November 3, 2025 • 10 mins
In this episode of Paramount Wealth Perspectives, host Chris Coyle, Market Director at Paramount Associates Wealth Management, sits down with Chief Investment Officer Scott Trem to break down the Fed’s recent 25-basis-point rate cut and what it means for investors. They discuss the Fed’s cautious pivot, the divide in consumer confidence, labor market resilience, and the outlook for housing and earnings. The conversation also explores opportunities in international markets, Europe’s surprising strength, and how investors can position for quality, stability, and growth heading into 2026.
Tune in for actionable insights, clear analysis, and strategies to stay disciplined in today’s shifting market.
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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 byParamount's, chief Investment
Officer Scott Trem.
Let's start with the big one,the fed cut rates by 25 basis
points.
How are you reading this latestmove?
Well, it's consistent with thepivot We've been expecting the
fed's walking a fine line.
(00:42):
They wanna support slowinggrowth, but not let inflation
reheat.
But Powell's tone was stillhawkish, which tells me they're
not in full easing mode yet.
But directionally, they've movedfrom fighting inflation to
managing the landing.
Consumer confidence came in at94.6 for October up a little
bit.
That feels counterintuitivegiven the layoffs and mixed
(01:05):
data, what's going on there?
Well, it's really a tale of twoconsumers.
Lower income households arefeeling the squeeze right now,
but higher earners are stillspending the headline number,
masks that divide.
What's interesting is thatconfidence fell most for those
making under$75,000 a year whilehouseholds earning over$200,000
(01:26):
remain Pretty upbeat.
The split will shape Q4 spendingtrends.
Let's hit the labor market.
We've seen some notable layoffslately, UPS, Amazon, Intel.
Yet jobless claims are down.
How do you square that?
That's the paradox.
Corporate headlines are scary,but the underlying data really
remain stable.
(01:46):
Aggregated state level numbersactually show claims falling
from 231,000 to 218,000.
So the job market isn't breakingyet, but we're seeing cracks in
confidence, And I think thatwill become more visible early
next year.
One story that's gainingtraction is this idea of a.
(02:07):
Tax refund stimulus in 2026.
What are you expecting?
Well, it's gonna be significant.
There are estimates that refundscould average about$3,200 per
filer with some householdsexceeding almost$4,000 by 2026.
It's likely to hit in the firsthalf of the year, a short term
boost for spending and possiblyinflation.
(02:30):
Housing's been quiet lately,pending home sales.
We're flat in September.
What's your read there?
Well, mortgage rates are stillhigh, around 6.3%, and that's
keeping both buyers and sellerson the sidelines.
Inventories are tight,affordability is stretched, and
you can feel the market justwaiting for the Fed to cut again
before moving.
(02:50):
It's frozen more than it isweak.
We've now seen roughly 70% of sand p companies report earnings.
How do you grade this season?
Uh, B to a b plus earnings aretracking about 8% year over year
ahead of the 6% consensus.
The mega cap names are carryinga lot of that weight, but the
(03:11):
broader market.
Isn't collapsing.
We are seeing the breadth ofearnings beats broaden out more
than just the last few years forsure.
The story this quarter isresilience, especially in
financials where strong tradingactivity and improving credit
quality definitely stand out.
Let's, let's stay on that.
Financials had a big quarter.
(03:32):
What's fueling the strength?
Well, three things in my mind.
The capital markets reopeningconsumer credit, holding up, and
regional banks finallystabilizing IPO activity jumped
40% year over year.
Delinquency rates actually fellto a two year low, and trading
volumes were robust.
It's a reminder that qualitybalance sheets still matter and
(03:55):
the market's rewarding that.
Our valuation starting toconcern you Again, the s and p
is up over 17% year to date.
Well, it's getting pricey perhistorical norms, uh, no
question on that.
But the four PE is around 22times, which isn't cheap.
Again, by historical norms.
My argument is that the economyis much different than the
(04:16):
historical norm and due to thelargest companies in the market
having higher price to earningsmultiples, the market trades at
higher valuations, but look atthe earnings growth of these
companies.
I think we are fairly valuedaround where we are now.
And remember the combination wehave earnings are growing.
Inflation is trending lower, andthe Fed is beginning its rate
(04:37):
cutting cycle.
