Latest / Paramount Wealth Perspectives / Flying Through Market Turbulence: Tech Rallies, Tariff Shifts, and What’s Next for the Fed - 8/11/25

Transcript

Flying Through Market Turbulence: Tech Rallies, Tariff Shifts, and What’s Next for the Fed - 8/11/25 · Paramount Wealth Perspectives

• 0:00
  Chris Coyle: Intro song
• 0:11
  Hello everyone.
• 0:12
  Welcome to Paramount Wealth Perspectives, your go-to podcast for the latest updates on global markets and current economic events.
• 0:19
  This is your host, Chris Coyle.
• 0:21
  I'm the marketing director and a financial advisor here at Paramount Associates Wealth Management.
• 0:27
  And today I'm joined by Scott Tremlett, chief Investment Officer here at Paramount Associates Wealth Management.
• 0:33
  Alright, let's get into it.
• 0:35
  The market wrapped up a strong week.
• 0:37
  What's the headline story in your mind, Scott?
• 0:40
  Thanks, Chris.
• 0:41
  Last week's story was the comeback in tech, no question.
• 0:44
  Apple was the clear leader jumping more than 13% after announcing a hundred billion dollar investment in US manufacturing.
• 0:52
  This isn't just a headline grabber, it's really strategic by producing more here at home.
• 0:57
  They're securing tariff exemptions on some key chip imports, and that's critical given how trade policy has shifted this year over.
• 1:05
  At Meta, they're doubling down on AI with a proposed 10 billion plus investment in scale AI signaling that even social media giants see AI infrastructure as a core pillar for future growth.
• 1:17
  However, Nvidia once again stole the show.
• 1:21
  It Stocks soar to record highs after securing US tariff exemptions for semiconductor firms that promise onshore production.
• 1:29
  It now holds the title as the world's most valuable company, highlighting the unique power of AI driven chip makers.
• 1:37
  And all this in a week where trade tensions kept heating up.
• 1:40
  Exactly.
• 1:42
  We now have the highest effective US tariff rate since the Great Depression era, the latest round hit over 90 countries.
• 1:50
  We're talking 50% on Brazil and India, and nearly 40% on Switzerland.
• 1:55
  Good news for China.
• 1:56
  An extension was announced today regarding today's China tariff deadline.
• 2:01
  The goal overall.
• 2:02
  Is to bring manufacturing back, raise revenue, and narrow the trade deficit on paper.
• 2:08
  The deficit has improved down about 10% last quarter, but it's not an even story.
• 2:14
  Most of the progress came from reduced imports from China.
• 2:17
  At the same time, deficits with countries like Vietnam, Taiwan, and Thailand have actually grown.
• 2:24
  So you're saying the supply chains are just finding new paths?
• 2:27
  That's right.
• 2:28
  It's like water flowing around a rock.
• 2:32
  Goods are still getting there, just rerouted through countries facing lower tariffs.
• 2:36
  This makes the headline deficit improvement look better than the actual underlying reality.
• 2:41
  And while prices haven't jumped dramatically.
• 2:44
  We're starting to see hints of tariff related cost pressures in certain product categories, and when costs start creeping up quietly like that, it often builds up pressure, which brings us to inflation.
• 2:56
  It's one thing when the numbers move on paper.
• 2:59
  But another when they start showing up on the grocery store shelf.
• 3:03
  Yes, Chris.
• 3:03
  This consumer price index this week is going to be big.
• 3:07
  Core inflation is expected to nudge higher as some of the import costs work their way into retail sales.
• 3:13
  Gasoline has been a bit of a relief valve keeping headline numbers in check, but household goods, electronics, and recreational products.
• 3:22
  Starting to see some price creep.
• 3:24
  The longer tariffs stay elevated, the more likely those costs hit the consumer directly.
• 3:30
  True, and the Fed must juggle that with a softer job market.
• 3:34
  Absolutely.
• 3:36
  July payrolls came in at just 73,000.
• 3:39
  Far below expectations and earlier months were revised down by a combined 165,000 jobs.
• 3:46
  Continuing job is, claims are at their highest level since 2021.
• 3:50
  That's why markets are now pricing in about a 90% chance.
