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 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.