Current Finance Articles
Every month, Fort Pitt Capital Group’s Dan Eye curates valuable finance articles for you from the vast amount of reading that the Portfolio Management Team does to stay up to date on the market. We want to help you cut through the clutter and have a resource to find current financial news from relevant sources.
Finance Articles October 2024
With 2025 is fast approaching, inflation, geopolitical news, Social Security changes, and retirement remain top of mind. As we continue to navigate these challenges, Fort Pitt is keeping you in the loop with the latest updates.
We look to ZeroHedge for this month’s first article, “No Central Bank Wants To Stop Price Inflation.” Central banks are incentivized to allow moderate inflation, which erodes purchasing power and indirectly benefits state interests by reducing real debt. Instead of aiming for true price stability, this approach fosters dependency on government programs, prioritizing debt management over consumer purchasing power and economic freedom.
Pivoting to the defense sector, Reuters features our next piece, “US strategy for anti-ship weapons to counter China: plentiful, mobile, deadly.” The U.S. is enhancing its Indo-Pacific defenses against China by stockpiling affordable, mobile anti-ship weapons like the GPS-guided QUICKSINK bomb. This strategy uses large numbers of cost-effective weapons to overwhelm Chinese ships, complementing high-end missiles such as the LRASM to level the regional playing field. Deployments include mobile missile batteries and plans to increase inventories of missiles like the SM-6, helping counter China’s numerical advantage in the region.
Returning to ZeroHedge, we have, “Elon Musk Says He’s ‘Upgrading Security’ After Being Named ‘Enemy Number Two’ By Media.” Elon Musk announced he’s increasing his security following a German magazine’s depiction of him as a high-profile adversary, similar to Donald Trump. Musk expressed concern over growing hostility he perceives from media and certain public figures and joked about using security decoys for added protection. The increased scrutiny comes amid his vocal support for free speech and recent political endorsements.
Our next story in Reader’s Digest features insight from Fort Pitt financial advisor, Paul Brahan, “Your 401(k) Could Get a Whole Lot Bigger in 2025—Here’s How.” In 2025, the SECURE 2.0 Act introduces enhancements to 401(k) plans, including higher catch-up contributions for workers aged 60-63, allowing them to contribute either $10,000 or 50% more than the standard limit. This rule aims to help older workers boost their retirement savings if they’ve fallen behind. “By taking advantage of this additional contribution limit, individuals can potentially accumulate a larger nest egg, which can provide greater financial flexibility and peace of mind in retirement,” says Brahan.
Concluding the month, Fort Pitt’s David Plante, CFP®, discusses the Social Security cost of living adjustment (COLA) in Financial Advisor Magazine with, “Don’t Panic Over Disappointing Social Security COLA, Advisors Say.” Advisors recommend staying calm about the smaller increase for 2025, advising clients to carefully balance spending, inflation, and long-term savings. “It is extremely important to strike a balance between meeting your spending needs, keeping up with or outpacing inflation, and preserving your nest egg for the long term. It’s better to adjust spending and optimize resources where necessary, rather than relying too heavily on investment gains,” explains Plante.
Finance Articles September 2024
As we approach Q4, many questions still remain about the economy, markets, and the impact on the average American. Below are some stories we are following to keep you in the loop.
We start the month examining income disparity in ZeroHedge with, “The Clash Of The ‘Dollar General’ Versus ‘Ferrari’ Economies.” Rising debt and low savings are pushing middle and lower-income Americans to rely on discount stores like Dollar General, while wealthy individuals continue to spend on luxury brands, such as Ferrari. This contrast reveals a widening gap between those struggling and those thriving, highlighting a growing divide between Americans. As the economy becomes more polarized, concerns grow over the long-term implications for social and economic stability.
Transitioning to AI news, ZeroHedge also has our next piece, “Data-Center Power Needs Pushing Oracle To Consider Next-Gen Nuclear, Larry Ellison Says.” Larry Ellison, chairman of Oracle, revealed that the company is considering next-gen nuclear power to meet the rising electricity demands driven by AI and data centers. Oracle is planning to use small modular nuclear reactors, which are expected to be commercialized by the 2030s, for a future data center requiring over a gigawatt of power. This move reflects the increasing energy challenges that companies face due to AI and cloud computing growth, and Ellison suggested a potential partnership with innovative nuclear firms like Oklo.
We look to WolfStreet for inflation updates in, “Recession Not Yet: Retail Sales Help Push Up Atlanta Fed GDPNow to +3.0% for Q3 GDP.” The Atlanta Fed’s GDPNow estimate for Q3 2024 has jumped to 3.0%, driven by robust retail sales, which surged 0.6% in August. Consumers are fueling growth, with spending up 2.5% from the previous year, even as other economic indicators show weakness. Retailers from bars to department stores saw revenue increases, bolstering economic activity. The report notes that while inflation-adjusted retail sales have risen, the strength of consumer spending could conceal deeper economic issues, potentially delaying a recession despite tightening financial conditions.
Bryson Roof, a Fort Pitt financial advisor, speaks with the Philadelphia Inquirer to discuss local personal finance trends in, “Personal finance will soon be a high school graduation requirement in Pa. Can you pass a quiz on the subject?” High schools in Pennsylvania are adding financial literacy courses to help students better understand essential money management skills, such as budgeting, saving, investing, and understanding credit. This move aims to address widespread gaps in financial knowledge among young people, equipping them with practical tools for real-world financial decisions. As these requirements are implemented, the goal is for students to graduate with a stronger grasp of personal finance, which is increasingly recognized as critical to long-term economic success.
To conclude the month, Fort Pitt senior investment analyst Christopher Barto reacts to the Fed’s 50 bps rate cut on Schwab Network, “Stocks with Sights on Rebound: KEYS, LULU, GXO.” “You have one of these scenarios where we marched up last year and this year, so what percentage of the market is actually pricing in more continued rate cuts? Additionally, do we have the risk of potential reinflation?” Barto explains.
Finance Articles August 2024
As summer winds down, we’re firmly focused on news and data that is impacting the markets and economy. The upcoming election, data from the jobs report and interest rates are all top headlines we’re following. We’re helping keep you informed about trends this past month.
Our first article comes from ZeroHedge, “US Jobs Revised Down By 818,000 In Election Year Shocker, Second Worst Revision In US History.” The U.S. Bureau of Labor Statistics has recently revised nonfarm payrolls by 818,000 jobs for the year ending in March 2024, making it the second-largest downward revision in our nation’s history. This significant adjustment suggests the labor market was weaker than previously reported, particularly in high-paying sectors like professional services and manufacturing. The revision poses political challenges for the Biden administration as it affects the narrative of a strong economy.
We shift our focus to interest rate news with the next story from CNBC, “Fed Chair Powell indicates interest rate cuts ahead: ‘The time has come for policy to adjust’.” Federal Reserve Chair Jerome Powell signaled that interest rate cuts might be forthcoming, indicating now is the time to adjust monetary policy. This marks a deviation from the Fed’s recent focus on combating inflation through rate hikes. Powell emphasized the need to balance inflation risks with the potential economic slowdown, suggesting that the Fed may begin reducing rates to support economic growth while maintaining vigilance on inflation trends.
Returning to ZeroHedge, we look to clean energy turmoil with, “Coming Clean On Clean Energy: It’s A Dirty Business.” Contrary to popular belief, the environmental impact of clean energy technologies like wind turbines, solar panels, and EV batteries is significant, involving toxic waste, habitat destruction, and resource exploitation in developing countries. To combat this, companies and legislators need a more balanced energy policy, rather than a sole focus on replacing fossil fuels.
Daniel Eye, chief investment officer at Fort Pitt Capital Group, speaks with the Pittsburgh Post-Gazette to discuss the importance of diversified, long-term portfolio management in “Pittsburgh-area financial advisers: Hold steady in market turbulence and look for bargains.” After the recent stock market correction, advisors see potential opportunities for investors, suggesting that now might be a good time to adjust portfolios for long-term gains and diversification. While the market is volatile, strategic moves could lead to favorable outcomes during recovery. “Staying invested in a well-diversified portfolio during periods of volatility has historically proven to be a successful strategy,” says Eye.
Wrapping up the month, Fort Pitt financial advisor Bryson Roof details a new back-to-school trend in Harrisburg Magazine, “‘Gift Matching’ Makes a Perfect Life Hack for Education Savings.” Rather than spending money on new clothes or school accessories, a new “Gift Matching” strategy has parents adding the value of gifts and supplies to a savings account. Following a 75:25 savings ratio for education, the majority of funds are moved into a 529 plan, and the remainder into savings bonds. This can help to establish a long-term fund for children while also teaching them the importance of financial well-being and planning.
Finance Articles July 2024
As we wrap up July, there’s no shortage of fireworks in the financial sector continuing to make headlines. As tech and AI continue to drive the market and investors react to the upcoming election, Fort Pitt is looking at the top stories to keep you informed.
To start the month, we look to ZeroHedge with, “AI Or Crash: A ‘Show Me The Money’ Attitude Starting To Emerge.” Despite significant initial gains, investor skepticism has grown toward AI, as concerns about the sustainability of current valuations and the uncertain timeline for adoption are realized. Investors are now adopting a “show me the money” attitude, demanding tangible results, and showing the need for AI companies to demonstrate real financial returns to sustain investor confidence.
