October 6, 2025 • 13 mins
In this episode of Paramount Wealth Perspectives, Chris Coyle and CIO Scott Tremlett break down a volatile yet resilient week in global markets. Despite a U.S. government shutdown and political uncertainty abroad, equities hit new highs as investors focused on interest rate cuts and early signs of an economic reset. The conversation covers how tariffs are reemerging as a source of inflation, what the latest labor data reveals about a “low hire, low fire” job market, and why this moment may mark the start of a new early-cycle phase for investors.
Tune in as Chris and Scott explore where opportunity—and caution—lie in today’s evolving market landscape.
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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'm the marketing director andan advisor here at Paramount
Associates Wealth Management.
And today I'm joined byParamount's, chief Investment
Officer, Scott Tremlin.
Scott, good to have you back.
Let's start with the bigpicture.
Last week was anything butquiet.
New records in US equitiesdespite a government shutdown in
the United States, politicaldrama abroad, and some data
(00:43):
surprises.
Walk us through what stood outto you.
Yes, Chris.
It was an interesting week.
You'd expect the shut downheadline to shake investor
confidence, but the marketessentially shrugged it off.
The s and p 500 climbed anotherone plus percent, setting a
fresh all time high in cappingits fifth straight monthly gain
up roughly 14%.
(01:04):
Year to date.
The story was a mix of twothings.
Rate cut, expectations gettingstronger after soft and.
Employment data and ongoingoptimism around the AI driven
investment cycle.
It's worth noting that globallyequities did well too.
European and UK indices postedsome of their best weeks of the
year driven by strength intechnology and healthcare.
(01:27):
And what really stood out washow resilient investor sentiment
has become even amid.
Political dysfunction inWashington.
Markets are focusing on whatcomes next in monetary policy
rather than all the noise.
So investors look past theshutdown, but from a macro
perspective, how disruptive isthis for the economy?
(01:49):
In the near term?
Not very disruptive.
It's mostly a data blackoutproblem.
Economic releases like payrollsand CPI maybe delayed, and that
complicates things for policymakers who rely on the fresh
numbers.
But historically, shutdowns haveonly had short-lived effects.
What matters more is how long itlasts.
(02:10):
If federal workers start missingpaychecks next week, pressure
will build fast.
But in market terms, it's theuncertainty that matters more
than the lost output.
And right now, markets arebetting it'll get resolved.
It's interesting.
Rather than reacting topolitics, markets seemed to look
through it.
Which sectors led that move?
(02:32):
Well, the driver wasn't all techthis time, but the winner for
the week was actuallyhealthcare, which rallied nearly
7%.
After President Trump announcedan agreement with Pfizer to
provide several high cost drugsat steep discounts, that deal
took a major cloud off thesector and markets immediately
priced in the possibility thatmore companies would follow.
(02:53):
Utilities and technology alsogained while energy lagged as
oil prices softened.
But the broader takeaway wasthat investors are still
rewarding policy clarity, evenif it comes from unusual places.
Healthcare pricing reform wasonce seen as risk.
Now it's being reframed asrelief.
That is an interesting turn.
(03:14):
Government action boostingsentiment instead of dampening
it.
What else caught your eye in thedata flow?
A couple things.
Chris first, manufacturing andservices pmmi came in mixed
globally, still in expansion,but off recent highs in the us.
The A DP employment reportsurprise sharply to the
downside, showing a loss of32,000 jobs versus expectations
(03:37):
for a small gain and consumerconfidence dropped.
To its lowest level since April.
Meanwhile, global PMI edged downto 52.4 from 52.9, suggesting
growth is moderating, but stillexpanding.
Europe held up better thanexpected and emerging markets
outperformed, particularly Chinaand India.
(03:59):
There are also subtle signs thatinflationary pressures are
changing shape.
For example, US consumer goodsinflation is now being nudged
higher by tariffs.
We'll get into that in a minute.
Even as a broader inflationtrend remains contained.
Yes.
Actually, let's go there.
The conversation around tariffsand inflation seems to be
heating up again.
(04:19):
What are you seeing in the data?
The impact is finally showingthrough.
According to recent reports, theTrump administration's
reciprocal, quote unquotetariffs, which now cover a broad
set of imports, are beginning topush consumer prices higher
across categories like.
