Open Windows

Waiting for the perfect split second is as hard as managing exclusively for short-term success

Summary: As the Q2 earnings season kicks off this week, we see a US economy that is incredibly resilient and consumers regaining confidence as the stock market rises. Trump is saber-rattling on tariffs again, though. Is the market overly complacent?

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Macro

The US economy is incredibly resilient
"The US economy is incredibly resilient, and while the rest of the world is fairly solid as well, we are still all connected and rely on each other for mutual long-term success. This recent experience may have had the unintended (but welcomed) effect of having many of our important allies realize they need to be independently strong, and while they can rely on the US to be a good partner, overreliance on this concept can be detrimental to all." – Jefferies (JEF 0.00%↑) CEO Richard Handler and President Brian Friedman

"There's an attitude in America that people continue to enjoy life and indulge and respond to what we're offering of great client service and great environments and obviously representing the best brands in the market. So, honestly, nothing that we would really characterize as surprising. We're going to keep working hard at it." – Watches of Switzerland Group (WOSG) CEO Brian Duffy

"....as we moved into June, we've seen the trends continue. And I don't think we have any reason to believe they're going to fall off." – Levi Strauss (LEVI 0.00%↑) CEO Michelle Gass

Consumers are regaining confidence
"I've been hoping we get a question in regards to this. We had our highest cash sales day in the month of July -- for the month of July in a 100-year history yesterday. So, advanced bookings are doing well and people are starting, I think, at the beginning, when people were fearful, we saw the further out bookings going away. We see those starting to return again and hopefully those trends continue." – Delta Air Lines (DAL 0.00%↑) President Glen Hauenstein

Labor markets remain stable
"Job growth continues at a healthy pace, averaging 135,000 over the last three months, in line with its 12-month average. Unemployment has been stable around its current low level of 4.2 percent." – Richmond Fed President Tom Barkin

"Here's the thing about the data on the job market. It feels to me like we get continuous months that emphasize we're pretty steady, stable, full employment kind of circumstance...what we've seen in the last year is stable, full employment, and nothing has changed with the UI claims or with the broader measures of the job market." – Chicago Fed President Austan Goolsbee

There's still a lot of uncertainty around tariffs
"The outcome of U.S. tariff developments remains uncertain. We are in regular dialogue with our brand partners, but it's too early to comment on the potential sector impact of further changes. We will provide further updates as to the potential impact on FY '26 guidance once the situation becomes clear. With that, I will now hand over to Brian for some final remarks." – Watches of Switzerland Group (WOSG) CFO Anders Romberg

The Fed is particularly uncertain
"At our last meeting, the FOMC held the federal funds rate steady. The fog is dense for us too, and there is little upside in heading too quickly in any one direction. Given the strength in today’s economy, we have time to track developments patiently and allow the visibility to improve. When it does, we are well positioned to address whatever the economy will require." – Richmond Fed President Tom Barkin

But so far tariffs haven't really impacted the economy or inflation
"Northern America is up 8.7% and this goes to show that this negative psychological effect due to the introduction of the tariffs has not had any negative consequence up to now." – Brunello Cucinelli (BC 0.00%↑) CEO Luca Lisandroni

"What we’ve seen so far is that tariff, tariffs haven’t hurt. The dog that didn’t bark was that tariffs were going to hurt the economy, were going to hurt the markets. Market had the fastest recovery ever, ever from the low in April, from a 15% decline. And we’re at new highs in the market...Thus far, we haven’t seen any inflation from tariffs. And again, I would say that tariffs are not inflationary. You could get a one-time price bump. But in terms of a generalized economic inflation, I don’t think that tariffs cause that." – U.S. Treasury Secretary Scott Bessent

"We did a lot of forward buying several months ago. And then a lot of our sellers, our third-party selling partners, forward-deployed a lot of inventory to avoid some of the issues with the uncertainty around where tariffs are going to settle. And we have so far not seen prices appreciably go up. And I think some of that may be the forward buying and deployment I mentioned, but some of it is, we have about two million sellers in our marketplace." – Amazon (AMZN 0.00%↑) CEO Andy Jassy

Markets may be getting complacent
"Unfortunately, there is complacency in the market [about tariffs] and (they are) a little desensitized...There is a lot of happy talk. One day, you may see a different reaction....I think the possibility of those higher rates are higher than anyone else thinks. If the market is pricing a 20% chance, I’m pricing in a 40% to 50% chance..I would put that as a cause for concern." – JPMorgan (JPM 0.00%↑) CEO Jamie Dimon

International