October 21, 2025 • 12 mins
In this episode of Paramount Wealth Perspectives, Chris Coyle and CIO Scott Tremlett break down a week of market recovery and renewed optimism. They explore how investors quickly shrugged off regional bank concerns, why “buy the dip” remains a dominant mindset, and how AI continues to fuel corporate earnings and sector strength. The conversation also covers the upcoming Fed decision, global trade tensions, and what “cautious greed” means for investor sentiment heading into the final quarter of the year.
Tune in for timely insights on positioning portfolios amid strong earnings, sticky inflation, and fragile confidence.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Chris Coyle (00:00):
Intro song
Hello everyone.
Welcome to Paramount WealthPerspectives, your go-to podcast
for the latest updates on globalmarkets and current economic
events.
This is your host, Chris Coyle.
(00:21):
I am the market director and anadvisor here at Paramount
Associates Wealth Management,and today I'm joined by
Paramount's, chief InvestmentOfficer Scott.
Alright, Scott, let's start witha recap of last week.
It felt like the market got itsfooting back after some midweek
volatility.
How did things shape up?
Yes, sir.
We saw a nice pop after thoseregional bank worries on
(00:44):
Thursday.
Markets rebounded into theweekend.
The s and p 500 gained about1.7%.
Nasdaq 2.1% and the Dow was upabout 1.6%.
It was a clear by the DIPresponse, which continues to be
the dominant theme, right?
Those banking headlines stirredsome short-term panic.
Indeed, the news from Zion'sBank and Western Alliance about
(01:07):
fraudulent commercial loans,definitely spooked investors,
but big bank earnings hadalready painted a healthy
picture.
Strong loan growth.
Steady credit metrics andhealthy capital markets
activity.
Once it became clear, theregional bank issues were
isolated.
Buyers came right back in, andearnings overall still solid.
(01:29):
They do about 12% of the s and p500 has reported and roughly 86%
have beaten estimates.
We're tracking 8.5% earningsgrowth for the quarter, the
ninth, straight positive yearover year period.
Revenues are up.
6.6% and the early trend isresilience, especially in
(01:50):
financials and tech, even withall the macro noise.
But tech's still doing a lot ofthe heavy lifting, correct?
Absolutely.
AI continues to be the strongestsecular story out there.
We saw TSMC raise full yearguidance.
Oracle defend its margins and aMD pop on new GPU demand from
(02:11):
Oracle Cloud.
Even Walmart, believe it or not,got into the AI mix partnering
with open AI on instantcheckout.
The AI investment cycle justkeeps broadening data centers,
chips, cloud infrastructure.
It's an arm place.
So if earnings are fine and AIis still fueling the narrative,
(02:31):
what's keeping investors onedge?
Two things in my mind.
Sentiment and positioning.
There's a lot of nervousoptimism.
On the one hand, you've gotresilient retail inflows.
Retail traders have been netbuyers for seven straight weeks.
On the other, institutionalinvestors are stretched long
according to recent funds.
Surveys, cash levels are at thelowest level since last
(02:54):
December, and equity exposure isat the highest since February.
So if there is a shockpositioning could amplify
volatility spot on.
You've got high positioning,narrow leadership, and
complacency showing up involatility markets.
If the VIX volatility levelfalls back below 14, that's
(03:15):
usually when markets getsurprised.
So while the setup isn'tbearish, it may be fragile.
A data surprise, a fed misstepor geopolitical flare up could
unwind risk quickly, but we'restill seeing a buy the dip
mentality hold.
Yeah, that's the thing.
Even the regional bank scareonly lasted today.
(03:35):
The strength of the corporatebalance sheets and the lack of
alternatives as cash yields arefalling again, keep drawing
money back into stocks untilsomething breaks that feedback
loop.
Dips will continue to be bought.
Let's talk policy for a moment.
We've got the fed meeting nextWednesday.
What are you expecting?
Well, the market's fully pricedfor a 25 basis point cut, which
(03:59):
would be the third of thiseasing cycle.
Powell will likely emphasizecaution.
The Fed wants to keep easingconditions without reigniting
inflation.
The Fed's blackout period's nowin effect, so we'll get all the
clarity we can from next week'sstatement and press conference.