Switching gears, CNBC.com looks into the trucking industry with, “America’s freight recession is nearing its end, logistics executives say, with retail orders and rates headed higher.” The trucking industry is recovering from a prolonged freight recession following the Covid transportation boom, with data showing a 30% year-over-year increase in trucking volumes to North American distribution facilities in June. Retailers are restocking, with a significant rise in orders across various sectors, and the industry is experiencing tighter capacity due to recent bankruptcies. Freight rates are expected to increase in the third quarter of 2024, potentially leading to higher consumer prices by early 2025. Globally, manufacturing growth in countries like Vietnam and India are contributing to a decrease in ocean freight orders from China, although rising transportation costs could impact future growth.
We stick with CNBC.com to discuss acquisition news with, “Activist Elliott reportedly has a significant stake in Starbucks, in talks with management.” Elliott Management has acquired a significant stake in Starbucks and is engaging in talks with the company’s management to address recent underperformance. The activist investor aims to influence strategic decisions to help turn around Starbucks following disappointing quarterly results. This move is part of Elliott’s broader strategy to drive improvements and increase shareholder value in underperforming companies. The discussions are focused on enhancing the company’s operational efficiency and financial performance.
Up next, Fort Pitt’s Chief Investment Officer Dan Eye weighs in on the performance of the Magnificent Seven with Pittsburgh Quarterly in, “How Long Will the Magnificent Seven Last?” The Magnificent Seven have shown dominant outperformance due to superior fundamentals, including higher revenue growth, earnings growth, and profit margin expansion. In 2023, they posted a 33% earnings growth rate while the rest of the S&P 500 saw a 5% decline. However, 2024 is seeing a broadening of market participation, with sectors like energy, financials, industrials, and healthcare leading the way. The market is now led by a more diverse group, reducing the dominance of mega-cap tech stocks.
Our final article, “Many people retire in debt. Here’s how to manage it,” comes from Yahoo Finance and includes insight from Paul Brahan, a financial advisor at the firm. Retiring with debt is increasingly common, with over a quarter of retirees facing mortgage and credit card debt, but there are ways to alleviate the stress. “Prioritize your debts by interest rate, paying off the most expensive ones first. Still, make minimum payments on all other debts while directing any extra cash you can at the high-interest one,” explains Brahan.
Finance Articles June 2024
We are now halfway through the year, but questions surrounding the future of the markets and economy remain. As we look ahead to the next 6 months, Fort Pitt is busy analyzing the stories that you need to be aware of.
Kicking off this month we have, “Junta of Mega-Cap Stocks Rules. Rest of the Market? Russell 2000 Hits Jan 2021 Level, S&P 500 Equal Weight Hits Jan 2022,” from WolfStreet. A small group of mega-cap stocks significantly influences the S&P 500’s performance, overshadowing broader market indicators like the Russell 2000 and S&P 500 Equal Weight Index, both of which have seen declines. This concentration in a few stocks raises concerns about the overall health and diversification of the market. The dominance of these stocks suggests a disparity between the market’s top performers and the wider economic landscape.
Up next is a ConstructionDrive article, “Oracle unveils $10B data center expansion plan.” Oracle’s 2025 expansion aims to match the scale of other tech giants in data center construction. This is driven by high demand for its cloud services, with plans to build some of the world’s largest data centers, including an AI facility in the U.S. capable of housing eight Boeing 747s. Despite challenges in the construction pipeline due to supply chain issues and power availability, Oracle is improving its efficiency in building these centers.
We move to interest rate news in ZeroHedge with “Bank of Canada Cuts Rates By 25bps As Expected, First G7 Central Bank To Launch Easing Cycle.” The Bank of Canada has reduced its key interest rate by 25 basis points to 4.75%, marking the first rate cut by a G7 central bank in this cycle. This move, anticipated due to earlier dovish statements, reflects a strategy to manage inflation expectations and economic growth. With inflation showing signs of easing, further rate cuts could be expected. The rate reduction has already positively impacted Canadian stocks and influenced interest-rate-sensitive sectors.
Another piece from WolfStreet, “The Foreign Holders of the Ballooning US Debt: They’re Buying, But Don’t Keep Up,” delves into foreign holdings. Foreign investors continue to buy U.S. Treasury securities, but their share of the ballooning national debt is declining. While the total foreign-held debt reached a new high of $8.02 trillion, it’s not keeping pace with the overall growth of U.S. debt, now expected to soon hit $35 trillion. The major buyers include the Euro Area and top financial centers like London and Luxembourg, while China and Japan have reduced their holdings. The U.S. is becoming less dependent on foreign financing as a result.
Wrapping up the month, Chief Investment Officer Dan Eye connects with MarketWatch to highlight the investment opportunities amid the AI boom in “AI mania is creating opportunities elsewhere, says money manager, who has three stocks to consider.” He emphasizes a shift toward a balanced approach, mixing growth and value investments, with a focus on finding undervalued opportunities outside of the tech sector. “The Magnificent Seven has kind of scaled down to the terrific two, with Nvidia accounting for something like 35% of the year-to-date return of the S&P 500. That’s a difficult environment for balanced and diversified portfolios,” Eye told MarketWatch.
Finance Articles May 2024
The markets and economy continue to face uncertainty as we move through the year. Amid earnings season, investors are looking to the Fed for direction and what future moves mean for both stocks and bonds. At Fort Pitt, we are staying ahead of the headlines to keep you informed and prepared.
“Buffett Invests in T-bills instead of Stocks, Waits for Bad Stuff to Happen, Cash is King at 5%-plus,” is our first article from Wolf Street. Warren Buffett’s Berkshire Hathaway has significantly increased its holdings in Treasury bills, valuing the 5% return over the risk of current stock prices. By March, Berkshire held $153 billion in T-bills, a notable increase from the previous year. Buffett also reduced Berkshire’s Apple shares, preferring the stability and return of T-bills while waiting for more favorable stock prices amid potential market downturns.
Our next Wolf Street article, “Junk-Bond Issuance Nearly Doubles YTD, amid Feverish Demand in La-la-Land and Ultra-Loose Financial Conditions,” discusses how junk-bond issuance has nearly doubled year-to-date. This is driven primarily by strong demand and loose financial conditions, despite the Federal Reserve’s efforts to tighten monetary policy. Companies are capitalizing on this environment by locking in historically narrow spreads and still relatively low yields.
Moving over to retailer news, we look at a ZeroHedge article, “Walmart, Target Unleash Price-Cut Tsunami As Working-Poor Hit Brick-Wall.” Walmart and Target are implementing significant price cuts on thousands of everyday items due to the financial struggles of low-income consumers who have exhausted credit and savings amid high inflation. This move aims to retain customers and boost sales. Both retailers are responding to consumer fatigue and competitive pressures, with Walmart noting an increase in higher-income shoppers trading down to their stores.
“Dave & Buster’s to allow customers to bet on arcade games,” comes to us from CNBC. Arcade giant Dave & Buster’s is planning to allow customers to place bets on arcade games, integrating a new gambling element to its entertainment offerings. This initiative aims to attract more visitors and enhance the gaming experience by adding a competitive and potentially profitable dimension to playing arcade games. The company believes this move will appeal to a broader audience and increase foot traffic to its venues as the stock is up more than 50% over the past year.
Lastly, we look at a MarketWatch article, “Why the post-Fed stock-market rally is raising fresh inflation questions.” In recent weeks, stock investors have experienced a rally driven by easing consumer-price gains for April and the Federal Reserve’s low likelihood of hiking interest rates. This situation mirrors late last year when a dovish pivot by the Fed led to significant stock market gains and higher-than-expected inflation. Dan Eye, Chief Investment Officer at Fort Pitt Capital Group, remarked, “I’m still in the camp that thinks we can make further progress on inflation when the lagged housing components of inflation come down. I’m pretty confident in saying we don’t think inflation is going to 2%, but there’s still progress that can be made.”
Finance Articles April 2024
April showers bring May flowers and there is a flood of news and stories that we’re keeping up with to help you stay informed. From continued housing turmoil to DOL rule changes, these are the stories Fort Pitt is staying on top of this month.
Kicking off this month we have, “Visualizing America’s Shortage Of Affordable Homes,” from ZeroHedge. The United States is experiencing a severe shortage of affordable homes, reaching its lowest supply level on record in 2023. Soaring home prices, coupled with high mortgage rates, have made it difficult for many buyers to enter the market. Although there is an expectation of increased new home construction in 2024, improving housing affordability to historical norms will likely take several years.
The second article we’re reviewing is, “Banks’ Exposure to CRE Loans by Bank Size,” from Wolf Street. In the U.S., Commercial Real Estate (CRE) loans total approximately $5 trillion, with banks holding around $2.4 trillion. Smaller banks exhibit higher exposure relative to their assets, heightening their risk of financial distress from CRE loan defaults. In contrast, larger banks maintain lower exposure, which shields them better from the effects of a CRE market downturn, though they still face significant risks if multiple smaller banks fail.
ZeroHedge contributes another piece, “World’s Biggest M&A Deal Is Terrible For Bonds,” discussing the impact of the U.S. government’s fiscal and monetary policies on bond markets, suggesting that the merging of Treasury and Federal Reserve functions is detrimental to U.S. Treasuries. This pseudo-merger, seen as a massive M&A deal due to the large balance sheets involved, raises risks for persistent inflation, which can lead to higher yields and decrease bond attractiveness. The analysis predicts that real assets like commodities may benefit from these conditions, ending their long-term underperformance relative to financial assets.
