Latest news with #WealthAlliance
Reuters
15-07-2025
- Business
- Reuters
Market Talk: Trump's pressure on Powell risks dollar's dominance
"Trump's got to be careful," warned Eric Diton, president and managing director of The Wealth Alliance, "because if he leans too hard on [U.S. Federal Reserve Chair] Jay Powell, or replaces him and brings in someone who is a Trump 'yes-man,' we are endangering the dollar as the international reserve currency." Lisa Bernhard has more.
Yahoo
28-06-2025
- Business
- Yahoo
How the Fed's July rate cut decision impacts American wallets
Federal Reserve officials are expressing mixed sentiment about whether to cut interest rates or hold them steady in the July FOMC meeting. Wealth Alliance CEO Rob Conzo joins Mind Your Money with Brad Smith to discuss how either outcome would impact Americans' everyday finances. To watch more expert insights and analysis on the latest market action, check out more Mind Your Money here. Well, Federal Reserve officials are split on whether an interest rate cut in July is on the table, depending on whether the FOMC holds rates steady or reduces the benchmark rate. What does that outcome mean for your everyday finances? Here to explain and discuss further, we've got Rob Conzo, who is the Wealth Alliance CEO. Rob, good to have you here with us. How does the Fed's benchmark rate affect people's personal finances? Great to be with you, Brad. Um, it's a very misunderstood rate. It's the rate, the rate that banks charge each other to borrow money, but how does that affect you personally? Well, first thing it affects you either way. Number one on the expense side, meaning borrowing. So we all know that, right? We have mortgages, and credit cards, and auto loans, and student loans, and, and small business loans. So when the Fed sets a rate, right now it's between four and a quarter and four and a half, well, then all the banks look at that rate and decide where they're going to charge you for the debt side of it, your expense. And let's not forget half of the American economy is small business. So when they have to pay more for lines of credit loans, well, it hurts them, they hire less, and it's a problem for the economy. That's why everybody wants the Fed to lower rates. So Rob, let's get specific. How are mortgage rates impacted by the Fed's next move? And what does and does a cut mean that we could see lower mortgage rates as well? Yeah. So the longer you go out with lending, the longer other factors are involved. I'll give you an example. Let's talk about money markets. That's money you're earning. Well, that's every single day, and all it matters is what the Fed's going to charge, and what the bank wants to make. And there's a rate, a mortgage, money expense, you're spending. Well, that's different. Now suddenly the bank goes, alright, let's see what the Fed is going to charge. Four, four and a quarter. Okay. Now, you want to get a mortgage. So the Fed rate is one aspect. Uh, how much of a mortgage is a second. How long are you going out? What's your salary? How the house is valued at. So the longer the debt, the more Fed rates, uh, the more your personal stuff gets involved and muddies the water between just the Fed rate. So the Fed rate is just a little part of it when you're going out longer. You know, while we have you here now, let's go to credit cards. Say, you know, maybe not me, but somebody I know has a lot of debt, debt and, and uh, racked up here. Will a lower benchmark rate from the Fed mean that I have to pay less interest perhaps? Great question. The credit card one is the one that's a little unique in the sense that credit card companies charge upwards of 15, 20, 25% in interest. And you're saying to yourself, well, how could it be so high? And it's so high because credit card companies want to make a lot of money. So at the end of the day, there's so much leeway in the credit card company. You would think if the Fed lowered rates, you would see credit card rates come in as well. That may not be the case. Some credit card companies just hold it steady and it is what it is. I'll tell you, give you another example. Sometimes, forget credit cards, again, when you had a bank savings account, and you're getting very, very little interest rate, but yet the Fed's rates at 4 and a quarter, 450. Why is that the case? The bank has the right to say, look, we're only going to give you 0.2%. Meanwhile, another brokerage account could give you 4% on a money market. So there is business parts of what the interest rate you pay or you receive on top of the Fed rate mandated. What about savings vehicles like CDs, certificates of deposit? How are they impacted depending upon the Fed's decision? So CDs, saving vehicles of all sorts, money markets is a is a standard one. Bank savings accounts, people know. Again, there's two aspects of it. Fed, surely, if the Fed raises rates like they have, well, then you're going to typically get more in bank savings accounts and CDs. And we've seen that, people getting 5% CDs. The Fed starts lowering rates, if they do, and we don't think they're going to be doing that this July, but good chance they could be doing that in September, the Fed starts lowering rates, you'll see those CD rates and savings rates come in. And that's why a lot of financial advisors are saying, hey, you may want to lock in a longer rate now while it's still high before the Fed cuts. And finally, while we have you here, Rob, when the Fed finally cuts interest rates, should you adjust your, yeah. Should you adjust your financial plans, things like your budget or borrowing or, should you just stay the course? Now, um, it's a very good question. And it it depends really. A lot of answers to financial questions are, it depends, unfortunately. But the real answer is when the Fed starts cutting rates, if it's just very, very minimal, a quarter of a point, um, that's not going to make a big difference on things. But as things start to go down further, if they do, well, then you want to start preparing for that now. You want to get your financial plan in order, understand how long your debt is going out. Are they credit cards with really high interest rates? And on the income side, on my income vehicles, bonds, CDs, savings accounts, giving me the interest that I need to make my retirement and financial goals. Rob, thanks so much for taking the time here. We're going to be watching closely as we know that you will be too for when they do start to cut interest rates. Thanks so much. Alright. Thank you.
