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Key Wealth Matters, a podcast series hosted by the experts of the Key Wealth Institute, explores the biggest news of today to determine how these headlines can impact wealth plans, financial strategies, markets, and investments.
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_____________________________________________________
We gather data and information from specialized sources and financial databases including but not limited to Bloomberg Finance L.P., Bureau of Economic Analysis, Bureau of Labor Statistics, Chicago Board of Exchange (CBOE) Volatility Index (VIX), Dow Jones / Dow Jones Newsplus, FactSet, Federal Reserve and corresponding 12 district banks / Federal Open Market Committee (FOMC), ICE BofA (Bank of America) MOVE Index, Morningstar / Morningstar.com, Standard & Poor’s and Wall Street Journal / WSJ.com.
Key Wealth, Key Private Client, Key Private Bank, Key Family Wealth, and KeyBank Institutional Advisors are brand names used by KeyBank National Association (KeyBank). Key Wealth and Key Private Client are also brand names used by Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor.
The Key Wealth Institute is comprised of financial professionals representing KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA).
Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual author(s), and may not necessarily represent the views of KeyBank or any of its subsidiaries or affiliates.
This material presented is for informational purposes only and is not intended to be an offer, recommendation, or solicitation to purchase or sell any security or product or to employ a specific investment or tax planning strategy.
KeyBank, nor its subsidiaries or affiliates, represent, warrant or guarantee that this material is accurate, complete or suitable for any purpose or any investor and it should not be used as a basis for investment or tax planning decisions. It is not to be relied upon or used in substitution for the exercise of independent judgment. It should not be construed as individual tax, legal or financial advice.
The summaries, prices, quotes and/or statistics contained herein have been obtained from sources believed to be reliable but are not necessarily complete and cannot be guaranteed. They are provided for informational purposes only and are not intended to replace any confirmations or statements. Past performance does not guarantee future results.
Brokerage and certain investment advisory services are offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor. Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA) and underwritten by third party insurance carriers not affiliated with KIS. KIS and KIA are affiliates under the common control of KeyCorp. To learn more about KIS’s investment business, as well as our relationship with you, please review our KIS Disclosure page. Check the background of KIS on FINRA's BrokerCheck.
Non-Deposit products are:
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY
©2026 KeyCorp®. All rights reserved.
Brian Pietrangelo [00:00:00]
Welcome to the Key Wealth Matters weekly podcast, where we casually ramble on about important topics, including the markets, the economy, human ingenuity, and almost anything under the sun, giving you the keys to open doors in the world of investing. Today is Friday, August 7th, 2026. I'm Brian Pietrangelo, and welcome to the podcast. As we head into the weekend, we've got a couple fun things going on nationally and internationally. On August 8th, we talk about International Beer Day and we also talk about National Pickleball Day, although I wouldn't combine the two. And if you're a big music fan, way back in the day of Elvis Presley, it begins Elvis Presley week. With that, I would like to introduce our panel of investing experts here to share their insights on this week's market activity and more. George Mateyo, Chief Investment Officer Steve Hoedt, Head of Equities and Rajeev Sharma, Head of Fixed Income. As a reminder, a lot of great content is available on key.com/wealthinsights including updates from our Wealth Institute on many different subjects and especially our Key Questions article series addressing a relevant topic for investors. In addition, if you have any questions or need more information, please reach out to your financial advisor. Taking a look at this week's market and economic activity, we'll talk to Steve about the market, but the economic releases were all related to the employment market, and we've got three updates for you. We'll give them right now. First up, earlier in the week, we got the JOLT report, the Jobs Opening and Labor Turnover Survey report from the Bureau of Labor Statistics, focusing on the job openings number, which came in at 7.4 million job openings. for the month of June, which was little change for the month of May. Again, this report is a two-month lag, but again, the good news is there that remains stable for employers looking to hire, at least on the JOLTS report. And second, just yesterday we got the weekly initial unemployment claims report where the data showed that it came in at a roughly 199,000 for the prior week, which continues to remain significantly stable. in terms of weekly initial unemployment claims, which again points towards a healthy jobs market, at least on this second of two indicators today. And third, the update just this morning also from the Bureau of Labor Statistics is the report known as the employment situation, which focuses on a couple key characteristics, the first being non-farm payrolls, which showed that there was a 23,000 decline in new non-farm payrolls for the month of July. So that was a little bit surprising given that the estimates were for 83,000 or so. So we'll take a look at that number as it continues to move forward in a slowing basis, which again is why I mentioned this is the third report for our podcast this week, that the first one showed a little bit of a negative sentiment in terms of the job market, that being the new non-farm payrolls. The unemployment rate ticked down to 4.1%. Again, that has remained fairly stable. So combining the three employment reports for this week, we had two that were fairly favorable and one not so favorable, that being the new non-farm payroll report. So we'll certainly talk to our panel about what that means for the economy, what that mean for the Fed, and what that might mean for the markets as we talk to George, Rajeev, and Steve. So George, let's get right to you in terms of your reaction to that data and other things that you might be thinking about with regard to the economy. George?
