Episode Transcript
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Speaker 1 (00:00):
This is straight Talk from the House with certified financial
planner Tracyanton here on thirteen ten WIBA. The website Tanton
Investment House dot com gives you a little bit more
information on Tracy and her team, and of course that's
a really good resource. If you miss any part of
the program you want to listen back or share information
with friends and family, of course, just head on over
to Tantoninvestment House dot com and of course joining us
(00:23):
this morning is certified financial planner Tracy Andton. Tracy, great
to see you this morning. How you doing this week?
Speaker 2 (00:29):
I'm doing great, Sean, how about you?
Speaker 1 (00:31):
I'm doing really good and I'm really excited to talk
to you because I saw in the news there was
some big, big news recently made and correct me if
I'm wrong. We're going to be talking about that big news.
Speaker 2 (00:43):
Yeah, I'm excited too.
Speaker 3 (00:44):
I mean, the Federal Reserve made a major move on
Wednesday and they cut interest rates by half a percentage point,
which is the largest single cut since two thousand and eight.
And this brings the benchmark rate down to a range
of four point seventy five to five percent, marking the
most basically the end of the most aggressive series of
rate hikes in forty years. So the decision to forego
(01:06):
a twenty five basis cut and go with a fifty
basis cut signals that the Fed they believe the disinflation
trend will continue, and has shifted its focus basically from
the risk of inflation increasing to the downside risk in.
Speaker 2 (01:20):
The labor markets.
Speaker 3 (01:22):
So there's still a long way to go, Sean, to
reach a neutral policy, which is one that's not too
restrictive or that's too accommodative.
Speaker 2 (01:30):
But for now, Sean, I think one's switching and looking
and saying.
Speaker 3 (01:35):
The attention goes to, you know, how much further rates
will drop, how quickly future cuts will happen as the
Fed turns its focus to support this weakening job market,
which is what we're seeing.
Speaker 1 (01:47):
Well, let's and let's get into some more of this stuff, Tracy,
as again, I think for everybody was kind of I
remember that morning turning on the radio and everyone's is
it going to be a core or is it going
to be half? What are we looking at? How big
is this? You know, how did this big change happen?
And are we going to see another rate cutter? What
do we read into this?
Speaker 2 (02:06):
Yeah, it's great. It's like reading the tea leaves rights well.
Speaker 3 (02:10):
The Federal Open Market Committee voted eleven to one to
cut interest rates by a half percentage point marketing again,
which is interesting. Just a side note that the first
time this is the first time a governor has disagreed
with the rate decision since two thousand and five. But
the FED also forecasted two more quarter percent rate cuts
later this year, with additional cuts totaling one and a
(02:32):
half percentage points expected in twenty twenty five and.
Speaker 2 (02:35):
Twenty twenty six.
Speaker 3 (02:36):
So the FED shared Jerome Powell emphasized that the Central
Bank is still focused on bringing the annual inflation down
to two percent from the level of two and a
half percent.
Speaker 1 (02:47):
Talking this morning with certified financial planner Tracy Anton right
here on thirteen ten WIBA. Of course, Tracy comes to
us from t Anton Investment House. If you ever want
to share this podcast or listen back, great opportunity to
share with your friends and family and of course get
the information from this show. I know sometimes in the morning,
coming and going from the car, maybe jumping out grabbing
some coffee and miss part of the show. You can
(03:09):
always listen back at teaantoninvestment House dot com. Also there
are some great news and other information as well available
to you for free again the website tantoninvestment House dot com.
Talking this week with Tracy about the big news from
Wednesday when it comes to interest rates. In Tracy, let's
get the market perspective before the recent cut and where
were we there?
Speaker 3 (03:29):
Well, Dana Trenshon have shown clear signs that the slowing
economy growth and easing inflation suggests that there is still
a possibility for a soft landing and the essentral banks
are beginning to shift toward the easing policies.
Speaker 2 (03:44):
So in the US, basically.
Speaker 3 (03:46):
Cooling economic indicators, particularly in the labor market reflected the slowdown.
So in Europe, growth had remained modest, driven by services
while manufacturing lagged, and in the Japan economy they had
recovered from the early year contractions, supported by stronger exports,
and while China's growth remained sluggish, with policy makers cautious
(04:09):
in providing stimulus. So again, Meanwhile, the European central banks
had advanced easing as inflation cooled, and the Bank of
Japan continued on its path of rate hikes, carefully watching
currency effects, so risk to global markets had included sharper
growth declines, potential central bank policy errors, and of course
there's always the elections, the geopolitical tensions and uncertainty around
(04:33):
China's growth trajectory.
Speaker 1 (04:35):
Fantastic information as we get this stuff from Tracy. Of course,
still I would say this this is a hot one,
hot off the press this week for sure. And again
as we mentioned one of the cool things about the
website Tanton investment House dot com. That's t A N
T O N investment House dot com. You go pretty
far back with those podcasts, by the way, that's those areas.
