Latest / Paramount Wealth Perspectives / Consumer Sentiment & More Earnings - 10/28/24

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Consumer Sentiment & More Earnings - 10/28/24 · Paramount Wealth Perspectives

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  Intro song game on.
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  Hello, everyone.
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  Welcome to paramount wealth perspectives.
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  Your go-to podcast for the latest updates on global markets and current economic events.
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  This is your host, Chris Coyle.
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  Each week we strive to bring you expert analysis on market trends, economic shifts.
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  And key financial developments from around the world.
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  Whether you're an investor business leader.
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  Or simply curious about the global economy.
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  Our podcast is here to keep you informed and ahead of the curve.
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  Now let's dive into the markets and explore what shaping the world of finance today.
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  Here with us today.
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  We have Scott Tremlett chief investment officer and managing partner at paramount associates, wealth management.
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  Scott looking back at last week, what are some major events you would like to highlight?
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  Thanks Chris, last week, the S and P 500 Dow Jones, industrial average Russell, 2000 and most international markets.
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  Fell from recent highs.
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  The NASDAQ and the Russell 1000 growth ended the week, slightly positive.
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  Treasury rates continue to climb.
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  And the 10-year treasury yield has risen nearly 20% since the federal reserve reduced rates.
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  By half a point last month.
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  That's interesting.
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  You said treasury rates have increased since the federal reserve cut rates last month.
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  Why would that be?
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  There are several factors that can lead to rising rates.
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  I think this time it comes down to market expectations about future fed actions.
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  Fed officials have stated that a pause and rate cuts may be in the cards at the next fed meeting.
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  Coupling that with sticky inflation concerns, the expectations for rapid reductions in the federal funds rate have come down.
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  I do want to add that the expectations coming down are due to a stronger than expected us economy.
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  Going into this year.
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  The U S face many uncertainties.
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  My main concern.
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  Was rising credit delinquency rates paired with decreasing personal savings rates.
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  I have been tracking this closely and thought that consumer spending might slow.
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  And once again, I was reminded that the one thing I should count on is the American consumer spending money.
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  There's definitely divergence of what am I about to say?
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  However, the us consumer looks healthy.
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  There is still more than one job for each job seeker.
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  And wages have increased year over year for 17 straight months.
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  Understood.
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  It sounds like overall the average us consumer is in a pretty decent spot.
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  So you mentioned some economic data and earnings were to be reported last week.
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  What exactly did you see there?
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  Last Monday, the conference board released the United States leading economic indicators report.
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  The indicators have been declining.
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  And including last month they have fallen over two and a half percent over just the last six months.
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  The conference board's points to us manufacturing as the biggest drag.
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  And we knew manufacturing, factory orders, signal uncertainty heading into 2025.
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  Us housing reports were mixed last week.
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  However, the increasing interest rates may slow or even reverse any positives that can be pulled from last week's announcements.
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  Jobless claims.
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  Fell below expectations.
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  The feds beige book, they commented that inflation continued to moderate overall.
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  But there were a few sources, upward price pressures, including input prices for goods, insurance, healthcare costs.
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  And food.
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  Led by eggs and dairy.
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  Overall of the 12 districts, six reported conditions that were neither expanding or contracting.
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  Three reported expansion.
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  And three report is slight decreases in activity.
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  As for earnings.
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  Earnings have been mixed.
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  As of Friday, we had just over one third of the S and P 500 reporting.
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  They have reported year over year earnings growth for the fifth straight quarter.
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  But the S and P 500 had reported its lowest year over year earnings growth rates since the second quarter.
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  Of 2023.
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  So far financials and consumer discretion, they have led while industrials, healthcare and energy sectors have been the biggest detractors.
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  Overall earnings growth has been positive.
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  At 3.6% versus the expected 4.3% going into the quarter.
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  Revenue growth is also declining.
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  And as of last Friday, revenue growth is trailing both its five-year and 10-year averages.
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  Bright side of that statement is if revenue growth continues as more companies report.
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  This would mark the 10th consecutive quarter of revenue growth for the S and P 500.
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  Well, we will have to see if the SNP can continue its streak of earnings and revenue growth.
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  what about consumer sentiment?
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  You had mentioned that last week.
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  Yes, Chris consumer sentiment was reported last Friday and it came in stronger than expected.
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  There was slight upward momentum, but it was really restrained due to uncertainties about inflation and the U S presidential election.
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  I place special emphasis.
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  On the university of Michigan's consumer sentiment report.
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  Studies by Roger Ibbotson, who is a professor at the Yale school of management.
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  Illustrate the biggest contributor or detractor on investment returns is actually popularity.
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  Traditionally market participants expect that greater risk equals greater returns.
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  Ibbotson's studies show that returns are not necessarily all risk based.
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  His study shows that greater returns come stocks or investments.
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  That have either grown out of favor or just wildly unpopular.
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  Ibbotson studied stock performance from 1980 through 2016.
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  And found that the most popular stocks, average 7.67% per year.
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  while.
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  The stocks with the least popularity.
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  Average over 15% per year.
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  Wow.
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  That's quite a spread between average returns there.
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  What are you looking at this week?
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  Scott?
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  In the U S we have the S and P 500 peak week of earnings with over 160 S and P 500 companies reporting.
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  From big tech to consumer names like visa and MasterCard.
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  Tomorrow we have the conference board's consumer confidence and the labor department's job openings report.
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  There are a handful of housing reports this week, including the case, Shiller home price index.
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  Wednesday, we have a us GDP print.
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  Jobless claims on Thursday, along with the Fed's preferred inflation gauge PCE.
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  And Friday, we have payrolls ways growth.
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  And a manufacturing number.
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  Outside of the U S Japan earnings start today.
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  And 60% of the Japanese market will report over the next two weeks.
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  The bank of Japan also announces on Wednesday on its target rate decision.
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  Is expected that they will maintain current rates.
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  In Europe, we have economic sediment, uh, GDP flash report.
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  Unemployment and inflation.
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  Manufacturing numbers from around the globe start Thursday was South Korea, Taiwan, and China.
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  With India and the UK reporting manufacturing on Friday.
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  Well, it sounds like we will have plenty to discuss next Monday.
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  For now.
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  Thanks for tuning into paramount wealth perspectives.
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  Stay informed.
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  Stay ahead.
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  And join us next week for more key updates shaping the global economy.
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