Corporate confidence climbs as economic slowdown talk fades

Economic slowdown fears are reportedly falling to a 17-year low, according to data out from Bloomberg.

The Transcript Editor Scott Krisiloff sits down with Market Domination Overtime host Josh Lipton to talk more about these trends and themes he is hearing from corporate earnings and conference calls.

To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime.

Video Transcript

00:00 Josh

Well, corporate confidence is making a comeback, at least in the way executives are talking this earnings season. Mentions of an economic slowdown are at their lowest since 2007, even as companies we know facing an uncertain economic landscape for more we're bringing in now Scott Krilov, editor at the transcript. Scott, it is great to see you. So let's start there because that that data point is interesting, Scott, that you that you know mentions of economic slowdown at their lowest level since 2007. What do you make of that, Scott? It does seem to track with some of the data points we get, you know, the Atlanta Fed GDP tracker for instance.

00:33 Scott Krilov

Yeah, I mean, I definitely think that CEOs are confident here and I think the main place that we're seeing that is in capital markets activity. So, if you look at any of the investment banks, obviously they're talking about large M&A pipelines, they're talking about IPO pipelines. Uh they're really doing the best business that they've done in a very long time. Um and so CEOs are confident, ready to invest and spend uh not only the tech companies on CAPEX but other companies as well.

00:57 Josh

So when you listen to those conference calls, Scott, and you read the transcripts, were there certain, I'm just curious, sectors where you tended to notice more of that confidence, more of that optimism than others?

01:08 Scott Krilov

Yeah, I mean, I think it's an AI market everywhere. And so, I think the tech trade is driving everything. And I think that the tech trade is driving capital markets. So we, you know, break out the financial section, the investment banks are are really bullish around all of that. Um and then the energy section, the industrials, uh all of it just tied back to the capex that's happening in AI. I think outside of that, honestly, you have kind of a middling economy. Uh the consumer is doing fine, spending growth is happening, but the consumer isn't strong, especially low-income consumers. Um but really you just have AI driving the entire economy right now.

01:36 Josh

Beyond AI, Scott, um I'm curious, tariffs and trade, how much were those dynamics sort of factoring in and and coloring corporate commentary?

01:43 Scott Krilov

That's a great question. You really don't see that much commentary about tariffs and trade today. I think it's uh just within the industrial sector, there are are companies that are um exposed to supply chains overseas, but most of them have moved uh supply chains around so that they're not as exposed to tariffs as they may have been earlier this year. Um and so you just really don't see tariffs factoring in all that much.

02:00 Josh

What about the labor market, Scott? Uh we know the Fed focused there, concerned about the cooling they see. Was that was that a dynamic, a trend to watch on the calls?

02:06 Scott Krilov

You know, honestly, the sentiment around the labor markets is probably weaker than the reality around the labor markets, at least from what we're seeing in the calls. I think most of the uh quotes that we pick up from calls around labor markets still suggest that labor markets are strong and tight. Um certainly consumer spending seems to be uh leveraging the low unemployment rate. Um and overall people are reasonably confident about their jobs even though there's weak sentiment especially driven by maybe AI taking people's jobs.

02:24 Josh

What about the government shutdown and focus too, Scott, we got a vote coming up here in a few hours. Uh was that coming up on calls? Did CEOs and CFOs bring that up as as a potential impact on uh consumer demand, for example, or operations?

02:37 Scott Krilov

Yeah, Josh, it's really incredible. It's just like a rose tinted economy all over the place and even though people do pay lip service to the government shutdown and potentially impacting the economy generally. Uh you're really not seeing a major impact of it. um and it's really just the lip service, it's just that.

02:52 Josh

About deal making Scott, you know, you you were there when when Trump uh was moving back into the White House, it was thought, okay, here comes a rush of deal making, a rush of M&A. Was that a theme?

03:01 Scott Krilov

Yeah, absolutely. So you're seeing a lot of capital markets activity. But I mean, kind of to this point, you're seeing pipelines that people are still talking about like robust pipelines in capital markets activity. Uh but you have seen more IPO activity obviously and you have seen deals announced. But in general, you know, the CEOs of the big banks are extremely bullish on their own capital markets businesses.

03:19 Josh

As you made your way through these earnings calls, Scott, I'm just curious, um the takeaways for you in terms of what perhaps this suggested to you about where we are in the business cycle as we head into 2026.

03:28 Scott Krilov

Look, it's that's a great question. The business cycle is the question itself around you've got a traditional business cycle that's happening with interest rates, but layered on top of it is what I spoke about earlier, it's just this AI trend and trade that is overwhelming pretty much everything else in the economy. Um because capital markets are so leveraged to the AI trade, because the Mag 7 represents so much of the S&P 500 today. Um and there are so many uh capital markets players that are benefiting from the AI trade basically. So the economic cycle, honestly, the traditional one, the industrial inventory cycle, the consumer cycle, those traditional pillars of the economic cycle just don't matter to capital markets as much as they traditionally would.

04:02 Josh

Scott, always great to see you and have you on the show. Thank you.

04:05 Scott Krilov

Thanks, Josh.

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