Speaker 2 (04:55):
I know, I'm just marketing.
Speaker 3 (04:56):
I mean, my anniversary for the Investment House is ten
years up in March.
Speaker 1 (05:00):
Congratulations.
Speaker 3 (05:01):
Know that we've been doing it ten years, just just
with the Investment House before, you know, before my prior.
Speaker 2 (05:08):
Work, my work history. So I mean, I go back
a long.
Speaker 1 (05:12):
Way you started, young Tracy. I still for folks that
don't know, I obviously we record and do the show.
Now things you know, podcasts are digital and things are
all done on computers these days. Back in the day
we used to do things. We have tapes and we
have oh my gosh.
Speaker 2 (05:34):
Give me that tape because I want to listen to it.
Speaker 1 (05:36):
Yeah, oh man, that was gonna have to. And for
folks that want to listen back to some of those
old shows, they are up at t on Investment Hows
dot com. I can go back there, and of course
there's a link to not only this most recent podcast
in the iHeart app also Apple if you're an Apple
user as well, there's a link there, Tracy. When we
kind of break this stuff down, then there's obviously some
(05:58):
things sometimes that may be overlooked or unnoticed what has
been unnoticed then recent with the recent market outlooks.
Speaker 3 (06:06):
Well, Although the US consumer confidence bounced back in augustean
thanks to optimism about the economy's resilience and easing inflation,
employment data had seen some clear slow down with the
unemployment rate rising and fewer job opportunities available. So the
survey also highlights that consumers remain worried about their personal
(06:28):
finances and any further job losses could quickly kind of
lead to reduce spending. So lower income households are feeling
this pinch of higher prices and are increasingly relying on
credit cards as their pandemic era savings runs out. Meanwhile,
you have the higher income consumers who have beenefitted from
strong four to one K balances and rising home prices.
(06:51):
They could also cut back on spending if layoff spread.
So the hope is really that recent rate cuts were
well timed to ease the layer market without coming too late,
potentially risking a sharp downturn in consumer spending. So we're
hoping that, you know, these rate cuts are gonna, you know,
help what we're seeing in the labor market.
Speaker 1 (07:12):
You know, one of the things that I've noticed with
the you know, we talked about having done this show
and of course your investment house looking towards ten years,
is there's always something going on. Like the markets are
never telling you this, Tracy. The markets are never you know,
it's never calm waters. There's always something going on going
on somewhere. And sometimes there's even a little construction going
(07:33):
on somewhere, which is its funny, but.
Speaker 3 (07:39):
That's shelving is going on.
Speaker 1 (07:46):
Oh that is great, That is awesome. Is I was
going to ask you though, Tracy, as you've experienced and
before we get kind of back to some of the
topics most recently, that is kind of one of those
things is is I think one of the things that's
really enjoyable and why I always tell people listen back
to some of the podcasts. You see you know, you
see trends, you see things happening, but there's never like
a time where everybody's like, all right, it's it's set
(08:09):
it and forget it time. It's always stuff that's that's
really interesting that's going on with the markets, isn't there.
Speaker 3 (08:15):
I mean it's it's never boring shots, right, and there's
always well a there's always something to talk about with
around the water cooler. But also I always try to
do the show because we talk about topics like this
that are timely that do make a difference.
Speaker 2 (08:31):
I don't say that they don't.
Speaker 3 (08:32):
I mean, there is tactical allocation that you guys should
be thinking about with gross stocks being too high and
some opportunities in other sectors. But at the same time,
it's really staying in the market for the long term
that makes the biggest difference in how your performance is
as long as those investments that you have are high quality,
(08:53):
you know, and that's you know.
Speaker 2 (08:54):
Part of part of it.
Speaker 3 (08:55):
But that plus good solid financial planning, I think is
really the essence to how you do well, you know,
in your in creating this you know, retirement lifestyle and
then using the dollars in a great way as well.
So I just stress that, yes, this all information is
all timely, timely, and we can, you know, try to
(09:18):
project what's happening in the markets and how the you know,
FED rate will change this, or how the cash flow
of the money markets will change this. You know, it's
great to project. And I'm you know, I'm all about
that because I'm interested. But at the same time, you know,
if it kind of glazes over and you go, I
don't know, you know, just staying in high quality investments,
(09:39):
and I actually like more managed investments right now because
the indexes are getting pretty frothy with high high high
earnings valuations and especially in the megacap area. But you know,
staying invested in high quality managed investments, I think that, well,
that'll that'll take you there and back talk.
Speaker 1 (10:00):
That's that's interesting and an important perspective as well. As
we talk with sort of fined financial planner Tracy Anton,
of course, offering advice and guidance to you each week
right here on thirteen ten W I b A don't
forget about the website t Aton Investment House dot com.
That's t A N t o N investment house dot com.