Clothing, electronics and carparts.
For instance, in the six monthsto August, audio equipment
(04:41):
prices jumped 14%, dresses 8%,and tools and hardware 5%.
These are all largely importedgoods.
Retailers are no longerabsorbing these costs, they're
passing them on to theconsumers.
Companies like AutoZone andAshley Furniture have already
announced additional price hikesas new tariff rounds hit later
(05:03):
this month.
So we're seeing a clear shift.
What started as a trade policytool is now a consumer price
story.
It's not runaway inflation.
But it does complicate the Fed'sbalancing act.
Headline inflation is stable,but goods inflation is creeping
back up.
So in a sense, tariffs arefunctioning like a tax on
(05:24):
consumption.
How's that playing into thepolitical and market narrative?
That's right.
Attacks on consumption andmarkets are recognizing the
tariffs have become a structuralinflation tailwind.
Even if modest, the White Houseis betting that stronger
domestic investment andmanufacturing offsets that pain.
(05:44):
But for consumers it means fewerbargains and more selective
spending.
For investors, the question iswhether these cost pressures
start eroding margins in retail,autos and manufacturing.
So far, earnings estimateshaven't flinched.
But if tariffs persist nextyear, we could see downward
revisions in those sectors.
(06:04):
Speaking of earnings, let'spivot there.
The latest global marketexpectations came out and they
tell an interesting story aboutwhere the markets think we are
in the cycle.
They really do.
Globally, earnings expectationsare broadening out.
Again, here's a snapshot.
S and P 500 earnings areprojected to grow about 11% in
(06:24):
2025 and 13.5% in 2026.
Developed international,excluding the US are expected to
rise 2.5% this year than almost10 and a half percent in 2026.
Emerging markets are expected tobe stronger as well.
Nearly 9% in 2025, acceleratingto 12% in 2026.
(06:48):
That distribution tells youinvestors expect a rotation.
US leadership remains intact,but the growth gap is narrowing
internationally.
Corporate margins have provenresilient and balance sheets
remain healthy at the same time.
The forward price to earningsmultiple on the s and p 500 has
climbed to 22.8 times, which ispricey, but not extreme given
(07:11):
where rates and inflation are.
So we're in a market that'soptimistic but not euphoric.
That kind of setup you typicallysee in an early cycle
environment.
That's a good segue.
There's been a lot of debatelately about where we are in the
economic cycle.
Some analysts argue we'realready in a new early cycle
phase.
Do you agree with that?
(07:32):
I do.
Cautiously.
I mean, historically, earlycycle recoveries come after
recessions, but this time feelslike a soft reset version of
that pattern.
We may have skipped the formalrecession, but the ingredients
of an early cycle environmentare emerging.
Earnings are reaccelerating.
Unemployment has ticked upmodestly and monetary and fiscal
(07:55):
conditions are poised to ease in2026.
If you look at past cycles like1993, 2003, 2009, those were all
early cycle years marked byoutsize equity gains in
improving risk appetite.
This year's internationalperformance with the developed
international index, excludingthe US.
(08:15):
Up almost 29% in dollars fitsthat same mold.
The implication is that we couldbe entering a multi-year
recovery window where on paper,small cap value and cyclical
sectors should start tooutperform Again.
Let's be clear, my portfoliosare not necessarily structured
(08:35):
that way, but I'm not going intothe year end risk off.
Overall, it's not without risk.
Valuations are high and globalpolitics are noisy, but
structurally it looks like apivot from defense to
opportunity.
And that aligns with the ideathat markets are looking through
near term uncertainty toward abroader expansion.
(08:59):
But there's one big variableleft labor.
You've talked before about thelabor market being sticky.
What's the latest there?
It's become one of the mostinteresting stories globally.
Labor markets are stuck in whateconomists are calling a low
hire, low fire cycle across theG seven job growth has slowed
(09:20):
dramatically, just 0.5%annualized in the us.
And 0.4% across the other Gseven economies.
Companies aren't cuttingaggressively, but they're not
hiring either.
They're basically holding theirworkforces steady while waiting
to see how trade technology andAI reshape productivity in the
(09:40):
us.
Job creation nearly stalled overthe summer.
Some regions even posted net joblosses in June.
Europe shows a similar pattern,particularly in the UK where
payroll employment fell by.
