December 23, 2024 • 7 mins
In this holiday edition of Paramount Wealth Perspectives, host Chris Coyle and Chief Investment Officer Scott Tremlett explore the latest market developments and economic trends. From the S&P 500's second consecutive weekly decline and a historic spike in volatility to the Federal Reserve’s cautious outlook for 2025, this episode delves into how shifting data and policy signals are impacting market expectations.
Scott breaks down the implications of stronger-than-expected retail sales, inflation trends, and consumer sentiment, emphasizing the delicate balance between economic resilience and the Fed’s rate decisions. With a mixed outlook for next year, the team discusses the bull case driven by optimism and innovation and the bear case underscored by stretched valuations and geopolitical risks.
They also highlight this week’s light economic calendar and share heartfelt holiday wishes with listeners. Don’t miss this insightful episode to stay informed and ahead of the curve. Happy holidays from all of us at Paramount Wealth Perspectives!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Chris Coyle (00:00):
Intro song game on.
Hello, everyone.
Welcome to paramount wealthperspectives.
Your go-to podcast for thelatest updates on global markets
and current economic events.
(00:21):
This is your host, Chris Coyle.
Each week we strive to bring youexpert analysis on market
trends, economic shifts.
And key financial developmentsfrom around the world.
Whether you're an investorbusiness leader.
Or simply curious about theglobal economy.
Our podcast is here to keep youinformed and ahead of the curve.
(00:41):
Now let's dive into the marketsand explore what shaping the
world of finance today.
Here with us today.
We have Scott Tremlett chiefinvestment officer and managing
partner at paramount associates,wealth management.
Scott.
Looking back to last week.
What are some major events youwould like to highlight?
Thank you, Chris.
Last week, major indices, Val.
(01:03):
The S and P 500 fell 2% for itssecond straight, weekly decline.
The S and P did end at streak of14 days of more declining stocks
than gainers on Friday.
The Dow Jones, industrialaverage.
I finally closed up lastThursday after 10 straight days
of declines.
(01:23):
It's the largest daily slidesince 1974.
What didn't fall the 10-yeartreasury rate.
The yield is now up nearly halfa percent in the last two weeks
alone.
Remember yields going up meanbond prices are going down.
Also gaining for the week wasthe dollar.
Which hit its two year high lastweek.
(01:46):
But the big gainer for the weekwas volatility.
The volatility index surge afterthe fed announcement Wednesday.
And fed chair Paul's testimony.
Uh, 74% jump in one day.
It's second biggest dailyincrease ever.
Wow, Scott, it sounds like thesurgeon volatility alongside the
(02:08):
rising yields and astrengthening dollar really
underscores how sensitivemarkets are to fed actions and
Pal's testimony last week.
How about the economic reportsfrom last week, Scott?
Economic reports were generallypositive last week, Chris.
November retail sales beat.
Up over 6% year over year.
(02:29):
It's highest growth rate since2021.
Headline and core PCE inflationnumbers.
Each came in softer thanconsensus.
Initial jobless claims werelower than expected.
And the university of Michigan'sconsumer sentiment report came
in at its highest mark sinceApril.
Third quarter us GDP was revisedup.
(02:49):
An existing home sales werebetter than anticipated.
I hear you, Scott, while thepositive economic data is
encouraging.
It's a classic case of good newsbeing bad news.
As stronger growth couldcomplicate the Fed's path toward
easing rates.
So overall, what are you takingaway from last week?
Yes, Chris.
(03:10):
Good economic news can be badnews for markets in periods of
monetary policy change.
The markets want rates to comedown.
They are somewhat dependent onat this point.
But, and this is the biggestnews item for last week.
Good economic news andinflation, seemingly sticking
(03:30):
around.
Change the projected pace offederal reserve rate cuts for
2025.
Last week the fed did cut theovernight rate.
Another quarter point.
But markets and volatility moveswere directly related to the fed
indicating that will only cutrates twice in 2025.
That has been my expectation.
(03:52):
But I guess the market needed tohear it to believe it.
The fed raised futureprojections for inflation.
And stated that they can affordto be more cautious and keep an
eye on the extent and timing.
Of additional moves.
Reading different comments fromfed participants.