There you can learn more about Tracy, her team, and
of course listen back to this In previous shows podcast,
(10:22):
we'll talk about cash flow. We'll get into that as
well as some other issues and things to keep in
mind when it comes to these rate cutting cycles. We'll
get the details from Tracy next as Straight Talk from
the House with certified financial Planner Tracy and Ton continues
here on thirteen ten w I b A. This is
straight Talk from the House with sortified financial planner Tracy Andton.
(10:42):
Of course, Tracy offers advice and guidance to you each
week right here on thirteen ten WU I b A.
Don't forget about the website Tanton Investment House dot com.
That's t A N t O N investment House dot com.
You can learn more about Tracy nt ant On Investment
House as well as the team all at the website.
Talking this week about the big move made by the
(11:02):
Federal Reserve on Wednesday when it came to interest rates
and Tracy let's kind of break down some of the
other inner workings in the market and what's kind of
going on right now when it comes to market cash flow.
Speaker 3 (11:13):
Well, despite expectations that money market assets would start flowing
back into risk your investments, money continues to pour into
this category, hitting a record six point six trillion in August.
And whether that's due to high stock valuation SEAN, or
worries about bond market volatility, or really the appeal of
(11:33):
the five percent yields, which you know, probable investors have
been hesitant to jump back into risk your assets. And unfortunately,
those who stayed in money market SEAN, they have missed
out on a big equity rally, with the S and
P five hundred gaining over twenty percent in the past year.
So conservative investors who were considering moving into longer term
(11:54):
bonds also missed out on a recent surge in bond yields.
So I would just you know, if you have missed out,
remember that it's I don't think it's too late. And
of course, you know, depending on your timeline, you know,
what is how long you have right what timeline you
should look at. But if you have a long term
time horizon over five to seven years, I would still
(12:18):
get your money. That's long term money.
Speaker 2 (12:21):
Invested. And why why do I say that?
Speaker 3 (12:23):
Because I don't know in the next year, you know,
whether markets will continue to rise.
Speaker 2 (12:27):
I'm positive, I'm optimistic, but I don't know.
Speaker 3 (12:30):
But I say that because we know that. You know,
long term money does money market money. You know it
can't riskless money. It can't beat inflation over the long term.
Speaker 2 (12:42):
It just can't.
Speaker 3 (12:43):
So why because it's too it It creates no risk.
So getting your long term money invested properly, you still,
to me have some opportunity here. Yes, you've missed out
and quite a quite a rally. But if there's six
point six trillion sitting on the sidelines, hm, I bet
you a lot of people are thinking, maybe, if interest
(13:05):
rates are coming down, where should I deploy my dollars
for the long term? And I would suggest looking at
how much is emergency cash and how much should be
long term money and having those discussions with an advisor,
your spouse, you know all the above.
Speaker 1 (13:21):
It's a lot of pent up and potential opportunity just
kind of waiting on the sideline. And that's that I
didn't realize it was that much. As we talk with
pretty high, it's pretty high. That's the big numbers, they're
six jillion. So we're talking with certified financial planner Tracy
Anton right here. Tracy, have we seen a change then
when it comes to.
Speaker 3 (13:39):
Earnings, well, investors remain optimistic about the rest of twenty
twenty four earnings after a slight dip. They're expecting corporate
earnings to bounce back with double digit growth in twenty
twenty four and beyond. So stock buybacks are still being
used to boost overall earnings per share it but they're
mostly concentrated. Shong among the biggest companies, and the top
(14:00):
twenty companies by market value, made up about half of
all buybacks this year. So again, although profit margins have
come down from record highs, they're now stabilized, so investors
are counting on margins to stay strong. But the key
here will be whether companies can keep their pricing power.
Speaker 1 (14:18):
Interesting as we talk with certified financial planner Tracy Anton
here on thirteen ten WIBA. Of course, Tracy, she offers
advice and guidance with us each week here on thirteen
ten wi BA. Don't forget if you ever a miss
part of the programmer you want to learn more about
t Anton Investment House, The website, it's super easy Tanton
investment House dot com. That's t A N t N
Investmenthouse dot com. As we're talking this week with Tracy
(14:41):
about the recent move made by the Federal Reserve when
it comes to interest rates, raise, cutting them, excuse me,
cutting them by half a percentage point. Big difference there, Tracy,
What do we then see when it comes to when
it comes to the area of kind of looking towards
the future and regarding the past then regarding rate cut cycles,
(15:03):
what do we know there? What have we seen in
the past?
Speaker 3 (15:05):
Right, So you know, the past obviously does not guarantee
the future shown.
Speaker 2 (15:10):
So I always have to say that.
Speaker 3 (15:11):
Because I think people think, oh, this is exactly what's
going to happen. I don't know, but if rate cutting
cycle does not coincide with a recession, then history would
suggest it could be positive backdrop for US equities. So again,
in the non recessionary easing cycle between beginning in nineteen
eighty four, nineteen ninety five and nineteen ninety seven, the
(15:34):
S and P five hundred index averaged a twenty seven
percent return from the first rate.