But while we're not in bubbleterritory, I do think
selectivity matters.
Quality and cash flow are whatwin from here.
International markets.
Any bright spots outside of theUnited States?
Absolutely.
We've moved from a selectivestance to a broader overweight
and developed internationalequities and equal weight in
emerging markets.
(04:58):
Valuations overseas remainattractive.
The US still trades at about a50% premium to non-US markets
compared with a historicalaverage closer to 18%.
That discount creates theopportunity.
Europe's been one of the quietwinners this year.
Resilient consumer demandstabilizing inflation in a more
dovish ECB.
(05:19):
Meanwhile, India continues tolead globally in growth
momentum.
It was slightly overvalued atthis point.
China's getting moreinteresting, again with a
renewed government stimulus andpotential tariff related
cooperation, improving thatsentiment.
So we're seeing a rotation notaway from the us, but beyond it.
It's a good time to broadenexposure where valuations and
(05:40):
policy alignment both favorupside.
You mentioned Europe earlier,what gives you confidence there
despite the slower growthnarrative?
Well, Europe's quietly becomingone of the more interesting
regions out there.
The story isn't about breakneckgrowth.
It's about resilience andadaptation.
Companies have been navigatingthe tariffs environment better
(06:02):
than expected, cutting costs,and even shifting production to
protect margins.
A Goldman Sachs basket of tariffexposed European stocks actually
outperformed the broader marketby nearly two times in October,
which tells you the damage wasfar less than feared.
What's really standing out isthe earnings recovery.
(06:22):
The stock 600 is on track fordouble digit profit growth next
year, and you're seeing bignames posting strong North
American sales despite tariffs.
That's been the surprise.
European companies are findingways to grow through friction,
not around it.
And in an ECB that's gone fromtightening to a holding pattern,
(06:43):
attractive relative valuations.
Europe's trading roughly 50%.
Cheaper than the us remember.
And a consumer base that's stillspending on quality brands and
you've got a region that doesn'tneed perfection to outperform,
stabilization alone can driveupside.
So from a portfolio perspective,Europe's mood from a void to
(07:03):
accumulate.
And it's not about chasingmomentum, it's about buying
durability at a discount.
Are global investors finallybeing rewarded for looking
outside of the United States?
Yes.
And that's something we haven'tsaid in years.
The developed internationalindex is up around 27%.
Year to date emerging markets,33%, and both outpacing the s
(07:26):
and Ps, about 16% gain throughlast Friday's close.
That performance gap is beingdriven by favorable currencies,
rate cuts abroad and strongerearnings breadth.
For the first time in a while,international diversification is
adding value instead of dilutingit.
Given that backdrop, what's thebiggest risk to your
international overweight?
(07:47):
Definitely the US dollar.
That's plain and simple.
A strong dollar can erodeforeign returns for US
investors.
Right now I expect dollarstrength to persist in the near
term, but over the next year orso, rate differentials could
narrow easing that headwind.
Alright, let's move to thelightning round.
Short questions, quick answers.
Let's do it.
Rate, cut or pause in December.
(08:10):
Rate cut, but smaller odds thanthe market thinks.
Soft landing or mild recession.
Soft landing.
Best performing asset class inquarter four.
Large cap growth.
Most underappreciated sectorfinancials, namely asset
managers, most overextendedsmall caps.
(08:31):
I'm not a fan.
Where's the 10 year yield byyear end.
Around 4% gold or Bitcoin goldoil in six months.
Higher or lower, slightly higherFavorite inflation hedge right
now infrastructure.
Will the Fed start cuttingaggressively in 2026?
(08:54):
Only if inflation breaks lower.
Biggest geopolitical risk onyour radar Trade friction
Reescalating with China.
US dollar strength or weaknessin 2026?
Gradual weakening.
Where's the next leadershiprotation in the s and p 500?
I don't see one coming.
(09:16):
Preferred fixed income?
Duration?
Intermediate.
What keeps you up at night?
Sticky inflation expectations.
And what's encouraging you mostright now?
Corporate earnings Resilience.
What's the most overlookedopportunity in this market?
Quality mid-cap stocks.
(09:36):
Most underpriced risk inmarkets.
Re-acceleration of inflation in2026.
One word to describe investormood resilience.
