Rise UP!—your go-to weekly market and economic recap, where the week’s biggest financial stories meet expert analysis. Hosted by two of the industry’s most accomplished voices, Rise Growth Partners Terri Kallsen, CFP®, and Joe Duran, CFA, along with special guests Peter Boockvar and Scott Schwartz.
This week on Rise Up! the team discusses the biggest financial stories of the week, including the latest CPI data, the potential impact of new tariffs, and the future of DEI initiatives. We also dive deep into crucial tax planning strategies for 2025, covering contribution limits, estate planning, and upcoming changes you need to know. Plus, we look ahead at the three big stories to watch in the coming week.
Investment Concerns? Get a free portfolio review with Wealthion’s endorsed financial advisors at https://bit.ly/3EydwYO
Terri Kallsen 0:16
Welcome to rise up where we take a really good look this week at breaking down all the stories that implied to you, we really want to help you grow and protect your portfolio. My name is Terry Colson, and I’m a managing partner at Rise growth. I’m also a certified financial planner, and I’m joined here with my co host, Joe Duran, who is also the founder of rise Growth Partners and an amazing entrepreneur who really led one of the largest RAs and fiduciaries in this country. Joe, thanks so much for joining us.
Joe Duran 0:47
Hey, how are you today? Terry, here we are going into president’s weekend. I don’t even feel like the year has started. So I don’t know how we got here so quickly, but I know up in your neck of the woods, we’re on the west coast here, getting bombarded with rain. My daughter’s in New York getting hammered with snow, so I think we’re in the real teeth of winter. Yeah, absolutely looking forward to a nice long weekend.
Terri Kallsen 1:11
Yeah. Well, you know, it’s really appropriate. Actually, we have a new president, so we might as well celebrate on President’s Day. So I know my family and I, we hope to go skiing over the weekend, because all this rain does really lead to great snow up in the mountains here in Northern California. So I hope everybody else is going to have a great weekend as well. We also have two other guests with us, Scott Schwartz, who’s a Certified Financial Planner and a principal at Bleakley Financial Group. And we have Peter Bucha, who’s the Chief Investment Officer at bleakly and the editor of a very popular book called The book report that’s available today, Peter and Scott. Thank you for joining us. Great to be here. Thanks. All right, let’s jump into the biggest stories of this week, which, of course, was the jump in Consumer Price Index, rising point 5% from December to 3% the news really set up a ripple effect, starting with the markets, as the S and P dropped 3% on the news, it also back, bounced back on Thursday, but we also have the 10 year treasury yields that added 10 basis points on Wednesday, reaching just Short of 4.64 which is the highest in two weeks before falling back the next day. Food and energy, which we’re hearing about in the marketplace, biggest drivers of CPI, which was up point 4% and you know, so many of us were hoping that inflation would start going down. That was really the hope for the new year. So Peter, I’d really like to start with you. Obviously, this news is going to keep the Fed. Pretty cool about lowering interest rates, but there’s another outline factor out there watching how the new US policies on tariffs are going to affect the economy. President Trump is announcing so many things, I think he’s flooding the zone, but it’s really a 25% tariff on steel and aluminum products coming into the US. Peter, what do we think of this?