Reuters
10-06-2025
- Business
- Reuters
Small-caps 'compelling' as stagflation risks rise, says wealth advisor
The stocks of smaller companies are attractive for a number of reasons including their lower prices, says Eric Diton, president and managing director of The Wealth Alliance.
Business Times
08-06-2025
- Business
- Business Times
Traders scour for ‘elusive' catalyst to push S&P 500 to record
For stock traders there's little to fear at the moment. Corporate America keeps churning out solid earnings. The chances of a recession aren't blaring. And President Donald Trump's tariff policy is expected to become more clear before long. So what's there to worry about? Despite sitting just 2.3 per cent away from a new all-time high, the S&P 500 Index has been struggling to get there, meeting resistance at 6,000 – a key psychological threshold. Prior to Friday (Jun 6), the equity benchmark had not seen a move exceeding 0.6 per cent in either direction for seven straight sessions – the longest stretch of calm since December, according to data compiled by Bloomberg. With a key inflation read on tap Wednesday as the Federal Reserve enters a blackout period before its June 18 interest-rate decision, money managers are wrestling with what could propel the S&P 500 back to a record after the index soared 20 per cent from its April lows. 'For US stocks to get back to all-time highs we have to get rid of uncertainty, but most catalysts are elusive for now until the trade war chaos is resolved,' said Eric Diton, president and managing director of the Wealth Alliance, whose firm is now putting on hedges in portfolios to protect against a sell-off. From US job growth moderating in May to sluggish US services and manufacturing activity, weakening economic data have been piling up recently. Yet, the market has been blowing it all off, with traders pricing in little risk over the next month on optimism that the worst effects of Trump's tariffs may be avoided. The Nasdaq 100 Index is just 1.9 per cent away from a record. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'My concern is investors are becoming too numb to the trade war and economic risks, so when red flags appear they start dismissing them,' said Oliver Pursche, senior vice-president and adviser at Wealthspire Advisors. Some traders are preparing for sticky inflation. The consumer price index report is forecast to show the core reading – which excludes food and energy costs – rose by 0.3 per cent in May from a month earlier, above April's 0.2 per cent print. That would leave the core gauge up 2.9 per cent year-over-year – above the Fed's 2 per cent target. Wells Fargo economists see inflation picking up in the second half of the year. Signs of a better-than-expected economic outlook has revived hopes that chair Jerome Powell will resume reducing borrowing costs as soon as September. At the same time, some are wary that any surprises in inflation and eventual return of volatility may fuel an unwind of wagers on riskier investments and spark another sell-off. With the S&P 500 trailing the MSCI All Country World Index excluding the US Index by almost 12 percentage points in 2025 – marking the worst start to a year against its global peers since 1993 – Bank of America strategist Michael Hartnett says global stocks are getting close to triggering a technical 'sell' signal after investors rushed into risk assets, leaving positioning stretched. 'Once there's too much complacency there's a risk of surprise, so I'm more cautious heading into the summer,' said Patrick Fruzzetti, portfolio manager at Rose Advisors, who is snapping up shares of health care and staples companies that tend to have comparatively low valuations and offer robust dividends. Traders are, however, still obsessed with macroeconomic data. Over the past three months, the S&P 500's average realised volatility on days when the CPI report, the government's monthly jobs data and Fed rate decisions are released has been nearly 42 per cent, compared with a reading of 29 per cent on all other sessions, according to data complied by Asym 500. After fund managers reduced cash holdings and invested heavily in US equities over the past two months, the boom has left demand for loss protection muted. The market is vulnerable to being caught off-guard if CPI comes out hotter than expected, Wealthspire's Pursche said. 'I fear many are not paying attention to these threats because most are thinking 'everything will be fine,' but they're ignoring warning signs,' Pursche added. Still, rules-based and discretionary investors remain moderately underweight equities, data compiled by Deutsche Bank show. That means traders still have dry powder to buy stocks in the weeks ahead. One key challenge for investors will be assessing the lagging impact of tariffs on inflation, which has money managers split on where stocks are headed in the coming months. 'We've become desensitised with inflation because everyone is betting that it will take months before tariffs will flow through into the economic data,' said Brooke May, managing partner at Evans May Wealth. 'But if there's a hot CPI print, it could lead to another sell-off in stocks, though will investors use any drawdown to keep buying the dip, or sell?' BLOOMBERG
SBS Australia
01-05-2025
- Business
- SBS Australia
Trump blames Biden for US economy's shrinkage since he assumed the presidency
