Wall of worry

It’s often said that financial markets climb a ‘wall of worry’. There is always something to worry about but in the end, on average, long-term developments are positive. Likewise, consumers have worries as well but in most regions, globally disposable incomes are on a long-term positive trajectory. A current top concern among US consumers is the political environment in their country. However, there are differences among household income levels with 35% of those earning less than USD 25,000 saying politics is a top concern compared to about 65% among high-income households. Another top concern among US consumers is inflation. Interestingly, worries about inflation are approximately equally spread across income cohorts. Much less of a worry at the moment are job loss and salary cuts as the labor market is still strong albeit cooling somewhat.

Source: Morgan Stanley, July 2024.