Latest / Paramount Wealth Perspectives / Fedspeak Continues - 10/14/24

Transcript

Fedspeak Continues - 10/14/24 · Paramount Wealth Perspectives

• 0:00
  I don't know.
• 0:11
  Game on.
• 0:12
  Hello, everyone.
• 0:13
  Welcome to paramount wealth perspectives.
• 0:15
  Your go-to podcast for the latest updates on global markets and current economic events.
• 0:21
  This is your host, Chris coil.
• 0:23
  Each week we strive to bring you expert analysis on market trends, economic shifts.
• 0:28
  And key financial developments from around the world.
• 0:32
  Whether you're an investor business leader.
• 0:34
  Or simply curious about the global economy.
• 0:37
  Our podcast is here to keep you informed and ahead of the curve.
• 0:41
  Now let's dive into the markets and explore what shaping the world of finance today.
• 0:46
  Here with us today.
• 0:47
  We have Scott Tremlett chief investment officer and managing partner at paramount associates, wealth management.
• 0:53
  Scott.
• 0:54
  Looking back at last week, what are some major events you would like to highlight?
• 0:59
  Thank you, Chris.
• 1:00
  Well, big picture.
• 1:02
  The S and P 500 did end the week up a little over 1%.
• 1:06
  The S and P 500 actually notched as 45th all time highs of the year.
• 1:11
  Last Friday.
• 1:12
  Overseas European markets were mixed.
• 1:15
  Last Tuesday, China actually posted its largest one day decline since 2008.
• 1:21
  And did snap a two week streak and gains.
• 1:24
  For the week.
• 1:25
  Chinese markets were down over six and a half percent.
• 1:28
  Treasury yields continue to increase.
• 1:30
  After fed minutes showed that the half percent rate cut was not universal.
• 1:36
  As well.
• 1:37
  Atlanta fed president Bostic mentioned that he is open to the idea of skipping a rate cut in November.
• 1:42
  Along with treasury rates rising, the dollar appreciated as the perceived path of rate cuts has eased.
• 1:49
  Interesting.
• 1:50
  So it looks like your forecast about the path of rate cuts are proving accurate.
• 1:55
  What do you think will happen next?
• 1:57
  Well, Chris, maybe I'm right so far, but everything is data dependent at this point.
• 2:03
  Before the next fed meeting, we still have their preferred inflation gauge PCE.
• 2:08
  And a handful of employment or jobless claims reports.
• 2:11
  Last week's consumer inflation report was a little worse than expected.
• 2:15
  However, the producer inflation report was a little better than consensus.
• 2:20
  Hmm.
• 2:20
  It seems like a mixed bag of inflation data.
• 2:22
  So what else happened last week?
• 2:25
  Yeah.
• 2:25
  I mentioned China earlier.
• 2:27
  It does seem like market participants are reversing course on that short term trade.
• 2:32
  In fact, the Chinese finance ministers briefing on Saturday, really lacked details around stimulus.
• 2:37
  Disappointing investors.
• 2:39
  Back here in the U S consumer sentiment was little change month to month.
• 2:43
  With long run business conditions, lifting to the highest reading and six months.
• 2:48
  At the same time.
• 2:49
  You're ahead.
• 2:50
  Inflation expectations.
• 2:51
  Did tech hire.
• 2:53
  We also started third quarter earnings season headlined by some of the big banks on Friday.
• 2:58
  We are early in the earning season, but optimism is growing that third quarter earnings may beat the reduced expectations of 4.4% year over year growth.
• 3:07
  On Friday.
• 3:08
  Uh, publication stated that based on earning so far.
• 3:11
  They expect 7% plus earnings growth.
• 3:15
  That would be above consensus.
• 3:17
  Earning season.
• 3:19
  That always is interesting.
• 3:21
  You commented on earnings last week.
• 3:23
  Could you refresh us on what is needed from earnings through the end of this year?
• 3:28
  What I feel is most important for the earnings going forward.
• 3:32
  It's for the results to support current market valuations.
• 3:36
  Throughout the year price earnings multiples have increased as has the stock market.
• 3:40
  When multiples increase, that means that prices of stocks have gone up versus earnings.
• 3:45
  Making the stocks more expensive.
• 3:47
  This is called multiple expansion and happens in anticipation of a growing economy.
• 3:52
  What is needed now, in my opinion is for earnings to increase either bringing the multiples down or at the very least supporting where prices are now.
• 4:01
  It's hard to be negative on the state of the us economy.
• 4:04
  There were other countries around the world that may have more upside in my mind.
• 4:08
  However I'm cautiously optimistic and have recently added to us equity exposure in portfolios.
• 4:14
  That makes sense.
• 4:15
  Thanks Scott.
• 4:16
  So what are you looking at this week?
• 4:19
  This week, we have a busy week of earnings with 43 S and P 500 companies reporting.
• 4:25
  We had the New York feds empire manufacturing survey and the Philly fed index.
• 4:30
  On Thursday, we have us retail sales and industrial production.
• 4:35
  As well as jobless claims.
• 4:38
  We have two us housing reports this week, which should be interesting considering the recent rise in interest rates.
• 4:43
  Overseas.
• 4:44
  We have India inflation numbers.
• 4:47
  China reports, GDP, industrial production, house price, index, and retail sales in the UK.
• 4:53
  We have unemployment and retail sales.
• 4:56
  We have Eurozone industrial production and the European central bank announcement on Thursday.
• 5:02
  Would they expect it to cut rates by 0.25%.
• 5:06
  Bringing their deposit rate down to 3.2, 5%.
• 5:11
  Sounds like quite the busy week.
• 5:12
  So what are you expecting to drive markets this week?
• 5:16
  Well, this week earnings may give us some insight into the true health of the U S economy.
• 5:22
  In Taiwan, semiconductor is expected to report earnings on Thursday.
• 5:26
  This might provide some guidance on that semi trade.
• 5:29
  But I think the biggest market moving events will be remarks this week from the fed.
• 5:36
  As to fed reserve governors and four fed bank presidents are scheduled to speak this week at various events.
• 5:42
  The federal reserve and its path moving forward.
• 5:44
  We'll continue to be the biggest story.
• 5:46
  As we move forward with their plan to ease and help the economy potentially fend off a weakening job market.
• 5:53
  Well, we will certainly keep an eye out on those and I'm sure we will have plenty to discuss next Monday.
• 5:59
  For now, thanks for tuning into paramount wealth perspectives.
• 6:03
  Stay informed.
• 6:04
  Stay ahead.
• 6:05
  And join us next week for more key updates shaping the global economy.