Peter Boockvar 3:06
Well, inflation has proven to be pretty persistent. It seems to be stuck at around this 3% level, and with the Fed’s target being two, it’s still stubbornly well above that. So it does put the fed on hold. Jay Powell did speak in front of both the Senate and the House this week, and he did say that they’re in no hurry to cut interest rates again. And the inflation data, both CPI and then the PPI on on Wednesday, I’m sorry, on Thursday, certainly confirmed that he should be sitting on his hands. So the question is, is, what can break inflation lower and an onslaught of tariffs would not do that. It would probably keep inflation as is, or even shifted higher. So it’s more of a cloudy result when it comes to inflation, and interest rates are going to stay persistently at current levels following the inflation numbers and Peter, I
Joe Duran 4:01
mean, I’d add the inflation is where people really notice right now. Eggs pricing is out of this world. Even though it’s really driven by the bird flu, it has an impact on everybody’s breakfast, coffee. New highs, these rents, new highs, like the things that are really visible in people’s lives, which I tell you, you see it here in California. Maybe it’s anecdotal, but I noticed that with the Super Bowl, they were giving away hotel rooms in Las Vegas this this last weekend, I didn’t go, but they were rooms that the win, and really luxury hotels at 150 $250 which this weekend is typically completely out of reach. So I am wondering if we’re starting to see a little bit of is this economy cooling? I noticed actually, in in the speech that was given by the Fed, the economy is doing great, but I am starting to see some anecdotal it’s easier to get a reservation for dinner. La. Last night, I was able to, for tonight, prior to Valentine’s Day, get a reservation at a restaurant very easily. It just seems like maybe, and maybe it’s just in California, but it seems like the inflation is really hitting people where it matters. And I just wonder if you think there’s a concern about the economy slowing in here, because that combination obviously has huge implications for investors. Well, it’s
Peter Boockvar 5:27
definitely been a very bifurcated consumer. We know the lower to middle income consumers gotten whacked pretty hard, and we’re still seeing stress on their pocketbooks. They’re focused more on their their their needs, less so on their wants, the upper income consumer has done much better, because they’re able to absorb the inflationary pressures much more easily. They’ve been shifting their spending too to more travel and leisure and away from goods. But it does highlight, as you mentioned, a very mixed and uneven consumer because of the cumulative impact on inflation that is very painful. And at best, wages, which have to have risen pretty nicely, are really only just keeping up with the level of inflation. When you look at it over a multi year time frame,
Joe Duran 6:11
I know you’re a planner. Scott’s a planner. What do you tell your clients in a day to day inflationary environment? How does that play into a financial plan like, how do you at what point do you say, Hey, we’ve got to change our expectations. Obviously, people who are in a fixed savings inflation eats away at their possibility of what they can live in retirement. So how often should you take a look and say, Hey, what does this mean to my retirement? What does this mean to do I need to work a few more years. So how to how should an individual think about that?
Scott Schwartz 6:43
Yeah, yeah. We spend a lot of time talking to our clients about liquidity. We spend a lot of time talking to our clients about, you know, how much money do they spend? What’s coming up on their time horizon? I review with my clients, I record, and the first question I ask is, how are we doing cash flow wise, and is there anything coming down the road? We spent a lot of time in this business talking about, where did the market close today? You know, what are the you know, what are the numbers on unemployment, etc. And this is kind of Peter’s bag. Well, I think it’s important. I think sometimes our clients are a little too focused on that. At the end of the day, we’re very well diversified with our clients. We want our own equities because we know we’re going to have inflation over time. We want to have growth to keep up with that inflation. But I think more importantly, we want to recognize the fact that as things are getting more expensive, we have the liquidity available if my clients are going to need to spend more money next year to live, I want to make sure that I’ve got that money set aside, you know, in fixed income, in cash and treasuries, so that we’re not forced to sell securities in an environment if we get into a, you know, into a really tough market where things get really expensive, my clients, I don’t want people to be in a position have to sell security, sell equities, but that’s our that’s our take on it.
Terri Kallsen 7:50
Yeah, Joe, I just wanted to say, if you’re going to take your wife, Jen, out for Valentine’s Day, you know, I just had dinner in California just this Tuesday, and the restaurant was completely out of chicken, so you and Jen did not expect to have chicken for Valentine’s Day, and I think that was bird flu related, but that was, that’s the first time that’s ever happened to me. So order something else. Alright,
Scott Schwartz 8:16
I’ll add something of value on Valentine’s Day. My wife apparently was reading somewhere that the the origin of Valentine’s Day is really pretty dark and bleak, if you want to look it up. So we’re not going out for Valentine’s Day. We’re just going to hang out at home,
Terri Kallsen 8:30
go out for President’s Day, because that’s even a better that’s what I would do if I were you, Scott. But let’s talk about the mag seven, right? Is the mag seven? Now, the leg seven, I don’t know, but the s, p, you know, ended end of day Thursday, up about 4% as of last Friday, Germany is up almost 13% UK is over 6% so we’re starting to look at some changes in the economy. But you know, Scott, a few weeks ago, you mentioned bleakly, clients were asking all about the mag seven and where we are now. What are your thoughts on that?
