Confidence Rebounding

Activity is starting to reaccelerate and confidence is coming back up

Summary: The economy looked like it was slowing during the summer but activity is starting to reaccelerate and confidence is coming back up. Business leaders are expecting pro-growth policies from the Trump administration and are gearing up for a rebound in capital market activity. However, Jerome Powell may say "not so fast" to additional rate cuts.

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Macro

Consumers are spending more again
"The consumer was slowing down in late summer—we saw it. It was concerning me because I thought it was slowing down to the point where it may be underneath what would imply a stable 2% (plus or minus) growth economy with lower inflation. The good news is, as we came into September and October if you look at the two months together—particularly October—it looks like it's leveling out. The expectations of our consumers to spend more in the holiday season are up by 7%, which is good" - Bank of America (BAC 0.00%↑) CEO Brian Moynihan

Confidence has come back up
"I think that confidence has come up. You saw it rise when the Fed announced they were going to cut rates—even before they actually cut them—consumer confidence moved up a little" - Bank of America (BAC 0.00%↑) CEO Brian Moynihan

Consumers are in a good place
"Households remain in pretty good shape. And unemployment is extremely low. There has been some real wage gains. Inflation has largely abated. And consumer household debt levels are relatively low by historic standards" - TransUnion (TRU 0.00%↑) President, CEO & Director Christopher A. Cartwright

"If you look at consumers' liquidity position, this is retail consumer, they're indexing 120 to pre-Covid. So they have good liquidity... If you look at some of the things that's happening with their savings, they're saving 100 bps more than they were saving last year. And so that's putting the consumer in a really, really good place" - Truist Financial (TFC 0.00%↑) Senior EVP Dontá Wilson

Getting through the election is a relief
"There's some of this that I think probably you're hearing from most companies at this conference that just getting through the election regardless of the outcome is a relief to everybody. In general, though, given our exposure, anything that's going to be done to encourage manufacturing in North America here in the U.S. is going to be likely a tailwind for us" - MSC Industrial Direct (MSM 0.00%↑) President, CEO & Director Erik David Gershwind

Trump is expected to be pro-growth
"So, I view this not just from the perspective of our own operations but from a broader perspective, considering our clients around the world. I think they'd identify four key areas. The first one is the tempering of regulation. The second would be taxes. The third would be tariffs. And the final one would be tightening immigration. As we look across the board, I would frame this within the context of a largely pro-growth agenda" - Citigroup (C 0.00%↑) CEO Jane Fraser

"I don't think it changes the trajectory, but it's certainly positive. The Republican focus is likely on less regulation, keeping taxes low, hopefully getting inflation under control, where there's still some work to be done there. I think it's good for business, and that's good for Equifax. There'll obviously be a likely regime change at the CFPB... likely a bit different tone perhaps than it has been the last 4 years with Director Chopra. So we think that's a positive for us also" - Equifax (EFX 0.00%↑) CEO Mark Begor

"I think when you look at the possible changes in economic policy under the Republicans, I think we're expecting a lighter touch regulatory environment, perhaps some reengineering or repeal of different regulations. I think the hope is that growth will accelerate" - TransUnion (TRU 0.00%↑) President, CEO & Director Christopher A. Cartwright

But his actual policies are TBD
"I think that's all a big TBD. I mean, understand there's what is said on the campaign trail and what is actually attempted once you have office and then what can actually be affected given the branches of government and the like. And I think we're just going to have to see how these net out, right?" - TransUnion (TRU 0.00%↑) President, CEO & Director Christopher A. Cartwright

The Fed is not in a hurry to lower rates
"The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully. Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve" - Fed Chair Jerome Powell. 

Inflation is not there yet
"On the inflation data, we do see inflation continuing on the bumpy path I mentioned. Today's reading showed a slightly more upward bump than we had expected, but I would say the broader trend, if you look back over the last 18 months, is still intact... Inflation is running much closer to our 2 percent longer-run goal, but it is not there yet" - Fed Chair Jerome Powell. 

People are tired of high rates
"I'm a little bit greedy after a couple of years of difficult economic conditions. And so I'd love to see interest rates as low as they can go. The Fed's cut rates by 3/4 of a point, but that hasn't really translated into a lower 10-year treasury rate, which underpins the mortgage market, which is the most sensitive of the markets that we compete in" - TransUnion (TRU 0.00%↑) President, CEO & Director Christopher A. Cartwright

International