November 11, 2024 • 11 mins
Tune in to learn about what happened last week, including the election and Fed announcement, as well as what happened around the rest of the world!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(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?
Thanks, Chris.
Us stocks were higher for theweek with the S and P 500 and
(01:04):
NASDAQ.
Ending the week at record highs.
The Russell 2000 had its bestweek since March of 2020.
All sectors were higher.
With the standouts being bigtech banks, investment banks,
credit cards, auto suppliers andairlines.
Under-performers included dollarstores.
China tech toys, pharma,athletic apparel, and food and
(01:28):
beverages.
Other headlines include apreliminary university of
Michigan consumer sentimentreport.
Which came in at its highestlevel in six months.
The number itself increased atits fastest monthly clip in
nearly four years.
Included in that report.
Consumers 12 month inflationexpectations actually ticked
(01:50):
down to the lowest level sincethe pandemic.
October us services, beatexpectations with its highest
print since July of 2022.
Last week, we also had a glimpseinto the global economy.
With our final service numbersand composite numbers coming in
from around the globe.
Our paramount global rankingswere updated just today.
(02:13):
Well, I have to say it'sencouraging to see the S and P
500 and NASDAQ reach, recordhighs.
And I'm interested to hear moreabout the updated paramount
global rankings.
Can you please explain what thatis to our listeners.
Of course I can, Chris.
Paramount global rankings is aneconomic ranking evaluation that
allows me to research differentareas of the globe for
(02:35):
investment ideas.
There are two sides to themodel.
When I call current power, thatis simply apples to apples,
whose number is bigger.
And then there's momentum.
Momentum allows me to analyzetrends.
Depending on where I feel we arein the economic cycle.
Either current or momentum mayhold greater importance.
(02:56):
I utilize the rankings to guidespecific strategic top-down or
big picture decisions in assetallocation.
I don't want to spend too muchtime on this today.
But in future podcast, I'mcertain I would dig deeper into
the trends and to the results.
Thanks for that, Scott.
I'm sure a lot of listeners willbe interested to hear how
paramount global rankingsprovides a strategic data driven
(03:20):
approach to asset allocation.
Now last week you mentionedthere were some upcoming labor
reports, as well as earningreports.
Can you please elaborate onthose?
As for jobs.
Initial jobless claims wereinline with consensus.
And continuing claims we'reabove consensus.
In fact continuing claims werethe highest in nearly three
(03:43):
years.
As for earnings the last twoweeks have been the busiest
period for S and P 500 earnings.
And as of Friday, 91% of theindex had already reported.
Earnings growth overall tickedup a bit for the week.
And now stands at 5.3% growthversus the 4.3% growth that
(04:04):
happened expected.
Here are some fun stats.
The number of companiesreporting earnings per share
above estimates is below thefive-year, but equal to the
10-year average.
The number of companiesreporting revenues above
estimates is below both thefive-year and 10-year average as
well.
They're earning beats.
(04:25):
Are averaging just 1.2% aboveestimates, which is below both
the five-year and 10-yearaverage.
Wow.
That's interesting to hear thatearnings per share are trailing
historical averages.
Now as you have stressed theimportance of the federal
reserve before.
Can you please elaborate more ontheir announcement from last
(04:47):
week?
Yes, Chris, the federal reservemet last week and cut rates by a
quarter point.
Their policy statement waslittle changed.
However, the fed did delete thestatement that the committee had
gained confidence that inflationis moving sustainably towards
their 2% goal.
Jerome Powell stated thateconomic activity has been
(05:09):
stronger than expected.
And the fed will have to waitand see where the data leads
them before deciding on policyin December.
Markets are now pricing in a 30%chance that the fed leaves rates
unchanged in December.
Up from 17% the previous week.
The committee also emphasizedthat labor market conditions had
(05:30):
generally eased.
Replacing a previous referenceto slowing job gains.
Elsewhere central banks werealso active in the UK, the bank
of England cut rates by quarterpoint.
This was expected.
The bank of England notedsignificant upwards revisions to
both its growth and inflationexpectations.
(05:52):
Moving over to emerging markets.