Speaker 2 (15:39):
Cut to the last. So that would bo say, Okay,
history might suggest that it would be very good for stocks.
Speaker 3 (15:47):
So again, according to the American Fund's literature, during those periods,
nearly every industry posted double jit digit gains, notably in
more defensive areas of the market. So the current environment
could also offer a active potential return potential for fixed income.
So the Bloomberg US aggregate bond in X return was
like twelve point three percent for those prior cutting cycles
(16:10):
since nineteen eighty four. So what did the market do
when they started cutting rates? Did the market both bond
and stock market did well. No guarantee that that will happen,
but that is what we have seen.
Speaker 2 (16:21):
In the past.
Speaker 1 (16:22):
Sometimes, of course beneficial to look to the past and
tracy then as we as we kind of look out
there and other experts kind of seeing what they're saying,
how are they feeling optimistic about stocks and bonds?
Speaker 3 (16:34):
Well, we are optimistic about stocks and bonds going forward.
As one chief US Chief of strategist Ed kliz Sold
at the ned Davis Research commented at the end of June,
he said, the modest earnings acceleration is continuing the economy.
Inflation appear to be moderating enough for the FED to
lower its benchmark rate, and the market tends to enjoy
(16:55):
a year in rally during presidential election years. Right.
Speaker 2 (17:00):
I like that last part. So someone else David Lefkowitz.
Speaker 3 (17:04):
He's the head of the US equities at UBS Global
Wealth Management. He points to growing investments in AI technology, solid.
Speaker 2 (17:12):
Profit growth, and a pivot to rate cuts.
Speaker 3 (17:15):
As inflation continues to fall, so he said, he wrote overall,
he wrote in a note, he said, we believe the
environment remains supportive for US equities and investors should have
a full allocation to asset class. And what he means
there is is don't sit on the sidelines.
Speaker 1 (17:31):
Yeah, for sure. And you know it's interesting as we
you know, we were kind of talking earlier about history
and you know, doing this show and some other things.
I remember even five ten years ago people saying, oh,
I don't know if now's the time, now's the time.
Speaker 2 (17:47):
I know exactly.
Speaker 1 (17:49):
Look what's happened. It's like goodness, if only, if only?
And now. Yeah, as we looked at this stuff, Tracy, obviously,
as we as we look in kind of a rosy picture,
there are always rich, aren't there.
Speaker 3 (18:01):
Yeah, And I would be remiss if I didn't tell you, Hey, you.
Speaker 2 (18:04):
Know, it's not exactly always for sure.
Speaker 3 (18:07):
Right, So we see valuations climbing, and we see a
handful of megacap tech stocks driving the market's return, and
what we want to see, Sean, is a broader participation.
Speaker 2 (18:18):
With other stock sectors.
Speaker 3 (18:20):
So if you combine that concern with overall slowing earnings
and a weakness and consumer sector and the labor market,
you know, you do have more portfolio risks. So what
do I see as a solution. I would say, don't
get caught up with your portfolio not properly allocated between
different kinds of stocks. There really is a big difference
between growth year stocks and value stocks or small, mid
(18:46):
and large cap stocks. So again, use some value stocks,
use some international stocks. You know, we all talk about
the Magnificent seven in the US, but there was the
Magnificent seven in the international stocks as well, So use
those to your advance.
Speaker 2 (19:00):
And I've been talking to people right.
Speaker 3 (19:02):
Now as well as saying, okay, you know, over the
last five years, the stock component of your portfolio continues
to rise. And now our current allocation, which we wanted
to be eighty twenty is, you know, more than eighty
five eighty nine percent stocks, So what about adding some bonds.
This is a good opportunity to add some bonds. When
(19:22):
you start reducing rates, you see bond you tend to
see bond prices go up. And like I said, intermediate
bonds are paying four to five in interest. That's also
that's also a nice thing. So I have seen actually
double digits and bonds.
Speaker 2 (19:34):
Am I saying it's going to happen? No, but I
have seen it.
Speaker 3 (19:37):
So I would just suggest be a well bounced portfolio,
which is, you know what people like us always say,
but particularly now when you have those growthy large cap
megastocks have done extremely well, don't get caught in this
is you know, going to be forever.
Speaker 1 (19:53):
Talking this morning was sort of fined financial planner Tracy Anton,
of course, offering advice and guidance to us each and
every week. Right here on thirteen ten double U, I
B A. You can learn more about t Anton Investment House.
You can learn about Tracy the team, listen back to podcasts,
a lot of great information there. When it comes to
what they do each and every day at t Anton
Investment House, all I gotta do is head on over
to the website Tanton Investment House dot com. That's t
(20:17):
a N t O N Investment House dot com Tracy,
It's always informative talking with you. You enjoy this beautiful day.
