Welcome to Yahoo Finance Invest. The global economy is rapidly evolving from shifting monetary policy to inflation pressures and structural changes thanks to technology. In the backdrop, record setting markets that are sparking fears of a correction or even worse.Joining me now is Muhammad Elaran, Alian's chief economic adviser. Muhammad, a real treat to have you here at Invest. Thank you for always making time for us.Let's start out of the block here on cockroaches. Uh there's a lot of talk on Wall Street ...

Let's continue that conversation with Muhammad Ali and this morning chief economic adviser at Aliance who I'm sure has been listening in. Muhammad, happy Friday. It's good to see you.Do you think this wave of unleashed data can be definitive. >> No. Um, you have deep divisions and you heard Steve say that you're likely to get three descents if they don't cut, four to five descents if they do cut.These are deep divisions getting deeper. They're getting deeper for three good reasons and one awful reasons. The ...

And right now we are 2 minutes away from the end of the trading day. Romaine Bostick alongside Scarlet Fu taking it through to the closing bell with the global simulcast. We're joined right now by Carol Massar and tim sandvik in the radio booth.Katie greifeld has the day off. Welcome to our audiences across all of our bloomberg platforms. That includes our partnership with YouTube for you to Gigli.Gus is over there in the radio booth trying to find what we're trying to figure out. We're playing planes, trai ...

Core Viewpoint - The luxury consumer segment is showing resilience, but overall consumer sentiment is low, which may impact spending during the holiday season [1][2][3]. Consumer Sentiment - Recent consumer confidence numbers from the University of Michigan indicate a decline in sentiment, particularly affecting lower to middle-income consumers [1][2]. - The K-shaped economy is widening, with a need for improvement in spending from lower to middle-income consumers [3]. Luxury Consumer Behavior - The luxury consumer and upper middle-income segments are still spending, as evidenced by positive sales results from companies like Tapestry and Ralph Lauren [2]. - The stock market's resilience is contributing to continued spending on new products and differentiation among luxury consumers [4]. Inventory Management - Overall inventory levels appear to be well-managed, with some companies bringing in inventories early to mitigate tariff impacts [5]. - There is a concern about how lean companies are running their inventories given the uncertainty in consumer sentiment [4]. Holiday Season Outlook - The upcoming holiday season is affected by one fewer shopping day, and there is no significant increase in promotions leading up to Black Friday [6]. - The focus for lower-income consumers is shifting towards necessities and value pricing [7]. Value Perception in Retail - Value is defined by brand and price, with off-price retailers and major players like Walmart and Costco being perceived as value leaders [8]. - Retailers that focus on value are experiencing strength, as seen in the leasing results from retail real estate landlords [9].

Group 1 - The current data landscape lacks comprehensive and reliable information, particularly from government sources, which is essential for making informed decisions [1][2][3] - There is a significant challenge in understanding the labor market dynamics, particularly regarding job creation and the unemployment rate, which are influenced by factors such as immigration and workforce aging [4][5][6] - The Federal Reserve faces a blind spot due to the absence of accurate unemployment data, which complicates their ability to assess and manage economic conditions effectively [7][8] Group 2 - The Federal Reserve's monetary policy is limited in its effectiveness, primarily relying on interest rates, which disproportionately affect financially constrained households and businesses [9][10] - The current economic environment presents a complex interplay of factors, with the Fed's restrictive policies being just one element influencing the broader economic landscape [11][12]

Consumer Behavior Insights - The current consumer landscape is characterized by a bifurcated market, with affluent consumers trading down while lower-income consumers face financial strain [1][11] - Companies like Walmart and McDonald's illustrate the varying performance across different market segments, with McDonald's reporting that 30% of US transactions involve extra value meals [2][3] Stock Performance - Live Nation, which owns Ticketmaster, saw a 10% drop in stock price after missing earnings expectations, reflecting broader market challenges [5] - Trex, a decking company, experienced a 25% decline in stock value, indicating struggles in the housing market, which remains locked due to high mortgage rates [7] Market Trends - Heavy discounting is expected during the holiday season, which may pressure profit margins for retailers like Best Buy and Dick's Sporting Goods [8] - The housing market is constrained, with mortgage rates unlikely to fall below 6%, leading to a situation where homeowners are cash poor despite high home values [9] Consumer Spending Patterns - There is a notable shift towards premium products, with Delta Airlines selling more first-class tickets than coach for the first time, and Coca-Cola seeing increased sales of premium beverages [10] - Consumers are increasingly opting to eat at home rather than dining out, which aligns with the trend of trading down in grocery purchases [10] Brand Performance - Capri Holdings, which owns luxury brands like Versace and Michael Kors, is facing challenges with its stock at a 10-year low, contrasting with brands like Ralph Lauren and Williams Sonoma that are performing well [12] - Estee Lauder is also experiencing difficulties, highlighting that not all luxury brands are immune to market pressures [12]