One piece of advice forinvestors, investors, stay
diversified, stay disciplined,and ignore the noise.
(09:56):
Appreciate it, Scott.
Catch you again in two weeks.
I also want to thank ouraudience for tuning in and
remember to please submit yourquestions via email to
general@paramountassoc.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 byParamount's, chief Investment
Officer Scott Trem.
Let's start with the big one,the fed cut rates by 25 basis
points.
How are you reading this latestmove?
Well, it's consistent with thepivot We've been expecting the
fed's walking a fine line.
(00:42):
They wanna support slowinggrowth, but not let inflation
reheat.
But Powell's tone was stillhawkish, which tells me they're
not in full easing mode yet.
But directionally, they've movedfrom fighting inflation to
managing the landing.
Consumer confidence came in at94.6 for October up a little
bit.
That feels counterintuitivegiven the layoffs and mixed
(01:05):
data, what's going on there?
Well, it's really a tale of twoconsumers.
Lower income households arefeeling the squeeze right now,
but higher earners are stillspending the headline number,
masks that divide.
What's interesting is thatconfidence fell most for those
making under$75,000 a year whilehouseholds earning over$200,000
(01:26):
remain Pretty upbeat.
The split will shape Q4 spendingtrends.
Let's hit the labor market.
We've seen some notable layoffslately, UPS, Amazon, Intel.
Yet jobless claims are down.
How do you square that?
That's the paradox.
Corporate headlines are scary,but the underlying data really
remain stable.
(01:46):
Aggregated state level numbersactually show claims falling
from 231,000 to 218,000.
So the job market isn't breakingyet, but we're seeing cracks in
confidence, And I think thatwill become more visible early
next year.
One story that's gainingtraction is this idea of a.
(02:07):
Tax refund stimulus in 2026.
What are you expecting?
Well, it's gonna be significant.
There are estimates that refundscould average about$3,200 per
filer with some householdsexceeding almost$4,000 by 2026.
It's likely to hit in the firsthalf of the year, a short term
boost for spending and possiblyinflation.
(02:30):
Housing's been quiet lately,pending home sales.
We're flat in September.
What's your read there?
Well, mortgage rates are stillhigh, around 6.3%, and that's
keeping both buyers and sellerson the sidelines.
Inventories are tight,affordability is stretched, and
you can feel the market justwaiting for the Fed to cut again
before moving.
(02:50):
It's frozen more than it isweak.
We've now seen roughly 70% of sand p companies report earnings.
How do you grade this season?
Uh, B to a b plus earnings aretracking about 8% year over year
ahead of the 6% consensus.
The mega cap names are carryinga lot of that weight, but the
(03:11):
broader market.
Isn't collapsing.
We are seeing the breadth ofearnings beats broaden out more
than just the last few years forsure.
The story this quarter isresilience, especially in
financials where strong tradingactivity and improving credit
quality definitely stand out.
Let's, let's stay on that.
Financials had a big quarter.
(03:32):
What's fueling the strength?
Well, three things in my mind.
The capital markets reopeningconsumer credit, holding up, and
regional banks finallystabilizing IPO activity jumped
40% year over year.
Delinquency rates actually fellto a two year low, and trading
volumes were robust.
It's a reminder that qualitybalance sheets still matter and
(03:55):
the market's rewarding that.
Our valuation starting toconcern you Again, the s and p
is up over 17% year to date.
Well, it's getting pricey perhistorical norms, uh, no
question on that.
But the four PE is around 22times, which isn't cheap.
Again, by historical norms.
My argument is that the economyis much different than the
(04:16):
historical norm and due to thelargest companies in the market
having higher price to earningsmultiples, the market trades at
higher valuations, but look atthe earnings growth of these
companies.
I think we are fairly valuedaround where we are now.
And remember the combination wehave earnings are growing.
Inflation is trending lower, andthe Fed is beginning its rate
(04:37):
cutting cycle.
But while we're not in bubbleterritory, I do think
selectivity matters.
Quality and cash flow are whatwin from here.
International markets.
Any bright spots outside of theUnited States?
Absolutely.
We've moved from a selectivestance to a broader overweight
and developed internationalequities and equal weight in
emerging markets.
(04:58):
Valuations overseas remainattractive.