It seems that possible paths arewidening even within the fed.
(04:14):
Some members, state inflation iscoming down as expected.
Some do not think that the bethe case.
Some members state that they areconsidering potential trade and
other policy changes in the us.
Some including fed chair Powell.
As stated that they have nottaken us policies into
consideration at all.
Sounds like a moving target.
(04:35):
Data dependent.
We will have to wait and seewhat all this means for 2025.
Thanks for that explanation,Scott, it's clear that the Fed's
cautious tone and reviseprojections for your fewer rate
cuts in 2025.
Are reshaping marketexpectations.
Underscoring just how sensitivemarkets are to both economic
(04:55):
data and policy signals.
So, what are you thinking fornext year?
Chris, we did touch onexpectations for 2025 last week.
And I'm certain, we will comeback to this topic again.
But.
At week's end, the big picturemarket outlook.
Is really mixed the bull casepoints to fed easing
(05:17):
disinflation, a strong usconsumer strong labor market
optimism for us policies and AIexcitement.
The bear case considers a morehawkish fed.
Stretch valuations.
And geopolitical concerns.
That's understandable with sucha mixed outlook.
It's fascinating to see the bullcase driven by optimism and
(05:40):
innovation while the bear casekeeps a cautious focus on
valuations.
And global uncertainties.
Finally, what are you looking atthis week?
Scott?
Due to the holiday.
Economic data is light thisweek, Chris.
Tomorrow market's closed earlyand Wednesday markets in the U S
are closed.
Today we saw the conference.
(06:01):
Board's consumer confidencenumber disappoint.
Well below projections asoptimism was replaced by
pessimism about future businessconditions and incomes.
Durable good orders came intoday, much weaker than
expected.
With transportation leading todecline.
We have weekly Java's claims onThursday and overseas.
(06:23):
We have various releases fromJapan, China, and South Korea
this week.
I didn't mention earlier.
But both the UK and Japan heldrates last week, no moves up or
down.
I want to leave our listenerswith a heartfelt, happy
holidays.
I hope you and your loved onestake advantage of this time
together and appreciate themoments the holidays bring us.
(06:45):
Well, maybe not the shopping orwrapping gifts.
I know all of us here atparamount.
Appreciate all of you.
Well, we will certainly keep onthe lookout for those reports
and trends.
And I'm sure we will have plentyto discuss next Monday.
For now stay informed, stayahead and join us next week.
For more key updates shaping theglobal economy.
(07:07):
Thank you for tuning intoparamount wealth perspectives.
We hope you all have a fantasticweek.
And a great holiday season.
Intro song game on.
Hello, everyone.
Welcome to paramount wealthperspectives.
Your go-to podcast for thelatest updates on global markets
and current economic events.
(00:21):
This is your host, Chris Coyle.
Each week we strive to bring youexpert analysis on market
trends, economic shifts.
And key financial developmentsfrom around the world.
Whether you're an investorbusiness leader.
Or simply curious about theglobal economy.
Our podcast is here to keep youinformed and ahead of the curve.
(00:41):
Now let's dive into the marketsand explore what shaping the
world of finance today.
Here with us today.
We have Scott Tremlett chiefinvestment officer and managing
partner at paramount associates,wealth management.
Scott.
Looking back to last week.
What are some major events youwould like to highlight?
Thank you, Chris.
Last week, major indices, Val.
(01:03):
The S and P 500 fell 2% for itssecond straight, weekly decline.
The S and P did end at streak of14 days of more declining stocks
than gainers on Friday.
The Dow Jones, industrialaverage.
I finally closed up lastThursday after 10 straight days
of declines.
(01:23):
It's the largest daily slidesince 1974.
What didn't fall the 10-yeartreasury rate.
The yield is now up nearly halfa percent in the last two weeks
alone.
Remember yields going up meanbond prices are going down.
Also gaining for the week wasthe dollar.
Which hit its two year high lastweek.
(01:46):
But the big gainer for the weekwas volatility.
The volatility index surge afterthe fed announcement Wednesday.
And fed chair Paul's testimony.
Uh, 74% jump in one day.
It's second biggest dailyincrease ever.
