Jim Tierney on US Economy, Earnings, and Investment Opportunities

Earnings and Market Performance

• 📈 Earnings numbers have been very good, with estimates actually increasing between the second and third quarters, indicating a strong performance beyond just meeting low expectations.
• 💡 Bank and healthcare sector results have been particularly strong, with companies like Coca-Cola and General Motors also reporting positive numbers.

The Broader US Economy

• 🧠 The strength of companies outside the AI sector demonstrates that the US economy is more robust than just the AI trade, which is important for market breadth.
• 💰 The US consumer remains incredibly strong, as evidenced by accelerating spending data reported by banks, suggesting positive outlooks for companies like Mastercard.

Investment Opportunities

• 💳 Both Visa and Mastercard are in strong positions due to the increasing mix of their high-margin services business, which is growing in the high teens.
• 🏦 Schwab is highlighted for its engaged retail investor base, leading to increased trading and margin borrowing, and the resolution of past cash sorting issues.
• 🚀 Schwab's entry into crypto trading is seen as a potentially highly profitable venture, leveraging their platform to disintermediate the market.
• 📦 Amazon is considered undervalued, with capacity expansion coming to AWS in early 2026 and powerful robotic advancements in retail logistics poised to improve delivery costs and competitiveness.