Scott Schwartz 9:04
So we’ve always been, you know, long term focus, right? We’re financial planners. We’re not market timers. Again, we all kind of get caught up in the current news, and our clients are excited when they look at the last few years with what Microsoft and Nvidia and some of these, you know, the smack seven, as you call it, have done. Look, the last few years, we have exposure to those stocks, of course, but we’ve also had exposure to non US equities. And quite frankly, you know, as you’re talking to your clients, last year, the year before, and you’ve got a non US equity position, they lagged. So, you know, I heard somebody once say that being diversified means always happen to say you’re sorry, but in the end, you want to be diversified. So what’s happening now is these stocks that are trading in much lower multiples, whether you’re talking about health care, whether you talk about mid cap stocks, when you’re talking about non US equities, they’re starting to lead. And that’s encouraging. I think you know from our perspective, seeing the market not so heavily dominated by. Seven names is encouraging. Now we still want to have exposure there. And if you’ve got money in the s, p5 100, or in any large cap domestic equity fund or the Russell 3000 you’re getting plenty of exposure to these mag seven stocks. My recommendation would be to people, don’t chase it. Don’t feel like you’ve missed it. You don’t need to go out and buy those stocks on top of your portfolio. Be overexposed there. There’s still good value out there. You know, we like healthcare. Like I said, mid cap stocks started to perform better. Small cap stocks could likely perform better, particularly if tax rates come down. So, yeah, being diversified or any good quality assets in the long run is always a good idea. It’s
Joe Duran 10:35
been a really diversification within the bag, 72 you know matters hitting all time highs, Tesla, I think it’s down. I think it’s had a really good run the last two days, but we were almost done 30% from 500 to 330 since the election, post result. And so you’re when you’re at these valuations. And all of the mag seven are very lofty valuations. We saw what happened with Nvidia, even though they’ve had very nice results. And Peter, I think we talked about this a few times, that you can own the S P, either as a cap weighted or as an equal weighted. Or you can instead of owning just the S p5 100, which again, heavily weights the mag seven, you can also on the Russell 1000 which is also the middle cap names. And in fact, if you take the s, p without the mag seven, it’s up about two or 3% more than with the mag seven. So we’re starting to see for the first time in quite a while, the companies that have not participated as much doing better, both on the downside, when the markets go down, and also when the markets are going up. So again, we’ve had these head fakes before. It might go back to being the mag seven. All about the mag seven again, but we are seeing some noise. And I think the other thing you have to point out is that when you have seven names and only seven names with very high valuations, if one thing goes sideways in one of them, it can have an impact across the board. So, you know, you look at Tesla, there’s a lot of there’s very little daylight between Tesla and the President right now because of the role that Elon Musk has induction, whatever your opinion is, good or bad, it certainly might be taking attention away from the fact that Tesla’s cars are now fairly mature. They need a new cycle, and you might be spending more time trying to figure out how to save billions of dollars on the US economy than figuring out what the right next car is to be successful. And then you have the second impact, which is not small, which is the political backwash. There might be more people in the center of the country buying Tesla trucks, but there’s also maybe fewer people on the west coast, the East Coast, buying Tesla cars. And so all of this stuff just speaks to the fact that you want to have a diversified portfolio. It’s interesting to have an interesting stock or two that you are a fan of, but you want to, if you’re going to be a serious investor with your serious long term wealth, your life altering wealth, you want to be very thoughtful about not over depending on any one thing working out and always being a little disappointed. I guess, as Scott said
Scott Schwartz 13:16
something so I’m sorry, Peter, just one thing to what you just said is a very good point. You have people out there who are just buying indexes because they think they’re really well diversified, and that’s where they want to be, but the truth is that the indexes have gotten very, very heavily skewed towards these big names. One of the things we do at our firm, we’re very careful to do, is we buy specifically a value position, a growth position, a mid cap position, a healthcare position, and we look at those positions, so we want to make sure that we’re well diversified, so that when these stocks are out of favor, and these other, you know, assets that have been under value come back into favor, that we actually own them, right? So I think it’s important to understand, what do you really own in these baskets? Because they have been somewhat skewed by these by these big market cap companies. It
Peter Boockvar 14:02
could I’m going to tie Valentine’s Day into into this. The market may be losing its mag seven Valentine in terms of their dominance in driving performance. It’s really down to the mag one. Joe, you mentioned meta. Meta stock is up 19 straight days, while the other six have sort of now more challenging fundamentals. You mentioned, Tesla, Apple hasn’t seen any growth, and the others, the the big hyper scalers like Amazon and Google are spending extraordinary amounts of money that investors are now beginning to question whether they’re going to see returns on that it’s sort of a post deep seek response which is good for the rest of the market, because maybe investors can now find other things to buy. And you know, Scott talked about diversification. And I think if the market loses those top seven stocks, and just to quantify, the top 10 stocks make up almost 40% of the S, p5, 100. It for comparison in the previous peak, 25 years ago, of the tech peak in March, 2000 the top 10 stocks made up about 27% of the index. So I think that’s why international stocks have started to outperform investors are looking to small, mid cap. So there is not necessarily a broadening, but a shifting of attention away from those most important stocks, sort of losing the Valentine and trying to find a new love.
