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As we come to the end of November, we
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are seeing questions about the state of
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the economy. But we're also seeing some
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earnings beating estimates with
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companies even pushing higher their
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fullear fiscal forecasts. We're seeing
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President Trump continuing to try and
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develop relations with China's President
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Xi. Plus, we have, of course, as always,
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questions about the path of rate cuts.
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Joining us to talk about all of it, pres
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professor Jeremy Seagull, professor
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emeritus of finance here at the Wharton
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School and also senior economist at
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Wisdomree. Hi Jeremy, great to chat
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again.
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>> Good to talk to you, Don.
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>> Let's start with the Fed and fiscal
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policy. Where do you think we kind of
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stand right now? Obviously, there's
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still talk about the impact of
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inflation, how much ever there is out
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there, uh, and a lot of discussion about
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what we may or may not see in the
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December FOMC meeting.
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>> Yeah. And this is likely to be uh the
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liveest me liveiest meeting uh that I
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can remember because if you want to know
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the truth I don't it's it's not decided.
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It usually is kind of decided by now but
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because we haven't been getting data and
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by the way we're getting as we speak
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we're just getting a slew of catchup
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data and we will be getting more
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catch-up data uh into the future. Um but
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they don't tell uh they told us that the
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employment report uh for the month of no
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uh November will not be ready by the
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time of the December 10th meeting which
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is a key report. So we have to rely on
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jobless claims and indirect reports. So
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there's so much uncertainty. Uh I think
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there's a big split right now and um um
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uh it you know it could be decided by
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the data that comes out in the next two
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weeks uh to push it uh one way or the
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other. Right now jobless claims are
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still it's it's a it's a the situation
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of no hire no fire. um uh jobless claims
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at 220 is right in that sweet spot, but
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continuing jobless claims, which means
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that, you know, people that have to keep
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on applying because they can't find a
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job is at a uh you know, a four-year
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high uh post pandemic high keeps on
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climbing up. So, you know, if you don't
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have a job now, it's hard to find one,
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but firms are not at this point uh
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getting rid of a lot of uh of uh of uh
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people saying that the the uh the
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outlook is is is dire. So you mentioned
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about uh the data that we are getting
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that is coming in the September data
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obviously more delayed than what we are
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normally used to but how much value does
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that data still have when you think
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about that December Fed meeting I mean
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it's obviously you're talking about
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probably what a six week gap in terms of
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truly understanding is there still some
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value or really not
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>> well you know I September data is an
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important even October I mean I data I
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I've been saying that uh if we're going
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to see a slowdown
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um if if tariff increases and you know
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we all know that that uh you know Trump
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is trying to walk a number of these back
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but if the tariff increases uh uh
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increases in place are going to have an
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effect. It's going to start now as
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holiday shopping ramps up. Um so uh you
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know really the data is is going to be
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some of it's an anecdotal how how well
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is Good Friday going to be. I think it's
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been watered down because you know
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everyone starting Good Friday earlier
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the day that used to be so uh
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concentrated now may not be. Uh we're
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going to hear anecdotal evidence. How
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are people reacting to the increases in
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the stores? We're going to get credit
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card data, department some department
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store data. uh re retail sales we will
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not get uh you know until after the
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meeting. So it's going to rely on uh on
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that and u uh I think that if if if
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there's reports of weakness, they're not
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seeing the buying that they expect, um I
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think we're going to have a 25 basis
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point cut. However, if those anecdotal
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or or credit card reports or weekly uh
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uh department sales reports hold up, I
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think there is a good case for a hold
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and with a willingness to go in the
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January meeting.
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>> What what's interesting for me and I've
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been following a lot of these earnings
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reports the last few weeks and I'll just
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use one for example as we're taping
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this. Dick Sporting Goods obviously a
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big presence in the United States. Not
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only did they have some promise for the
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quarter they just completed, but they
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upped their fiscal year forecast. And
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they're not the only one. So, there is
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some optimism, I think, out there that
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the that even the doom and gloom that's
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been kind of talked about like a slowing
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in the holiday shopping period, a lot of
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these retailers still feel like it's
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going to be a good quarter.
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>> Yeah. And and and that's true. I mean,
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everyone talks about the record beats
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that we had or nearrecord beats. You
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have to remember that everyone was so
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pessimistic. I mean, actually, Goldman
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Sachs came into the third quarter
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thinking, you know, I mean, you know,
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after the tariffs that it might be a 1
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and a.5% GDP, they're up to almost 4% uh
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GDP now. Uh, as well as Atlantic Fed was
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slightly over 4% for that third quarter.
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But third quarter is done. As I've
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always said, if we're going to have an
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effect of tariffs, we'll see it mostly
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in the fourth quarter. That's why those
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that are forecasting good are are you
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know that's very very very very
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encouraging. Uh but a lot of these beats
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were because going into the third
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quarter looking from the you know the
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second quarter looked so bad that uh it
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was a it was basically a low bar. That
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being said, you know, AI, you know,
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we're get that this is quite interesting
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what's going on. uh as you know as we're
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talking Google's threat to Nvidia uh
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you know Alphabet's new um uh AI program
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Gemini 3 uh you know taking leaps and
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bounds over uh you know uh the uh open
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AI chat gpt
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wow I mean that competition there is is
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is this is heating and this is going to
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be really important because we all know
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AI has been the major thing driving this
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market.
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>> So this is this is as we speak
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tremendously in flux and I think will be
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really quite maybe uh uh the topic of
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what really drives the market uh in in
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uh in this fourth quarter. Let me finish
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up by getting your thoughts. And
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obviously we see a lot of headlines of
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President Trump talking with President
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Xi about the importance of having a
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decent relationship, the US having a
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decent relationship with China as a
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trade partner, how important and how
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valuable that can be.
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>> Well, it's very important. I mean, I
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think he recognized it earlier
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and that's why we've already had a
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meeting with Shei that was was good.
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There may be another meeting. Uh there's
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no question
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that Trump has been sensitized to the
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inflationary consequences of his tariffs
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and with the polls not looking very
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favorable towards his economic program
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and uh affordability
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uh uh uh you know topic uh which is on
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everyone's lips right now. uh he is uh
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he is obviously wants to make sure that
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uh we we don't have any further tariff
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induced uh increases in in in prices. I
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mean I I definitely see a reversal there
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and um you know that's clearly favorable
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to the market. Uh I don't you know no
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more threats. I'm not saying there won't
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be any because there'll be political
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issues that might come up and he might
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threaten with terrorists. But
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nonetheless, there's there's a walk back
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here that actually started, I would say,
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last month with the meeting with with
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Chief
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>> Jeremy. Always great to talk with you
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and get your insight. We will catch up
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again next month. Thanks again.
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>> Thank you very much. Happy Thanksgiving.
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>> You too as well. Jeremy Seagull,
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professor ofmeritus and finance here at
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the Wharton School and senior economist
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at Wisdom Tree.