One hundred days into his presidency, Donald Trump has received a less-than-glowing report card from his rivals - and the economy. The United States economy had been predicted to grow 0.3 per cent. Instead, it shrank by the same figure, signalling the first decline in three years. When the news broke, senior Democratic Leader Chuck Shumer [[shoo-mer]] had strong words for the President. "Today's new economic news showed that Donald Trump is running the American economy the way he ran his family business - into the ground." That rebuke came as President Trump used a Cabinet meeting to pin the poor economic performance to the policies of his predecessor. He described the lowered growth as a removal of what he called "distortions" of the figure in previous quarters, including high government spending. "And I have to start off by saying that's Biden, that's not Trump, because we came in on January, these are quarterly numbers, and we came in and I was very against everything that Biden was doing in terms of the economy, destroying our country in so many ways." But the lowering of the U-S G-D-P is linked to a surge in imports ahead of a new policy: the escalating tariffs placed on imported goods across industries, from almost all countries. Economists say businesses have used the past quarter to buy up goods, as an unpredictable trade policy takes effect. The President has imposed a 90-day pause on steep tariffs on imports, after dozens of countries approached his administration for reprieves. The Wealth Alliance Managing Director, Robert Conzo, says Mr Trump must follow through with negotiations, fast. "What he has is this 90-day reprieve, which is ticking down. He has to get some deals under his belt. That message has to come clear that countries not only came to the table, but they actually did negotiate." One country does not have a seat at the table - China. 150 per cent tariffs have been levelled on all Chinese imports and they have been excluded from the 90-day reprieve given to other trading partners. Speaking to his Cabinet, Mr Trump downplayed concerns over price rises on goods. He said the U-S is doing well with tariffs, but China - which he calls the "Chief ripper-offer of the United States" - is not. "Look, right now, and I told you before, they're having tremendous difficulty because their factories are not doing business. They made a trillion dollars with Biden - a trillion dollars, even a trillion-one with Biden selling their stuff. Much of it we don't need. You know, somebody said, oh, the shelves are going to be open. Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more than they would normally." The NASDAQ - which represents the top 3,500 U-S stocks - dipped on the back of the news, before recovering to end Wednesday higher than it opened. Economists report the country is inching closer toward a possible recession but the broader picture remains uncertain. That is because the latest data is a mixed bag; consumer spending slowed to 1.8 per cent - its weakest rate since mid-2023, it powers two-thirds of the economy and represents American households cutting back on household purchases. The lacklustre figure combines with lower-than-expected employment numbers and the negative G-D-P. Government spending dropped to minus 5.1 per cent ((-5.1%)) during the first three months of Donald Trump's term; in the previous quarter it hit four per cent growth. But businesses bought big; investment grew almost 10 per cent in the quarter [[9.8%]] ahead of price rises from expected tariffs. Private U-S investment boomed in the past three months, too, hitting its highest rate since late 2021. U-S strategists are reporting on the news, which we've voiced. Mark Hackett, chief market strategist at Nationwide, says the contradictory data muddied an already-unclear economic outlook. "It's more frustration for the long-term investor because you're not getting a really good read on what the actual economy is doing. We need to know what's happening in the economy ... and reports like this don't give us a lot of useful data on that." Matthew Miskin, co-chief investment strategist at John Hancock Investment Management, points to the uncertainty around trade. "There's just massive distortion and volatility in the economic data right now because of the pull-through of tariffs. The GDP report doesn't help shake off this economic contraction fear that has been gripping markets." Peter Andersen, founder of Andersen, Capital Management in Boston, agrees. "This period where tariffs are trying to be negotiated and acknowledged by the market makes things extremely difficult to model and predict." Meanwhile, the President is urging patience for his tariffs plan. Hosting bosses of major companies at the White House, he listed big brands who have promised to do business in the U-S, including Novartis, G-E Aerospace, Toyota and Hyundai. And as a volatile Wall Street reacts and rebounds off the latest reports, a coup from Kyiv. Ukraine has signed a 10-year, US-Ukraine reconstruction investment fund, which would see the U-S pocket half the revenue from new rare earth mining licences in Ukraine. In exchange, Ukraine has a measure of assurance of continued U-S support in its ongoing war with Russia. The deal still needs to be ratified by the Ukrainian Parliament before it can take effect.