George Mateyo [00:03:33]
So of all the employment reports issued this week, Brian, I think the big report that markets matter most towards is the report that came out this morning here Friday morning around the job situation for the past month. And of course, this was a big one in the sense that the first time in a long time, we've actually seen a negative surprise only I guess the last few times we had a decline, it was probably over a year ago or so in the sense that people were expecting something like 80,000 jobs added for the prior month and it said roughly 23,000 jobs were lost. So that's a big deviation from the overall consensus estimate. I think there's an open question as to whether or not this is driven by supply forces, meaning are there just fewer jobs in general or is this more of a function of demand? employers aren't hiring as many workers. And I think it's a bit of both. It's probably a bit of both. And I think the supply situation is a little bit probably more of a bigger influence, but it's hard to say for sure. I think there were probably some interesting things behind the scenes a little bit that deserve some attention in the sense that historically, and maybe going back now for the past several months, we saw the health care sector represent a significant portion of job gains. That didn't happen this past month. We also saw a decline in leisure and hospitality. And we've talked about this, I think, for the past few weeks anyway, in the sense that maybe some of those numbers in the prior months actually were boosted by the World Cup. And that seems reversing. And the other thing we have to note in that sense that overall government workers actually shrunk a little bit as well. So there's a lot of moving parts there. I think the other thing that markets are paying attention to this morning has to do with the fact that the unemployment rate declined. But it declined for what they call the wrong reasons in the sense that it really wasn't a function of more jobs being added. It was fewer people that are in the labor force in general are showing up. So again, the overall job situation is probably just net-net a bit softer than people expected. And I think this is probably good news in the sense that the markets are embracing this this morning, it seems like, but it's good news in the sense that maybe the Fed won't be so inclined to hike rates when they get together in September. So again, there are probably a lot of puts and stakes with the overall report. I think the key takeaway from my perspective, again, is that the inflation situation is not getting out of hand. The labor market is probably a little bit softer than people thought just a few weeks ago. And I think if anything else, the market is going to be mostly focused on inflation when we come to next week. So Rajeev, if I were you, I'm thinking about maybe the bond market now kind of embracing the fact that maybe the Fed is going to be a little less hawkish. But probably again, we have to pay attention to the employment report next week. What are your thoughts about that important report thinking about the week ahead?
Rajeev Sharma [00:06:13]
Well, George, with that jobs report, we did see treasuries rally sharply on the print. We saw yields falling across the curve. We saw both steepening pattern. Front end and belly was really leading the curve. If you want to talk specifics, the two year immediately snapped down in yield by eight basis points to 4.18%. And the 10-year was down 6 basis points to 4.63%, which is a pretty big move on the day. I mean, if you look at the 2-10s curve and the 5-30s spreads, they've all steep into session highs and all wider as well by 1.5 and 3.5 basis points respectively. So what does this really do to the Fed? Monetary policy expectations have changed sharply just based on this one print. The weak print meaningfully erodes some of those Fed hike expectations that the market was having. The market is fixated on September being a rate hike. Around 11 basis points of September hike premium was removed right on the jobs print. The swaps market right now is pricing less than a 50-50 odds that we would have a rate hike in September 16th meeting. Money markets are still projecting one hike for 2026, but not before December. So this is how quickly things can change in the market. We had that FOMC meeting recently for the July FOMC, and at that point, the market has pretty much gravitated towards the September rate hike. Now that's kind of gone away. 50/50 odds of a rate hike in September are quite significantly lower than there were just a few days ago. So right now, I think the market is really trying to understand every single data print. We're going to get less guidance from the Fed. That seems to be the new the new regime for the Fed. So if you expect less guidance, that makes every single economic data point even more important, whether it's inflation or jobs. And what that's really done is you've seen rates be higher for longer. So bottom line is you get a decisively weak jobs current. It triggers a treasury rally, it triggers a bull steepening. The front end is outperforming. September rate hikes are cut significantly. And the curve dynamic and T-bill demand suggests the markets are leaning towards a prolonged Fed pause, meaning higher for longer. And that's something we've been forecasting with our listeners for some time now. If you'd want to look at other parts of the bond market, we can talk about corporate bonds. I mean, spreads have been pretty well behaved, but we have seen a lot of new issuance. This week, we did see heavy $80 billion worth of new issuance for investment grade. It was led by Alphabet's $25 billion bond deal. And the credit backdrop was described as pretty actionable on that data. A lot of people got involved with that deal. I think what's going to be