Terri Kallsen 15:29
Yeah, they’re going to have to find a new love, and especially around the electric vehicles or the Teslas, we talked about 30% down from its December highs. I mean, you know, when you think about the tax credit on the electric vehicles, and the 7500 that, you know, our viewers can get back if they bought a Tesla in 2024 that’s up for air, that’s up for grabs. And so that that also is causing people to really question if they want to buy another Tesla in their car. But let’s move on to another great topic from the week. You know, this is really the DEI the diversity, equity and inclusion is this dying in our government, in our corporate industry today, we’re seeing large companies pulling back from investors complaining about money being spent on diversity programs. We just saw Goldman Sachs pull back in this area, President Trump signed an executive order, which, for many things, asked federal agencies to identify public companies that are working towards dei programs and potentially prosecuting them. Disney’s this week also started pulling back, but there are companies that are standing behind their dei programs like the NFL, for example, just came out. Apple, Microsoft. I know that Costco is another one. But you know, what do we think about this? Take on Dei, and how should investors be thinking about this in their portfolio? Joe, you
Joe Duran 16:56
know, Terry, I was at Goldman Sachs as a partner there right after Black Lives Matter really put di at the front and center. It was already a movement that was happening as an undercurrent, but it really, really magnified after Black Lives Matter. And actually was on the diverse the DEI committee for the wealth group, and there was absolutely every intention of figuring out how to make it more inclusive. That was the initials really about listening to what people that were having experiences in America that were different than other people, and hearing that. That’s what the original intent was. It then turned into action. And without getting into politics and which side of the audio end, there’s even been challenges now about the legality of how much differentiation is happening within corporate America. I can tell you what I saw happen, certainly at Goldman Sachs, is that they realized that they had to create an equal balance field, and that they had done a lot of work already to promote different groups, but I think what changed in the last few months is that the legal system is now saying you cannot apply these kinds of standards, and so certainly with Goldman’s most recent move, and I’m not speaking as an insider here, just as a public reader now not an investor, that they now no longer require that you have to have a minority representation in order to have an IPO on the board. It used to be you have to have at least one member from a diverse group on the board. They’ve removed that, and I think that is, as well as not great policy on their part that they’ve decided to amend for whatever reason. It’s also true that they’re not sure about the legality. They think that’s the main reason is that the courts have said you cannot, you cannot apply a filter. And so I think what you’re seeing now is everyone sort of calibrating without wanting to not include and elevate all the people on their team. And so I think we’re in this very messy middle right now, and clearly the President has a very strong view on this, again, regardless of what your opinion is, but the courts are also questioning, how far can you take it? And certainly I was speaking to the dean of the business school at UC Berkeley, my alma mater, just last week, and she was saying they have no filters at all. And if you see Berkeley, one of the most progressive colleges in the world, cannot apply any diversity filter, then it’s interesting. I can tell you interestingly, they do apply an income filter. So I don’t know if that’s even going to be permitted. But for now, even the most liberal schools are realizing that they cannot apply some of the filters they might prefer to have in place.
