One of the big talking points for markets is the collapse in US consumer sentiment, driven by a steep and prolonged increase in inflationary pressures. Oreana Financial Services’ Isaac Poole says such a deterioration has usually occurred before a slowdown in consumer spending, pointing to a growing risk of economic slowdown next year. However, we’re not dealing with normal times: household balance sheets have strengthened noticeably thanks to soaring asset valuations and increased household savings. Isaac also discusses the political ramifications from persistently strong inflation, along with the risk that Jerome Powell may be replaced as Federal Reserve chair to appease mounting community frustration. Despite the uncertainty, Isaac still thinks equities are the place to be, suggesting there’s still upside for earnings thanks to the continued reopening of the economy. (Source: Ausbiz)
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