“The new DOL fiduciary rule: How it could change your company’s 401(k) plan,” is our next article written by our own Nathan Boxx in Benefits Pro. It delves into the new Department of Labor (DOL) fiduciary rule which requires advisors to prioritize their clients’ best interests when recommending investments for 401(k) plans. This regulation prompts employers to reassess and potentially adjust their retirement plan offerings to ensure they meet these updated fiduciary standards, focusing on the long-term security and interest of plan participants.
The final article this month, “Creating Realistic Retirement Budgets – Tricks Smart Advisors Use,” comes from Financial Advisor Magazine and features insight from Skylar Riddle. Skylar explains the complexities of retirement budgeting, emphasizing common errors such as underestimating healthcare costs and home maintenance. He also discusses the challenges advisors face when clients are self-reporting their spending habits and strategies advisors can use to help them reach financial security.
Finance Articles March 2024
Q2 is fast approaching and investors are looking for more ways to take advantage of current market highs and diversify their portfolios. With a new company or trend making the headlines each day, these are some of the stories Fort Pitt has been keeping tabs on.
This month we start with the ZeroHedge article, “Fed Bubble Ignites ‘Great Retirement’ Wave As Baby Boomers Party Like It 1999”. Rising tech stock values and home prices are driving a significant surge in early retirements across the United States, leading to what Bloomberg has coined the “Great Retirement Boom.” This increase is fueled by retirement savers’ heavy investments in tech stocks, in anticipation of Fed interest rate cuts, which has contributed to an artificial intelligence bubble.
Our next story, “Higher Forever? Even Yellen Starts to Get it: Higher Inflation & Higher Yields Are Here to Stay,” comes from Wolf Street. Treasury Secretary Janet Yellen acknowledges the new economic reality that yields, which have risen significantly since the pandemic, are unlikely to return to their pre-pandemic lows. This shift comes amid persistent inflation and a reevaluation of fiscal strategies, including national debt that the government aims to manage through inflation. The White House’s budget proposal reflects these changes, projecting higher long-term interest rates, with the 10-year Treasury yield expected to average 4.4% in 2024, a notable increase from the decade before the pandemic.
Another article from ZeroHedge, “Liz Warren And Socialist Pals Want To Normalize Confiscation Of Assets With ‘Ultrarich’ Tax,” details the reintroduction of the ‘Ultra-Millionaire’ Tax Act. The act aims to levy a 2% tax on households with a net worth between $50 million and $1 billion, and a 3% tax on those over $1 billion. Critics argue that this wealth tax could harm the economy by reducing capital, lowering wages, and decreasing GDP, as it taxes unrealized gains, potentially forcing asset sales or business downsizing, thereby impacting job creation.
The fourth article, “Financial advisors have 3 questions to decide how much to invest,” comes from Business Insider and features insight from Fort Pitt financial advisor Emily Franco. As more people look to invest, there are several considerations to make regarding personal debt, income, and more. “It’s about allocating the resources that you have in a way that is mindful and makes the most sense for your situation,” Franco explains.
To round out the month, Fort Pitt senior investment analyst Brian Jankowski joins Schwab Network to discuss market activity in a recent broadcast segment, “KEYS, DOW, GXO Stock Picks With Attractive Entry Points.” He details how valuations are getting stretched, but the technology sector can still offer opportunities for investors looking to take advantage of the recent bubble.
Finance Articles February 2024
As we settle into 2024, the market shows no signs of slowing down after hitting all-time highs this month. However, with uncertainty around future Fed rate cuts, it’s important to pay close attention to key economic indicators and the economy at large. We’re staying on top of these stories to help clients navigate the road ahead.
This month’s first article, “Stunning Collapse In Credit Card Debt Change As Average APR Hits New All-Time High,” comes to us from ZeroHedge. In December, U.S. households experienced a significant slowdown in consumer debt growth, with total consumer debt increasing by $1.561 billion, a dramatic drop from November’s $15.4 billion and well below the estimates. This slowdown was largely due to a remarkable collapse in revolving credit, specifically credit card debt. Despite this reduction in debt accumulation, the average interest rate on credit card debt across all commercial banks reached a new record high of 21.47%, indicating a growing reluctance among consumers to use their credit cards amidst soaring rates.
Up next is the Wolf Street article, “Mortgage Rates Rise Back to 7%, Housing Market Re-Freezes, Buyers’ Strike Continues. Prices Are Just Too High.” Mortgage rates have climbed back to 7%, causing the housing market to freeze as high prices are deterring buyers. This uptick in rates has led to a sharp decline in mortgage applications and refinancing, signaling a stagnant market. Despite some anticipation of lower rates, inflation suggests high mortgage rates could remain for years, keeping buyers and sellers on the sidelines. While homebuilders have adapted by lowering prices and incentives, existing homeowners have been slower to adjust.
We turn back to ZeroHedge for the next article, “What AI CapEx Boom? World’s Biggest Network Provider Slashes Jobs As Tech-Spend Sinks.” Despite expectations of a surge in AI-related expenditures, Cisco, the world’s largest network equipment manufacturer, is reducing its workforce due to a significant drop in corporate tech spending, leading to its first sales contraction in three years. This downturn comes amidst a broader tech spending slowdown, challenging the notion of a booming AI CapEx environment. Even as Cisco partners with Nvidia to enhance AI deployment capabilities, the company’s reduced sales and profit forecasts reflect the broader industry’s cautious stance on tech investments.
Our fourth article, “Walmart and Total E-commerce Sales in the US,” is from Wolf Street. Q4 of 2023 saw U.S. e-commerce sales reach a record $325 billion, marking a 7.2% increase from the previous year and surpassing the peak pandemic levels of 2020. Walmart, as the second-largest e-commerce retailer in the country, saw its online sales jump by 17% year-over-year, contributing significantly to its total sales growth. The surge in e-commerce accounts for 17.1% of total retail trade sales and reflects a continuing shift in consumer spending habits.
We wrap up this month with the U.S. News & World Report article, “Where Are the Economy and Interest Rates Headed? This Week May Provide an Answer.” Despite a slight improvement in consumer confidence, the LEI’s negative trajectory continues, driven by manufacturing weaknesses, high interest rates, and mixed consumer sentiment. Fort Pitt investment analyst Christopher Barto suggests that the labor market’s resilience and ongoing consumer spending might limit the number of anticipated rate cuts by the Federal Reserve. “We may not get as many rate cuts this year as people expected. We see these layoffs getting announced but people are getting jobs right back again and people continue spending,” he explains.
Finance Articles January 2024
For many, a new year means a fresh start. But when it comes to the financial world and markets, we’re still keeping an eye on Q4 data and its impact ahead. At Fort Pitt, we are closely following emerging trends and the run-up we’re seeing from tech in the markets. Stay informed with a few articles we’re reading this month.
Our first article, “Q4 GDP Unexpectedly Soars, Driven By Lack Of Destocking And An RV Spending Spree,” comes to us from ZeroHedge. Despite forecasts of a slowdown following a Q3 surge, the economy grew by 3.3% in Q4, surprising economists with its strength. A lack of destocking and a significant increase in recreational vehicle spending, personal consumption, investment changes, and government spending contributed to this growth.
The next article, “When Consensual Hallucination Fades: iRobot Shares -91% from Peak Meme-Stock Mania,” is from WolfStreet. iRobot’s share price saw a dramatic decrease recently, falling 91% from its peak during the meme-stock mania. This decline can be attributed to several factors, including a failed acquisition by Amazon, iRobot’s business challenges, as well as volatility inherent in meme stocks.
The third article this month comes from CNBC, “Apple takes top spot in China’s smartphone market for the first time as Huawei returns to the top 5.” In 2023, Apple became the leading smartphone vendor in China for the first time, capturing a record market share of 17.3%, despite a 5% decline in the overall market. Amid a challenging economic environment and strong competition from Chinese brands like Huawei, Apple rose to the top due to effective price promotions and the appeal of its high-end products.
The final article, “7 Reasons DIY Investors Should Consider Getting a Financial Advisor in 2024,” features insight from Fort Pitt financial advisor Brad Newman. He emphasizes the importance of financial health for individuals in their 40s and 50s, highlighting that financial needs often become more complex during these years.
Finance Articles December 2023
As we wrap up 2023, many are looking ahead to the new year and anticipating economic changes ahead. At Fort Pitt, we are busy following these trends and analyzing the impact so we can plan for the future.
This month’s first article, “Recent data shows AI job losses are rising, but the numbers don’t tell the full story,” comes from CNBC.com. Artificial Intelligence continues to have an impact on the workforce, indicating that while AI has led to job replacements and anticipated layoffs, experts believe it also enables higher-value human work. “Human-centered AI,” which enhances rather than replaces human skills, is key. The good news is that historically, the workforce has adapted to technological advancements, so it’s unlikely we’ll see mass unemployment.
Up next from RedFin we have, “The Tide Turns for Renters as Asking Rents Post Biggest Decline in Over 3 Years”. In November 2023, U.S. median asking rents experienced the largest decline in more than three years, dropping 2.1% year-over-year to $1,967. The surplus in apartment availability following a recent construction boom led landlords to lower rents and offer concessions. Despite the decline, rents are still 22.1% higher than in November 2019, and vacancies have increased reaching 6.6% in the third quarter, the highest since early 2021.
