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Macro Insights from Bank Earnings Calls
The latest Fincredible MacroTalk covers several very interesting quotes from bank earnings calls on the current macroeconomic conditions. Here are the quotes I found most relevant:
- $GS take on the US economy: "There are a number of emerging areas of uncertainty we're paying close attention to: first, the trajectory of inflation, particularly wage inflation in the short term. Second, there remains significant uncertainty around the Delta variant. Third, there's ongoing political debate in the U.S. over economic policy, including the potential for additional infrastructure deals, the longer-term extension of the federal debt ceiling and tax increases. And fourth, the U.S.-China relationship remains complicated. Taken together, these items have the potential to be a headwind to growth."
- $JPM on consumer spending: "Combined credit and debit spend was up 24% versus the third quarter of '19 and in line with last quarter. Within that data, travel and entertainment spend was up 8% versus 3Q '19 and very closely track the patterns of the Delta variant within the quarter, softening in August and early September and reaccelerating in recent weeks."
- $C on the health of the US consumer: "Consumer balance sheets remain unusually strong on the back of the increasing consumer net worth during the pandemic.
- $MS on FED tapering and rates: "We do expect the Federal Reserve will begin tapering soon, and that will be followed by increasing rates in 2022."
- More on rates from $WFC: "And so I think if you look at what's happening in inflation and with tapering coming and we still think that there's more risk to upside on rates than there is downside at this point. And so we're still being patient as we sort of look at our redeployment there.
Heading into the end of the year, it's clear the US consumer is still in a very strong position, which should bode well for the overall market ( $SPY $IWM ), particularly consumer goods companies not facing significant supply chain issues. However, there are several potential headwinds like rate hikes and geopolitical tensions that could dampen the mood.
If you'd like more insights, here's the full post Fincredible MacroTalk October 20: Macroeconomic Insights
fincredibletranscripts.substack.com
Fincredible MacroTalk October 20: Macroeconomic Insights
Macroeconomic insights from earnings calls of $GS $JPM $C $WFC $PNC $USB $MS $BK
Interesting that Morgan Stanley went out and stated they expect the Fed to increase rates in 2022. That would be a bit earlier than what the Fed has signaled (2023)
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