“The consumer has saved a lot” to resist some inflation: director of Merrill Lynch

The reaction to retail earnings this week may be too bearish on the state of the consumer, according to an investment expert.

“Frankly, I think some of the readings on retailers are more pessimistic about the state of the consumer than what our data shows,” Andy Sieg, president of Merrill Wealth Management, told Yahoo Finance Live on Thursday.

“When we look at Bank of America checking and savings accounts, we see our customer base, which includes 67 million households across the United States, in a position of strength. Balances and current accounts are more than double what they were before the pandemic,” Sieg said.

A shopper wears a mask while shopping at a Walmart store in Bradford, Pennsylvania, U.S., July 20, 2020. REUTERS/Brendan McDermid

“We are more optimistic than many today that the consumer has saved considerably and has the ability to weather some of the inflation and other waves that are rocking them right now,” he said. added.

This week, shares of Walmart (WMT) and Target (TGT) suffered their biggest intraday falls since the crash of 1987. The two retail giants disappointed Wall Street with their quarterly results and outlook. Their performances highlighted the impact of high inflation on consumers and changing their buying habits.

Markets sold off sharply on Wednesday. The S&P 500 (^GSPC) suffered its worst daily decline since June 2020.

“As a retail investor, one of the things we need to be very aware of – this is a time when emotions are running high. We need to maintain a certain calm and balance and keep our eyes focused on the medium-term and long term,” says Sieg.

Ines is an equity market reporter. Follow her on Twitter at @ines_ferre

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