China policy makers announced apackage to offset local
government's debt problems.
And provided forward guidance.
I'm future policy support forbank recapitalization
consumption and the propertysector.
Understood.
It sounds like the fed willcontinue to let data guide their
decisions in December and movingforward.
(06:15):
Looking to the other major eventlast week that everyone is
speaking about.
Can you please discuss theelections implications?
Yes, Chris.
And then there was the election.
Donald Trump, the Republicannominee defeated Kamala Harris,
vice president, and thedemocratic candidate in
Tuesday's vote.
(06:36):
I have been in conferences sincethe election regarding the
potential market impact of aTrump presidency.
Let's keep in mind that campaignrhetoric often does not match
actual policy.
This time around, however, Trumpwill not be restrained by
divided government.
Also, he can't run on a thirdterm, so he doesn't have to
(06:57):
support policies just to getreelected.
I don't want to dig too deepinto the weeds here as a guest
speaker.
And I will discuss this more inthe coming weeks, but here are
some of the expectations thistime around.
First.
Last time Trump did tariffs onChina, be executive order, and
this could be immediate in 2025.
(07:20):
We'll see how this plays out,but initial expectations are for
more inflation in the us, and itmay also force Chinese policy
makers to make quicker and moredrastic.
Fiscal policy moves to offsetany decline in foreign
consumption.
Tariffs may be short term,depending on how they're
classified.
They may hold longer term.
(07:41):
It they're looked at as afunding source to offset
reductions in taxes.
Next we do have taxes andregulations.
Tax cuts.
We're set to expire at the endof 2025 should be extended.
Also should Republicans win amajority in the house?
The corporate tax rate couldpotentially drop from 21% to
(08:03):
15%.
For domestic manufacturers.
One report.
I read estimates that proposedtax cut itself may boost S and P
earnings by almost 4%.
As far as regulation orderegulation.
That is really driving marketexpectations for financials.
Namely asset managers.
(08:24):
Do the possibility of more MNAand IPO's as the election
overhang lifts from the markets.
I will say lastly, but I'm notsure that this will be the last
thing that comes up there isimmigration and the extent of
the deportation policies.
Keep in mind, those workers jobswill have to come from somewhere
(08:45):
no matter what.
This may lead to wage growthwith less workers in the
workforce overall.
And I think I would say this foreither candidate in different
ways.
Proposed policies areinflationary in this case.
Inflation may be caused by atighter job market.
And tariffs.
Well, you make it clear thatthis new Trump administration
(09:06):
could bring significant shiftsin tariffs taxes.
And regulations.
All of which are likely to havea profound impact.
On inflation, corporate earningsand even labor markets.
So, what does this mean formarket expectations?
So far, Chris inflationexpectations have driven up
interest rates.
(09:28):
And strengthen the dollar.
As a more resolute, betterreserve is anticipated.
Consequently, the number of fedrate cuts projected for 2025 has
dropped to just two down fromfour in mid-October.
There are some possible shiftsin investment strategy.
Considering the possibility ofless globalization.
(09:49):
And more policy uncertainty thatis really expected to drag on
both Chinese and Europeangrowth.
As these areas seem mostvulnerable.
Overall to end on a positive.
The current economic environmentis favorable for stock markets.
Rates coming down at all andreal wage gains help an American
(10:10):
consumer that continues tospend.
That makes sense.
And it sounds like an activeinvestment management approach
is imperative during times likethese.
What major events are youlooking at this week?
Scott?
This week, we have two biginflation reports in the U S and
Friday.
We have retail sales, which Ipay close attention to.
(10:33):
We have fed chair Powell,governor Waller.
And New York fed presidentWilliams scheduled to speak.
China publishes a range ofeconomic reports.
And the UK gives a snapshot ofgrowth on Friday.
Earnings are slow this week.
With just nine S and P 500 firmsreporting.
Well, we will certainly keep onthe lookout for those reports
(10:56):
and I'm sure we will have plentyto discuss next Monday.
For now.
Stay informed.
Stay ahead.
And join us next week for morekey updates shaping the global
economy.