About 0.5% over the past year.
The paradox is that unemploymentremains low, yet job mobility
has collapsed.
(10:01):
LinkedIn data shows that theshare of workers changing jobs
is roughly 20% below prepandemic levels in most major
economies.
Debt reflects caution.
Employees want stability, andemployers are reluctant to take
risks.
So it's not a jobs crisis, but afreeze.
What are the implications ofthat for policy and markets?
(10:25):
That's spot on.
It's a stalemate, not acollapse.
For policymakers, it complicatesinterpretation.
If fewer people move jobs.
Wage pressures can ease evenwithout layoffs, which does help
inflation.
But when job growth stalls, ittakes a spark out of the
economy.
Fewer job changes means slowerproductivity gains.
(10:47):
From a market perspective, itargues for moderate growth.
with Persistent slack that's asweet spot for equities in the
short term because it allowscentral banks to stay
accommodative longer, butstructurally.
If this drags on, it could weighon long-term potential growth.
It's also demographic.
(11:08):
Aging workforces across Europeand North America are less
mobile, so the labor market isnormalizing, but it's not firing
in all cylinders.
But remember my point.
From previous episodes with lessimmigration, we may not need the
same amount of hiring to keepthe job market healthy.
Let's tie this all together.
We've got early cycle signals,firm earnings expectations,
(11:32):
sticky labor dynamics in thereemergence of tariffs in the
inflation mix.
How do investors make sense ofall that?
Well, I.
Really been reluctant to saythis, but I'm now convinced that
we are in a transitional market.
Moving from resilience torecovery, the narrative is
shifting from will growth breakto how strong will the rebound
(11:55):
be.
Earnings are, reacceleratingpolicy is set to ease.
Inflation is evolving, notexploding, and a labor market is
softening without cracking thatcombination supports risk
assets, but it's also a reminderthat this next phase will be
selective.
You can't buy everything andexpect the same result.
(12:16):
Investors will need to emphasizequality, pricing, power, and
flexibility.
The traits that hold up acrossregimes, if the early cycle view
proves right, the next fewquarters could be rewarding, but
success will depend on beingdisciplined, capturing upside
without ignoring the structuralshifts.
They're redefining the economy.
(12:38):
That's a great way to frame it.
Disciplined optimism.
Scott, as always thoughtful andgrounded.
Thanks for joining.
Thanks, Chris.
Always a pleasure.
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.
(12:59):
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'm the marketing director andan advisor here at Paramount
Associates Wealth Management.
And today I'm joined byParamount's, chief Investment
Officer, Scott Tremlin.
Scott, good to have you back.
Let's start with the bigpicture.
Last week was anything butquiet.
New records in US equitiesdespite a government shutdown in
the United States, politicaldrama abroad, and some data
(00:43):
surprises.
Walk us through what stood outto you.
Yes, Chris.
It was an interesting week.
You'd expect the shut downheadline to shake investor
confidence, but the marketessentially shrugged it off.
The s and p 500 climbed anotherone plus percent, setting a
fresh all time high in cappingits fifth straight monthly gain
up roughly 14%.
(01:04):
Year to date.
The story was a mix of twothings.
Rate cut, expectations gettingstronger after soft and.
Employment data and ongoingoptimism around the AI driven
investment cycle.
It's worth noting that globallyequities did well too.
European and UK indices postedsome of their best weeks of the
year driven by strength intechnology and healthcare.
(01:27):
And what really stood out washow resilient investor sentiment
has become even amid.
Political dysfunction inWashington.
Markets are focusing on whatcomes next in monetary policy
rather than all the noise.
So investors look past theshutdown, but from a macro
perspective, how disruptive isthis for the economy?
(01:49):
In the near term?
Not very disruptive.
It's mostly a data blackoutproblem.
Economic releases like payrollsand CPI maybe delayed, and that
complicates things for policymakers who rely on the fresh
numbers.
But historically, shutdowns haveonly had short-lived effects.
What matters more is how long itlasts.
(02:10):
If federal workers start missingpaychecks next week, pressure
will build fast.
But in market terms, it's theuncertainty that matters more
than the lost output.
And right now, markets arebetting it'll get resolved.
It's interesting.
Rather than reacting topolitics, markets seemed to look
through it.
Which sectors led that move?
