Animal Spirits

There is a collective sigh of relief on tax policy

Summary: Confidence in the economy is rising and consumer spending remains strong. Animal spirits appear to be awakening.

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Macro

The economy is resilient
"But if we look at the economy overall, it continues to be pretty resilient. I'm not telling you anything you don't know when we talk about the fact that inflation continues to appear to move in the right direction towards policy target. Obviously, preceding the interest rate cuts, there was a little bit of softness let's say, or a little bit of increase in unemployment that led to the beginning of the cutting cycle. That has firmed a little. I think the risks are a bit more in balance." — JPMorgan Chase (JPM 0.00%↑) CEO of Consumer & Community Banking Marianne Lake

Consumer spending has held up
"...the U.S. is -- has been particularly strong and resilient, and you look at both the consumer and the corporate balance sheets remain quite strong...On the consumer side, I look at, again, I think the consumer has been -- has held up pretty nicely. When I look at the holiday spend in our cards portfolio, on the branded card side between Thanksgiving and Cyber Monday, spend was up in the mid-single digits year-over-year." — Citigroup (C 0.00%↑) CFO Mark A.L. Mason

"...the word I would use is stable and that's not a word that I used a year ago....We see stability with consumers, although their credit balances on their credit cards and personal loans are up versus a couple of years ago. Job market is generally strong and there is more confidence and more stability." — Intuit (INTU 0.00%↑) CEO Sasan Goodarzi

"I'd say that the demand environment is kind of stable. It's -- and it continues to be...we are seeing no sign of degrading or improvement." — UiPath (PATH 0.00%↑) Co-Founder, CEO, & Chairman of the Board Daniel Solomon Dines

"...in the last several years, in general, businesses have been cautious to lean in...but we believe the next several years will be better than the last several years in terms of just confidence in consumer business." — Intuit (INTU 0.00%↑) CEO Sasan Goodarzi

"...the consumer remains incredibly resilient, quite frankly, probably more so than I would have predicted heading into the year...overall spending levels, I think we've been very pleased with what we've seen in Q4 thus far." — Global Payments (GPN 0.00%↑) SVP & CFO Cameron M. Bready

Savings are stable
"If you look at the Consumer and starting with balances, so cash balances or cash buffers. Those have largely normalized now across income segments. And so, I think it's fair to say that the excess liquidity that people have been enjoying over the last several years is gone, but the cash buffers have stabilized. So, they're not deteriorating. It doesn't feel people are over-borrowing or continuing to spend down. That said, spend trends are stable too...I would say year over year, it feels the spend is solid to a little firmer than it was last year." — JPMorgan Chase (JPM 0.00%↑) CEO of Consumer & Community Banking Marianne Lake

There's plenty of money in the economy
"In aggregate, the U.S. consumer remains very resilient...there's plenty of money in the economy that's driving the more premium segments." — Coca-Cola (KO 0.00%↑) CEO & Director James Robert B. Quincey

Strong labor markets = strong consumer
"So, with the consumer, as long as there's not a shock to labor markets or an asset price correction that's material, it feels the consumer is on reasonably solid footing for now. Small business is in a similar place." — JPMorgan Chase (JPM 0.00%↑) CEO of Consumer & Community Banking Marianne Lake

People are expecting lower rates
"And I think there's reasons for optimism. The expectation is that interest rates will continue to come down. I don't know how quickly and what -- ultimately how that plays out with the consumer. But I think it's much more likely we see lower rates than higher as we go into next year." — CSX (CSX 0.00%↑) CFO Sean Pelkey

Inflation is flat at Costco
"Inflation was once again essentially flat in the quarter across all core merchandise." — Costco Wholesale (COST 0.00%↑) SVP & CFO Gary Millerchip

Uncertainty has been removed
"...a lot of uncertainty was removed. Just the fact that we had an election, we had an outcome. And it has been interesting because I have been out a lot postelection, and actually even preelection, and that conversation, those dialogues are really happening. I mean clients are interested. They're bringing things sort of back off the shelf, putting them on the front of the desk in terms of things that they're contemplating going forward." — Truist Financial (TFC 0.00%↑) Chairman & CEO William Henry Rogers

Confidence is moving higher
"...the most recent sort of sentiment from our corporate clients is perhaps unsurprisingly that confidence is moving higher and sort of somewhat notably over the last couple of months. Recessionary fears are fading, are faded a lot. Inflationary concerns are present, but not really sort of dampening what I would characterize as a sort of broadly cautiously optimistic tone coming into 2025." — JPMorgan Chase (JPM 0.00%↑) CEO of Consumer & Community Banking Marianne Lake

“I think where we sit today heading into 25 is we have a consumer that I believe is even more confident than they were 60 days ago because they do know the answer as to who the election is that uncertainty is gone. And then when you look at what's happened, the reaction to the stock market, I think people are feeling pretty good as it relates to the market. So I think we're heading into 2025 with the consumer in a good spot.” — Travel + Leisure (TNL 0.00%↑) CFO Michael Hug

“I would say right now, it feels like the economy and markets are in a bit of a sweet spot...When we survey our CEOs, 15% CEO recession in the next 12 months. So a very low percentage. And so on the ground it generally feels good.” — Blackstone (BX 0.00%↑) President and COO Jon Gray

“...the sentiment amongst corporations is really positive. The talk of M&A coming back, the talk of investments, some degree of certainty based on what you're going to face and regulation is causing a little bit of amped up energy.“ — PNC Financial Services Group (PNC 0.00%↑) Chairman, President & CEO William S. Demchak

“...consumer sentiment rose in November to its highest level since April and the stock market continues near all-time highs.” — Hooker Furnishings (HOFT 0.00%↑) CEO Jeremy Hoff

“The mainstream customers certainly performed are connected with us better in the third quarter than the second quarter...They're telling us they feel better.” — Kroger (KR 0.00%↑) Chairman & CEO William Rodney McMullen

Animal spirits have awakened
"I think our clients are feeling optimistic, like you can tell that the animal spirits have returned a little bit here, like I think an element which is a collective sigh of relief on tax policy...there's a lot of excitement about the opportunities that could open up. But that sentiment needs to then translate into actual sort of constructive activity." — Fifth Third Bancorp (FITB 0.00%↑) President Timothy N. Spence

"It's definitely awakened the animal spirits, I think it's fair to say...the level of discussion and the level of pipeline building has clearly increased. So, the expectation is that there will be less regulation, it will be easier to get deals done, and hopefully, financing remains relatively cheap compared to the past couple of years. So, I think people are looking forward to a very active year next year." — Deutsche Bank (DB 0.00%↑) Head of M&A Alison Harding-Jones

International