Thank you for tuning intoparamount wealth perspectives.
We hope you have a fantasticweek.
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?
Thanks, Chris.
Us stocks were higher for theweek with the S and P 500 and
(01:04):
NASDAQ.
Ending the week at record highs.
The Russell 2000 had its bestweek since March of 2020.
All sectors were higher.
With the standouts being bigtech banks, investment banks,
credit cards, auto suppliers andairlines.
Under-performers included dollarstores.
China tech toys, pharma,athletic apparel, and food and
(01:28):
beverages.
Other headlines include apreliminary university of
Michigan consumer sentimentreport.
Which came in at its highestlevel in six months.
The number itself increased atits fastest monthly clip in
nearly four years.
Included in that report.
Consumers 12 month inflationexpectations actually ticked
(01:50):
down to the lowest level sincethe pandemic.
October us services, beatexpectations with its highest
print since July of 2022.
Last week, we also had a glimpseinto the global economy.
With our final service numbersand composite numbers coming in
from around the globe.
Our paramount global rankingswere updated just today.
(02:13):
Well, I have to say it'sencouraging to see the S and P
500 and NASDAQ reach, recordhighs.
And I'm interested to hear moreabout the updated paramount
global rankings.
Can you please explain what thatis to our listeners.
Of course I can, Chris.
Paramount global rankings is aneconomic ranking evaluation that
allows me to research differentareas of the globe for
(02:35):
investment ideas.
There are two sides to themodel.
When I call current power, thatis simply apples to apples,
whose number is bigger.
And then there's momentum.
Momentum allows me to analyzetrends.
Depending on where I feel we arein the economic cycle.
Either current or momentum mayhold greater importance.
(02:56):
I utilize the rankings to guidespecific strategic top-down or
big picture decisions in assetallocation.
I don't want to spend too muchtime on this today.
But in future podcast, I'mcertain I would dig deeper into
the trends and to the results.
Thanks for that, Scott.
I'm sure a lot of listeners willbe interested to hear how
paramount global rankingsprovides a strategic data driven
(03:20):
approach to asset allocation.
Now last week you mentionedthere were some upcoming labor
reports, as well as earningreports.
Can you please elaborate onthose?
As for jobs.
Initial jobless claims wereinline with consensus.
And continuing claims we'reabove consensus.
In fact continuing claims werethe highest in nearly three
(03:43):
years.
As for earnings the last twoweeks have been the busiest
period for S and P 500 earnings.
And as of Friday, 91% of theindex had already reported.
Earnings growth overall tickedup a bit for the week.
And now stands at 5.3% growthversus the 4.3% growth that
(04:04):
happened expected.
Here are some fun stats.
The number of companiesreporting earnings per share
above estimates is below thefive-year, but equal to the
10-year average.
The number of companiesreporting revenues above
estimates is below both thefive-year and 10-year average as
well.
They're earning beats.
(04:25):
Are averaging just 1.2% aboveestimates, which is below both
the five-year and 10-yearaverage.
Wow.
That's interesting to hear thatearnings per share are trailing
historical averages.
Now as you have stressed theimportance of the federal
reserve before.
Can you please elaborate more ontheir announcement from last
(04:47):
week?
Yes, Chris, the federal reservemet last week and cut rates by a
quarter point.
Their policy statement waslittle changed.
However, the fed did delete thestatement that the committee had
gained confidence that inflationis moving sustainably towards
their 2% goal.
Jerome Powell stated thateconomic activity has been
(05:09):
stronger than expected.
And the fed will have to waitand see where the data leads
them before deciding on policyin December.
Markets are now pricing in a 30%chance that the fed leaves rates
unchanged in December.
Up from 17% the previous week.
The committee also emphasizedthat labor market conditions had
(05:30):
generally eased.
Replacing a previous referenceto slowing job gains.
Elsewhere central banks werealso active in the UK, the bank
of England cut rates by quarterpoint.
This was expected.
The bank of England notedsignificant upwards revisions to
both its growth and inflationexpectations.
(05:52):
Moving over to emerging markets.
China policy makers announced apackage to offset local
government's debt problems.