The third article comes to us from MSN: “Despite Record Home Prices, Housing Is About to Drag Inflation Down.” Economists note that consumer prices rose 3.1% in November, shelter costs, which make up a significant portion of the CPI, increased by 6.5%. However, rent growth has slowed to 3.3%, and this lag in rent changes will likely decrease shelter’s inflationary impact.
The next article comes from Bloomberg, “JPMorgan Is in a Fight Over Its Client’s Lost $50 Million Fortune.” Peter Doelger, who amassed a fortune of $50 million but showed signs of dementia, experienced a drastic wealth loss after JPMorgan Chase & Co. managed his portfolio, resulting in a reduction to $1.5 million. This led to a legal battle in Boston federal court, with the Doelgers accusing JPMorgan of mismanagement and seeking to recover millions. The case emphasizes the importance of working with a trusted advisor and recognizing the risks of cognitive decline for clients.
The fifth and final article this month, “Here’s why now is the perfect time to put your savings in a CD,” comes from CNBC.com and features insight from one of our financial advisors, Ian Eberle. The Federal Reserve’s recent decision to hold its benchmark rate steady, with hints of potential rate cuts in 2024, signals that interest rates may have peaked. According to Eberle, if inflation continues to cool, the Fed is likely to start lowering rates next year. This change could reduce borrowing costs for consumers but also decrease earnings on savings, making it a favorable time to invest in Certificates of Deposit (CDs) to lock in current high rates.
Finance Articles November 2023
As we gear up for the holiday season, Fort Pitt has been busy staying on top of this month’s biggest finance stories. From the S&P tech rally to 2024 recession predictions, there is no slowdown of news as we approach December.
This month’s first article, “Stanley Druckenmiller says government needs to stop spending like ‘drunken sailors,’ cut entitlements,” comes from CNBC.com. Billionaire investor Stanley Druckenmiller criticized the federal government’s spending habits, noting a significant increase from 20% to 25% of GDP pre-COVID. He highlighted the government’s failure to issue debt at lower rates in the past, leading to a nearly $1.7 trillion deficit and a total debt nearing $34 trillion. Druckenmiller advocated for cuts in government entitlement programs, proposing reduced Social Security benefits to address these financial challenges.
Up next comes, “Tech Rally Sees It Grab An Ever Greater Share Of The S&P 500,” from ZeroHedge. The technology sector has become increasingly dominant in the S&P 500, driving most of its gains over the past week and throughout the year. This growth has led the sector to exceed its post-pandemic highs. The success of major tech companies like Apple, Microsoft, and Amazon has been pivotal; without them, the S&P 500 would be down year-to-date.
Our third article, “Walmart: Consumers No Longer Willing to Pay Whatever. Prices of Goods Fall Broadly, as Inflation Shifted to Services,” is from Wolf Street. Despite falling prices of many consumer goods, Walmart’s earnings report revealed a 4.9% rise in comparable sales, driven by groceries and e-commerce, with e-commerce sales increasing by 24%. The decline in general merchandise prices is not favorable for stocks, even though there is a positive trend in consumer demand, and there continues to be downward pressure on dollar revenues and profit margins.
The fourth article also comes from Wolf Street titled, “‘Leading Economic Index’ Predicts Recession for Early 2024, after Having Predicted a Recession for Late 2022, Early 2023, Mid-2023, and Late 2023.” The Leading Economic Index (LEI) has shifted its recession prediction several times, initially forecasting a recession in late 2022 and now setting it for early 2024. This change is attributed to elevated inflation, high interest rates, and contracting consumer spending due to depleted pandemic savings and mandatory student loan repayments. Despite these predictions, actual economic performance has been different, with the U.S. GDP growing by 4.9% in Q3 2023, following increases in previous quarters.
Our final article this month, “How to set up a backdoor Roth IRA in 7 easy steps,” comes from USA Today and features insight from Brad Newman, financial advisor at Fort Pitt. Newman discusses the backdoor Roth IRA strategy and the benefits of Roth IRAs in estate planning, noting its effectiveness for wealth transfer due to tax-free withdrawals for most non-spousal IRA beneficiaries. It’s important to consider long-term implications and potential legislative changes when using a backdoor Roth IRA.
Finance Articles October 2023
With Q4 underway, the financial world shows no signs of slowing. From Treasury yield spikes to a possible government shutdown, there are several stories the Fort Pitt team is following to stay on top of the news and help keep you informed.
The first article this month, “Why Longer-Dated Treasury Yields Spiked. It’s Not Magic: Yield Solves All Demand Problems,“ comes to us from Wolf Street. The recent surge in Treasury yields is largely due to a significant issuance of Treasury securities to cover government deficits, requiring higher yields to attract buyers. Foreign buyers are not keeping pace with the supply, and other buyers need higher yields as an incentive. Additionally, the Federal Reserve’s shift from Quantitative Easing to Quantitative Tightening has led to a demand gap filled by other buyers at higher yields.
Our next article, “D.C. Has Done The Fed’s Job For Them,” is from ZeroHedge. It suggests that rates have been a result of political decisions more so than the Federal Reserve. Higher yields are hurting small and mid-size companies, and the continuous rise in yields impacts the politicians who are supported by local businesses, leading to faster action.
Up next, we have another piece from ZeroHedge titled, “A Timeline Of US Government Shutdowns.” With the threat of a government shutdown earlier this year, and the potential for one in 2024, there’s a noticeable trend of increasing duration in US government shutdowns over recent decades. Notably, the longest was 34 days in 2018/19. Luckily, bipartisan efforts allowed the government to continue to run until November.
Our fourth piece is a BenefitsPro byline from Nathan Boxx, director of retirement plan services at Fort Pitt, titled, “6 retirement plans small business owners should consider: Know your options.” He emphasizes the importance of retirement planning for small business owners and suggests various strategies and retirement plan options such as: establishing a retirement savings goal, starting early with savings, leveraging tax-advantaged retirement accounts like traditional IRA, and planning an exit strategy for the business. Consulting with financial professionals to create a tailored retirement plan and regularly reviewing and adjusting this plan is also advised for ensuring a financially secure retirement.
The final article this month, “41% of Women Say They Don’t Make Enough Money To Save — Here’s How To (Realistically) Build It Into Your Budget,” comes from GoBankingRates and features insight from Emily Sippel, CFP and financial advisor at Fort Pitt. She provides financial advice for women earning between $35,000 and $50,000, suggesting following the 50/30/20 budget rule, where 50% of income goes to needs, 20% to savings, and 30% to wants. Additionally, the article recommends dividing leftover money post-expenses between a “fun fund” and future savings. Lastly, it stresses the importance of a disciplined budget to avoid spending on unimportant or unnoticed items, such as recurring online subscriptions.
Finance Articles September 2023
September marks the onset of fall and at the same time, it brings pivotal financial news. Here at Fort Pitt, we have been following the Federal Reserve, student loan repayments and ESG investing three themes that are critical to the economy as we head into Q4.
This month’s first article, “Green bubble burst: US ESG fund closures in 2023 surpass total of previous three years,” comes from ZeroHedge. BlackRock and other money managers are unwinding several ‘green’ products due to increased backlash and scrutiny from investors. Data reveals that entities like State Street, Columbia Threadneedle Investments, Janus Henderson Group, and Hartford Funds Management Group have closed over two dozen ESG funds this year, surpassing the total number of closures in the last three years, signaling a possible burst of the ESG bubble as investors withdraw money from these funds.
Next we have, “‘Carefully,’ dude: Powell at the press conference,” from Wolf Street. Despite the cautious approach from the Fed in keeping interest rates at 5.50%, the economy is showing surprising strength, with the labor market and household balance sheets in good shape. However, there is still dissatisfaction among people due to inflation, impacting those on fixed incomes the most.
The third article, “Congrats, America. we made it! Government debt spikes past $33 trillion: +$1.6 trillion since debt ceiling, +$2.2 trillion from year ago,” also comes to us from Wolf Street. The US debt has spiked by $1.58 trillion since the debt ceiling was lifted, reaching $33.04 trillion. This surge in debt is notable given the economy’s decent growth rates. The debt is composed of $6.8 trillion of nonmarketable Treasury securities and $26.2 trillion in marketable securities, while the average security has risen to 2.92%, the highest since 2011.
“UAW auto strike costs ‘Detroit 3’ $250 million in lost profit every day, will lead to much more inflation,” from ZeroHedge discusses the ongoing UAW (United Auto Workers) strike and its economic implications, particularly focusing on the “Detroit 3” automakers: Ford, GM, and Stellantis. The strikes are estimated to cost these companies around $250 million in lost profit every day and potential labor inflation of 30 to 40% over the next 4-year contract if a deal is reached. This, in turn, can lead to adjustments in EVs and ICEs as well as increased car prices moving forward.
Finally, one of the biggest stories this month has been the resumption of student loan payments in October. Bevin Baker, financial advisor at Fort Pitt, spoke with Julia Glum at Money to discuss this in her recent article, “5 steps to take now to get ready for the return of student loan bills.” Baker explains how the first step is to find who your loan servicer is. With millions of loans being transferred, it is estimated that 44% of borrowers will have at least one new servicer to deal with when payments resume.
Finance Articles August 2023
As summer winds down and kids head back to school, we’re keeping ourselves educated on the top stories in the financial services industry. Inflation, markets, the U.S. debt crisis, and federal student loan payments are all on our reading list here at Fort Pitt.