Speaker 2 (20:23):
Thanks Sean. Take care,
This is straight Talk from the House with certified financial
planner Tracyanton here on thirteen ten WIBA. The website Tanton
Investment House dot com gives you a little bit more
information on Tracy and her team, and of course that's
a really good resource. If you miss any part of
the program you want to listen back or share information
with friends and family, of course, just head on over
to Tantoninvestment House dot com and of course joining us
(00:23):
this morning is certified financial planner Tracy Andton. Tracy, great
to see you this morning. How you doing this week?
Speaker 2 (00:29):
I'm doing great, Sean, how about you?
Speaker 1 (00:31):
I'm doing really good and I'm really excited to talk
to you because I saw in the news there was
some big, big news recently made and correct me if
I'm wrong. We're going to be talking about that big news.
Speaker 2 (00:43):
Yeah, I'm excited too.
Speaker 3 (00:44):
I mean, the Federal Reserve made a major move on
Wednesday and they cut interest rates by half a percentage point,
which is the largest single cut since two thousand and eight.
And this brings the benchmark rate down to a range
of four point seventy five to five percent, marking the
most basically the end of the most aggressive series of
rate hikes in forty years. So the decision to forego
(01:06):
a twenty five basis cut and go with a fifty
basis cut signals that the Fed they believe the disinflation
trend will continue, and has shifted its focus basically from
the risk of inflation increasing to the downside risk in.
Speaker 2 (01:20):
The labor markets.
Speaker 3 (01:22):
So there's still a long way to go, Sean, to
reach a neutral policy, which is one that's not too
restrictive or that's too accommodative.
Speaker 2 (01:30):
But for now, Sean, I think one's switching and looking
and saying.
Speaker 3 (01:35):
The attention goes to, you know, how much further rates
will drop, how quickly future cuts will happen as the
Fed turns its focus to support this weakening job market,
which is what we're seeing.
Speaker 1 (01:47):
Well, let's and let's get into some more of this stuff, Tracy,
as again, I think for everybody was kind of I
remember that morning turning on the radio and everyone's is
it going to be a core or is it going
to be half? What are we looking at? How big
is this? You know, how did this big change happen?
And are we going to see another rate cutter? What
do we read into this?
Speaker 2 (02:06):
Yeah, it's great. It's like reading the tea leaves rights well.
Speaker 3 (02:10):
The Federal Open Market Committee voted eleven to one to
cut interest rates by a half percentage point marketing again,
which is interesting. Just a side note that the first
time this is the first time a governor has disagreed
with the rate decision since two thousand and five. But
the FED also forecasted two more quarter percent rate cuts
later this year, with additional cuts totaling one and a
(02:32):
half percentage points expected in twenty twenty five and.
Speaker 2 (02:35):
Twenty twenty six.
Speaker 3 (02:36):
So the FED shared Jerome Powell emphasized that the Central
Bank is still focused on bringing the annual inflation down
to two percent from the level of two and a
half percent.
Speaker 1 (02:47):
Talking this morning with certified financial planner Tracy Anton right
here on thirteen ten WIBA. Of course, Tracy comes to
us from t Anton Investment House. If you ever want
to share this podcast or listen back, great opportunity to
share with your friends and family and of course get
the information from this show. I know sometimes in the morning,
coming and going from the car, maybe jumping out grabbing
some coffee and miss part of the show. You can
(03:09):
always listen back at teaantoninvestment House dot com. Also there
are some great news and other information as well available
to you for free again the website tantoninvestment House dot com.
Talking this week with Tracy about the big news from
Wednesday when it comes to interest rates. In Tracy, let's
get the market perspective before the recent cut and where
were we there?
Speaker 3 (03:29):
Well, Dana Trenshon have shown clear signs that the slowing
economy growth and easing inflation suggests that there is still
a possibility for a soft landing and the essentral banks
are beginning to shift toward the easing policies.
Speaker 2 (03:44):
So in the US, basically.
Speaker 3 (03:46):
Cooling economic indicators, particularly in the labor market reflected the slowdown.
So in Europe, growth had remained modest, driven by services
while manufacturing lagged, and in the Japan economy they had
recovered from the early year contractions, supported by stronger exports,
and while China's growth remained sluggish, with policy makers cautious
(04:09):
in providing stimulus. So again, Meanwhile, the European central banks
had advanced easing as inflation cooled, and the Bank of
Japan continued on its path of rate hikes, carefully watching
currency effects, so risk to global markets had included sharper
growth declines, potential central bank policy errors, and of course
there's always the elections, the geopolitical tensions and uncertainty around
(04:33):
China's growth trajectory.
Speaker 1 (04:35):
Fantastic information as we get this stuff from Tracy. Of course,
still I would say this this is a hot one,
hot off the press this week for sure. And again
as we mentioned one of the cool things about the
website Tanton investment House dot com. That's t A N
T O N investment House dot com. You go pretty
far back with those podcasts, by the way, that's those areas.