(02:32):
Well, the driver wasn't all techthis time, but the winner for
the week was actuallyhealthcare, which rallied nearly
7%.
After President Trump announcedan agreement with Pfizer to
provide several high cost drugsat steep discounts, that deal
took a major cloud off thesector and markets immediately
priced in the possibility thatmore companies would follow.
(02:53):
Utilities and technology alsogained while energy lagged as
oil prices softened.
But the broader takeaway wasthat investors are still
rewarding policy clarity, evenif it comes from unusual places.
Healthcare pricing reform wasonce seen as risk.
Now it's being reframed asrelief.
That is an interesting turn.
(03:14):
Government action boostingsentiment instead of dampening
it.
What else caught your eye in thedata flow?
A couple things.
Chris first, manufacturing andservices pmmi came in mixed
globally, still in expansion,but off recent highs in the us.
The A DP employment reportsurprise sharply to the
downside, showing a loss of32,000 jobs versus expectations
(03:37):
for a small gain and consumerconfidence dropped.
To its lowest level since April.
Meanwhile, global PMI edged downto 52.4 from 52.9, suggesting
growth is moderating, but stillexpanding.
Europe held up better thanexpected and emerging markets
outperformed, particularly Chinaand India.
(03:59):
There are also subtle signs thatinflationary pressures are
changing shape.
For example, US consumer goodsinflation is now being nudged
higher by tariffs.
We'll get into that in a minute.
Even as a broader inflationtrend remains contained.
Yes.
Actually, let's go there.
The conversation around tariffsand inflation seems to be
heating up again.
(04:19):
What are you seeing in the data?
The impact is finally showingthrough.
According to recent reports, theTrump administration's
reciprocal, quote unquotetariffs, which now cover a broad
set of imports, are beginning topush consumer prices higher
across categories like.
Clothing, electronics and carparts.
For instance, in the six monthsto August, audio equipment
(04:41):
prices jumped 14%, dresses 8%,and tools and hardware 5%.
These are all largely importedgoods.
Retailers are no longerabsorbing these costs, they're
passing them on to theconsumers.
Companies like AutoZone andAshley Furniture have already
announced additional price hikesas new tariff rounds hit later
(05:03):
this month.
So we're seeing a clear shift.
What started as a trade policytool is now a consumer price
story.
It's not runaway inflation.
But it does complicate the Fed'sbalancing act.
Headline inflation is stable,but goods inflation is creeping
back up.
So in a sense, tariffs arefunctioning like a tax on
(05:24):
consumption.
How's that playing into thepolitical and market narrative?
That's right.
Attacks on consumption andmarkets are recognizing the
tariffs have become a structuralinflation tailwind.
Even if modest, the White Houseis betting that stronger
domestic investment andmanufacturing offsets that pain.
(05:44):
But for consumers it means fewerbargains and more selective
spending.
For investors, the question iswhether these cost pressures
start eroding margins in retail,autos and manufacturing.
So far, earnings estimateshaven't flinched.
But if tariffs persist nextyear, we could see downward
revisions in those sectors.
(06:04):
Speaking of earnings, let'spivot there.
The latest global marketexpectations came out and they
tell an interesting story aboutwhere the markets think we are
in the cycle.
They really do.
Globally, earnings expectationsare broadening out.
Again, here's a snapshot.
S and P 500 earnings areprojected to grow about 11% in
(06:24):
2025 and 13.5% in 2026.
Developed international,excluding the US are expected to
rise 2.5% this year than almost10 and a half percent in 2026.
Emerging markets are expected tobe stronger as well.
Nearly 9% in 2025, acceleratingto 12% in 2026.
(06:48):
That distribution tells youinvestors expect a rotation.
US leadership remains intact,but the growth gap is narrowing
internationally.
Corporate margins have provenresilient and balance sheets
remain healthy at the same time.
The forward price to earningsmultiple on the s and p 500 has
climbed to 22.8 times, which ispricey, but not extreme given
(07:11):
where rates and inflation are.
So we're in a market that'soptimistic but not euphoric.
That kind of setup you typicallysee in an early cycle
environment.
That's a good segue.
There's been a lot of debatelately about where we are in the
economic cycle.
Some analysts argue we'realready in a new early cycle
phase.
Do you agree with that?
(07:32):
I do.
