Latest / Markets with Megan: A Quick Financial Markets Update / Market Mayhem: What’s REALLY Behind the Chaos? | S2 E014 | 02-24-25

Transcript

Market Mayhem: What’s REALLY Behind the Chaos? | S2 E014 | 02-24-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Investors are getting a dose of volatility in the markets we've seen over the past few days.
• 0:05
  Megan Horneman: It's Monday, February the 24th, and this is Markets with Megan.
• 0:09
  Megan Horneman: Don't forget to subscribe.
• 0:11
  Megan Horneman: Like this podcast, hit the alarm bell and you can always share this with friends, family or colleagues.
• 0:16
  Megan Horneman: Let's dig into what's been moving the markets over the past few days.
• 0:20
  Megan Horneman: Today's investors are getting a little bit of reprieve.
• 0:23
  Megan Horneman: The markets rebounded a bit after a pretty dismal end to last week.
• 0:27
  Megan Horneman: Last week we saw the Dow Jones Industrial Edge post two back-to-back days of a decline of 1% or more.
• 0:34
  Megan Horneman: That was the first time we've seen that happen in six months.
• 0:37
  Megan Horneman: The S&P 500 did hit a record high but it retreated and we actually saw both the Russell 2000 and Russell 2500 go into negative territory year to date.
• 0:47
  Megan Horneman: So why did all this happen last week?
• 0:51
  Megan Horneman: First of all, we've gotten some pretty weak economic data, not just on the housing market last week, but also the consumer.
• 0:58
  Megan Horneman: Consumer confidence is falling pretty rapidly and we're seeing this reflected in the retail sales.
• 1:04
  Megan Horneman: We got for, for example, january that saw an unsurprising decline.
• 1:09
  Megan Horneman: We've seen earnings downgrade.
• 1:11
  Megan Horneman: Walmart really set the tone last week and we had this in a prior podcast about the consumer behavior and their concern about consumer spending this year.
• 1:20
  Megan Horneman: Seasonality also is a challenge for the markets.
• 1:23
  Megan Horneman: February tends to be a weak month and that's replaying again this year.
• 1:28
  Megan Horneman: Inflation We've gotten several economic reports that show consumer expectations for inflation are surging.
• 1:36
  Megan Horneman: In fact, in the University of Michigan survey we saw that that five to 10-year inflation expectation jumped to the highest level since 1995.
• 1:45
  Megan Horneman: Valuations this was what we talked about coming into 2025.
• 1:51
  Megan Horneman: The valuations in the equity market were just pricing in.
• 1:54
  Megan Horneman: Not only a perfect soft landing the Fed coming in and cutting interest rates and then a seamless transition for the Trump administration.
• 2:01
  Megan Horneman: All of this has gotten quite cloudy over the first real eight weeks of this year.
• 2:06
  Megan Horneman: Lastly, this political uncertainty is weighing on sentiment.
• 2:09
  Megan Horneman: This is not unexpected.
• 2:11
  Megan Horneman: We knew that there would be a pickup in volatility when Trump took office because, similar to his first term, he's hit the ground running in an aggressive manner.
• 2:19
  Megan Horneman: He's signed more executive orders than any president in history in just the first month in office.
• 2:24
  Megan Horneman: So it's creating some uncertainty from the business perspective.
• 2:31
  Megan Horneman: Our business is wanting to spend with all of this uncertainty from tariffs going forward as well, and then consumers are concerned about inflation.
• 2:37
  Megan Horneman: So this is what tariffs may do with inflation.
• 2:40
  Megan Horneman: So this is filtering into, obviously, the sentiment and then we're seeing it start to filter into sales.
• 2:44
  Megan Horneman: So this is filtering into, obviously, the sentiment and then we're seeing it start to filter into sales.
• 2:46
  Megan Horneman: We're going to continue to monitor these developments.
• 2:50
  Megan Horneman: We expected volatility.
• 2:51
  Megan Horneman: We've got some dry powder on the sidelines to put to work in our clients portfolios, but this is a very fluid situation.
• 2:58
  Megan Horneman: We remind investors it's the price that you pay for the investment.
• 3:03
  Megan Horneman: What's the appropriate price In this environment with so much uncertainty?
• 3:06
  Megan Horneman: Don't overpay for high valuations.
• 3:09
  Megan Horneman: Be smart, be patient and be disciplined.
• 3:11
  Megan Horneman: That's what we're doing for our clients.
• 3:13
  Megan Horneman: We'll be back this week.
• 3:14
  Megan Horneman: We'll have more economic data and more market reactions with the Markets with Megan, and if you want a history of our podcast, you can go to marketswithmegan.
• 3:21
  Megan Horneman: fm.
• 3:22
  Megan Horneman: Thank you.