Luxury consumer can not continue to bail out the overall economy, says BCA's Doug Peta
December 17, 2025 • 5m 26s
Brien Sullivan (Reporter)
00:00.150
meantime
it
was
yet
another
day
where
the
AI
narrative
had
the
market
swinging
back
and
forth
so
as
we
head
into
twenty
twenty
six
how
should
investors
distinguish
what's
a
move
LED
purely
by
an
AI
headline
and
what's
a
real
concern
for
the
market
joining
us
now
are
doug
peta
he
Brien Sullivan (Reporter)
00:14.350
is
chief
US
investment
strategist
at
BCA
research
and
matt
stuckey
chief
portfolio
manager
at
northwestern
mutual
wealth
management
guys
welcome
let's
see
matt
how
should
investors
treat
this
AI
turbulence
in
a
market
that
still
richly
valued
on
the
expectation
that
the
AI
Brien Sullivan (Reporter)
00:34.990
economy
will
actually
materialize
i'm
thinking
about
some
mature
investors
who
are
less
diversified
than
usual
historically
leaning
into
stocks
and
perhaps
growth
Matt Stucky (Chief portfolio manager)
00:46.780
look
i
mean
i
think
the
recommendation
from
from
our
firm
is
the
same
regardless
of
whether
or
not
you
know
this
continues
on
in
twenty
twenty
six
and
twenty
twenty
seven
in
terms
of
the
ongoing
investment
into
AI
it's
that
don't
put
all
your
eggs
into
one
basket
i
think
Matt Stucky (Chief portfolio manager)
00:58.940
diversification
we
think
is
is
the
best
recipe
for
uncertainty
for
the
ongoing
build
out
of
AI
and
it's
it's
starting
to
spill
over
into
other
areas
and
other
sectors
of
size
just
technology
just
look
at
kind
of
what
chapter
robinson
was
discussing
with
their
investors
in
the
Matt Stucky (Chief portfolio manager)
01:13.380
most
recent
earnings
call
just
the
productivity
unlock
that
this
technology
is
is
disseminated
across
the
economy
we
think
is
a
powerful
factor
that
probably
is
a
little
bit
underappreciated
in
other
sectors
other
asset
classes
besides
just
us
large
cap
technology
however
there
Matt Stucky (Chief portfolio manager)
01:28.070
are
you
know
additional
reasons
to
to
be
optimistic
for
kind
of
what
AI
looks
like
next
year
scaling
laws
from
gemini
three
as
well
as
chatgpt
five
point
two
continue
to
be
intact
which
provides
the
incentive
for
hyperscalers
to
continue
to
invest
and
you
just
saw
with
the
the
Matt Stucky (Chief portfolio manager)
01:43.240
the
earnings
announcements
from
micron
that's
that's
having
a
benefit
to
their
business
i
mean
gross
margins
that
are
twelve
and
a
half
points
above
expectations
for
the
second
quarter
we
think
is
is
just
a
remarkable
feat
and
you
know
that
puts
you
know
a
a
run
rate
earnings
in
Matt Stucky (Chief portfolio manager)
01:56.950
the
picture
of
thirty
dollars
plus
and
so
it's
it's
it's
interesting
to
see
just
this
continuing
to
play
out
but
diversification
again
is
is
your
best
friend
in
these
environments
Brien Sullivan (Reporter)
02:05.190
doug
backing
up
and
looking
at
the
overall
economy
what's
the
role
of
the
consumer
especially
the
working
class
consumer
we
talk
about
the
K
shape
of
this
thing
can
the
the
three
consumer
continue
to
bail
out
the
rest
of
us
in
Doug Peta (Chief US Investment Strategist)
02:22.500
my
view
the
luxury
consumer
cannot
continue
to
bail
out
the
entire
economy
in
our
view
and
you
mentioned
the
K
shaped
economy
in
our
view
the
lower
leg
of
the
K
when
it
comes
to
the
bifurcation
among
consumers
is
more
important
than
the
upper
leg
of
the
K
we
always
have
the
rich
Doug Peta (Chief US Investment Strategist)
02:43.950
daddy
warbucks
according
to
a
little
orphan
annie
cartoons
did
quite
well
during
the
depression
and
i
imagine
his
fellow
club
members
did
as
well
but
we
still
have
the
depression
it
is
the
lower
leg
of
the
K
that
is
the
marginal
consumer
if
you
break
the
american
households
into
Doug Peta (Chief US Investment Strategist)
03:04.670
their
five
income
quintiles
in
our
view
what
matters
the
most
is
those
middle
three
quintiles
and
they
are
increasingly
struggling
so
what
i
think
in
in
terms
of
the
K
is
that
the
ranks
of
the
lower
leg
of
the
K
are
growing
with
each
month
that
we
have
soft
payroll
status
soft
Doug Peta (Chief US Investment Strategist)
03:26.710
job
creation
and
therefore
that
lower
leg
is
getting
more
and
more
important
and
i
do
not
believe
that
the
upper
leg
of
the
K
can
carry
the
banner
for
the
overall
economy
so
in
? (Reporter)
03:36.630
light
of
that
doug
are
you
concerned
that
the
labor
market
could
tip
the
economy
into
contraction
i
mean
we
heard
from
fed
governor
chris
waller
earlier
today
on
CNBC
he
was
dovish
he
tends
to
be
dovish
perhaps
more
dovish
than
expected
today
but
he
again
talked
about
his
? (Reporter)
03:51.990
concern
about
the
softening
of
the
labor
market
and
the
fact
that
he
has
that
case
or
is
making
the
case
that
we
should
continue
to
see
steady
cuts
back
down
to
a
neutral
rate
that's
lower
than
where
it
is
now
Autoscroll