And the data vacuum from thegovernment shutdown.
Is that still a problem?
(04:20):
Huge problem.
We haven't had a clean read onjobs, retail sales, or producer
prices.
In weeks, we hear some tidbitsfrom a DP on jobs and payrolls,
but the only major data.
We'll get this Friday isSeptember's consumer inflation
report, which has to be releasedfor social security reasons.
(04:40):
Markets expect a modest 0.3headline and a 0.2% core print.
Anything hotter than that.
Would complicate the easingnarrative heading into year end.
Let's pivot abroad.
The US China situation was noisyagain last week.
Where do things currently stand?
The big one was China's rareearth export curbs.
(05:02):
It spooked supply chains and hadechoes of 2019, but by the end
of the week, things calmed down.
The US Treasury secretary spokewith China's vice premier and
they'll meet again in Malaysiato prep for the potential Trump
Z Summit in South Korea laterthis month.
Both sides seem motivated todial it down.
(05:23):
Markets like that, so it's tensebut not escalating, right?
It's a push and pull dynamic.
Political posturing and economicreality in the background, even
Trump's language softened a bitsaying a hundred percent
tariffs.
Aren't sustainable.
That was enough to take pressureoff risk assets late in the
week.
(05:44):
What's all on the docket forthis week?
Well, the big three R, I mean,the Fed decision is still
looming for next Wednesday witha 25 point cut expected.
We have Friday's consumerinflation report.
It's a key input before the nextfed meeting, and there's an
earning floodgate this week,nearly 90 s and p companies
(06:04):
report, including Tesla,Netflix, gm, ge, Coca-Cola,
Proctor and Gamble, Ford andIntel.
It's a full spectrum from heavyindustry to consumer to big
tech.
So we'll get a strong read onoverall momentum.
Time for the lightning round.
We doubled the questions thisweek because, well, there's a
(06:24):
lot to unpack.
Ready?
Let's do it.
What's the single biggest riskto markets right now?
A hawkish surprise from the Fed.
If Powell hints that inflation'snot under control, you'll see a
yield spike and a quick five to7% equity pullback.
Where's the best opportunity inquarter four?
In my mind, industrialautomation and AI
(06:47):
infrastructure, semis, powerequipment, and select cloud
names also short duration, highgrade credit still pays you
decently with manageable risks.
Any sectors you'd completelyavoid.
Well the regional banks, untilwe get clear data on loan
quality, also long duration,utilities rates may fall, but
(07:07):
the debt load there stillworries me.
How do you see consumer healthheading into the holidays?
Still solid Chase card datashows spending up 0.7% in
September.
Upper income consumers are doingthe heavy lifting, and we
haven't seen meaningful creditdeterioration yet.
W in your opinion, willinflation pick back up?
(07:30):
Not dramatically.
Uh, goods inflation has pickedup and services and housing are
definitely sticky.
I think we end the year withcore CPI or consumer inflation
around 2.7%, but that is abovethe fed's target is the gold
run.
Sustainable gold's up 25% sincesummer.
(07:50):
As long as real yields drift,lower and geopolitical stress
stays elevated.
The trend holds I trim intostrength, but not abandon the
trade altogether.
If you are in, how about oil?
Three straight down weeks?
Yep.
Crudes around$57.
Supplies fine.
Demand soft.
(08:11):
Unless China or OPEC doessomething dramatic, I think oil
grinds sideways into year end.
Are we in an AI bubble?
You can make an argument thatparts of the AI buildup are
trending into bubble territory,but I'm not in that camp right
now.
It's not 1999.
There's real revenue andinfrastructure behind it.
(08:33):
Semis, power Cloud, it's just aquestion of timing and valuation
discipline.
Investors need to separate AItheme.
From AI fundamentals, thesecompanies have real cash flows
for CapEx, and they're evenbuying back stock if the economy
slows.
What's the Fed's next move afterthis cut?
(08:55):
Well, I would think that therewould be another 25 basis points
in December.
After that, I do think that theypause and watch the labor data.
They don't wanna burn all theirammo before 2026.
What are bond investors missingright now?
They're underpricing thestickiness of inflation.
Real yields might not fall asfast as people expect, and there
(09:19):
is some risk still to duration.