Terri Kallsen 19:49
You know, thinking about Berkeley, I’ve run the Berkeley marathon probably 10 times in my life here, and it is one of the most beautiful schools that I’ve been. But you, like you said, also one of the most liberal schools as well. You know, I want to just talk about our next big topic. And for me, I’m kind of excited about this topic because I think it unites all of Americans. And that’s our tax time, April 15, 2025 is our tax commitment day, our tax day. And, you know, sometimes people think taxes are stressful, but the IRS is really trying to make a lot of changes to improve the overall experience. Hopefully it won’t take as long, there won’t be as much fraud and so on. So there’s a lot to talk about for 2025 and we wanted our viewers to hear this early in February, so everyone’s ready, you know, to actually apply by April of this year. But the first question we have, and I want to talk to the group about this, you know, every year there’s opportunity for higher contribution limits for 401, K’s, RIAs Roth, IRAs, which are after tax, 403, B’s, 457, plans, all of those out there, designed to help us achieve our retirement goals. And so what are the changes going on? So I wanted to talk a little bit about this, and I’d invite you guys in. But you know, the deferral limits are have been increased. $23,500 that’s an extra $500 and if you’re 50 or older. Watching this, you can add another 7500 so you can actually save almost $30,000 in one of your 401 K’s, or your 403 B’s. And there’s a special catch up if you’re 60 or older. So for those of you are listening, there’s another $11,000 that you can actually contribute. So the the Traditional and Roth IRAs, the contributions stays the same at 7000 but if you’re 50 or older, again, it’s another $1,000 so there’s a lot of opportunity to save. You know, Scott, I wanted to ask you, how are you working with clients to really take advantage of these tax saving opportunities? Yeah,
Scott Schwartz 22:00
so we, we run a lot of qualified plans. So you know, cash balance plans for our clients who own businesses who want to put a lot of money away, of course, 401 K plans, profit sharing plans, we’re always very careful to see how efficient the plan is. But as you were talking, Terry, it made me think of something. So the limits have all gone up, and that’s a good thing for most of us, right? Who feel like, yeah, I can put some more money away pre tax save tax dollars this year. From a planner standpoint, though, long term, one of the things we spent a lot of time looking at is, where are we really saving our money? So the one trap that some people fall into is, particularly people are a little wealthier, is that they’re encouraged by these higher limits. They throw more and more money into their qualified plans, and what they find is, in retirement, they might not be in a significantly lower tax bracket, right? So, you know, the qualified plan and taking the deduction works great assuming that you’re in a lower tax bracket, because remember, when I take the money out of that retirement plan, ultimately I’m paying ordinary income taxes on all of it, not capital gains. So what we spend a lot of time in our practice looking at is launcher and plan. You know, where are you going to be ultimately, you might be collecting a pension, Social Security, you might have a large portfolio that’s throwing up income and dividends. So we want to make sure that we’re not encouraging people to put more money into qualified plans where they’re going to have more money that’s going to ultimately be taxed.
Joe Duran 23:15
Scott I want to just highlight this one, because this is one of the blind spots I hear incessantly, because the media tells everybody save as much as you can in your retirement plan. And if you are a medium or low income person, that is true. But if you’re a high income individual, if you have millions of dollars and your income, you’re generating income from your portfolio, even if you don’t have a pension plan, and you’re generating dividends and you’re generating distributions and bond yield payments, it’s easy to get into the higher tax bracket, and then you don’t benefit from if you took that same money and invested it and it grew and you paid capital gains at the end or invested it in municipals, you might actually not be in a better place in a tax situation. And when you die, I believe you get taxed a second time because you have an estate tax on top of it, potentially. And so it is true, it’s a it’s a great savings vehicle if you’re accumulating savings, but if you already have a lot of savings, the answer is not always max it up. And Joe,
Scott Schwartz 24:28
to your point, I had a conversation with a client a couple of days ago. We were looking at where all their assets were, a new client, actually, and we’re flip flopping their assets. They had a bunch of equities and IRA accounts, okay? And he’s an older guy, and mostly fixed income and treasuries and their non qualified accounts. And what I tried to like, what I helped him understand, the reason why he’s doing business with me is he’s not likely going to spend this money so growing all this money in his IRA account, not only is it taxable, he would have got a stepped up basis in his personal account on equities. Ultimately, he passes. Tax that he leads to his kids there be zero taxes as he accumulates all of these equities and all this growth in his IRA account over all this time, his kids are going to be ordinary income taxes and all that growth when it comes out. So, yeah, I would say great that we can put more money away. For some people. It’s going to be an excellent opportunity. For other people, they should be a little more thoughtful about, you know, where are we accumulating our money and what assets are we getting, where sometimes you could have too much money in your IRA accounts and