Our first article, “Timing the market: Why it’s so hard, in one chart,” comes from ZeroHedge. The article takes a look at how mistiming the market can have a huge impact on your returns as an investor. Many investors sell too early as they’re nervous to ride the wave when the market is in red, but staying steady through the highs and lows has historically generated outsized returns.
“Is inflation already at the Fed’s target,” is our next article from ZeroHedge. While inflation has fallen from its peak, it still is not at the Federal Reserve’s goal of 2%. However, the article suggests that CPI may actually be at the 2% target, especially when considering distortions caused by shelter prices. The bond market is showing concerns about potential short-lived price declines, and there’s a growing apprehension about entering a prolonged period of elevated prices. The article also highlights the discrepancies in the CPI report, particularly in the shelter prices section, which might be causing a lag in the reflection of real-time data.
Our third article is also from ZeroHedge. “‘Arbitrary…outdated!’ – Yellen outraged after Fitch cuts USA’s AAA-rating,” Fitch Ratings has downgraded the USA’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘AAA’ to ‘AA+’. This decision is attributed to the anticipated fiscal deterioration in the coming years, the increasing government debt burden, and a perceived decline in governance standards over the past two decades, especially regarding fiscal and debt matters. Treasury Secretary Yellen expressed strong disagreement with the downgrade, labeling it as “arbitrary” and based on “outdated data.” She emphasized the strength of the American economy and the U.S. dollar’s status as the world’s leading reserve currency.
Bevin Baker, financial advisor at Fort Pitt, appeared on Gray TV’s Local News Live in a segment, “Preparing to make student loan repayments again.” With federal student loan payments set to resume in October, Baker shares ways borrowers can plan for their loans to kick back in after a three-year pause. She notes how 44% of borrowers’ providers changed during the pause, so they’ll want to make sure all of their contact information is up to date so they’ll receive information for their account. Baker said borrowers can also start looking into their income-based repayment options.
Lastly, Skylar Riddle, financial advisor at Fort Pitt, was quoted in a Bankrate article, “How to avoid the biggest credit card mistakes you can make.” Credit cards, while useful to help build your credit, tend to be overused and mishandled. Riddle weighs in on the common credit card mistakes users can avoid, such as not paying the bill on time, using too much of their credit limit, and not using the correct cards to their advantage. “Don’t pick a card that looks the coolest or has your favorite department store on it. You should only be selecting cards that pay you some sort of reward — either cash back, travel points, or store discounts,” said Riddle.
Finance Articles July 2023
After a pause to interest rate hikes in June, the Federal Reserve returned and raised interest rates 25 basis points. While interest rates and inflation remain top of mind, advancements in artificial intelligence technology, the U.S. housing market, and a new Federal payment service are also topics worth discussing. Here are some of the headlines we’re keeping an eye on here at Fort Pitt.
Our first article, “’I warned you guys in 1984…and you didn’t listen’ – Director James Cameron highlights fears of A.I. takeover,” is from ZeroHedge. As A.I. continues to gain steam across industries, the Titanic movie director is speaking out with a warning about the takeover of A.I. James Cameron says he foresaw the dangers of A.I. when he was directing “The Terminator” in 1984. He says he agrees with experts that there needs to be regulation around A.I. technology in order to protect humanity. While there have been concerns that A.I. will disrupt multiple industries and lead to people losing their jobs to the technology, Cameron says he doesn’t believe it will impact movie writers anytime soon but is concerned that A.I. can be used for weapons such as nuclear arms.
Reuters provides our next article, “Fed launches long-awaited instant payments service, modernizing system.” The new payment service developed by the U.S. Federal Reserve called “FedNow” will upgrade the country’s payment system allowing Americans to send and receive funds in just a matter of seconds 24/7, instead of waiting several days. Other countries such as the United Kingdom, India, Brazil, and the European Union already utilize this kind of system. So far, 41 banks and 15 service providers are certified to use the service, with 35 banks already utilizing it, including JPMorgan Chase, Bank of New York Mellon, and U.S. Bancorp.
“Complete paralysis: just 1% of U.S. homes have changed hands in 2023, the lowest on record,” is our third article from ZeroHedge. This article dives into the U.S. housing market. Redfin, a national real estate brokerage firm, did a study that found “14 of every 1,000 U.S. homes changed hands during the first six months of 2023.” The data suggests that homebuyers have fewer homes to choose from and states the pandemic played a role because increased demand, low inventory, and high mortgage rates led to a shortage of homes, and few buyers could afford a home.
Bryson Roof, financial advisor at Fort Pitt, is included in the MarketWatch column The Moneyist article, “’Index funds didn’t provide much income’: My brother is a combat veteran with PTSD. How do I invest his savings?” In this article, Roof offers advice to a writer who wants to help their brother invest money received from the government where he will still receive income and appreciation but at low risk. The writer is considering index funds but isn’t sure if that’s the right option. “It will be important to continue to focus on dividends and laddering fixed-income positions,” said Roof. “While looking at dividend paying stocks, look for companies that also have long-term appreciation potential, this will help in off-setting long-term inflationary pressures.”
Lastly, Dan Eye, chief investment officer at Fort Pitt, is quoted in a Bloomberg article, “Corporate America’s profit engine is just starting to rev up.” Wall Street analysts are becoming increasingly optimistic about earnings prospects for S&P 500 companies over the next year. This is a change from the recession tune we’ve heard most of the year. “The worst of the profit pain is likely over unless there’s a situation where there’s a deep recession — which we don’t see since inflation has significantly eased,” Eye said.
Finance Articles June 2023
The Federal Reserve paused interest rate hikes this month, however, during his testimony before Congress, chairman Jerome Powell shared we’ll likely see two additional rate hikes sometime this year. Aside from inflation remaining a major topic, wildfires in California and Canada are also taking precedence as they are causing air quality alerts prompting insurance companies to make changes. Here are some of the headlines we’re keeping an eye on here at Fort Pitt.
Our first article, “Mike Rowe is on a mission to reverse the ‘unspeakable stupidity’ of devaluing work,” is from ZeroHedge. Rowe, an American television personality and trade activist, has spent several years advocating for people to pursue trades. Since 2011, Rowe has been trying to convince lawmakers that skilled trades are the key to saving the American economy. He eventually decided his efforts would be better served taking matters into his own hands and showing why skilled trades are valuable jobs that should be introduced to students.
Our second article, “Allstate drops California; Will not write new insurance policies over wildfires, construction costs,” also comes from ZeroHedge. As wildfires continue to wreak havoc in California, insurance giant Allstate announced it will no longer write new policies for homeowners. In an SF Chronicle article, the company cited wildfires, higher costs of construction and higher reinsurance premiums as reasons behind their decision. Allstate isn’t the only insurer that has stopped writing new policies. State Farm also stopped issuing new policies in May for the same reasons.
A third article comes from ZeroHedge. “The ESG ruse continues: Legacy tobacco companies are posting higher ESG scores than EV maker Tesla,” dives into how tobacco companies are thriving in the ESG space despite their products being unhealthy for consumers. The article notes that tobacco companies’ ESG success can be attributed to their willingness to diversify their boards and take on social justice initiatives such as investing in minority businesses and supporting transgender women who participate in sports.
Emily Franco, financial advisor at Fort Pitt, is included in a Financial Advisor Magazine article, “When couples are at financial loggerheads.” As the financial dynamics with marriages continue to change, financial advisors have to find the best way to reframe their thinking when it comes to determining who will be managing their finances. Instead of the breadwinner making the decisions, it could be the partner who stays home or the one who is better at managing finances overall. “I don’t believe it’s necessary to clarify the power dynamic of a couple. You should always assume that both partners are making the decisions,” said Franco.
Lastly, Brian Jankowski, senior investment analyst at Fort Pitt, appeared on the TD Ameritrade Network in the segment, “APO, TSCO, STZ: Stocks to watch.” Jankowski shared his thoughts on inflation, national rent prices, and the banking crisis. He touched on the Federal Reserve’s decision to pause interest rate hikes this month. “We think it made a lot of sense for the Fed to pause following the good inflation read and we think that helped to propel markets right now,” Jankowski said. He also shared his stock picks with eyes on Apollo Global Management, Tractor Supply Co, and Constellation Brands, Inc.
Finance Articles May 2023
Recession, inflation, and artificial intelligence are once again hot topics that investors around the globe are paying attention to. In addition to those, the debt ceiling discussions taking place between President Biden and House Speaker McCarthy are taking over headlines. As the deadline draws closer, many are wondering about the impact the lack of negotiations will have on the economy. Here’s what we’re keeping our eye on here at Fort Pitt.
“IBM to stop hiring for roles that can be replaced by AI; Nearly 8,000 workers to be replaced by automation,” is our first article from ZeroHedge. As artificial intelligence (AI) continues to ramp up and gain in popularity, some businesses are laying off employees and replacing them with AI. Goldman Sachs predicted that there could be 300 million layoffs due to AI and “two-thirds of occupations could be partially automated by AI.” At IBM, the company is expected to pause hiring for roles that could be replaced with AI.
Our second article, “I’m surprised how well retail sales held up despite price drops of many goods as spending and inflation shifted to services,” comes from Wolf Street. The article takes a look at total retail sales and performance. Three categories account for 40% of total retail sales: food and beverage stores, motor vehicle and parts dealers, and gasoline stations. It’s noted that despite companies in these categories selling more units, their dollar sales dropped because of a drop in pricing.