And provided forward guidance.
I'm future policy support forbank recapitalization
consumption and the propertysector.
Understood.
It sounds like the fed willcontinue to let data guide their
decisions in December and movingforward.
(06:15):
Looking to the other major eventlast week that everyone is
speaking about.
Can you please discuss theelections implications?
Yes, Chris.
And then there was the election.
Donald Trump, the Republicannominee defeated Kamala Harris,
vice president, and thedemocratic candidate in
Tuesday's vote.
(06:36):
I have been in conferences sincethe election regarding the
potential market impact of aTrump presidency.
Let's keep in mind that campaignrhetoric often does not match
actual policy.
This time around, however, Trumpwill not be restrained by
divided government.
Also, he can't run on a thirdterm, so he doesn't have to
(06:57):
support policies just to getreelected.
I don't want to dig too deepinto the weeds here as a guest
speaker.
And I will discuss this more inthe coming weeks, but here are
some of the expectations thistime around.
First.
Last time Trump did tariffs onChina, be executive order, and
this could be immediate in 2025.
(07:20):
We'll see how this plays out,but initial expectations are for
more inflation in the us, and itmay also force Chinese policy
makers to make quicker and moredrastic.
Fiscal policy moves to offsetany decline in foreign
consumption.
Tariffs may be short term,depending on how they're
classified.
They may hold longer term.
(07:41):
It they're looked at as afunding source to offset
reductions in taxes.
Next we do have taxes andregulations.
Tax cuts.
We're set to expire at the endof 2025 should be extended.
Also should Republicans win amajority in the house?
The corporate tax rate couldpotentially drop from 21% to
(08:03):
15%.
For domestic manufacturers.
One report.
I read estimates that proposedtax cut itself may boost S and P
earnings by almost 4%.
As far as regulation orderegulation.
That is really driving marketexpectations for financials.
Namely asset managers.
(08:24):
Do the possibility of more MNAand IPO's as the election
overhang lifts from the markets.
I will say lastly, but I'm notsure that this will be the last
thing that comes up there isimmigration and the extent of
the deportation policies.
Keep in mind, those workers jobswill have to come from somewhere
(08:45):
no matter what.
This may lead to wage growthwith less workers in the
workforce overall.
And I think I would say this foreither candidate in different
ways.
Proposed policies areinflationary in this case.
Inflation may be caused by atighter job market.
And tariffs.
Well, you make it clear thatthis new Trump administration
(09:06):
could bring significant shiftsin tariffs taxes.
And regulations.
All of which are likely to havea profound impact.
On inflation, corporate earningsand even labor markets.
So, what does this mean formarket expectations?
So far, Chris inflationexpectations have driven up
interest rates.
(09:28):
And strengthen the dollar.
As a more resolute, betterreserve is anticipated.
Consequently, the number of fedrate cuts projected for 2025 has
dropped to just two down fromfour in mid-October.
There are some possible shiftsin investment strategy.
Considering the possibility ofless globalization.
(09:49):
And more policy uncertainty thatis really expected to drag on
both Chinese and Europeangrowth.
As these areas seem mostvulnerable.
Overall to end on a positive.
The current economic environmentis favorable for stock markets.
Rates coming down at all andreal wage gains help an American
(10:10):
consumer that continues tospend.
That makes sense.
And it sounds like an activeinvestment management approach
is imperative during times likethese.
What major events are youlooking at this week?
Scott?
This week, we have two biginflation reports in the U S and
Friday.
We have retail sales, which Ipay close attention to.
(10:33):
We have fed chair Powell,governor Waller.
And New York fed presidentWilliams scheduled to speak.
China publishes a range ofeconomic reports.
And the UK gives a snapshot ofgrowth on Friday.
Earnings are slow this week.
With just nine S and P 500 firmsreporting.
Well, we will certainly keep onthe lookout for those reports
(10:56):
and I'm sure we will have plentyto discuss next Monday.
For now.
Stay informed.
Stay ahead.
And join us next week for morekey updates shaping the global
economy.
Thank you for tuning intoparamount wealth perspectives.
We hope you have a fantasticweek.
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