Activity in the housing sector remains weak.
In our summary of economic projections, the median participant projects GDP to rise 1.6% this year and 1.8% next year, a touch stronger than projected in June.
Wall Street turning higher after Fed Day.
The Federal Reserve cutting interest rates as expected by 25 basis points, but Fetcher Jay Powell tempered enthusiasm about the rate cut outlook.
Now shares of high flying tech stocks led the losses after the Fed decision as investors took profits on.
Bull market winners.
Nvidia, Oracle and Palantirer and Broadcom all declined after the meeting.
Now Intel's share is higher this morning as Nvidia takes a $5 billion stake in the company.
Joining me to weigh in this morning is Michael Landsberg, CEO of Landsberg Bennett Private Wealth Management.
Thank you so much for joining me.
So here we are finally a day after the Fed, and there's been so much anticipation heading into the September meeting.
So what did you make of not only the rate decision but obviously Powell's statement and the implications moving forward?
I think what was interesting is obviously telegraph to get a cut.
But I think a lot of his statements about risk management has an indication that as we think, we think inflation is accelerating here, and I think there's a little bit of a of a cautionary tale here to tell the market is, we're not sure where to get more.
I think a lot of people are very anxious and eagerly anticipating lots of cuts.
I'm not sure where to get as many as people think.
Yeah, so Michael, for viewers out there who might have been doing other things at the time of the presser, what did that term risk management mean to you?
To me, I thought it meant the idea was we're going to do this now almost because we feel pressured to do it.
We've we've been telegraphing this since Jackson Hole.
But now we're looking at it, we're going to go back to being data, data deficient sufficient looking at the data dependent, and I think the idea is going to be here is with CPI, we think it's going to accelerate the October print will be September's number is going to be higher.
I think they're going to go into a wait and see mode.
I think going back to data dependent is going to mean they're going to look at the data, the data is not going to be saying, hey, we need to cut and cut and cut, and I think that's going to be what people are going to be surprised to see.
Yeah, and the details are in the data, so of course we're paying attention to the labor market and inflation, and next week we will be getting that GDP revision as well as durable goods and some of the flash PMI readings, but also at the end of the week PCE.
So what will you be looking for in the upcoming week?
Yeah, it's interesting.
I look at when I'm looking at economically, obviously retail sales are very strong.
I think that surprised people.
I think what we Seen kind of by and large Wall Street's been positioned for this incorrectly.
They've been way too negative.
Earnings for the last quarter when we went in the quarter, Wall Street was looking at 2.8% growth.
It came in at 12.8%, so they've grossly missed this to the upside.
And so I think what's happened is they've been too low.
Things have rallied.
I think they're playing catch up.
So unless the data is really, really crazy, and I don't see that happening, I think we're in this environment where the CPI right.
Before that next Fed meeting is going to drive a decision to pause, which I think is going to be interesting because they're going to have some political brush back because obviously the president wants cuts and cuts and cuts.
I don't think if Jay Powell's consistent with what Jay Powell said, he's looking at data, it's going to be tough if CPI goes up as much as we think.
We think it's going to be 25 basis points higher to maybe a 315 to 320 print from 290.
That's going to be tough to say, Hey, we need to cut.
I think it's going to be cut.
They might be in a wait and see.
I think there might be some pressure on him politically.
Yeah, and Michael, of course we were paying attention to politics, especially as we were moving into that meeting on Tuesday.
But as we move forward, as you mentioned, we'll keep an eye on those data points.
But break down the surprise and the retail sales.
I know many viewers out there are wondering how is inflation going to affect all of us, but what did you make of the sales and will it be sustainable?
What's interesting is I don't think the tariffs really, I think everybody exaggerated how bad the tariffs were going to be.
I think what's happened is a lot of these companies now have kind of kept prices in check.
They've kind of eaten it a little bit, but I think what's happened is earnings have been kind of positively surprised because I think people were so negative.
So I think they've done a good job of not passing a lot of that stuff on to the consumer.
Whether they can do that or not forever is going to be interesting.
I think retail sales, the American consumer always.
It amazes me when they shouldn't spend they spend and when they should they spend.
So it's never been an area where you're like, oh this will be a bad it's never a bad holiday season.
So I think I don't want to ever bet against the American consumer.
They spend money when they have it, they spend it when they don't.
And I think that's again we always focus on the earnings.
At the end of the day these companies have done really well earnings wise, I think across the broad markets.
I think that continues.
Yeah, and speaking of which, we know consumer spending affects a lot of growth, especially in GDP figures, but we're also looking at concentration risk right now, especially given the uptick in AI.
So while we're on this topic this morning, we got news that Nvidia will be investing $5 billion into Intel, and as a result, we saw Intel shares rally by as much as 30%.
Market and they have opened higher up by over 20% this morning.
So what do you make of that deal?
Well, it's interesting because originally when I first saw the deal I'm like, oh, Nvidia, they're going to have problems making the chips quick enough.
They're going to use Intel to do that.
Well, that's not the case.
It's a collaboration around data centers.
They've collaborated a long time over different things.
I think it's basically it's a stamp of approval that Intel will be here.
I think there were concerns not too long ago.
They didn't have a tech to kind of compete.
I think this shows you that, if Nvidia is endorsing them to putting their basically their gold standard with them, I think that means Intel will be here.
Data centers obviously are here to stay in any way you can play data centers is going to be good.
We don't own Intel.
We've owned Nvidia.
It's our largest position.
We'll continue to own it, but it's smart for Nvidia to diversify them because they've got so much. so much market share, but also their fear has to be who comes up and catches them, and this is a good way for them to diversify their risks.
Yeah.
And finally, before I let you go, you mentioned a keyword that is on the floor, and that is diversification across assets.
So now that we have come out of the September Fed meeting and we have about 3 months to go until year end, what does diversification look like for you?
I think the big issue I see with a lot of a lot of people is inventing a great story.
It's actually larger market cap than France and Germany and the all world index.
That's a problem to me.
So I look at that and say, OK, do we have that much?
And a lot of US investors, it's a lot more than that.
And so to me, you want to look at diversifying out of some other some other sectors, doesn't mean you're going to hurt yourself, but international's done very well.
Golden commodities have done very well, so you can do that and not get hurt performance wise, which has been a big knock.
I want to own Mag 7.
It's the only thing performing.
That's not the case anymore.
A lot of other things are performing.
It makes sense to take some money and spread it.
Well, Michael, we will have to leave it there, but thank you so much for joining me a day after the fact and thank you so much for your insights and perspective.
My pleasure.
Thank you.