What's your take on small caps?
Well, small caps are cheap, buttricky.
If the fed sticks, the landingand grows stabilizes, they could
rip for a minute.
But right now, funding costsstill pinch.
So selective exposure only, andI am not on the small cap train.
(09:41):
What's one contrarian idea forthe next six months?
It's not contrarian to mebecause I've been in this boat,
but Europe valuations arediscounted.
The ECBs done hiking andearnings expectations are so
low.
They're low enough to beat.
Any major bright spots inhousing, well sentiment's
(10:02):
improving.
The NAHB index jump from 32 to37.
Builders are cutting prices andand they're finding some demand.
If rates do drift down, housingstabilizes faster than people
may think.
Our retail investors drivingthis rally.
Well, they're definitelyparticipating seven weeks of net
(10:24):
buying, but the market's stillinstitutionally led.
Retail's just adding fuel to themomentum right now.
What is your favorite defensiveplay right now?
Well, on paper, people willthink high quality staples with
pricing power and strong balancesheets.
However, I am not a believer.
My defensive plays are more inthe infrastructure space.
(10:47):
How do you read the globalpicture?
After the IMF meetings, themessage was resilience with.
Fatigue.
The world's adjusting to Trumpera tariffs as the new normal,
but no one's collapsing.
So growth is slowing, but notstopping.
What's one metric you arewatching more than usual?
(11:08):
Real time jobless claimsestimates the sell side has'em
around 217,000 and any sustaineduptick would signal labor
softening.
In your opinion, is cryptorelevant again?
Well, Bitcoin's off its lows,but still consolidating.
It's behaving more like a riskasset than a hedge.
(11:30):
The next leg really dependsentirely on liquidity, not the
hype.
Last one.
If you could summarize marketpsychology in one phrase right
now, what would it be?
Well, one phrase, I guess Iwould say cautious greed.
People know risks are building,but they can't resist the
momentum.
Perfectly said.
(11:51):
Alright, we'll wrap it up there.
Sounds good.
Well, next week we got the Fedand a tidal wave of earnings.
Plenty to digest.
Appreciate it, Scott, catch youagain in two weeks.
Thanks Chris.
See you then.
I also want to thank ouraudience for tuning in and
remember to please submit yourquestions via email to general
at Paramount A-S-S-O-C.
(12:13):
Dot com.
For now, stay informed.
Stay ahead and join us next timefor more key updates shaping the
global economy.
Intro song
Hello everyone.
Welcome to Paramount WealthPerspectives, your go-to podcast
for the latest updates on globalmarkets and current economic
events.
This is your host, Chris Coyle.
(00:21):
I am the market director and anadvisor here at Paramount
Associates Wealth Management,and today I'm joined by
Paramount's, chief InvestmentOfficer Scott.
Alright, Scott, let's start witha recap of last week.
It felt like the market got itsfooting back after some midweek
volatility.
How did things shape up?
Yes, sir.
We saw a nice pop after thoseregional bank worries on
(00:44):
Thursday.
Markets rebounded into theweekend.
The s and p 500 gained about1.7%.
Nasdaq 2.1% and the Dow was upabout 1.6%.
It was a clear by the DIPresponse, which continues to be
the dominant theme, right?
Those banking headlines stirredsome short-term panic.
Indeed, the news from Zion'sBank and Western Alliance about
(01:07):
fraudulent commercial loans,definitely spooked investors,
but big bank earnings hadalready painted a healthy
picture.
Strong loan growth.
Steady credit metrics andhealthy capital markets
activity.
Once it became clear, theregional bank issues were
isolated.
Buyers came right back in, andearnings overall still solid.
(01:29):
They do about 12% of the s and p500 has reported and roughly 86%
have beaten estimates.
We're tracking 8.5% earningsgrowth for the quarter, the
ninth, straight positive yearover year period.
Revenues are up.
6.6% and the early trend isresilience, especially in
(01:50):
financials and tech, even withall the macro noise.
But tech's still doing a lot ofthe heavy lifting, correct?
Absolutely.
AI continues to be the strongestsecular story out there.
We saw TSMC raise full yearguidance.
Oracle defend its margins and aMD pop on new GPU demand from
(02:11):
Oracle Cloud.