really important is that you've got to look at investment grade supply this year. Every year we've had a record year as far as investment-grade supply is, and the demand for investment-grade corporate bonds remains unwavering. You have a lot of investors that really like the yield options you're getting right now. They like the coupons. They like the carry that you can get with corporate bonds. We're now forecasting very close to $2 trillion in new issuance for 2026. I think the initial forecast when we started the year off was around $1.6 trillion. Now we're thinking about 1.9 trillion to 2 trillion. Those estimates have gone up. And the reason they've gone up is you have AI related funding, which is much larger than had been expected. The five largest hyperscalers right now, they issued approximately $190 billion in corporate bonds this year. And that's just the first half of 2026. If you think about 2025, those same five hyperscalers issued about $100 billion in all of 2025. So half a year, we're close to $200 billion in new issuance for the five largest hyperscalers. It's not going to slow down. Hyperscalers have already surpassed Moody's full year estimates for debt year to date. And I think you're going to see those hyperscalers continue to come to the debt markets to finance their CapEx. The only difference is that after a couple of these deals, investors are expecting a lot more concessions on these deals. So you could see these deals come out with a little more spread on them, and I think that's going to entice investors to get involved. If you don't see the extra concessions, you will not see investors get involved. US non-financial corporate bond issuance for the first five months of 2026 totaled about $956 billion, again, up 43% year over year. So there's a lot of new paper coming to market and It's trying to satisfy that demand for corporate credit. We've been strong proponents for corporate bonds. over treasuries in this kind of rate environment. And I think so far this year, it's paid off.
George Mateyo [00:11:05]
Well, speaking of paper, Steve, there's a lot of paper gains that are going through the earnings statements these days in the sense that a couple of companies have reported massive increases in earnings, but a lot of that's on paper, right, in the sense that they have-- I don't call them real earnings. I guess they are to some extent, but there are a lot of unrealized gains on prior investments. What's your thought on the market kind of processing earnings that has just been spectacular, but again, maybe artificial at the same time?
Steve Hoedt [00:11:31]
Yeah, I think that the reaction to the market, to this earnings explosion, which has been driven by a whole host of things, but part of it is for sure what you just mentioned, the paper gains. It's been the mark, the multiple that they're willing to pay, that we're willing to pay for these earnings down. So if you look Back last October, the peak for the forward P multiple for the S&P 500 was just a little bit more than 23 times. And I think back at that time, we talked about how we thought that the market's valuation at that point in time was extended and we needed to see earnings pick up the baton. They certainly picked up the baton. But I think that the quality of those numbers is not necessarily what we would want to see. So the markets reacted to that rationally and has taken the multiple down. You might not realize it when you look at the S&P 500, but the multiple for the S&P 500 right now is trading in just a little less than 20 times. We're at 19 and a half about a week ago. And that was the same level that we were, George, back at the trough in March when the market sold off. We've seen the market rally as earnings have exploded, but we've seen the multiple remain pretty tame. And that, in our view, is a pretty rational response to what's going on in the earnings line.
George Mateyo [00:12:59]
And how are you thinking about energy these days, Steve? I know that's also been an important sector in terms of earnings gains, but we've seen a lot of volatility there too, given what's happened in the Middle East.
Steve Hoedt [00:13:09]
Yeah, the situation there remains fluid at best. Tight supplies globally, we've eaten through a lot of inventories, price has moved up, I think that the magic number for the pain point tends to be somewhere north of 90, anywhere between 90 and 100, you start to see people squawk about it. It feels to us like we're just at the top end of this big trading range that we've been in for oil now, which is basically 65 to 95. And in between 65 and 95, energy companies mint money and people don't complain a lot. And if you get outside of those ranges, either higher or lower, it creates pain points either for the consumer on the high end or energy companies on the low end. and something happens to bring it back to that equilibrium. So we continue to exist in this area where the energy companies are being able to maximize their profits because the refining at current prices is just extremely profitable. we don't really see much that's going to take us out of there. I do feel like when you look at the inventory situation, though, it's going to have to be addressed in the next three to six months or else it's going to become potentially problematic for the global economy. We've... We've eaten through a lot of the buffer in order to keep prices from getting out of control. There has been some demand destruction, but most of that demand destruction has happened in China, where they've had a whole host of other things available to them and lots of levers to pull on for the Chinese to kind of control things much more so than in the West. So we'll just have to see how it goes. I don't think we're going to get some kind of a crazy super spike, though. I think that kind of thing is off the table.