Joe Duran 25:24
Terry, obviously, one of the biggest questions this year is, what’s going to happen with the tax the original tax plan that the Trump had put in several years ago, it expires this year. So that’s right, and it’s not just for estates that it could be a massive impact, because we’re today, I think it’s 24 25 million you can pass on. Yeah, I think it reverts back, if it doesn’t get extended to like two or $3 million
Terri Kallsen 25:49
yeah, it goes backwards. It’s really, this is such an important topic for everyone, because in 2017 President Trump put in a number of different tax changes to really lower taxes on income, as well as state planning. And he did that for a couple of different ways. He did higher standard deductions, which makes filing taxes even easier, and you can actually keep a larger portion of your income shielded from tax. He also improved the Qualified Income business deductions that made it easier for businesses now to qualify up to 20% of their qualified income to reduce taxes. And then, as you mentioned, Joe, the estate and gift tax changes have changed considerably, and really it roughly doubled the exemption. Exemption Say that 10 times fast the exemption amount for estate and gift tax, and those were decided to be permanent. But if this doesn’t happen, there will be a significant change to what people can leave from a wealth transfer standpoint. And you know, Joe, this is actually true and dear to me with my family, my parents. My dad is 88 my mother is 84 I helped them build their estate plan their wills. And you know, this has been since 2017 and so I’m working with them. I was just home last weekend looking over their files, making sure we’re still current, but helping them understand if President Trump doesn’t change this tax exemption for estate planning, we got to go backwards and do it all over again. So they’re not very happy about that. So I’m hoping that President Trump will continue these he says he has. But you know, everyone, all of our viewers, need to be very aware of this, because they are set to expire at the end of 2025 and if Congress doesn’t act to extend that, you know, everyone should go see their attorney as well as their certified financial planner in their life, their advisor, so they can make sure they’ve got their tax bills set up. But you know, 2025, right now, this year is a good year. It’s lower tax rates, higher standard deductions, really, more deductions for pass through it, business income and really a reformed AMT. If you recall the AMT tax, there’s less people with the burden of AMT tax, so we’ll see what happens by the end of the year. But start thinking about this now, as you think about your future in taxes, one of the
Scott Schwartz 28:17
things on that note, we do have this large credit right now, and that exemption can be used either after you die or before. So look, I’m pretty confident that they’re going to extend these taxes, these tax rates. I should say, in fact, I talked to my trust in the states attorney is a pretty smart guy who talks to a lot of folks in their world. A lot of people think they’re actually going to extend that credit to an even larger number. But one thing you can do in 2025 if you’re not so confident, you can give that money into trust. There’s certainly trust out there where you can control your money, remove it from your state now, so that the credit does go back to those historically lower numbers. You’ve gotten the money out of your estate. And if the you know, as if the exemption amount goes up, you can do a little more planning later. People still do have time to do some planning, if they’re not, you know, confident about that? Yeah,
Terri Kallsen 29:06
I think that’s a great point, either before or after. But have a plan, right? I think that’s the most important piece. And just one more thing on taxes, because I can’t give this up, you guys. I just think this is so fun, but you know, just a little trivia for you. Hey,
Joe Duran 29:20
something like the CFP chair you as the chair of the CFPs around the world. You need to say that? Yeah,
Terri Kallsen 29:29
well, the IRS is really trying to improve the overall experience. They’ve actually invested a lot of money in their direct file program, because today, the average American today spends 13 hours and $290 to file their taxes. And so you know, they can actually reduce that amount through electronic filing. And last year, only 12 states qualified for the direct file, which is a much easier process with fewer fewer mistakes. And now. It’s 25 states, so they’ve doubled the number of states that direct file is available to. And I highly encourage our viewers to check that out, because you’ll get faster service, and you’ll get quicker response times if you use that. And just so you know, most of the time, if you’re getting a payment, if you’re getting a tax refund, if you direct file, you’ll get that within 21 days. So, you know, nobody really likes to work on their taxes, but if you get money back in 21 days, maybe you can go on a spring vacation or a summer vacation, just
Joe Duran 30:32
go to the grocery store and buy eggs.
Terri Kallsen 30:36
That’s right, that’s right. Oh, good. All right, so let’s go on now we’re going to move on to the three big stories to watch for the coming week. You know, Peter, there’s a lot of housing data that’s coming out this week. Housing starts builder confidence and permits existing home sales. What are you looking for here?