A third article comes from ZeroHedge. “US rents on verge of first annual drop since covid crash amid supply glut,” looks at how annual shelter inflation has peaked at just below 9% annual growth according to delayed CPI data. The article also takes real-time data from Rental Market Tracker from Redfin into account, which suggests rent prices will decrease on an annual basis for the foreseeable future.
Bryson Roof, financial advisor at Fort Pitt, was included in the MarketWatch column The Moneyist article, “I volunteered after 9/11, and was diagnosed with cancer. I received $225,000 from the Victim Compensation Fund. How would you invest it?” Roof offers advice to a reader on how to invest money they will be receiving from the fund. The reader wants to save, invest, and spend and breaks down how they envision using the funds. Roof shares insight that the first step is to build an emergency fund. “For a single household, I like to maintain at least six months of expenses in a high-interest savings account, or higher if anticipating a large transaction in the future, such as a medical procedure,” Roof said.
Lastly, chief investment officer at Fort Pitt, Dan Eye, is quoted in our next article, “Cost of insuring against default on U.S. government debt hits all-time high amid debt-ceiling impasse.” The article takes a look at how the credit-default swap has widened to a record high of 175 basis points. In addition, the spread is higher than other comparable spreads in Mexico, Greece, and Brazil. While Democrats and Republicans battle it out over whether to eliminate spending cuts to lift the $34.1 trillion debt ceiling, the June 1st deadline is drawing nearer. “The base-case view is that we are going to get a lot of volatility and back and forth in headlines, with the likelihood of a last-minute deal coming through,” said Eye.
Finance Articles April 2023
Once again, economists are gauging whether we’ll see a recession this year. And while inflation and a recession remain hot topics, artificial intelligence is taking over the headlines. Here are some of the topics we’re keeping an eye on here at Fort Pitt.
Our first article, “Biden to hike payments for good-credit homebuyers to subsidize high-risk mortgages,” is from The Washington Times. In May, potential homebuyers with good credit may find themselves paying more for their mortgage to make housing more affordable and stabilize risks from buyers with lower credit scores. A new federal rule from the Federal Housing Finance Agency will make it possible for people with a low credit score and low downpayment to have discounted fees and better mortgage rates. The article shares, “Homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees.”
“But what if we don’t get a recession in 2023? That would be a bummer for Wall Street,” is from Wolf Street. Recession is on top of mind these days as we head into the next FOMC meeting in May where the Federal Reserve may hike interest rates once again. For now, economists are predicting a recession later this year, based on earlier comments from the Federal Reserve. However, given current conditions, there’s no reason the Fed would loosen monetary policy. And after more than a decade of free money, Wall Street is going to have to get used to the new normal.
Our third article comes from ZeroHedge. “Mass automation to sweep across Walmart stores by 2026,” takes a look at the growth of AI technology. AI has taken over headlines this year as people and businesses figure out how to navigate using the technology to operate businesses, create content, and more. Walmart recently announced that 65% of its stores may be automated by the end of the 2026 fiscal year. The company did not share how the use of AI will impact employment for its staff.
Bryson Roof, financial advisor at Fort Pitt, penned an article for Harrisburg Magazine, “Planning an inheritance during an inflationary environment.” In the article, Roof shared insight into the impact inflation can have on your long-term financial goals, including how much you’ll be able to leave for your family. Roof said it’s a good idea to look at your finances and develop a new plan. That plan should include ensuring you’re set for retirement, preparing for your end-of-life finances, and identifying the best way to give money to your kids. “A financial plan will also help you outline what you can afford to gift as a lifetime inheritance. Gifts to your adult children, in their 20’s and 30’s, are often more impactful than inheritance in their retirement,” said Roof.
Lastly, chief investment officer at Fort Pitt, Dan Eye, is quoted in our next article, “Dow ends down 220 points as First Republic worries overshadow upbeat Big Tech earnings,” from MarketWatch. Eye shared insight about the impact First Republic Bank had on the market despite big tech stocks reporting upbeat earnings for the quarter boosting investor confidence.
Finance Articles March 2023
March was a difficult month for banks. Silicon Valley Bank (SVB), Signature Bank and Credit Suisse all failed, sending the markets into turmoil. Here are some of the topics we’re keeping an eye on here at Fort Pitt as Wall Street continues to rebound from the banking crisis.
Our first article, “Deposit drain from smaller banks into financial giants like JPMorgan Chase has slowed, sources say,” from CNBC.com takes a look at the aftermath of the banking crisis. When Silicon Valley Bank collapsed at the beginning of March it caused a domino effect. Tech companies and venture capital startups were largely impacted and as a result, big banks like JPMorgan Chase and Wells Fargo began receiving streams of deposits from smaller banks as customers began to move their money. However, that has started to slow as the month comes to a close but the situation is evolving.
“Bank stocks got wacked: Between a rock and a hard place as banks run out of free money,” is our next article from Wolf Street. The article discusses how bank stocks have been hit hard after the collapse of Silicon Valley Bank. SVB was forced to sell “available-for-sale” bonds at a $1.8 billion loss. Because of the distress caused by SVB failing, many other banks also saw a drop in stock price as customers began to move their money around in fear. This article suggests that “the only free money left for banks is from depositors”.
Our third article comes from Reuters. “After SVB failure, U.S. acts to shore up banking system confidence.” Emergency measures had to be put in place by U.S. authorities to help stabilize the banking system after Silicon Valley Bank crashed. Bank customers were updated on when they would be able to access their deposits and banks were given access to emergency funds.
Dan Eye, Chief Investment Officer at Fort Pitt, appeared on the TD Ameritrade Network in a segment, “Will tightened lending standards bring inflation down?, where he discussed market highs and lows. He provided his viewpoints on whether or not the Federal Reserve will continue to raise interest rates as well as his stock picks. “I think banks will focus on liquidity and their balance sheets, which will tighten lending standards. The Federal Reserve understands this dynamic as it could bring inflation lower. Also, the Fed is close to the point of pausing their interest rate hiking cycle,” said Eye.
Lastly, senior analyst Brian Jankowski is featured in Business Insider where he shares insight on AI in, “Buy these 6 stocks to bet on the AI boom and future-proof your portfolio, according to a senior analyst.” Jankowski explores the impact AI has had on the tech industry, more specifically, six stocks he’s keeping an eye on. These stocks include Microsoft and Google Alphabet. “We’re focused more on large companies utilizing AI capabilities to improve their business productivity,” Jankowski said. “So large companies using it and rolling it out and adapting it.”
Finance Articles February 2023
After nearly two years of speculating the U.S. is heading toward a recession, experts are now saying there may not be one after all. So what does this mean for investors ahead? Read on for insight and topics we’re keeping an eye on here at Fort Pitt.
Our first article, “‘No landing’ scenario at odds with Fed’s goals,” comes from ZeroHedge. The article explores a “no landing” in which inflation doesn’t cool and economic growth continues. This is signaled by the disconnect between the Fed and the market, which expects potential rate cuts to start mid-year. After January’s rate hike, Fed Funds futures are only pricing in a 21% chance of a rate hike at the March meeting.
Wolf Street has our next article, “San Francisco Bay Area housing market crashes, prices plunge 35% from crazy peak: Where’s demand supposed to come from?” Housing prices are plunging as the real estate market continues to be shaky amid high interest rates. The article shares how the market in San Francisco has been hit particularly hard with the median price declining 35% from the peak sales period in March 2022.
Our third article also comes from Wolf Street. “Bond market a tad antsy about inflation not just vanishing? One-year yield nears 5%. Mortgage rates back at 6.5%,” as the Federal Reserve continues to fight inflation, the article takes a look at the U.S. Treasury yields. The one-year yield rose 31 basis points, the two-year yield rose 45 basis points, and the 10-year yield rose 34 basis points since early February. The article suggests that inflation isn’t quite cooling yet.
Dan Eye, Chief Investment Officer at Fort Pitt, is quoted in our next article, “Inverted yield curve: What this key market indicator means for your 401(k),” from Money.com. Eye spoke about the inverted yield curve and how it is often used to determine if a recession is on the horizon. “Lead times for between when the yield curve inverts and the onset of the recession is from three months to two years,” said Eye. “So it doesn’t really tell investors the very important piece of data they would need, which is, when does the recession start?”
Lastly, financial advisor Skylar Riddle shared insight with Bankrate in, “Should couples have a separate or joint bank account?” The article explores the advantages and disadvantages of couples joining their finances once they’re married. A study shows that just 43% of couples who are married or living together have a joint bank account. Riddle shares that having joint accounts can help couples reach their savings goals together. He also explains it’s beneficial for everyday finances, “The ability to jointly pay for living expenses and other expenses such as vacations, home projects, and expenses for children.”
Finance Articles January 2023
As we kick off 2023, we’re seeing much of the same market we left in 2022. Between ongoing inflation and a decelerating housing market, here are some of the topics we’re keeping an eye on here at Fort Pitt.
Our first article, “The first pause: Bank of Canada hikes 25bps as expected, will hold rates as it ‘assesses impact’,” comes from ZeroHedge. Last year, the Bank of Canada (BOC) raised rates rapidly, but may soon come to a pause as officials believe the economy will cool rapidly due to the impact rates have had on household spending and inflation despite the current overheating. The article explains the recent hike took the benchmark to its highest level in 15 years with an overnight rate of 4.5%.
