Finance & Economy

Leadership

Decoding the Investment Landscape with Kate Moore

June 5, 2024

Decoding the Investment Landscape with Kate Moore

Kate Moore

Managing Director and Head of Thematic Strategy at BlackRock

Kate Moore shared her thoughts about AI, the economy, and how BlackRock stays ahead of the tech curve.

Decoding the investment landscape with Kate Moore

Kate Moore, Managing Director and Head of Thematic Strategy at BlackRock and fan-favorite recurring guest on the Walker Webcast, recently discussed with me the current economic landscape, artificial intelligence, and how BlackRock is staying ahead of the technology curve.

Are the worst of corporate earnings behind us?

Corporate earnings have made a strong recovery. While many thought that corporate earnings would continue to lag for several years, Kate was one of the few to accurately believe that this would be strictly a 2023 issue. She drew this conclusion because she was seeing quite a bit of optimism coming from CEOs and CFOs, not just in terms of their own business, but in terms of the broader economy throughout Q2 and Q3 of last year. Although there are certainly some sectors that aren’t performing the best, she continues to see this optimism throughout the majority of businesses today, which leads her to believe that much of the worst is behind us for now.

The state of consumer health

Interest rates affect consumers very little daily, given the gift of a 30-year fixed-rate mortgage. This has enabled the average consumer to do quite well even though rising interest rates have put pressure on the real estate market and the broader business landscape.  However, inflation has wreaked havoc on consumers—specifically, lower-income consumers.  While upper- and middle-income consumers remain relatively unphased by the lasting effects of the recent spike in inflation, lower-income consumers continue to feel the effects and have begun to trade down, purchasing generic brands rather than name brands, as well as going out to eat less frequently.

Will the Fed raise or cut rates?

There are a couple of different camps regarding rate cuts; one believes that Fed cuts are right around the corner, and the other believes that we will see higher rates for longer. Kate believes that we will see one or two rate cuts before the end of the year, as inflation seems to have been beaten down into a range slightly above the Fed’s target rate.

However, she pointed out that it’s important to remember that there are a couple of different things that decreasing interest rates won’t affect. The first is insurance - many have seen their premiums rise drastically (or insurers stop insuring them altogether) over the past few months. This has become a real problem. Additionally, food prices aren’t affected much by interest rates.  When you couple these two things together, we could see interest rates decrease drastically without relieving the low-end consumer.

Want more?

To see our list of upcoming guests, be sure to subscribe to the Walker Webcast.  Also, mark your calendar to tune in on June 19th for my quarterly conversation with Dr. Peter Linneman, the best hour in CRE.

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