Speaker 2 (04:55):
I know, I'm just marketing.
Speaker 3 (04:56):
I mean, my anniversary for the Investment House is ten
years up in March.
Speaker 1 (05:00):
Congratulations.
Speaker 3 (05:01):
Know that we've been doing it ten years, just just
with the Investment House before, you know, before my prior.
Speaker 2 (05:08):
Work, my work history. So I mean, I go back
a long.
Speaker 1 (05:12):
Way you started, young Tracy. I still for folks that
don't know, I obviously we record and do the show.
Now things you know, podcasts are digital and things are
all done on computers these days. Back in the day
we used to do things. We have tapes and we
have oh my gosh.
Speaker 2 (05:34):
Give me that tape because I want to listen to it.
Speaker 1 (05:36):
Yeah, oh man, that was gonna have to. And for
folks that want to listen back to some of those
old shows, they are up at t on Investment Hows
dot com. I can go back there, and of course
there's a link to not only this most recent podcast
in the iHeart app also Apple if you're an Apple
user as well, there's a link there, Tracy. When we
kind of break this stuff down, then there's obviously some
(05:58):
things sometimes that may be overlooked or unnoticed what has
been unnoticed then recent with the recent market outlooks.
Speaker 3 (06:06):
Well, Although the US consumer confidence bounced back in augustean
thanks to optimism about the economy's resilience and easing inflation,
employment data had seen some clear slow down with the
unemployment rate rising and fewer job opportunities available. So the
survey also highlights that consumers remain worried about their personal
(06:28):
finances and any further job losses could quickly kind of
lead to reduce spending. So lower income households are feeling
this pinch of higher prices and are increasingly relying on
credit cards as their pandemic era savings runs out. Meanwhile,
you have the higher income consumers who have beenefitted from
strong four to one K balances and rising home prices.
(06:51):
They could also cut back on spending if layoff spread.
So the hope is really that recent rate cuts were
well timed to ease the layer market without coming too late,
potentially risking a sharp downturn in consumer spending. So we're
hoping that, you know, these rate cuts are gonna, you know,
help what we're seeing in the labor market.
Speaker 1 (07:12):
You know, one of the things that I've noticed with
the you know, we talked about having done this show
and of course your investment house looking towards ten years,
is there's always something going on. Like the markets are
never telling you this, Tracy. The markets are never you know,
it's never calm waters. There's always something going on going
on somewhere. And sometimes there's even a little construction going
(07:33):
on somewhere, which is its funny, but.
Speaker 3 (07:39):
That's shelving is going on.
Speaker 1 (07:46):
Oh that is great, That is awesome. Is I was
going to ask you though, Tracy, as you've experienced and
before we get kind of back to some of the
topics most recently, that is kind of one of those
things is is I think one of the things that's
really enjoyable and why I always tell people listen back
to some of the podcasts. You see you know, you
see trends, you see things happening, but there's never like
a time where everybody's like, all right, it's it's set
(08:09):
it and forget it time. It's always stuff that's that's
really interesting that's going on with the markets, isn't there.
Speaker 3 (08:15):
I mean it's it's never boring shots, right, and there's
always well a there's always something to talk about with
around the water cooler. But also I always try to
do the show because we talk about topics like this
that are timely that do make a difference.
Speaker 2 (08:31):
I don't say that they don't.
Speaker 3 (08:32):
I mean, there is tactical allocation that you guys should
be thinking about with gross stocks being too high and
some opportunities in other sectors. But at the same time,
it's really staying in the market for the long term
that makes the biggest difference in how your performance is
as long as those investments that you have are high quality,
(08:53):
you know, and that's you know.
Speaker 2 (08:54):
Part of part of it.
Speaker 3 (08:55):
But that plus good solid financial planning, I think is
really the essence to how you do well, you know,
in your in creating this you know, retirement lifestyle and
then using the dollars in a great way as well.
So I just stress that, yes, this all information is
all timely, timely, and we can, you know, try to
(09:18):
project what's happening in the markets and how the you know,
FED rate will change this, or how the cash flow
of the money markets will change this. You know, it's
great to project. And I'm you know, I'm all about
that because I'm interested. But at the same time, you know,
if it kind of glazes over and you go, I
don't know, you know, just staying in high quality investments,
(09:39):
and I actually like more managed investments right now because
the indexes are getting pretty frothy with high high high
earnings valuations and especially in the megacap area. But you know,
staying invested in high quality managed investments, I think that, well,
that'll that'll take you there and back talk.
Speaker 1 (10:00):
That's that's interesting and an important perspective as well. As
we talk with sort of fined financial planner Tracy Anton,
of course, offering advice and guidance to you each week
right here on thirteen ten W I b A don't
forget about the website t Aton Investment House dot com.
That's t A N t o N investment house dot com.