Wolf Street has our next article, “What’s behind the tech & social media layoffs?” Big tech and social media companies, such as Amazon, Microsoft, Twitter, Salesforce, and Meta, have laid off hundreds of employees. Some of the companies even let go 10,000 or more. This is likely a result of over-hiring in the last few years and that while the number of employees being laid off is large, the number of people let go in the United States is likely a smaller amount.
Our third article also comes from Wolf Street. “Prices of existing homes fall 11% from peak. Sales hit lockdown low. Cash buyers and investors pull back hard,” takes a look at the current housing market. The article shares the National Association of Realtors shows home sales in December 2022 were down to 326,000 homes from 513,000 homes in December 2021. The article speculates that this is in part due to sellers not appropriately pricing their homes.
Dan Eye, Chief Investment Officer at Fort Pitt, appeared on TD Ameritrade Network to discuss a few names that he likes in the current market environment, “BX, DVN, LOW: stock picks for the current market rally.” He also spoke with the host Nicole Petallides about the performance of Blackstone’s BREIT product, private equity, and his outlook on how long the current market rally may last.
Chief Investment Officer Dan Eye also shared insight with CNBC.com in “Dow closes 260 points higher, Nasdaq notches fourth day of gains ahead of key inflation report,” about market performance. This came just a day before the CPI report was released with speculation that prices cooled. “It’s really all today about kind of positioning ahead of head of CPI. You’re trying to get in there ahead of a big, big move on the report tomorrow,” Eye explains.
Finance Articles December 2022
As we close out the year, we’d like to wish all of our clients a happy New Year! Here are some topics we’re keeping an eye on at Fort Pitt as we head into 2023.
Our first article, “Fed veteran: Powell ignored the latest CPI data, latest FOMC forecast is bogus,” comes from ZeroHedge. The article speculates that Fed chair Jerome Powell didn’t receive CPI numbers in enough time for officials to adjust their forecasts ahead of December’s meeting. During the meeting, the FOMC raised interest rates another 50 basis points. The article explores whether or not officials missed the mark by not using the correct data.
“MIT researchers creating self-replicating robots with built-in intelligence,” is our next article from Fox Business. Researchers at Massachusetts Institute of Technology (MIT) say they are making tiny robots that will be able to build vehicles, buildings, and larger versions of themselves. The robot includes a part called a voxel that carries the data and power. Researchers are working with NASA, the automobile industry, and aviation industry to develop the new technology that they say is promising.
ZeroHedge provides another article, “Used-car prices collapse most on record,” which highlights the Manheim Used Vehicle Value Index by Cox Automotive dropped 14.2% from where it was this time in 2021. Experts attribute the drop to “a combination of new car supply and soaring borrowing rates.”
Beth Lynch, senior vice president and financial advisor at Fort Pitt Capital Group, is included in our next article from MarketWatch. The piece, “Opinion: Rebalancing your stocks and bonds too much could cost you more than it’s worth,” takes a look at whether it’s a good idea to rebalance your portfolio before the year ends or to wait for January. Lynch explained that timing depends on your needs. She shared that people should know their overall tax ramifications in regards to capital gains in early December while January and June are a good time to get an overall assessment of your portfolio.
Our last article, “Stock market today: Stocks stabilize after jobs report jolt,” comes from Kiplinger. The article dives into the November jobs report and the Federal Reserve’s work to slow the economy. Senior vice president and financial advisor at Fort Pitt Capital Group Daryl Patten shared his outlook on the report and says it’s important to take a close look at it. Patten also notes that a majority of the job growth is in the service sector. “As the pandemic raged in 2020, consumer spending shifted away from services (think travel, restaurants, etc.) in favor of real goods. As interest rates rise, we’re seeing a reversal of that spending back toward services,” he explained.
Finance Articles November 2022
It’s hard to believe December is here. As the holiday season gets into full swing, we have a lot to be thankful for. Here are some topics we’re keeping an eye on at Fort Pitt as we approach the end of the year.
Our first article, “Don’t tell Powell, but US rents just tumbled the most on record as economy craters,” comes from ZeroHedge. The article makes a case that the Federal Reserve is out of touch with the housing market and rent inflation. In a press conference after the Federal Open Market Committee (FOMC) this month, Powell said he believes we’ll see rent come down at some point. However, the article cites that recent CPI data is showing that rent has already begun to slow.
“I agree: don’t regulate crypto, let it burn. Making good progress on its own,” is our next article from WolfStreet. As news continues to circulate on the collapse of crypto firm FTX, the decision of whether or not to regulate the new currency has been a hot topic. The article argues that it shouldn’t be regulated and instead, it should be left to burn. In fact, the author shares that there’s no need to regulate crypto because “it’s self-regulating by the fact that lots of people will just lose lots or all their money.”
ZeroHedge provides another article, “Sam Bankman-Fried’s parents bought Bahamas “vacation home” among $121 million in FTX property purchases.” The parents of FTX’s founder, Sam Bankman-Fried, are under fire for allegedly purchasing property in the Bahamas under the company’s name. The article says his parents are trying to return the deed of the property following filing for bankruptcy. The article quotes Reuters as reporting that “the deeds of the properties showed that they would be used for “residence for key personnel.”
Emily Sippel, a financial advisor at Fort Pitt Capital Group, is included in our next article from GoBankingRates.com. “Realistic financial advice for women making less than $50k”, offers advice to women who want to save and invest money but don’t know where to start with their incomes. Sipple shares that it’s important for them to start with a realistic budget and to know exactly where their money goes.
Our last article, “What to do with client cash now that interest rates are up,” comes from Financial Advisor Magazine. In the article, financial advisor David Zabela gives advice on where clients should keep their emergency funds and how to maintain them. Zabela explains that one option is with a money market mutual fund, however, those don’t come without concerns. “When you see a money market with a dramatically higher yield than its peers, that can sometimes be a red flag that the fund is taking on some additional risk to help boost its yield,” said Zabela.
Finance Articles October 2022
The Federal Reserve is expected to raise interest rates another 75 basis points next month leaving many to speculate a recession may be on the horizon. While inflation is still a hot topic in the last few months of the year there are few critical items impacting the economy. Here are some of the topics we’re watching at Fort Pitt.
Our first article, “A Fed shift from quantitative tightening to ‘tinkering’ will emerge as a new bull factor for the stock market in 2023, Bank of America says,” comes from Markets Insider. The Federal Reserve is in a quantitative tightening cycle reducing its near $9 trillion balance sheet via $95 billion per month. Quantitative tightening is used to reduce the Federal Reserve’s balance sheet by either selling Treasury bonds or letting them mature. If the Federal Reserve pauses interest rate hikes, it could be a sign to investors a bull market may be ahead in 2023.
“NY Fed 1-year inflation expectations slide to 12 month low as household spending expectations crater most on record,” is our next article from ZeroHedge. The article takes a look at the New York Federal Reserve’s household spending expectations as the Federal Reserve continues to raise interest rates in an effort to combat inflation. The New York Federal Reserve found that one-year-ahead inflation expectations is the lowest it has been since 2021, down from 5.7% to 5.4%. Additionally, the median expected growth in household income in September remains at a high of 3.5%.
Wolf Street supplies our third article, “The most splendid housing bubbles in Canada, October update: Prices plunge at fastest pace on record.” The article breaks down the stats of the housing market plunging in different parts of Canada. The Bank of Canada’s interest rate repression plays a role in the plunge. The article shares the index has dropped 7% over four months.
Dan Eye, chief investment officer at Fort Pitt, is included in our next article from MarketWatch, “Stock market’s wild gyrations put earnings in focus as inflation “crushes” Fed pivot hopes.” The consumer price index (CPI) showed an inflation rate of 8% for the seventh month in a row which suggests the Federal Reserves aggressive interest rate hikes has yet to calm inflation. Earnings are seeing the impact, explains Eye, “I don’t think any strategist or analyst who follows the market closely really anticipates that earnings are going to hold up into 2023. We are in a situation where it’s a matter of how far they need to be marked down.”
Lastly, financial advisor Bryson Roof, shares how people can keep from falling victim to misleading sales pitches from financial advisors with a breakdown of financial words and phrases. The article, “Decoding financial jargon,” in Harrisburg Magazine shares buzzwords and other practices to watch out for when vetting an advisor.
Finance Articles September 2022
The Federal Reserve raised interest rates another 75 basis points this month and plans to continue to hike rates in the coming months. This is leaving many to ponder the economic ramifications. Amid these changes, we’re staying on top of the news versus the noise. Here are some of the stories we’re keeping an eye on here at Fort Pitt.
Our first article comes from CNBC, “More homebuilders lower prices as sentiment falls for ninth straight month.” The National Association of Home Builders/Wells Fargo Housing Market Index showed the sentiment fell 3 points in September. The article says that home builders are lowering the prices of their homes because of rising interest rates.
ZeroHedge provides our next article, “Yields are defying yesterday’s logic.” This article explores how bond yields perform in different types of market conditions. While inflation is high and the market is volatile investors favor Treasury bonds. On the other hand, when the economy is strong bond yields are attractive.
“‘Perfect storm’ strikes but governments continue to spend as if nothing has changed,” is another article from ZeroHedge. Retail sales are down as inflation remains high and prices are increasing. The article suggests that this is a perfect storm and will impact small businesses the most. The article also explores how government spending hasn’t slowed despite inflation continuing to rise.