Group 1 - Current infrastructure spending is significantly lower than historical averages, with only slightly less than 1% of GDP being spent compared to the historical range of 2% to 5% [2] - There is a belief that the current technological advancements, particularly in AI, could lead to a transformational tech trade, which may involve significant creative destruction [6][11] - The economic landscape is characterized as K-shaped, where wealth inequality is increasing, with the rich getting richer while lower-level employees face job insecurity due to technological advancements [10][12] Group 2 - The Federal Reserve's approach may need to adapt to the changing labor market dynamics influenced by technology, immigration, and an aging population [13] - There is a recognition that the current economic growth is driven by supply-side factors, which may require a different perspective from traditional demand-side economic theories [9] - The potential for a new infrastructure build driven by technological advancements is seen as a critical factor for future economic growth [4][5]

Group 1 - The Consumer Price Index (CPI) for September showed a month-over-month increase of 0.3%, which was better than anticipated, with core inflation rising by only 0.2% [1][2][6] - Year-over-year inflation figures for both core and headline CPI came in at 3%, indicating a deceleration in inflation, which alleviates some concerns regarding tariffs and their impact on inflation [1][3][10] - The report is considered significant due to the government shutdown delaying other economic data, making this report more impactful [2][8][9] Group 2 - The Federal Reserve is expected to cut interest rates, with a quarter-point cut anticipated next week and possibly another in December, as the inflation data provides them with the necessary cover [11][15][36] - Despite the positive CPI report, inflation remains above the Fed's target of 2%, indicating that the Fed has substantial work ahead to manage inflation effectively [10][19][70] - The bond market reacted positively, with yields dropping below 4%, reflecting market expectations of rate cuts [12][14][57] Group 3 - The inflation report indicates that while some areas, such as food and energy, are experiencing price increases, overall inflation is stabilizing, which could influence the Fed's monetary policy decisions [25][61][70] - There are concerns about the labor market softening, with job cuts reported from major companies, suggesting a cautious approach to hiring amid economic uncertainty [45][47][49] - The market is currently experiencing a risk-on rally, with large-cap tech stocks leading, but there are signs of froth and over-speculation, prompting a need for diversification in investment strategies [50][72][76]

Market Overview - The market finished slightly in the green, with the S&P 500 approaching 6700, and the NASDAQ up about 0.7% [5][3] - The semiconductor sector showed strong performance, increasing nearly 3% [2][3] Company Earnings - United Airlines reported a third-quarter adjusted EPS of $2.78, beating estimates of $2.66, with CapEx at $6 billion and operating revenue meeting expectations [6][7] - The outlook for United Airlines indicates a fourth-quarter adjusted EPS of $3 to $3.50, surpassing the street's expectation of $2.82 [8][11] - J.B. Hunt's third-quarter EPS was $1.76, exceeding expectations by $0.30, with total revenue of $3.05 billion, also above the forecast [23][24] Individual Stock Performances - Advanced Micro Devices (AMD) stock rose about 9% after HSBC raised its price target from $185 to $310 [15] - Bank of America and Morgan Stanley saw stock increases of approximately 4.5% and 4.7%, respectively, driven by strong earnings and increased investment banking activity [16] - Papa John's Pizza stock increased over 9% following a bid from Apollo Global to take the company private at $64 per share [18] Economic Context - The market dynamics are influenced by ongoing trade tensions between the U.S. and China, particularly regarding rare earth minerals [3][4] - The Federal Reserve's Beige Book indicated a K-shaped economy, with some consumers continuing to spend on services despite broader economic uncertainties [11][12]

Market Overview - The Federal Reserve's minutes are being analyzed for insights on interest rate paths, with major market averages remaining less than 1% from all-time highs [1] - Current market conditions suggest a period of digestion, but fundamentals still support market appreciation due to increased earnings estimates and better-than-expected growth [2][3] Economic Indicators - Liquidity in the market and rising earnings, alongside Fed rate cuts, have contributed to positive equity performance since the selloff on August 1 [4] - Expectations indicate a potential market "melt-up" towards the end of the year, although pullbacks may occur due to volatile news cycles [5] Investment Strategy - The market's future trajectory hinges on the absence of a recession, with no recession anticipated in the near term [6] - Investors are advised to invest at regular intervals rather than attempting to time the market, as the setup for the next 6 to 12 months appears favorable due to supportive monetary and fiscal policies [7] Fiscal Policy Impact - Upcoming fiscal stimulus of approximately $150 billion in early 2026 is expected to support lower-income earners and corporate tax breaks, which may help stabilize the economy [7] Inflation Concerns - While the current economic setup could be inflationary, increasing productivity may counteract inflationary pressures [8] - The market's performance is influenced by consumer cyclical groups, which have shown some faltering, indicating potential underlying issues in the economy [10][12] Corporate Performance - Despite concerns about consumer spending, many retailers reported better-than-expected performance, suggesting resilience in the consumer sector [10][11] - The earnings contributions from various sectors are expected to broaden, indicating a healthy market environment as long as recession signals do not emerge [13]