Wow, Scott, it sounds like thesurgeon volatility alongside the
(02:08):
rising yields and astrengthening dollar really
underscores how sensitivemarkets are to fed actions and
Pal's testimony last week.
How about the economic reportsfrom last week, Scott?
Economic reports were generallypositive last week, Chris.
November retail sales beat.
Up over 6% year over year.
(02:29):
It's highest growth rate since2021.
Headline and core PCE inflationnumbers.
Each came in softer thanconsensus.
Initial jobless claims werelower than expected.
And the university of Michigan'sconsumer sentiment report came
in at its highest mark sinceApril.
Third quarter us GDP was revisedup.
(02:49):
An existing home sales werebetter than anticipated.
I hear you, Scott, while thepositive economic data is
encouraging.
It's a classic case of good newsbeing bad news.
As stronger growth couldcomplicate the Fed's path toward
easing rates.
So overall, what are you takingaway from last week?
Yes, Chris.
(03:10):
Good economic news can be badnews for markets in periods of
monetary policy change.
The markets want rates to comedown.
They are somewhat dependent onat this point.
But, and this is the biggestnews item for last week.
Good economic news andinflation, seemingly sticking
(03:30):
around.
Change the projected pace offederal reserve rate cuts for
2025.
Last week the fed did cut theovernight rate.
Another quarter point.
But markets and volatility moveswere directly related to the fed
indicating that will only cutrates twice in 2025.
That has been my expectation.
(03:52):
But I guess the market needed tohear it to believe it.
The fed raised futureprojections for inflation.
And stated that they can affordto be more cautious and keep an
eye on the extent and timing.
Of additional moves.
Reading different comments fromfed participants.
It seems that possible paths arewidening even within the fed.
(04:14):
Some members, state inflation iscoming down as expected.
Some do not think that the bethe case.
Some members state that they areconsidering potential trade and
other policy changes in the us.
Some including fed chair Powell.
As stated that they have nottaken us policies into
consideration at all.
Sounds like a moving target.
(04:35):
Data dependent.
We will have to wait and seewhat all this means for 2025.
Thanks for that explanation,Scott, it's clear that the Fed's
cautious tone and reviseprojections for your fewer rate
cuts in 2025.
Are reshaping marketexpectations.
Underscoring just how sensitivemarkets are to both economic
(04:55):
data and policy signals.
So, what are you thinking fornext year?
Chris, we did touch onexpectations for 2025 last week.
And I'm certain, we will comeback to this topic again.
But.
At week's end, the big picturemarket outlook.
Is really mixed the bull casepoints to fed easing
(05:17):
disinflation, a strong usconsumer strong labor market
optimism for us policies and AIexcitement.
The bear case considers a morehawkish fed.
Stretch valuations.
And geopolitical concerns.
That's understandable with sucha mixed outlook.
It's fascinating to see the bullcase driven by optimism and
(05:40):
innovation while the bear casekeeps a cautious focus on
valuations.
And global uncertainties.
Finally, what are you looking atthis week?
Scott?
Due to the holiday.
Economic data is light thisweek, Chris.
Tomorrow market's closed earlyand Wednesday markets in the U S
are closed.
Today we saw the conference.
(06:01):
Board's consumer confidencenumber disappoint.
Well below projections asoptimism was replaced by
pessimism about future businessconditions and incomes.
Durable good orders came intoday, much weaker than
expected.
With transportation leading todecline.
We have weekly Java's claims onThursday and overseas.
(06:23):
We have various releases fromJapan, China, and South Korea
this week.
I didn't mention earlier.
But both the UK and Japan heldrates last week, no moves up or
down.
I want to leave our listenerswith a heartfelt, happy
holidays.
I hope you and your loved onestake advantage of this time
together and appreciate themoments the holidays bring us.
(06:45):
Well, maybe not the shopping orwrapping gifts.
I know all of us here atparamount.
Appreciate all of you.
Well, we will certainly keep onthe lookout for those reports
and trends.
And I'm sure we will have plentyto discuss next Monday.
For now stay informed, stayahead and join us next week.
For more key updates shaping theglobal economy.
(07:07):
Thank you for tuning intoparamount wealth perspectives.
We hope you all have a fantasticweek.
And a great holiday season.
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