There you can learn more about Tracy, her team, and
of course listen back to this In previous shows podcast,
(10:22):
we'll talk about cash flow. We'll get into that as
well as some other issues and things to keep in
mind when it comes to these rate cutting cycles. We'll
get the details from Tracy next as Straight Talk from
the House with certified financial Planner Tracy and Ton continues
here on thirteen ten w I b A. This is
straight Talk from the House with sortified financial planner Tracy Andton.
(10:42):
Of course, Tracy offers advice and guidance to you each
week right here on thirteen ten WU I b A.
Don't forget about the website Tanton Investment House dot com.
That's t A N t O N investment House dot com.
You can learn more about Tracy nt ant On Investment
House as well as the team all at the website.
Talking this week about the big move made by the
(11:02):
Federal Reserve on Wednesday when it came to interest rates
and Tracy let's kind of break down some of the
other inner workings in the market and what's kind of
going on right now when it comes to market cash flow.
Speaker 3 (11:13):
Well, despite expectations that money market assets would start flowing
back into risk your investments, money continues to pour into
this category, hitting a record six point six trillion in August.
And whether that's due to high stock valuation SEAN, or
worries about bond market volatility, or really the appeal of
(11:33):
the five percent yields, which you know, probable investors have
been hesitant to jump back into risk your assets. And unfortunately,
those who stayed in money market SEAN, they have missed
out on a big equity rally, with the S and
P five hundred gaining over twenty percent in the past year.
So conservative investors who were considering moving into longer term
(11:54):
bonds also missed out on a recent surge in bond yields.
So I would just you know, if you have missed out,
remember that it's I don't think it's too late. And
of course, you know, depending on your timeline, you know,
what is how long you have right what timeline you
should look at. But if you have a long term
time horizon over five to seven years, I would still
(12:18):
get your money. That's long term money.
Speaker 2 (12:21):
Invested. And why why do I say that?
Speaker 3 (12:23):
Because I don't know in the next year, you know,
whether markets will continue to rise.
Speaker 2 (12:27):
I'm positive, I'm optimistic, but I don't know.
Speaker 3 (12:30):
But I say that because we know that. You know,
long term money does money market money. You know it
can't riskless money. It can't beat inflation over the long term.
Speaker 2 (12:42):
It just can't.
Speaker 3 (12:43):
So why because it's too it It creates no risk.
So getting your long term money invested properly, you still,
to me have some opportunity here. Yes, you've missed out
and quite a quite a rally. But if there's six
point six trillion sitting on the sidelines, hm, I bet
you a lot of people are thinking, maybe, if interest
(13:05):
rates are coming down, where should I deploy my dollars
for the long term? And I would suggest looking at
how much is emergency cash and how much should be
long term money and having those discussions with an advisor,
your spouse, you know all the above.
Speaker 1 (13:21):
It's a lot of pent up and potential opportunity just
kind of waiting on the sideline. And that's that I
didn't realize it was that much. As we talk with
pretty high, it's pretty high. That's the big numbers, they're
six jillion. So we're talking with certified financial planner Tracy
Anton right here. Tracy, have we seen a change then
when it comes to.
Speaker 3 (13:39):
Earnings, well, investors remain optimistic about the rest of twenty
twenty four earnings after a slight dip. They're expecting corporate
earnings to bounce back with double digit growth in twenty
twenty four and beyond. So stock buybacks are still being
used to boost overall earnings per share it but they're
mostly concentrated. Shong among the biggest companies, and the top
(14:00):
twenty companies by market value, made up about half of
all buybacks this year. So again, although profit margins have
come down from record highs, they're now stabilized, so investors
are counting on margins to stay strong. But the key
here will be whether companies can keep their pricing power.
Speaker 1 (14:18):
Interesting as we talk with certified financial planner Tracy Anton
here on thirteen ten WIBA. Of course, Tracy, she offers
advice and guidance with us each week here on thirteen
ten wi BA. Don't forget if you ever a miss
part of the programmer you want to learn more about
t Anton Investment House, The website, it's super easy Tanton
investment House dot com. That's t A N t N
Investmenthouse dot com. As we're talking this week with Tracy
(14:41):
about the recent move made by the Federal Reserve when
it comes to interest rates, raise, cutting them, excuse me,
cutting them by half a percentage point. Big difference there, Tracy,
What do we then see when it comes to when
it comes to the area of kind of looking towards
the future and regarding the past then regarding rate cut cycles,
(15:03):
what do we know there? What have we seen in
the past?
Speaker 3 (15:05):
Right, So you know, the past obviously does not guarantee
the future shown.
Speaker 2 (15:10):
So I always have to say that.
Speaker 3 (15:11):
Because I think people think, oh, this is exactly what's
going to happen. I don't know, but if rate cutting
cycle does not coincide with a recession, then history would
suggest it could be positive backdrop for US equities. So again,
in the non recessionary easing cycle between beginning in nineteen
eighty four, nineteen ninety five and nineteen ninety seven, the
(15:34):
S and P five hundred index averaged a twenty seven
percent return from the first rate.
