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As we get closer to December, we’re optimistic on consumer spending: Strategist

Jimmy Lee, The Wealth Consulting Group CEO joins the Yahoo Finance Live panel with the latest market action.

Video transcript

ZACK GUZMAN: And for more on where we're at, as we approach the end of the year, I want to bring on Jimmy Lee, the Wealth Consulting Group CEO joins us now. And Jimmy, good to be chatting with you again today. And when we look at earnings so far, what we got last week from the big banks delivering a lot of optimism, the Q4-- or Q3, rather, the results there are going to look pretty strong. Talk to me about what you're seeing in terms of the market reaction to some of those reports and what you're expecting this week.

JIMMY LEE: Good morning or afternoon, wherever you're at. But I think that investors are looking at last week's reports from the big financials as a really positive sign for quarter 3. And what we could expect maybe from some other sectors, we saw a positive report also on the retail sales number. And my opinion is that I think the consumer is going to end up being stronger than what a lot of people think coming into December and holiday spending.

Of course, a lot of that depends on the supply shortages that-- I don't know-- we're going to be discussing a bit later on in the show. And hopefully, as the supply constraints are being resolved, you know, there'll be enough goods out there for people to spend money on. So I think we can have a really good positive Q3. And I think, again, as Congress gets together and can pass some more stimulus, it's very tough to fight against low interest rates. And I think equity prices continue to go higher. And maybe we see new highs before year end.

AKIKO FUJITA: Jimmy, let's talk about some of the sectors you're bullish on right now. You've got energy listed as one. And I imagine that's partly on the expectation of oil pushing even higher. We've talked enough about the energy crunch that we're seeing right now. What's the base case you're operating under when you're talking about some of these investments in terms of where oil's likely to go?

JIMMY LEE: Yeah, we like energy still. We don't think it's too late for that. We also like financials and industrials. I think that we've seen this playbook before. So we had a slowdown in the economy with the certain states and certain parts of the world shutting down due to the rise in COVID cases. And as that gets resolved again, I think we see this playbook that we saw in 2020 play out again and in the first quarter of this year. So I think the cyclical sectors that benefit from the economy being open go up again another leg.

And so, I think that those sectors will end up doing very well, going into the next three to six months, assuming that the COVID situation, once again, calms down and we get more business going on in parts of the world that are still shut down. And so, I think that's a good thing. And again, energy will lead the way.

Hopefully, as we're talking about inflation and trying to make sure that the Fed doesn't have to raise rates too quickly, because I know investors will not like that, hopefully, that so the supply situation gets worked out. But I still see, again, like I said earlier, we're still in a bull market, I believe, in equities. And I would be more cautious as a bond investor. We've got the 10-year now above 1.6% and I think going actually even higher.

ZACK GUZMAN: Yeah, I guess, Jimmy, just to wrap up here, I mean, when we talk about the health of the consumer, you're talking about maybe some of those supply issues. But also on the price front, you know, as we see prices continue to rise on a lot of staples out there, not just energy, but also food costs as well, I mean, what you think the overall state of the consumer is still with some of those question marks you talked about here as we wrap up in year end.

JIMMY LEE: It's a little touchy. But I think the labor market is very strong. I mean, just some anecdotal evidence, we're hiring at our firm. And it's, you know, we're paying more. And I think the candidates are coming from, in some positions, from the unemployed part of the sector, but also from other parts that are employed and wanting to earn more and have more opportunities.

So I think the labor market's strong. I think that the consumer pocketbook is going to be strong as well. And it'll just depend on the confidence that we have going into next year, how much consumers will spend. And I think that we're going to see some optimism as we get closer to December.

ZACK GUZMAN: Well, at least, our viewers know that the Wealth Consulting Group is hiring here. Jimmy Lee, the CEO there, appreciate it. And keep us posted on what happens there. We always love the labor updates here from guests. We don't get them too often, but appreciate you coming on here to chat with us today.