'The consumer has substantially built their savings' to weather some inflation: Merrill Lynch exec

The reaction to retail earnings this week may be too bearish on the state of the consumer, says one investing expert.

“Candidly, I think some of the read on the retailers is more pessimistic on 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 checking and savings accounts across Bank of America, we see our client base, which is 67 million households across the U.S. in strong positions. Balances and checking accounts are more than double what they were pre pandemic,” said Sieg.

“We’re more optimistic than many today that the consumer has substantially built their savings and has an ability to weather some of the inflation and other waves that are buffeting them right now,” he added.

This week shares of Walmart (WMT) and Target (TGT) saw their biggest intraday falls since the crash of 1987. Both giant retailers disappointed Wall Street with their quarterly results and outlook. Their performance highlighted how high inflation is impacting consumers and shifting their buying patterns.

The markets sold off heavily on Wednesday. The S&P 500 (^GSPC) saw 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 high. We’ve got to maintain some calm and and balance and keep our eyes focused on medium and long-term goals,” says Sieg.

Ines is a markets reporter covering equities. Follow her on Twitter at @ines_ferre

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