Cautiously.
I mean, historically, earlycycle recoveries come after
recessions, but this time feelslike a soft reset version of
that pattern.
We may have skipped the formalrecession, but the ingredients
of an early cycle environmentare emerging.
Earnings are reaccelerating.
Unemployment has ticked upmodestly and monetary and fiscal
(07:55):
conditions are poised to ease in2026.
If you look at past cycles like1993, 2003, 2009, those were all
early cycle years marked byoutsize equity gains in
improving risk appetite.
This year's internationalperformance with the developed
international index, excludingthe US.
(08:15):
Up almost 29% in dollars fitsthat same mold.
The implication is that we couldbe entering a multi-year
recovery window where on paper,small cap value and cyclical
sectors should start tooutperform Again.
Let's be clear, my portfoliosare not necessarily structured
(08:35):
that way, but I'm not going intothe year end risk off.
Overall, it's not without risk.
Valuations are high and globalpolitics are noisy, but
structurally it looks like apivot from defense to
opportunity.
And that aligns with the ideathat markets are looking through
near term uncertainty toward abroader expansion.
(08:59):
But there's one big variableleft labor.
You've talked before about thelabor market being sticky.
What's the latest there?
It's become one of the mostinteresting stories globally.
Labor markets are stuck in whateconomists are calling a low
hire, low fire cycle across theG seven job growth has slowed
(09:20):
dramatically, just 0.5%annualized in the us.
And 0.4% across the other Gseven economies.
Companies aren't cuttingaggressively, but they're not
hiring either.
They're basically holding theirworkforces steady while waiting
to see how trade technology andAI reshape productivity in the
(09:40):
us.
Job creation nearly stalled overthe summer.
Some regions even posted net joblosses in June.
Europe shows a similar pattern,particularly in the UK where
payroll employment fell by.
About 0.5% over the past year.
The paradox is that unemploymentremains low, yet job mobility
has collapsed.
(10:01):
LinkedIn data shows that theshare of workers changing jobs
is roughly 20% below prepandemic levels in most major
economies.
Debt reflects caution.
Employees want stability, andemployers are reluctant to take
risks.
So it's not a jobs crisis, but afreeze.
What are the implications ofthat for policy and markets?
(10:25):
That's spot on.
It's a stalemate, not acollapse.
For policymakers, it complicatesinterpretation.
If fewer people move jobs.
Wage pressures can ease evenwithout layoffs, which does help
inflation.
But when job growth stalls, ittakes a spark out of the
economy.
Fewer job changes means slowerproductivity gains.
(10:47):
From a market perspective, itargues for moderate growth.
with Persistent slack that's asweet spot for equities in the
short term because it allowscentral banks to stay
accommodative longer, butstructurally.
If this drags on, it could weighon long-term potential growth.
It's also demographic.
(11:08):
Aging workforces across Europeand North America are less
mobile, so the labor market isnormalizing, but it's not firing
in all cylinders.
But remember my point.
From previous episodes with lessimmigration, we may not need the
same amount of hiring to keepthe job market healthy.
Let's tie this all together.
We've got early cycle signals,firm earnings expectations,
(11:32):
sticky labor dynamics in thereemergence of tariffs in the
inflation mix.
How do investors make sense ofall that?
Well, I.
Really been reluctant to saythis, but I'm now convinced that
we are in a transitional market.
Moving from resilience torecovery, the narrative is
shifting from will growth breakto how strong will the rebound
(11:55):
be.
Earnings are, reacceleratingpolicy is set to ease.
Inflation is evolving, notexploding, and a labor market is
softening without cracking thatcombination supports risk
assets, but it's also a reminderthat this next phase will be
selective.
You can't buy everything andexpect the same result.
(12:16):
Investors will need to emphasizequality, pricing, power, and
flexibility.
The traits that hold up acrossregimes, if the early cycle view
proves right, the next fewquarters could be rewarding, but
success will depend on beingdisciplined, capturing upside
without ignoring the structuralshifts.
They're redefining the economy.
(12:38):
That's a great way to frame it.
Disciplined optimism.
Scott, as always thoughtful andgrounded.
Thanks for joining.
Thanks, Chris.
Always a pleasure.
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.
(12:59):
Stay ahead and join us next timefor more key updates shaping the
global economy.
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