Brian Pietrangelo [00:15:10]
So, Steve, one final question for you on the podcast. I'm going to tie a lot of things that we discussed today together. And when you think about the sort of slightly artificial gains on the paper that George talked about with corporate earnings with some of the hyperscalers, you talk about Rajeev and the additional debt issuance by the hyperscalers. You talk about the Fed reaction coming up in September, and you talk about September as usually an unfavorable month. So when you look out in the next 60 to 90 days, Steve, what are maybe some warning signals you're looking for in those corporate earnings that may be a little bit disruptive to the market?
Steve Hoedt [00:15:46]
Well, I don't know if it's just the earnings, but what's been funny to me to watch is that the two worst months of the year from a seasonal perspective are September and August. February is also pretty bad too, but August is not typically a good month, right? And I think a lot of people came into this month thinking that, okay, this is a month where we can go take a vacation. I know a lot of us have vacations planned and other things, but take a vacation, just not pay too much attention to what's going on. And then all of a sudden, we got a breakout to new all-time highs by the S&P 500 within the last week. And I think that that has caught a lot of people on the wrong foot who maybe were thinking that we were just going to consolidate here. I know I was one who thought we were going to consolidate for a while given the seasonals and the news flow that we've been talking about on this call. The breakout to new highs kind of puts that into a different perspective because you get the whole FOMO business, fear of missing out, where you have people decide to pile into stuff. So it's been a pretty good week for the market on the heels of that. And the question for us is, it gonna continue? And I think when you get a fairly benign jobs report today that takes the prospect of a Fed rate hike off the table, it gives us the opportunity to have that positive narrative continue to work in the market. And the earnings numbers have been plenty good. So if people are willing to focus on that, that gives you yet another reason to push the market higher here during a window of time when it typically doesn't. And I've talked on this call before that when the market behaves in a way that is counter to how it historically has and how it should, you should pay attention to that. So if the market says we're supposed to go down at this point in time during the year or we should be consolidating and it doesn't, That tells you just how strong the underlying bull market is.
Brian Pietrangelo [00:17:50]
Well, thank you for the conversation today, George, Steve, and Rajeev. We appreciate your insights. And thanks to our listeners for joining us today. Be sure to subscribe to the Key Wealth Matters podcast through your favorite podcast app. As always, past performance is no guarantee of future results, and we know your financial situation is personal to you. So reach out to your relationship manager, portfolio strategist, or financial advisor for more information, and we'll catch up with you next week to see how the world and the markets have changed and provide those keys to help you navigate your financial journey.
Disclosure [00:18:26]
We gather data and information from specialized sources and financial databases including but not limited to Bloomberg Finance L.P., Bureau of Economic Analysis, Bureau of Labor Statistics, Chicago Board of Exchange (CBOE) Volatility Index (VIX), Dow Jones / Dow Jones Newsplus, FactSet, Federal Reserve and corresponding 12 district banks / Federal Open Market Committee (FOMC), ICE BofA (Bank of America) MOVE Index, Morningstar / Morningstar.com, Standard & Poor’s and Wall Street Journal / WSJ.com.
Key Wealth, Key Private Client, Key Private Bank, Key Family Wealth, and KeyBank Institutional Advisors are brand names used by KeyBank National Association (KeyBank). Key Wealth and Key Private Client are also brand names used by Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor.
The Key Wealth Institute is comprised of financial professionals representing KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA).
Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual author(s), and may not necessarily represent the views of KeyBank or any of its subsidiaries or affiliates.
This material presented is for informational purposes only and is not intended to be an offer, recommendation, or solicitation to purchase or sell any security or product or to employ a specific investment or tax planning strategy.
KeyBank, nor its subsidiaries or affiliates, represent, warrant or guarantee that this material is accurate, complete or suitable for any purpose or any investor and it should not be used as a basis for investment or tax planning decisions. It is not to be relied upon or used in substitution for the exercise of independent judgment. It should not be construed as individual tax, legal or financial advice.
The summaries, prices, quotes and/or statistics contained herein have been obtained from sources believed to be reliable but are not necessarily complete and cannot be guaranteed. They are provided for informational purposes only and are not intended to replace any confirmations or statements. Past performance does not guarantee future results.
Brokerage and certain investment advisory services are offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor. Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA) and underwritten by third party insurance carriers not affiliated with KIS. KIS and KIA are affiliates under the common control of KeyCorp. To learn more about KIS’s investment business, as well as our relationship with you, please review our KIS Disclosure page. Check the background of KIS on FINRA's BrokerCheck.
Non-Deposit products are:
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY