US Bank Asset Management Group Chief Investment Officer Eric Freedman and Mizuho Securities USA Chief Economist Steven Ricchiuto join Wealth! to discuss the current economic landscape and give insight as to why consumer sentiment remains low as markets trade at record levels.
Joining me now, we've got Eric Friedman who is the US Bank Asset Management Group, chief Investment Officer.Let let's start first on the economic side of this and, and Steve particularly as we think about where there is this disconnect between what Wall Street is saying and what main street or what the household economics are feeling right now.Well, I think the difference really is the price level is the problem for households, not necessarily the inflation rate.
So I think the other thing that's really important is not only is it impacting corporate earnings, but also the housing market. I mean, that is one of the areas that the fed and and data continues to point out is that when you have homers homeowners equivalent rent or when you have the cost of shelter and the cost of energy continuing to be the stickiest parts of inflation, there is a consideration for where that also impacts other areas of household spending too.
So in general, consumers are doing well, but you're starting to see some level of disparities across a different income cohort, which you and corporate earnings can provide some more insights into Steve, you know, just one more question on the economy here and then I wanna shift to some investing strategy.
What is that next natural consideration as investors have to realize or think about the trends that have driven us to this point and whether that's still locked in so much so that they can remain comfortable in what are becoming some very overcrowded trades.
So I think there will probably be some level of rate cuts but not as many as the market may anticipate for this year and perhaps uh the balance of next year. So we think that for those clients that are looking for a little more safety and also wanna participate in large cap companies because we actually think there's some refinancing risk in small cap, owning equal weighted S and P is probably our preferred method of getting large cap equity equity exposure right now.Uh just lastly while we've got you guys, Steve, uh we, we heard Yardeni research essentially say today, the, the Q 1 2024 and is over earnings season is over.
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