Latest / HPK Provident Advisors: The Weekly Bull / Why A “Good” Inflation Print Isn’t Convincing Investors

Transcript

Why A “Good” Inflation Print Isn’t Convincing Investors · HPK Provident Advisors: The Weekly Bull

• 0:06
  SPEAKER_01: Welcome to Friday Live.
• 0:08
  SPEAKER_01: Every Friday, the partners of HBK Profiting get together and discuss what we're seeing going on in the economy, the markets, and time topics.
• 0:16
  SPEAKER_01: So it's just me today.
• 0:17
  SPEAKER_01: You're stuck with the investment guy.
• 0:20
  SPEAKER_01: So that's going to be the main focus here.
• 0:22
  SPEAKER_01: Good news is the data vacuum ended.
• 0:24
  SPEAKER_01: So we had some very important information come out this week, including jobs, inflation, and retail sales.
• 0:29
  SPEAKER_01: So I'll start with the jobs numbers.
• 0:31
  SPEAKER_01: Came in at 64,000, higher than expectations.
• 0:34
  SPEAKER_01: Very good.
• 0:36
  SPEAKER_01: But beneath the surface, there are some things that uh weren't particularly positive.
• 0:41
  SPEAKER_01: For example, October was revised lower to 105,000.
• 0:46
  SPEAKER_01: That big decline was due to the government uh workers.
• 0:49
  SPEAKER_01: That that was the time period where they could accept their resignations, or when that took effect, I should say.
• 0:55
  SPEAKER_01: The unemployment rate has ticked up.
• 0:57
  SPEAKER_01: This is the fourth straight month.
• 0:58
  SPEAKER_01: So we are now at 4.6%, pretty high.
• 1:03
  SPEAKER_01: So that's a little alarming, uh, especially with wage wage growth, really solid deceleration.
• 1:09
  SPEAKER_01: Uh we got back down to pre-pandemic levels around 3.5%.
• 1:13
  SPEAKER_01: So um inflation's well, actually, inflation was good this this uh month.
• 1:20
  SPEAKER_01: The readings came in at uh three or sorry, 2.6% for core, well below I think the expectation was for 3%.
• 1:29
  SPEAKER_01: Now economists are really questioning the validity of the numbers around uh the data collection.
• 1:34
  SPEAKER_01: We saw a big deceleration in owner's equivalent rent, which is a big component of that price basket.
• 1:41
  SPEAKER_01: Um, so I'm I'm not too optimistic that that's gonna continue.
• 1:47
  SPEAKER_01: Um, some other things that economists have been flagging are we really only got the reading from the second half of October for that month, and that really reflected a lot of the discounted pricing for holiday sales.
• 2:00
  SPEAKER_01: So another component that could really affect the numbers.
• 2:03
  SPEAKER_01: Um the stock market originally was up a lot, gave back some of it, muted reaction out of the bond market, and looking at Fed rate expectations for the first half of next year, there are very little changes.
• 2:16
  SPEAKER_01: So I think they're in the same boat as economists questioning this report.
• 2:20
  SPEAKER_01: We're really gonna have to see another couple of reports to really determine which ways inflation is heading.
• 2:26
  SPEAKER_01: Um, my thought is it's gonna remain sticky, especially with tariffs.
• 2:31
  SPEAKER_01: Um I and the Fed is expecting the unemployment rate to come back down next year, but I don't know what the catalyst is for that with AI and productivity growing.
• 2:43
  SPEAKER_01: You would think if anything, that would just add to that.
• 2:45
  SPEAKER_01: Um, but let's turn to the markets now.
• 2:48
  SPEAKER_01: So we are we dropped below that tight price channel.
• 2:51
  SPEAKER_01: Um, we're trying to claw our way back into it, but until we get back into that level, I'm a little more biased to the downside.
• 2:59
  SPEAKER_01: Yesterday um we failed to really get above the previous day's high, and then we're still kind of around that same level today.
• 3:07
  SPEAKER_01: Um, we really need to bump back up into that price channel.
• 3:10
  SPEAKER_01: The 10-year treasury um really not too much change on the week, really a reflection of you know, not buying into the deceleration and the inflation number.
• 3:24
  SPEAKER_01: Um I'm surprised we didn't have more of a more of a drop in the 10-year due to the what I saw as a somewhat weak jobs report.
• 3:35
  SPEAKER_01: Um now turning to our blog post for the week.
• 3:39
  SPEAKER_01: Uh let me see here.
• 3:40
  SPEAKER_01: Let me get so all of our blog posts go out to social media um and our website, but we do we also do social posts, which only go out to the social media.