Speaker 2 (15:39):
Cut to the last. So that would bo say, Okay,
history might suggest that it would be very good for stocks.
Speaker 3 (15:47):
So again, according to the American Fund's literature, during those periods,
nearly every industry posted double jit digit gains, notably in
more defensive areas of the market. So the current environment
could also offer a active potential return potential for fixed income.
So the Bloomberg US aggregate bond in X return was
like twelve point three percent for those prior cutting cycles
(16:10):
since nineteen eighty four. So what did the market do
when they started cutting rates? Did the market both bond
and stock market did well. No guarantee that that will happen,
but that is what we have seen.
Speaker 2 (16:21):
In the past.
Speaker 1 (16:22):
Sometimes, of course beneficial to look to the past and
tracy then as we as we kind of look out
there and other experts kind of seeing what they're saying,
how are they feeling optimistic about stocks and bonds?
Speaker 3 (16:34):
Well, we are optimistic about stocks and bonds going forward.
As one chief US Chief of strategist Ed kliz Sold
at the ned Davis Research commented at the end of June,
he said, the modest earnings acceleration is continuing the economy.
Inflation appear to be moderating enough for the FED to
lower its benchmark rate, and the market tends to enjoy
(16:55):
a year in rally during presidential election years. Right.
Speaker 2 (17:00):
I like that last part. So someone else David Lefkowitz.
Speaker 3 (17:04):
He's the head of the US equities at UBS Global
Wealth Management. He points to growing investments in AI technology, solid.
Speaker 2 (17:12):
Profit growth, and a pivot to rate cuts.
Speaker 3 (17:15):
As inflation continues to fall, so he said, he wrote overall,
he wrote in a note, he said, we believe the
environment remains supportive for US equities and investors should have
a full allocation to asset class. And what he means
there is is don't sit on the sidelines.
Speaker 1 (17:31):
Yeah, for sure. And you know it's interesting as we
you know, we were kind of talking earlier about history
and you know, doing this show and some other things.
I remember even five ten years ago people saying, oh,
I don't know if now's the time, now's the time.
Speaker 2 (17:47):
I know exactly.
Speaker 1 (17:49):
Look what's happened. It's like goodness, if only, if only?
And now. Yeah, as we looked at this stuff, Tracy, obviously,
as we as we look in kind of a rosy picture,
there are always rich, aren't there.
Speaker 3 (18:01):
Yeah, And I would be remiss if I didn't tell you, Hey, you.
Speaker 2 (18:04):
Know, it's not exactly always for sure.
Speaker 3 (18:07):
Right, So we see valuations climbing, and we see a
handful of megacap tech stocks driving the market's return, and
what we want to see, Sean, is a broader participation.
Speaker 2 (18:18):
With other stock sectors.
Speaker 3 (18:20):
So if you combine that concern with overall slowing earnings
and a weakness and consumer sector and the labor market,
you know, you do have more portfolio risks. So what
do I see as a solution. I would say, don't
get caught up with your portfolio not properly allocated between
different kinds of stocks. There really is a big difference
between growth year stocks and value stocks or small, mid
(18:46):
and large cap stocks. So again, use some value stocks,
use some international stocks. You know, we all talk about
the Magnificent seven in the US, but there was the
Magnificent seven in the international stocks as well, So use
those to your advance.
Speaker 2 (19:00):
And I've been talking to people right.
Speaker 3 (19:02):
Now as well as saying, okay, you know, over the
last five years, the stock component of your portfolio continues
to rise. And now our current allocation, which we wanted
to be eighty twenty is, you know, more than eighty
five eighty nine percent stocks, So what about adding some bonds.
This is a good opportunity to add some bonds. When
(19:22):
you start reducing rates, you see bond you tend to
see bond prices go up. And like I said, intermediate
bonds are paying four to five in interest. That's also
that's also a nice thing. So I have seen actually
double digits and bonds.
Speaker 2 (19:34):
Am I saying it's going to happen? No, but I
have seen it.
Speaker 3 (19:37):
So I would just suggest be a well bounced portfolio,
which is, you know what people like us always say,
but particularly now when you have those growthy large cap
megastocks have done extremely well, don't get caught in this
is you know, going to be forever.
Speaker 1 (19:53):
Talking this morning was sort of fined financial planner Tracy Anton,
of course, offering advice and guidance to us each and
every week. Right here on thirteen ten double U, I
B A. You can learn more about t Anton Investment House.
You can learn about Tracy the team, listen back to podcasts,
a lot of great information there. When it comes to
what they do each and every day at t Anton
Investment House, all I gotta do is head on over
to the website Tanton Investment House dot com. That's t
(20:17):
a N t O N Investment House dot com Tracy,
It's always informative talking with you. You enjoy this beautiful day.
Speaker 2 (20:23):
Thanks Sean. Take care,
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