A top Wall Street investor is warning the American public that — although the Dow Jones Industrial Average crossed the 50,000 threshold for the first time last week — these benefits are not trickling down to ordinary Americans, ultimately putting the entire economy in peril.
In a note to investors released on Monday and published in Fortune Magazine, JPMorgan's chief global strategist David Kelly described an economy plagued by "soggy consumption, weak job gains and a sour public mood," with consumer activity dropping in light-vehicle sales (by 14.9 million units, the lowest in three years), hotel occupancy (by 1 percent year-over-year) and the housing market (homebuyer traffic fell to 23 on the builder index, below the 50 threshold indicating poor condition, while the rental vacancy rate of 7.2 percent is the highest since 2017).
Kelly further argues that these trends speak to deeper economic stagnation. Job openings plummeted to a five-year low of 6.5 million and the gap between workers finding jobs "plentiful" versus "hard to get" has reached its lowest point in four years. Kelly argues that because the working-age population is shrinking by 20,000 monthly, with the situation worsening further due to reduced immigration.
"In short, while the stock market is booming and tech sector capital spending is soaring, much of the real economy remains very slow," Kelly argued. He cited another Wall Street analyst, Albert Edwards at Societe Generale, who expressed similar concerns.
"We are again in a Peter Pan world where an exuberant Wall Street is propping up the real economy," Kelly quoted Edwards as saying. "'Things' could get interesting very quickly"
Kelly’s warning is part of a larger trend among Wall Street analysts. Last month Fox Business contributor Charles Gasparino reported that a large number of high-level financial sector professionals oppose the Department of Justice (DOJ) launching a criminal investigation into Federal Reserve chairman Jerome Powell. By doing this and thereby raising doubts about the stability of the dollar, Gasparino reported that financial insiders fear fewer institutional investors will buy U.S. Treasury securities and the value of the dollar overall will plummet. These concerns are reinforced by Trump and his own Treasury Secretary, Scott Bessent, offering seemingly contradictory messages about the future of the dollar.
"The feeling among most of the senior staff in the White House is that the president is screwing things up with this investigation of Powell, though no one will publicly admit it," a Wall Street executive anonymously told Gasparino. "It’s also unclear if they have made that case to Trump himself." Gasparino’s anonymous source makes the same argument as conservative commentator Bernard Goldberg, who wrote for The Hill that it appears Trump’s advisers are unwilling to tell him the truth about the flailing economy.
David Bahnsen, a wealth management expert known for his conservative views, is financial bigwig who warned that Trump’s economic policies are a disaster. Writing for National Review, Bahnsen said that proposals like banning large investors from buying single-family homes, regulating defense/aerospace executive pay and shareholder returns, requiring Fannie Mae/Freddie Mac to buy $200 billion in mortgage securities and capping credit card interest rates at 10 percent were unworkable, illegal and/or both.
"Of that list," Bahnsen said, "only No. 3 is arguably allowed within the powers of the presidency, and even that only because the federal government has foolishly maintained the conservatorship of Fannie and Freddie 17 years past their demise…. But even if all of these ideas go the way of his 50-year-mortgage idea of not that long ago — it has already been abandoned — even mere ideation on social media carries consequences."