We turn to Money.com for our fourth article, “Dollar Scholar asks: When should I use ‘Buy Now, Pay Later’ apps?” Buy now, pay later (BNPL) apps have grown in popularity in recent years as people use them similarly to layaway to fund large purchases. Financial advisor Kaitlyn Haney provides insight on when you should use BNPL and when you should avoid them, “For someone who is responsible with their debt, I recommend using these plans, when offered, if you are making a larger purchase like a television or appliance.”
Our final article comes from Harrisburg Magazine where financial advisor Bryson Roof writes about, “Building a financial dream team.” In this article, Roof explains why having a team of financial experts in different areas is beneficial to your overall financial goals. Roof parallels the need for different doctors to the need for different financial experts, “I absolutely love my dermatologist; she has an amazing bedside manner, and I really trust her. That being said, she will not be my first call if I need neurosurgery–expertise matters.”
Finance Articles August 2022
Summer is winding down and as students head back to school, we have our back-to-school reading list to keep you updated on what’s been going on in the markets. Here is a look at some of the stories we’re keeping an eye on here at Fort Pitt.
Our first article, “Who’s afraid of Jackson Hole?” comes from ZeroHedge. The article shares outlook on the Federal Reserve’s Jerome Powell’s speech in Wyoming. In his speech, Powell is expected to discuss the current economic outlook, but this article suggests that people really want to hear his outlook on the federal funds rate. In a report published in June, the FOMC projected the federal funds rate to increase to 3.4% by the end of this year.
“Euro trades at two-decade low against the dollar. And some think it could slide much farther,” is our next article from CNBC.com. Since the euro traded at 0.9903 against the US dollar, analysts are anticipating it will slide further because of the ongoing conflict in Ukraine, inflation, and China’s economy slowing down.
ZeroHedge provides another article taking a look at inflation and rent, “Some more good inflation news: owner-equivalent rents are about to peak.”. The article suggests inflation actually peaked 4 to 7 months ago. However, the article also says that latest Apartment List data suggests that CPI shelter data is once again delayed and will peak again in September or October.
We turn to PlanAdviser for our fourth article, “SEC flexes regulatory muscle with RIAs, brokers in focus.” Our chief compliance officer, Mary Giconi shared insight on the importance of RIAs having a compliance arm within their firm. “The role of the compliance officer has changed significantly,” she says. “Compliance has really shifted from being a reports-generating department to a more dynamic part of the organization. There is a greater focus on training and building dialogue with the advisers so that we are providing the best client service that we can.”
Lastly, Bryson Roof, a financial advisor at Fort Pitt, pens an article for Harrisburg Magazine about “What happens to my money when I die?” In the article, Roof explains that it’s important for people to make plans early so they understand all of the options available to them.
Finance Articles July 2022
For many across the country, this summer has been a hot one, but it’s not just the temperature turning up the heat. Movement in the stock market remains a hot topic as second-quarter earning season reports come out and tech companies scale back on hiring. Here are stories we’re keeping an eye on and what we’ve been up to at Fort Pitt Capital Group:
Our first article, “Supply chains inching back to normal brace for headwinds of softer demand,” comes from Bloomberg. The article takes a look at the supply chain that was uprooted during the pandemic. Economists are now saying that things are turning around and supply may soon catch up with demand as ocean freight rates decline from a two-year high.
“Microsoft eases up on hiring as economic concerns hit more of the tech industry,” is our next article from CNBC.com. The article talks about how Microsoft is slowing down its hiring pace and instead realigning resources. Hiring slowing at the tech giant may trigger broader economic concerns for the tech industry.
Another piece from CNBC.com, “Senate advances more than $50 billion bill to boost U.S. semiconductor production,” looks at a bill being moved through Senate. In an effort to become less dependent on Asia-based manufacturers, the Senate voted on a bill that will boost semiconductor production within the U.S. The bill will provide about $50 billion in computer chip manufacturing if passed.
We turn to The Balance for our next piece featuring Fort Pitt’s Bryson Roof, “Trust vs. will: what’s the difference?” This article explores the differences between a trust and a will and how to decide which one is best for your needs. Roof explained, “A will answers, ‘How do you give your assets to someone when you die?’ A trust can be used in the same fashion, but tends to be used for more complex situations or when someone wants to retain a level of control. To me, trust equals control.”
Lastly, Dan Eye, chief investment officer at Fort Pitt, was featured in a MarketWatch article, “Dow books biggest drop in more than two weeks after report about Apple’s plans to slow hiring, spending.” Apple is another tech company that is slowing down its hiring pace and this article takes a deeper look into why it likely caused the biggest drop in weeks on Dow. “We are going to need to get our arms around what earnings are going to look like in coming quarters and that’s going to depend on guidance,” Eye shared.
Finance Articles June 2022
It’s officially summer and we’re halfway through the year! Take a look at what news we’re keeping an eye on and what we’ve been up to at Fort Pitt Capital Group:
Our first article, “Chevron hits back, says Biden trying to “impose obstacles” to energy delivery” comes from ZeroHedge. As drivers are feeling the impact of rising gas prices at the pump, energy companies and the White House are at odds on the obstacles moving forward. The article highlights 10 things the administration can do to help reduce gas prices.
“Here’s why this housing downturn is nothing like the last” is our next article from CNBC.com comparing today’s housing market to markets past asking, “Is today’s housing market in the same predicament that it was over a decade ago, when the 2007-08 crash caused the Great Recession?” The article explains that the market today is in better health than it was in 2010 and explores how affordability is another issue impacting the market.
Another key topic is whether or not the U.S. is headed toward a recession. ZeroHedge supplies our next article, “A look at the last five recessions.” Economists are looking at previous recessions for guidance on what may lie ahead and the impact on different sectors of the market.
Our next article comes from Seeking Alpha, “Where are Treasury yields headed as the Fed embarks on quantitative tightening?” where Dan Eye, chief investment officer at Fort Pitt, discusses the Fed’s plan for monetary policy. “I don’t think we know the impacts of QT just yet, especially since we haven’t done this slimming down of the balance sheet much in history. But it’s a safe bet to say that it pulls liquidity out of the market, and it’s reasonable to think that as liquidity is pulled out, it affects multiples in valuations to some degree,” he explains.
Lastly, Dan Eye was also featured in a Barron’s Advisor article, “Staples stocks are usually a safe bet. Why they’re getting crushed.” While consumer staples are usually a reliable sector, recent earnings show signs of weakness.
Finance Articles May 2022
We’re back from a restful and patriotic Memorial Day weekend. Here’s some of our beach reading material and an update on what’s new at Fort Pitt Capital Group:
“Employees everywhere are organizing. Here’s why it’s happening now,” is our first article from CNBC. This piece discusses the resurgence of unions amid the Great Resignation. A survey from the National Labor Relations Board found that union representation petitions increased 57% from the same time last year. The article dissects the reasons why unions might be increasing in popularity, including supportive policies from the White House, increased health concerns stemming from the pandemic and recent success of unionized companies like Starbucks.
We turn to ZeroHedge for our next piece, “These cities and states are leading America’s manufacturing comeback.” Not since World War II have we seen such a resurgence of manufacturing across America. This article focuses on what cities in Michigan and California are leading the charge for the manufacturing comeback. Additionally, there’s been exponential manufacturing job growth in Nevada over the last 10 years, with a 50% increase in jobs.
Next up from the TD Ameritrade Network, we have, “Streaming steals parks’ spotlight in Disney’s (DIS) 2Q report,” featuring chief investment officer Dan Eye. Eye joined host Nicole Petallides on “The Watch List” to discuss Disney earnings and whether or not investors should buy the dip.
Finally, “Actuary lawsuit highlights data breach risks” comes from the Plan Adviser and includes insight from vice president David Graver. As more and more of our business transact online, Graver emphasizes the importance of individuals and plan advisers being aware of cyberthreats like ransomware and phishing scams.
Finance Articles April 2022
April showers bring May flowers! As spring is in full swing, here’s what we’ve been reading and what we’ve been up to this month at Fort Pitt Capital Group:
“Most U.S. college grads don’t work in the field they studied, survey finds,” is our first piece from Bloomberg. Amid inflating student-loan debts in the U.S., parents may be wondering whether or not a college degree is worth the price tag. The study sparking this debate comes from a new survey conducted by Intelligent.com. The survey, completed by 1,000 Americans with either a four-year or postgraduate degree, revealed that more than half of college graduates over the age of 25 don’t work in their field of study. Additionally, 25% of participants earn less than $30,000 a year, and one out of seven earns less than $15,000 per year.
We turn to ZeroHedge for our next piece, “Rising unaffordability is causing renters to abandon hope of ever owning a home.” Following a two-year home buying frenzy, many American home buyers may be losing hope. The New York Fed’s 2022 SCE Housing Survey showed that participants are now less likely to buy a home if they were to move. This is compared to the 2021 survey, with the drop amounting to a decline of 10 percentage points. The article also shares an alarming graph that demonstrates the percentage of renters who believe they will ever own a home has fallen to the lowest level since the survey began in 2014.
Next up from Fox Business, we have, “These sectors are where investors want to be right now: Market expert,” featuring chief investment officer Dan Eye. Eye joined host Liz Claman for ‘The Claman Countdown’ to discuss why he believes the gaming and leisure properties space is a very solid income play.
Lastly, “A hard shove to boost retirement stockpiles,” comes from the Pittsburgh Post-Gazette and includes vice president, Chris Chaney. As the Secure Act 2.0 is currently making its way through Congress, Chaney explains his thoughts on the proposed bill as well as the big impact it could have on retirement savings and more.