Even Walmart, believe it or not,got into the AI mix partnering
with open AI on instantcheckout.
The AI investment cycle justkeeps broadening data centers,
chips, cloud infrastructure.
It's an arm place.
So if earnings are fine and AIis still fueling the narrative,
(02:31):
what's keeping investors onedge?
Two things in my mind.
Sentiment and positioning.
There's a lot of nervousoptimism.
On the one hand, you've gotresilient retail inflows.
Retail traders have been netbuyers for seven straight weeks.
On the other, institutionalinvestors are stretched long
according to recent funds.
Surveys, cash levels are at thelowest level since last
(02:54):
December, and equity exposure isat the highest since February.
So if there is a shockpositioning could amplify
volatility spot on.
You've got high positioning,narrow leadership, and
complacency showing up involatility markets.
If the VIX volatility levelfalls back below 14, that's
(03:15):
usually when markets getsurprised.
So while the setup isn'tbearish, it may be fragile.
A data surprise, a fed misstepor geopolitical flare up could
unwind risk quickly, but we'restill seeing a buy the dip
mentality hold.
Yeah, that's the thing.
Even the regional bank scareonly lasted today.
(03:35):
The strength of the corporatebalance sheets and the lack of
alternatives as cash yields arefalling again, keep drawing
money back into stocks untilsomething breaks that feedback
loop.
Dips will continue to be bought.
Let's talk policy for a moment.
We've got the fed meeting nextWednesday.
What are you expecting?
Well, the market's fully pricedfor a 25 basis point cut, which
(03:59):
would be the third of thiseasing cycle.
Powell will likely emphasizecaution.
The Fed wants to keep easingconditions without reigniting
inflation.
The Fed's blackout period's nowin effect, so we'll get all the
clarity we can from next week'sstatement and press conference.
And the data vacuum from thegovernment shutdown.
Is that still a problem?
(04:20):
Huge problem.
We haven't had a clean read onjobs, retail sales, or producer
prices.
In weeks, we hear some tidbitsfrom a DP on jobs and payrolls,
but the only major data.
We'll get this Friday isSeptember's consumer inflation
report, which has to be releasedfor social security reasons.
(04:40):
Markets expect a modest 0.3headline and a 0.2% core print.
Anything hotter than that.
Would complicate the easingnarrative heading into year end.
Let's pivot abroad.
The US China situation was noisyagain last week.
Where do things currently stand?
The big one was China's rareearth export curbs.
(05:02):
It spooked supply chains and hadechoes of 2019, but by the end
of the week, things calmed down.
The US Treasury secretary spokewith China's vice premier and
they'll meet again in Malaysiato prep for the potential Trump
Z Summit in South Korea laterthis month.
Both sides seem motivated todial it down.
(05:23):
Markets like that, so it's tensebut not escalating, right?
It's a push and pull dynamic.
Political posturing and economicreality in the background, even
Trump's language softened a bitsaying a hundred percent
tariffs.
Aren't sustainable.
That was enough to take pressureoff risk assets late in the
week.
(05:44):
What's all on the docket forthis week?
Well, the big three R, I mean,the Fed decision is still
looming for next Wednesday witha 25 point cut expected.
We have Friday's consumerinflation report.
It's a key input before the nextfed meeting, and there's an
earning floodgate this week,nearly 90 s and p companies
(06:04):
report, including Tesla,Netflix, gm, ge, Coca-Cola,
Proctor and Gamble, Ford andIntel.
It's a full spectrum from heavyindustry to consumer to big
tech.
So we'll get a strong read onoverall momentum.
Time for the lightning round.
We doubled the questions thisweek because, well, there's a
(06:24):
lot to unpack.
Ready?
Let's do it.
What's the single biggest riskto markets right now?
A hawkish surprise from the Fed.
If Powell hints that inflation'snot under control, you'll see a
yield spike and a quick five to7% equity pullback.
Where's the best opportunity inquarter four?
In my mind, industrialautomation and AI
(06:47):
infrastructure, semis, powerequipment, and select cloud
names also short duration, highgrade credit still pays you
decently with manageable risks.
Any sectors you'd completelyavoid.