• 3:52
  SPEAKER_01: Um, so if you want to be able to see everything, including our Friday lives, you really have to go to our Facebook page.
• 3:58
  SPEAKER_01: So let me pull that up here.
• 4:01
  SPEAKER_01: Um Monday, as always, I do the week ahead post, just reflecting on what what we're looking at from the previous week and in the upcoming week, we talk about data, we talk about markets.
• 4:12
  SPEAKER_01: So, really a comprehensive view of what we're seeing in the market.
• 4:15
  SPEAKER_01: Tuesday, Brian has been doing a tax campaign.
• 4:18
  SPEAKER_01: Um, so this one was all about tax loss harvesting.
• 4:21
  SPEAKER_01: Um, if you have losses in your portfolio in a taxable account, you can realize them.
• 4:27
  SPEAKER_01: And if they're greater than the the capital gains that you've realized for the year, then it uh it can go against your income and carry forward.
• 4:36
  SPEAKER_01: So that's a good one.
• 4:38
  SPEAKER_01: Um, Wednesday was about estate management.
• 4:41
  SPEAKER_01: This was really about the importance of having a will to be able to um bypass your assets when you die going through probate.
• 4:50
  SPEAKER_01: It takes a while, it's costly, so a will can really streamline that.
• 4:54
  SPEAKER_01: On the investment side, you can retirement accounts have assigned beneficiary, so that is already taken care of.
• 5:00
  SPEAKER_01: That does supersede the will, um, actually.
• 5:04
  SPEAKER_01: And then on the taxable investment accounts, you can also add transfer on death uh instructions to go directly to your beneficiary.
• 5:11
  SPEAKER_01: So that just kind of streamlines things.
• 5:13
  SPEAKER_01: Um, Thursday was a look at uh systematic withdrawals from your portfolio in retirement.
• 5:19
  SPEAKER_01: Uh, it's a nice little handy calculator.
• 5:21
  SPEAKER_01: You can go on, plug in your assets and how much you plan to take, your expected growth rate, and it'll it'll tell you if you're gonna outlive your money or not.
• 5:29
  SPEAKER_01: Uh if you really want a detailed financial plan, um that's really what Brian does.
• 5:34
  SPEAKER_01: Uh, he's our CFP and partner.
• 5:37
  SPEAKER_01: Um, if you give us a call, we can get you some get you started with a financial plan and kind of give you guidelines on actionable ideas to do to either get you into retirement in a better position or how to tax efficiently do withdrawals from your your portfolios and various income sources.
• 6:00
  SPEAKER_01: So he really goes into a lot of detail on it.
• 6:02
  SPEAKER_01: Like I said, I'm the investment guy, not the financial planning guy.
• 6:05
  SPEAKER_01: So you really have to give our office a call and book an appointment with him.
• 6:10
  SPEAKER_01: Um, I I come in on the investment side.
• 6:13
  SPEAKER_01: Um, next week we should, if we do have Friday live, it is the day after Christmas.
• 6:18
  SPEAKER_01: Um, hopefully we'll have Brian or David alongside of me.
• 6:23
  SPEAKER_01: Um, but we'll keep this one short this week.
• 6:25
  SPEAKER_01: Um I hope everyone has a good weekend, and hopefully we'll see you next next Friday.
• 6:31
  SPEAKER_01: And I'm gonna flip on the disclosures before I go.
• 6:34
  SPEAKER_01: Security and LPL uh keep an eye on the C number of FENRA and SIPLC.org.
• 6:39
  SPEAKER_00: Advisory services offered through LPL Financial LLC, a registered investment advisor.
• 6:45
  SPEAKER_00: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 6:51
  SPEAKER_00: Content discussed is for informational purposes only and not intended as an offer or solicitation to buy or sell any security or investment strategy.
• 6:59
  SPEAKER_00: Any opinions expressed are those of the authors and do not necessarily reflect the views of LPL Financial or its affiliates.
• 7:06
  SPEAKER_00: All investments involve risk, including the possible loss of principal.
• 7:10
  SPEAKER_00: This communication may include links or references to third party websites.
• 7:14
  SPEAKER_00: These links are provided as a convenience only.
• 7:16
  SPEAKER_00: LPL Financial and its representatives are not responsible for the accuracy or content of such sites.
• 7:22
  SPEAKER_00: Brian, Mike, and David, and HBK Profit and Advisors may only transact business in states where they are properly registered or exempt from registration.