May 15, 2026 Fed Chair Appointment Could Spur Consumer Rebound
""And that date, everybody is May 15th, 2026. And in case you haven't been paying attention on what's going on in Washington, that is when the new Fed chair will be appointed by President Trump. If he gets his way, with interest rates targeted at 1 to 2%, this could provide a safety valve for the battered consumer segment. With consumers currently representing just 15% of the S&P 500—the lowest ever—we could see an aggressive bounce in consumer stocks as lower rates ease mortgage burdens and improve affordability.""
Rob Spivey outlines a significant macro catalyst centered on the appointment of a new Fed chair on May 15, 2026, as driven by President Trump's agenda. He explains that with potential interest rate cuts to 1-2%, consumer stocks, currently undervalued in the S&P 500, may experience a strong rebound. The commentary emphasizes the impact of easing credit conditions on consumer affordability and market dynamics.
Fed's Rate Cuts Could Fuel Inflation Risks in 2026
"And the mistake is the Fed is cutting rates. They've cut 75 basis points in 2025 to add in to the 100 basis points that they cut in 2024. And they keep citing the labor market. Are they completely misreading this? And yes, the labor market's weak, but the other half labor supply. We don't need that many jobs and we're doing fine. And that will dictate all of 26. If we've overdone it, we risk too much inflation."
Jim Bianco argues that the Fed's aggressive rate cuts, despite a labor market that doesn't require massive job growth, could backfire by fueling sustained inflation. He warns that the easing policy, combined with shifting demographic pressures, may lead to overheated pricing in 2026.
Bullish Macro Forecast for 2026
"So reasons to be bullish for 2026. I think there are six main reasons to be really really bullish. Number one is the US economy remains very strong. A lot of economists they said that we're going to go into recession this year, but the recent GDP quarter 3 data showed that the US economy grew the fastest in the last two to three years. The Fed is in a rate cut cycle and has ended quantitative tightening, which boosts the money supply. S&P 500 companies are expected to grow earnings by 15% next year, driven by productivity from AI adoption, and the yield curve is in a sweet spot. Plus, we're entering the fourth year of a bull market where historically gains are even stronger."
The speaker outlines six bullish factors for the market in 2026, citing strong GDP growth, favorable Fed policy and quantitative easing conclusions, robust earnings expectations driven by AI productivity, a well-positioned yield curve, and a sustained uptrend entering the fourth year of the bull market.
FedEx Faces Turnaround Challenge Amid Mixed Earnings
"Speaking of comeback stories, you're tracking another one that is waiting for a turnaround to take hold. We're looking at shares of FedEx. This is ticker FDX. Shares are down more than 1% right now. It did raise the low end of its profit outlook for this year and it reported earnings that topped expectations. Uh this of course was really helped by volume and pricing gains in the US. But, you know, we are seeing some weakness, especially as investors are trying to see whether or not the CEO's plan will really map out. They're seeing a string of cost headwinds, including the grounding of its MD11 plane. So, that's really weighing on sentiment today in the trade."
The FedEx commentary balances a positive earnings beat and improved profit outlook with significant operational headwinds, including cost pressures and uncertainty over the CEO's turnaround plan.
FedEx Faces Cost Headwinds Despite Raised Profit Outlook
"FedEx. Uh, it seemed like good news right from the start. Um FDX is ticker raised the low end of its profit outlook for the year, reported earnings topped Wall Street estimates but it just wasn't enough. Investors had these high expectations. It's been suffering from a lot of cost headwinds. You had the grounding of the MD11 planes and they said they expect a $600 million hit to adjusted earnings in the second half because of that but also because of weakness in the less than truckload freight market. They've been also affected by the trade tariff policies and more competition, with Amazon now handling much of the delivery logistics."
FedEx's update shows mixed signals. While the company raised the low end of its profit outlook and beat earnings estimates, significant cost headwinds such as the MD11 grounding and market weaknesses, compounded by rising competition from Amazon, continue to pose challenges going into the second half of the year.
