Newscasts - Market Talk: Investors 'nervous on the Trump train'

Navidea Biopharmaceuticals

28/02/2025 21:42

Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_d50lqs58&referenceId=tag:reuters.com,2025:newsml_RW532028022025RP1_930&pageId=Newscasts
Source: 'Reuters - Business videos'

Description: Robert Conzo, CEO and managing director of The Wealth Alliance, said the shouting match between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy on Friday stunned investors, which triggered a selloff before rebounding later in the session, and added to uncertainty in financial markets already jittery due to weakening economic data and volatility around U.S. trade policies. Lisa Bernhard has more.

Short Link: https://refini.tv/41C2xGG

Video Transcript:

US President Trump and Ukraine President Volodymyr Zelenskyy clashed repeatedly in the Oval Office on live television. Here to discuss that is Rob Conzo of The Wealth Alliance. Rob, investors have largely shrugged off geopolitical events, but what we saw today appeared to be a direct correlation between stocks coming down slightly and this very heated argument in which Zelenskyy questioned Trump's tilt toward Russia, and Trump accused Zelenskyy of being disrespectful, even gambling with World War III. What do you make of the markets’ reaction?

I think the thing that was most shocking about it was, we as a viewer, got to see first-hand things that I don't think you normally see. It was a real heated exchange. You saw Trump in his element. It reaffirms many people's “fears.” He's a wild card. You don't know where he's going to go. And so, the name of the game here, and this was a perfect, perfect example of it is uncertainty. People were not expecting that exchange on any level to happen like that. The fact that it does is basically how his presidency has been going ever since. Things come out in three seconds and changed the game. Uncertainty reigned supreme today.

Zelenskyy ended up leaving the White House early and the press conference that the two were supposed to have was cancelled. So, do you see this as shifting into a real risk off environment with stocks? We know bitcoin is down. The 10-year Treasury yield is down. What do you think?

Well, the interesting thing about his presidency and also what else is going on is he's a president that speaks a lot about what he can do. I can impose tariffs at 25%. I can end the Ukraine war. I can stop government spending and after that doesn't tell you what he's doing. So, it's like driving down a road that's completely pitch black with a lot of curves, you drive completely nervous, and you wait for the next turn. That's what it's like on the Trump train. People are nervous, this uncertainty. So, at the end of the day, what do we make of it? Well, there's other things that are creating uncertainty like you look at AI, all this infrastructure, all this build out around AI, chips, power grids, data centers. At the end of the day, DeepSeek comes out, changes the game, NVIDIA drops 20%. That's unnerving to investors. So, yes, there are certain things that investors should be thinking about going forward and we have certain ideas about where to go with this, but in the meantime, people have to quell their uneasiness and nervousness. I don't believe this is a market mover going forward. I think it's just part of the game in a Trump train.

Turning to some key data today, the personal consumption expenditures index, or PCE, the Federal Reserve's preferred inflation gauge, came out for January. And the annual rate through January was 2.5%. That's come down a little bit from December. And the core inflation rate, excluding volatile food and energy prices, was at 2.6%, that came down a little bit as well. What do you make of these numbers, Robert?

The thing that jumps out to me is when you look at PCE at 2.6% and go back, look at since February of 2024, PCE, which is PCE core, which is a great Fed's preferred measure, has hovered between 2.7% and 2.8%. Now, it just dropped to 2.6%. It's essentially sideways. It’s going flat. When you look at CPI, headline CPI, 3.3%. Basically, going back mid-year 2024, till now, inflation is sticky. It's flat, it did drop down, felt pretty good about that. But it became - the Fed really is saying we're putting Fed cuts and monetary policy on hold. Again, the Fed is reaffirming what the investor feels: uncertainty. They're saying we don't know, we have to see. Investors don't like that. You go one step further and what came out today was on the consumption versus income. Personal consumption basically dropped just a little and personal income dropped up, most of that was from farmers getting reimbursements. But even on that, what you really have is wage growth right now at 3.9%. You have PCE, let's call it 2.6%. Wage growth higher than consumption. That's a good thing. You got a gap there, that's what you want to see. You want to see that and we’re still there. So, we feel pretty good about it, about these numbers.