On today's episode of Wealth!, Host Brad Smith breaks down key personal finance stories, from the market volatility to AI to consumer spending. The market...
The market has experienced a volatile week, and Powers Advisory Group Managing Partner Matt Powers joins the show to give insight into."Our advice really has been don't overreact to market volatility , especially don't completely sell off some of the affected areas. But start looking more opportunistic, start looking at some of the unloved, unappreciated areas of the market," Powers says. He has his eye on sectors like consumer staples , healthcare, and utilities.
This week, there is some risk of overreaction here to give us his thoughts on this week's markets and how he's advising his clients. But the bounce back Tuesday and then clearly yesterday made this look a little bit less of a huge across the board loss in more to come and more just a, uh, a typical sell off.But, um, take us into your investment philosophy then with that activity that we had seen and, and the retreat into some of those safe havens.So we're looking at companies that pay a history of a growing dividend and typically we're just, we're really looking at a strong entry point into these companies.
None of those sectors are typically exciting but we're in, we're in this situation where there's some tail winds at our back Um with regards to dividend growth and, and you can shift your investment strategy a little more towards uh holdings that are more conservative.So in the consumer staples area, Mondale, um you know, everyone knows Ritz Oreo chips.They're number one in, in biscuits, number two in chocolate, number three in pastries and snack bars.
So Lily's been on a tear but we've been steadily adding to that since the drop in, in mid to early July.Yeah, one of the larger in uh earnings moves that we've seen over the course of this period here, Matt Powers who is Powers Advisory Group managing partner.Well, a lot of the wild moves that we saw in markets this week can be attributed to recession fears after that softer than expected jobs report last Friday.
And until we start to see faltering in income growth or in consumption growth, there's really no, no reason to think that the economy needs lower interest rates yet.I mean, it's cracks showing up in the rate at which wages right now are, are starting to just kind of moderate.So it feels like the pressure is is there and getting larger, especially as the economist that we've speak, spoken with.
And so I think uh before we start to take data like that, as a sign of actual weakness throughout the economy, we need to see some, some sustained weakness in those uh in those indicators.Remember that a recession doesn't mean that one part of the economy is weak. Um my, uh my recession probability forecasting model has increased in probability, um but only to 41%.
What happens to the housing market if we don't see the initial cut that perhaps signals what the rest of the policy pathway could look like. Now the drop in mortgage rates comes as investors have ramped up their bets that the fed will cut interest rates starting next month. Well, one of the things about this generation, they're much smarter than us, I think, you know, maybe not you, but smarter than I was at that at that age.They, uh you know, they've been through the meme stocks and the day trading and Bitcoin and everything else.
You know, what is your estimation or uh you know, as you look out into the future, what is your anticipation of how much artificial intelligence will be leveraged into investment strategies? What, what do you hear from students about the existing financial services industry that are wanting to enter into it and, and also wanna kind of figure out, all right, is this pathway for me?Yeah, that's great question, Brad, because they, the bulk of them really want to go into the investment field, mainly New York, uh uh investment banking.
So what are the pros and cons that we're gonna see play out this school year with new advancements in generative A I?First of all, this is going to be a very exciting year when it comes to A I, you know, last year you could kind of get away with uh still exploring, still uh questioning whether A I is gonna really matter this year.That's the big thing, right?
Yeah, I mean, there's so many, one of the things that's great about A I is, it does a very good job of giving feedback, right?So if I say here's something I've been working on, uh A I tell me what are the, the five problems with this argument that I've created? But A I actually gives the ability for a, a faculty member for a teacher to customize content even when they have a large number of students, but you have to prepare them for how to do that.
Investors are turning to A I to help them reach their retirement goals, but their risk is involved here.So great to be here and this is really a fun topic because I talk a lot about financial literacy and how people are just sort of frozen when they start thinking about what to do about saving for retirement.
So of course, you've got the Paris Olympics, a lot of people visiting there, you've got Taylor Swift concerts around Europe.But even here, uh domestically, you know, restaurants, movie theaters, uh concerts, all those kinds of services and entertainment is really the bulk of where the spending is going right now.
So I think it's more, uh, the comfort level and the fact that there's still a spending, I think another important data point. And it's, it's really critical because every dollar a client spends, they, they get some back that takes the overall cost down a little bit.It's also drives spending on restaurants and all the other entertainment stuff.
So we see the investing that's coming in is going into thinking about more long term planning, which is really how we try to help them and educate them on how to best think about investing over the long term. Do you wanna do it yourself all the way up to, you know, working with an advisor, you know, and certainly in our business, our Merrill Lynch advisors, our private banks.
You've got one former president saying that he should have an eye into what the fed is doing and all of this is gonna lead into November, which has already been looked at by many CEO S is what's going to be a very vitriolic earnings or excuse me, election season, what are the best way that investors can stay a step ahead of the campaign, talk, rhetoric and debates even?
And then on the other that we were discussing a moment ago, technology in that sector, I mean, massive pullback over the course of this week that we saw and some picking and choosing that investors are trying to chart as they decide where it seems like an opportunity to get back in at discount prices if you will not bargain basement, but certainly offer some of the high valuations that we've seen before.
And when you get into the consumer discretionary, that's where I think it's, it's more of a roll of a dice, right?They might be the Home Depots, the lows or manufacture and produce more in the US Colombia, right.And, and things we've talked about in the past of like Lulu Lemon under Armor, Nike, you know, Gap Ralph Lauren, I I think you stay away from those, but maybe because the unknown is, is too great in, in that market.
Um, and I think there'll be some cracks and then some breaks in the system over the next year or two, which that's why I'm not focused so heavily on.Right, in a policy standpoint, because I'm more worried about the financial stability of credit markets and loans and refinancing even if they cut 75 basis points in September, right or something, you know, crazy like that.Anthony Tony, I should say, see Tony Zar, who is the equity set ceo joining us here on set.
STATEMENT FROM DENNIS DARBY, PRESIDENT & CEO, CANADIAN MANUFACTURERS & EXPORTERS FOLLOWING THE DECISION OF THE CANADA INDUSTRIAL RELATIONS BOARD ON A POTENTIAL RAILWAY WORK STOPPAGE
Matt Powers Market Volatility Personal Finance Brad Smith Employment Report Powers Advisory Group Managing Partner Consumer Staples
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
June PCE and Fed rates, crypto, Social Security: Wealth!On today's episode of Wealth!, host Madison Mills covers the biggest stories impacting the market, from June's PCE data to the Bitcoin 2024 Conference. June ...
Read more »
Fed responds to economic data, not politics or stocks, says Chicago Fed's GoolsbeeThe Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.
Read more »
Fed responds to economic data, not politics or stocks, says Chicago Fed's GoolsbeeChicago Federal Reserve Bank President Austan Goolsbee on Thursday reiterated that the central bank's job is not to respond to stock market routs or...
Read more »
A Fed rate cut could be a revolutionary moment: Former Fed nominee Judy SheltonPeople shouldn't be cheering a potential Fed rate cut this fall, explains long-time economist Judy Shelton.
Read more »
Why the Fed should target 0% inflation: Fmr. Trump Fed nomineeEconomic improvement over time is supposed to be achieved by having vigorous debate from those with varying perspectives. No one has a monopoly on great...
Read more »
Fed should be cautious with rate cuts: Fmr. Fed presidentWith the latest data from CME Fedwatch tool showing that there is an almost 100% chance of an interest rate cut in September, the market is beginning to...
Read more »