FedEx Turnaround Faces Mixed Earnings
"This is another turnaround story FedEx because their CEO is looking to turn around the business here and push FedEx ground and air freight networks together and slash costs. The latest earnings giving us maybe a mixed picture on how well that's going at least in the near-term. The stock is down about 2% right now, and it was down as much as 5.6% - the biggest intraday drop since June. They did upgrade their fuel targets but to a lower magnitude than the second quarter earnings beat, and then they raised the low end of the profit outlook. But the company also said they expect a $600 million hit to adjusted earnings due to higher costs from the grounding of some of their MD11s."
FedEx is undergoing a turnaround effort with initiatives to integrate its freight networks and slash costs, yet mixed earnings and a significant $600 million earnings hit from grounded MD11s suggest near-term caution.
FedEx Shows Resilience with Improved Profit Guidance and Cost Reductions
"FedEx opposite story. FedEx uh shares last I checked were up 2 and a.5% about in the post market and FedEx narrowed its fullear EPS guidance to the upside and also posted a quarterly beat on profit and that really comes from the fact that demand is improving."
The commentary highlights that FedEx is benefiting from improved demand, better EPS guidance, and effective cost-cutting measures, contributing to its post-market gain. It underscores the company's ability to navigate headwinds and suggests a positive near-term outlook.
Macro Outlook: Fed Easing Could Propel S&P 500 Past 8,000
"If the Fed eases further on the back of improving inflation dynamics, the S&P could go past 8,000 next year. We're thinking of that more as an upside scenario, contingent upon the Fed easing more than just one more time before then going into a prolonged pause. This base case scenario, with a 7500 level in mind, suggests there's room for a short-term tactical lift across risky assets if inflation comes in better than expected."
The macro commentary centers on the potential for further Fed easing to boost the S&P 500 beyond 8,000 next year. The speaker outlines a scenario where improved inflation dynamics lead to a strategic pause in rate hikes, benefiting risky assets through a tactical, short-term uplift.
Fed Policy Uncertainty Creates Arbitrage Opportunity
"Okay, let's talk about the Fed. So, one of the biggest things that shocks new investors in the market is the sheer amount of power that the Federal Reserve has over stock market valuations and overall trading. But bigger picture, this is an arbitrage opportunity. Why? Well, because the short-term Fed goal right now is probably that we're not going to get a December cut. So, sure, markets go down, but the medium-term Fed goal, and almost all of the Fed chair folks are in agreement, is that over the next 6 to 18 months, they're going to cut rates. And just because they skipped one meeting doesn't mean that we're going to continue to see rate cuts paused. Considering that we're in a midterm election year and Trump's going to choose a new Fed chairperson in May, it's hard to imagine that we won't end at much lower rates by the end of next year."
The speaker emphasizes the power of the Federal Reserve and highlights an arbitrage opportunity arising from the current short-term policy stance. While a December rate cut appears unlikely, medium-term expectations of rate cuts over the next 6 to 18 months suggest that market valuations may adjust, creating potential investment opportunities.
Midcycle Optimism Driven by Fed Liquidity and Foreign Investment
"I am broadly optimistic about the economy. I think we're in midcycle. I do not think we're in late cycle. The liquidity indicators – the M2, GDP ratio – are on fire. When you look at the macro, it's popular for a lot of commentators to say that the sky is always falling, but if you look at the big numbers, right now we're actually in a pretty good spot near-term. One of the biggest stories is that the Fed is no longer afraid of inflation; they've just ended QT, which means a burst of relative liquidity coming into the market. Add to that massive foreign investment and explosive growth in AI capabilities, and you have a recipe for near-term growth despite long-term fiscal concerns."
Peter expresses a broadly optimistic view of the near-term economy despite acknowledging long-term fiscal challenges. He emphasizes that liquidity is booming as QT ends and major foreign investments are on the horizon, alongside rapid advances in AI, positioning the economy favorably in the midcycle phase.