Economic data will be behind next market catalyst, says Piper Sandler's Craig Johnson

But what are the next catalysts for this market? Let’s talk about it with our lead off market panel. With us tonight is Piper Sandler, Chief Market Technician, Craig Johnson and soulless alternative Asset Management Chief Strategist, Dan Greenhouse. Guys, thank you both for being here. Craig, let me start with you. We’re talking about catalysts for this market. We’re sort of past the bulk of earnings season now and we’re going into the summer months. What’s out there at this point that could take this market higher? Well Amon, it’s going to have to be on the economic front. It’s going to have to be something along the lines of inflation, perhaps an indication that the CPI when it comes out in about two weeks that that’s going to be a little bit softer in here, perhaps 10 year bond yields further coming down given the inverted correlation between the S&P 500 and interest rates right now. It’s going to have to perhaps also be on the job front. It’s going to have to be one of these things, Amon, because you’re right, we’re through earnings and we’re through the Fed meeting and the next catalyst is has got to be something related with the with the Fed and perhaps a lowering of Fed expectations. So Dan, what do you see? Craig says it’s got to be economic data. What do you see around the corner? Yeah, I think I think Craig’s probably right. We’re we’re coming towards the end of of the bulk of earnings season here. There’s some companies that’ll, that’ll come in the next week or two of importance, Walmart, Disney, Raw Stores, a couple of retailers that you’ll want to listen to for some indication that maybe something’s going on with the consumer, although I don’t see that as of yet. So I think again, Craig’s right, that something on the inflation front playing into the idea that bought the move higher in bond yields has probably run its course. Dan, you mentioned the consumer. I want to get to that question because as you look at the Magnificent 7 earnings scorecard here, you know we talked about wages all day on CNBC today. Goldman Sachs is Jan Hatsius was on earlier today and he said you know his sense is wage growth is coming down and he says that’s encouraging, that’s encouraging If you’re Goldman Sachs, maybe if you’re on Wall Street, not so encouraging if you’re a wage earner and if you’re a low end retail consumer. And we saw some question earlier in the week about some of the retail consumers and whether or not they’re starting to crack against all these prices. Starbucks may have been the big bellwether for that. So Craig, as you look at the consumer and wages, does that start to give you some pause that maybe we’re out a little bit over our skis, You know, absolutely. And our Chief Global Economist, Nancy Lazar put out a great report this week talking about, you know, the bifurcated economy and talking about the consumer and talking about some of these these pieces you’re mentioning here, Eamon. And I agree, you know the weakness in McDonald’s, the weakness in Starbucks, these are all concerns that are still out there. The lower end consumer is still getting squeezed and inflation is still sticky as Nancy talks about here on our team. And we continue to think that this is an economy that’s going to have some challenges going forward. I mean, yeah, go ahead, Greg, finish your thought. I was just going to say you’re watching growth slowing, it’s sticky inflation and you’re seeing now a little bit of an A pickup in the unemployment rate. That’s kind of an interesting combination that ultimately see the markets move higher in here. It certainly was a lot of question with the clients that we’re having conversations with today. Yeah, Dan, I mean, that’s the question for you, right? I mean, it’s this moment where economists say, you know, this is a pretty good dynamic. You got inflation is going to come down and wages sort of moderate a little bit, that’s good. But if you’re the consumer, you’re caught between that wage number and that inflation number. And while you’re waiting for inflation to come down, you’re getting lower wages and so you’re stuck. And so of course, you’re going to see that play out in McDonald’s, right? You listen, it’s a difficult conversation to have why lower wages is a good thing. I’ll put good in quotes, but we’ll leave that for another day. The one point I do want to make right now and listen, Craig is great, Nancy’s great. I’ve had a problem with this weakening consumer argument for let’s call it a year. Now it’s not that they don’t buy it because there is certainly some weakness in the lower income consumer. I think as Craig mentioned a couple of companies that’s borne out, but I always fall back on the credit card companies who who cover spending across products and and goods and services. MasterCard just reported, they mentioned the quote healthy consumer five different times in their call. Beeson Amex said something similar on their calls. DoorDash reported they processed 620 million orders and they said they don’t see any change in consumer behavior and Live Nation reported just today. Their call was just today and they also said they see no weakness in the consumer. So. So I don’t disagree that Starbucks and McDonald’s may be seeing something that everyone else isn’t. I would put the emphasis on everyone else isn’t. Craig, let me ask you, I mean what are the numbers on the S&P that you’re looking for here as we go out this year where where are the breaking points? Yeah, let me hit on that real quick one second. But you know, I would push back a little bit and say credit card debt is on, the credit card debt is on the rise out here and that’s an issue. And if the unemployment rate is going to start to tick up all of a sudden that become a could become a real issue really fast, wouldn’t you think? Yeah, Dan, what do you think? Dan, we lost you there. I think you got a little mute problem. I my dog was barking. I apologize. Oh, there you, there you go. Credit card debt is certainly rising. Delinquencies are certainly rising. I would use the word normalization it’s it bears watching. But I don’t think either of those are at concerning levels as of right now, especially compared to incomes.