FED, Investment Analyst, Financial Engines Research Center discussed on Investing Sense


Investment analyst in the Financial Engines research center, and as usual Bilas brought along a lot of charts that contain the ideas and data that really will help you visualize. What he's about ready to talk about. Now, you'll find those at investingsensEcom Bill. It's great to have you back on the show with us. So far here today, we've been talking about a couple of risks the trade wars and interest rates in we'd like to get to both of those here in just a second. But while. What a week it's been. It's been a week. Right. So actually if you look at the news flow on trade this week in the markets. I mean, we're not really seeing much of an impact on on Wall Street. I am I reading that. Right. Oh, yeah. Kind of expect the unexpected when it comes to markets right back in April may whenever we'd get that in the next round of news on those US, China tariffs. Kind of see some some selling. But this week getting announcement for those proposed tariffs on another two hundred billion and imports. And just the fact that it's a ten percent tariff. Twenty five percent tariff has helped push the Dow P five hundred back to all time highs. So that's Wall Street on main street. You know from your research perspective in the team's perspective. What impact is it actually having on businesses on the ground and on main streets across the country. Look at things like that leading economic indicators index. This we've talked about before not really seeing an impact there, certainly not seeing the impact on small business sentiment as the chart boasts over on investing sense shows, you know, it's at a new peak for small business sentiment other areas like jobless claims definitely no sign there right now that it's bleeding over kind of a see jobless claims are keep coming at a multi decade lows overall really so far it seems that the impact of the tariffs kinda remains a small relative to the pro growth fiscal policy in place right now with the tax cuts increase spending. You know, kind of one area we are looking at is that we saw bond yields backup this week with the ten year back over three percent. So seeing somewhere. Yeah. You know that that fiscal policy and its impact on flation inflation down the road. You know in the trade dispute, what's might add. You know, a few tenths of a percent to inflation could be having some impact on the bond markets. We did see some data from cornerstone macro this week looking at that increase in a ten year yield and showing that half of the yield increase this week was due to increased inflation expectations. So that's an area where there might be some spillover effect from those. Trade disputes that could be a risk the portfolios that some might overlook Bill. Let's talk a little bit about inflation. Because when you talk about inflation, you talk about what the key issues. The fed is looking at when making the decision to hike rates. So what do you think that we'll see from the fed the rest of the year right now, we've got the fed funds futures fully pricing another hike at that meeting next week. So, you know, a lot of attention to be paid to the dot plot. You know, we want to see what the path of rates in the future will be like since we are, you know, it's already kind of a foregone conclusion that next week. We get another increase. So on that note, another move in December as we show in the second chart we posted over on investingsense dot com is also largely priced in. So the probability of that December move is over eighty percent right now. So you know, one risk. We're looking at his any sort of surprise out of the fed next year, not not very likely, but you know, got a hike at a meeting where markets weren't really expecting it or or maybe a fifty basis point hike instead of the usual twenty-five that could could increase uncertainty about the future moves and impact yields. All right. So you talk and uncertainty. We've we've hit trade wars. We've hit inflation. What does all of these different types of risk mean for portfolios as you are looking at the investments in his you're looking at the allegations. I can one specific area that we're looking at when we're talking rates and trade wars is within income, right know, always important in. And I know you guys hit on this point over and over again to know what you're invested in. So in the long run income is the most important driver of total returns for bonds. But those bond price. Is do move when rates move, and it's important to know how sensitive your holdings are to that. So we've touched on some of that positive economic data earlier, which kind of leads to a, you know, an environment. That's remains pretty supportive of credit risk. So we do always want to know that you know, what we're investing in and know that we're working with teams that are doing that fundamental analysis on the security that they're investing. And so we really want to know that our managers, you know, know, what's in their portfolios, and they manage the risks accordingly when it comes to trade wars and a interest rate Bill, Tracy senior investment analysts from Financial Engines research, and is he not just the nicest guy that we talked to all we end, smart and smarts, a great recipe. Don't thanks for taking some time here in this was great. Thanks, a lot guys always always going to be here. And remember if you want to visualize.

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