• 3:54
  The Fed cuts rates in September, but it's really a tricky balance.
• 3:58
  Cut too soon and you risk fueling inflation way too long and you risk letting the labor market weaken further.
• 4:06
  Now, if we step away from the big picture, current events for a moment and look inside the engine of the market earning season has been stronger than expected.
• 4:16
  And in some ways the story there is just as compelling, much stronger than expected as of last Friday, about 90% of s and p 500 companies have reported, and earnings growth is tracking near 12% for the quarter.
• 4:31
  More than double what analysts were expecting just a few months ago.
• 4:35
  Revenue growth has also been pretty impressive.
• 4:37
  With tech communication services and financials leading the way.
• 4:41
  The interesting dynamic is how the market is reacting to the numbers.
• 4:45
  Companies that beat expectations aren't getting huge rewards in their stock prices, but those that miss, they are being punished heavily.
• 4:54
  So I guess you could say the market's in a quote unquote prove it mood Exactly.
• 4:59
  Investors want not just a good quarter, but a great outlook.
• 5:04
  And themes like artificial intelligence are still a huge driver, especially in AI infrastructure and software.
• 5:10
  But hardware is more mixed with some names facing stiffer competition and narrow margins.
• 5:17
  Let's shift gears because outside of earnings, the commodity space told its own story last week, almost like a different market playing to a different rhythm.
• 5:26
  Different rhythm.
• 5:27
  Yes.
• 5:27
  That's what they're playing.
• 5:28
  It seemed gold surge to fresh record.
• 5:31
  Highs driven by safe haven.
• 5:33
  Demand as price tensions and geopolitical uncertainty start to ramp up.
• 5:37
  Oil on the other hand fell more than 5% after OPEC plus signal plans to ease production cuts starting next month, the dollar again weakened, which tends to help commodity prices broadly.
• 5:49
  And Bitcoin rallied strongly moving close to its all time highs.
• 5:54
  And what about globally?
• 5:56
  Really globally right now?
• 5:58
  The China data on trade has really caught my eye.
• 6:02
  Both exports and imports grew faster than expected in July, but the context really matters.
• 6:08
  A lot of that trade is moving indirectly through the countries that can sidestep us.
• 6:14
  Tariffs.
• 6:15
  In Europe, bond markets are showing unusual calm yield spreads between core and peripheral.
• 6:20
  economies are the narrowest they've been in decades.
• 6:24
  That reflects stronger fiscal discipline.
• 6:26
  Do Francis Rising Deficit is starting to be a bit of a growing concern.
• 6:31
  From the sound of it, this isn't shaping up to be a quiet stretch at all.
• 6:35
  In fact, it sounds like the next week is stacked with data and events that could move markets in a heartbeat.
• 6:41
  Without question, the the big ones really are CPI, consumer inflation in the US and PPI, producer inflation in the US for July.
• 6:50
  Any surprises in those numbers, could really shift fed expectations in a big way.
• 6:55
  And on the geopolitical side, the Trump Putin meeting is set for later this week.
• 7:00
  Add to that retail sales and consumer sentiment, and you've got a lot of moving parts that could push markets around quickly.
• 7:07
  Got it.
• 7:08
  So overall, what's your advice for investors right now?
• 7:11
  Scott, stay nimble.
• 7:13
  This is a market where you want to be selective.
• 7:16
  Focus on high quality growth names with strong balance sheets, but keep some flexibility.
• 7:22
  Headlines could shift sentiment in a heartbeat, so having some dry powder to invest may prove valuable.
• 7:29
  Think of it as flying through the air with turbulence, seatbelt, fastened, eyes forward, but ready to adjust your course when the sky's clear.
• 7:39
  Well, thank you, Scott, for taking the time to share your thoughts.
• 7:42
  Thank you to our audience for tuning in, and remember to please submit your questions via email to general@paramountassoc.com.
• 7:53
  For now, stay informed.
• 7:55
  Stay ahead.
• 7:56
  And join us next time for more key updates shaping the global economy.