The US still trades at about a50% premium to non-US markets
compared with a historicalaverage closer to 18%.
That discount creates theopportunity.
Europe's been one of the quietwinners this year.
Resilient consumer demandstabilizing inflation in a more
dovish ECB.
(05:19):
Meanwhile, India continues tolead globally in growth
momentum.
It was slightly overvalued atthis point.
China's getting moreinteresting, again with a
renewed government stimulus andpotential tariff related
cooperation, improving thatsentiment.
So we're seeing a rotation notaway from the us, but beyond it.
It's a good time to broadenexposure where valuations and
(05:40):
policy alignment both favorupside.
You mentioned Europe earlier,what gives you confidence there
despite the slower growthnarrative?
Well, Europe's quietly becomingone of the more interesting
regions out there.
The story isn't about breakneckgrowth.
It's about resilience andadaptation.
Companies have been navigatingthe tariffs environment better
(06:02):
than expected, cutting costs,and even shifting production to
protect margins.
A Goldman Sachs basket of tariffexposed European stocks actually
outperformed the broader marketby nearly two times in October,
which tells you the damage wasfar less than feared.
What's really standing out isthe earnings recovery.
(06:22):
The stock 600 is on track fordouble digit profit growth next
year, and you're seeing bignames posting strong North
American sales despite tariffs.
That's been the surprise.
European companies are findingways to grow through friction,
not around it.
And in an ECB that's gone fromtightening to a holding pattern,
(06:43):
attractive relative valuations.
Europe's trading roughly 50%.
Cheaper than the us remember.
And a consumer base that's stillspending on quality brands and
you've got a region that doesn'tneed perfection to outperform,
stabilization alone can driveupside.
So from a portfolio perspective,Europe's mood from a void to
(07:03):
accumulate.
And it's not about chasingmomentum, it's about buying
durability at a discount.
Are global investors finallybeing rewarded for looking
outside of the United States?
Yes.
And that's something we haven'tsaid in years.
The developed internationalindex is up around 27%.
Year to date emerging markets,33%, and both outpacing the s
(07:26):
and Ps, about 16% gain throughlast Friday's close.
That performance gap is beingdriven by favorable currencies,
rate cuts abroad and strongerearnings breadth.
For the first time in a while,international diversification is
adding value instead of dilutingit.
Given that backdrop, what's thebiggest risk to your
international overweight?
(07:47):
Definitely the US dollar.
That's plain and simple.
A strong dollar can erodeforeign returns for US
investors.
Right now I expect dollarstrength to persist in the near
term, but over the next year orso, rate differentials could
narrow easing that headwind.
Alright, let's move to thelightning round.
Short questions, quick answers.
Let's do it.
Rate, cut or pause in December.
(08:10):
Rate cut, but smaller odds thanthe market thinks.
Soft landing or mild recession.
Soft landing.
Best performing asset class inquarter four.
Large cap growth.
Most underappreciated sectorfinancials, namely asset
managers, most overextendedsmall caps.
(08:31):
I'm not a fan.
Where's the 10 year yield byyear end.
Around 4% gold or Bitcoin goldoil in six months.
Higher or lower, slightly higherFavorite inflation hedge right
now infrastructure.
Will the Fed start cuttingaggressively in 2026?
(08:54):
Only if inflation breaks lower.
Biggest geopolitical risk onyour radar Trade friction
Reescalating with China.
US dollar strength or weaknessin 2026?
Gradual weakening.
Where's the next leadershiprotation in the s and p 500?
I don't see one coming.
(09:16):
Preferred fixed income?
Duration?
Intermediate.
What keeps you up at night?
Sticky inflation expectations.
And what's encouraging you mostright now?
Corporate earnings Resilience.
What's the most overlookedopportunity in this market?
Quality mid-cap stocks.
(09:36):
Most underpriced risk inmarkets.
Re-acceleration of inflation in2026.
One word to describe investormood resilience.
One piece of advice forinvestors, investors, stay
diversified, stay disciplined,and ignore the noise.
(09:56):
Appreciate it, Scott.
Catch you again in two weeks.
I also want to thank ouraudience for tuning in and
remember to please submit yourquestions via email to
general@paramountassoc.com.
For now, stay informed.
Stay ahead and join us next timefor more key updates shaping the
global economy.
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