area with respect to AI is one that if they really solve the full self-driving car issue sometime within the next year or two or however long it takes them to do it, uh, the thing that really stood out to me in that call was how quickly they can deploy it and how much that could impact mass psychology for the markets again in terms of the AI wave, maybe seeing a renewal. So that's probably not something that's going to happen in the next six months, but it is something to keep on the horizon uh as something that could be another wave for this AI move.

Plenty of Tesla bulls coming the show, Scott pounding the table on AI and those robo taxis. Thanks so much for joining us, Scott. Appreciate it as always.

Thank you.