Well the regional banks, untilwe get clear data on loan
quality, also long duration,utilities rates may fall, but
(07:07):
the debt load there stillworries me.
How do you see consumer healthheading into the holidays?
Still solid Chase card datashows spending up 0.7% in
September.
Upper income consumers are doingthe heavy lifting, and we
haven't seen meaningful creditdeterioration yet.
W in your opinion, willinflation pick back up?
(07:30):
Not dramatically.
Uh, goods inflation has pickedup and services and housing are
definitely sticky.
I think we end the year withcore CPI or consumer inflation
around 2.7%, but that is abovethe fed's target is the gold
run.
Sustainable gold's up 25% sincesummer.
(07:50):
As long as real yields drift,lower and geopolitical stress
stays elevated.
The trend holds I trim intostrength, but not abandon the
trade altogether.
If you are in, how about oil?
Three straight down weeks?
Yep.
Crudes around$57.
Supplies fine.
Demand soft.
(08:11):
Unless China or OPEC doessomething dramatic, I think oil
grinds sideways into year end.
Are we in an AI bubble?
You can make an argument thatparts of the AI buildup are
trending into bubble territory,but I'm not in that camp right
now.
It's not 1999.
There's real revenue andinfrastructure behind it.
(08:33):
Semis, power Cloud, it's just aquestion of timing and valuation
discipline.
Investors need to separate AItheme.
From AI fundamentals, thesecompanies have real cash flows
for CapEx, and they're evenbuying back stock if the economy
slows.
What's the Fed's next move afterthis cut?
(08:55):
Well, I would think that therewould be another 25 basis points
in December.
After that, I do think that theypause and watch the labor data.
They don't wanna burn all theirammo before 2026.
What are bond investors missingright now?
They're underpricing thestickiness of inflation.
Real yields might not fall asfast as people expect, and there
(09:19):
is some risk still to duration.
What's your take on small caps?
Well, small caps are cheap, buttricky.
If the fed sticks, the landingand grows stabilizes, they could
rip for a minute.
But right now, funding costsstill pinch.
So selective exposure only, andI am not on the small cap train.
(09:41):
What's one contrarian idea forthe next six months?
It's not contrarian to mebecause I've been in this boat,
but Europe valuations arediscounted.
The ECBs done hiking andearnings expectations are so
low.
They're low enough to beat.
Any major bright spots inhousing, well sentiment's
(10:02):
improving.
The NAHB index jump from 32 to37.
Builders are cutting prices andand they're finding some demand.
If rates do drift down, housingstabilizes faster than people
may think.
Our retail investors drivingthis rally.
Well, they're definitelyparticipating seven weeks of net
(10:24):
buying, but the market's stillinstitutionally led.
Retail's just adding fuel to themomentum right now.
What is your favorite defensiveplay right now?
Well, on paper, people willthink high quality staples with
pricing power and strong balancesheets.
However, I am not a believer.
My defensive plays are more inthe infrastructure space.
(10:47):
How do you read the globalpicture?
After the IMF meetings, themessage was resilience with.
Fatigue.
The world's adjusting to Trumpera tariffs as the new normal,
but no one's collapsing.
So growth is slowing, but notstopping.
What's one metric you arewatching more than usual?
(11:08):
Real time jobless claimsestimates the sell side has'em
around 217,000 and any sustaineduptick would signal labor
softening.
In your opinion, is cryptorelevant again?
Well, Bitcoin's off its lows,but still consolidating.
It's behaving more like a riskasset than a hedge.
(11:30):
The next leg really dependsentirely on liquidity, not the
hype.
Last one.
If you could summarize marketpsychology in one phrase right
now, what would it be?
Well, one phrase, I guess Iwould say cautious greed.
People know risks are building,but they can't resist the
momentum.
Perfectly said.
(11:51):
Alright, we'll wrap it up there.
Sounds good.
Well, next week we got the Fedand a tidal wave of earnings.
Plenty to digest.
Appreciate it, Scott, catch youagain in two weeks.
Thanks Chris.
See you then.
I also want to thank ouraudience for tuning in and
remember to please submit yourquestions via email to general
at Paramount A-S-S-O-C.
(12:13):
Dot com.
For now, stay informed.
Stay ahead and join us next timefor more key updates shaping the
global economy.
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