Peter Boockvar 31:00
It’s actually a, as you mentioned, those numbers, but it’s somewhat of a break from a heavy data week this week with the inflation stats the week before, with jobs data and other sentiment surveys. So I think it’s going to be more of a focus on continuation with fourth quarter earnings, and everyone on their toes when it comes to any details with respect to tariffs, because that’s been an ongoing attention getter every week, and what that means in terms of flow through, in terms of corporate earnings and and impacts on overseas economies. But it’s going to be at least a step down in terms of news flow, which I think the market would welcome.
Joe Duran 31:48
I also think, you know, it’s been a big earnings we’ve been on the peak of earnings. Think we start to get a little bit more tranquil here, and hopefully start getting some good economic growth in the mix. And again, we’ll always be looking out to see what the President does next. Hopefully it’ll be quite on Monday, so we can all enjoy a nice vacation.
Terri Kallsen 32:08
Well, he should take a day off, don’t you think on President? I think so, you know, we should ring the White House and say, Hey, Buddy
Peter Boockvar 32:17
golf on Monday. Yeah, there you
Terri Kallsen 32:18
go. Then we can all, yeah,
Joe Duran 32:20
I just remember the last presidency. It was like the media would go on and on about how many hours he is watching TV. And now it’s amazing, like it’s a turnstile of business leaders that are going through the White House right now. Like we just had the sea over rising go through. It is every day there’s a new CEO coming in. It’s very clear the White House is open for business. It’s very clear that this is a we want to hear and do things, and they’re not resting and talking like I don’t recall in my 37 years as an American, more movement in the first month of a presidency ever. It’s almost maybe, because we’ve never had a cycle where presidents come in left and had the opportunity to come back in and say, Well, this is what I’m doing differently. But I think we were nine months before he had his whole cabinet, and he’s basically done, and it’s five weeks in, not even so I look however you feel about it, there’s no question there’s a new sheriff in that. Yeah,
Terri Kallsen 33:24
his endurance is pretty spectacular from everything I’ve seen. But we are going to see the Fed minutes this week. Do you guys anticipate any surprises?
Peter Boockvar 33:32
I think the Fed is much less relevant. To be honest, we hear a lot of speeches after the meetings. We just heard from Jay Powell, so I don’t think it’s going to be much of an information provider. The Fed is on hold right now. The inflation statistics confirm that, and they’re just in wait and see mode. I
Joe Duran 33:51
can’t imagine what we need to be true for them to lift it. I also can’t imagine what we need to be true for them to drop it. So right now, the reality is we’re, I think, in a tipping point between inflation and recession, and they’re just sitting tight. They’ve got a lot of power in either direction. The good news is, if we can end up seeing the economy start to really slow, they got a lot of drops they can make to create liquidity. And if the opposite happens, we’re already fairly high rates. The long term rate will automatically adjust stuff. It happens very quickly. I’ve noticed the swings we’re seeing on the tenure are automatically doing the job that the Fed needs to do fairly consistently, like we’re seeing these 30 and 40 basis point swings in the course of a couple days. So I think the market is kind of trying to figure out where this new equilibrium is anyway. Yeah, agree the
Peter Boockvar 34:43
bond market is taking control of monetary policy, and
Terri Kallsen 34:46
then the initial jobless claims will be out this week, and how does that tie into inflation? I think that’s,
Joe Duran 34:52
I think, I think Peter, we both agree that is the number like, like, the truth is employment is what’s going to drive the Fed. Uh, because it speaks to the recession and it speaks to inflation. Right now, Peter mentioned it already, people’s pay, even with the increases, are not keeping up with what’s happening with inflation. And so the question is, do people keep getting jobs? It’s been sort of squishy employment reports lately. Does that continue? And if not, then there’ll be the, if the employment reports are good, the Fed’s really not going to do anything for for a long time. So to me, that that’s the canary in the coal mine. For me, is the the employment reports and what’s happening with pay. Well,
Terri Kallsen 35:33
I’m looking forward to hearing what we have to say about that next week, but I want to wrap up today. Thank you so much. Peter Scott and Joe, thank you so much for watching today for a rise up. We’re just getting started. Remember, we want to hear from you what topics are really interesting to you. What questions do you have? You know, please comment on our show and also subscribe, so that we get to see you every week, and if any part of today’s conversation really got you interested in a portfolio review or to understand a little bit more of one of our trusted RIAs like Scott and his team, just go to wealthion.com free, backslash free, and click in so that you can get the description and sign up and we’ll be Happy to help you. We’ll see you next week. You
