Subscribe
Share
Share
Embed
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.
Join our team of advisors for unbiased, proactive advice about individual and family finances, estate and legacy planning, family dynamics, investing, as well as trends for business owners, nonprofits, and institutions.
To submit potential topics or questions to our experts, contact us via email at Key_Wealth_Institute@keybank.com.
For more information, articles, or other insights related to wealth management, visit key.com/ourinsights.
_____________________________________________________
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, July 17th, 2026.
I'm Brian Pietrangelo, and welcome to the podcast. If you are a sports fan, there is a lot going on this week with a very diverse list of sporting events. First up we had the Major League Baseball All-Star Game in Philadelphia as a nod to the 250th anniversary of the United States where the American League won 4-0. We also have the FIFA World Cup final coming up this Sunday where Spain will be taking on Argentina for all the marbles. We also have the 113th version of the Tour de France underway which is taking on stage 13 of 21 as it rolls through the entire month of July. Always A fascinating observation of endurance at its best. Good luck to all the cyclists.
And also across the pond, we have the 154th version of the British Open, or as they say over there, they just call it the Open because it is version of the original major tournament for golf, this year being held at Royal Birkdale in England. And now outside of the sports world wanted to share a very cool and unique experience that I had back on Monday of this week. As we say every week on this podcast, we are huge fans of human ingenuity and technological innovations. So when we think about that, we had a really big one come through this past week. Some people have been following this closely and some people have not, but it is the train known as Big Boy number 4014, which is the world's largest operating steam locomotive, which had a significant journey across America to celebrate the United States' 250th anniversary. And the unique part about it is that the train stop and the tour across the country came right through Cleveland, Ohio. And the big boy engine and its entire train stopped on the west side of Cleveland within a 10-minute walk from my house. So it was a great opportunity to go down there, see the train, really observe the significant crowd that came to watch, which was a testament to all of those who significantly wanted to give a testament to what the United States has built and the innovation around what had happened along with the railroads way back when the steam locomotive was a significant innovation. The train actually stopped for about 30 minutes to give everyone an observation up close within 5 or 10 feet of the locomotive, and then they set their sails on the way for the remainder of the trip across back to the west coast. And as they got ready to depart, here's what it sounded like. So again, great observation to see up front, classic concept of innovation, strength, resilience in the United States of America as we celebrate our 250th anniversary.
And 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 Mateo, Chief Investment Officer, Rajiv Sharma, Head of Fixed Income, and Sam Snyder, Director of Equity Research. As a reminder, a lot of great content is available on key.com slash Wealth Insights, 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've got four key economic releases to give you an update on, and we will begin first with the inflation update from the report known as the Consumer Price Index, or CPI. On a month-over-month basis for June, the number for all items came in as a negative at 0.4% negative, which the decline is good news. We haven't seen that in quite a while, but again, the caveat there is it does include the decline in gasoline prices. So the core number, which excludes food and energy, came in flat at 0.0% for the month, which again was some good news, lower than the prior two months of April and May. As that converts to the year-over-year number, the number for June, all items, was 3.5%, which was lower than May's, and the core, excluding food and energy, at 2.6%, also lower than May, which was again good news, but still elevated over that all elusive 2% target that the Fed has for core CPI. And speaking of the Fed, #2, Kevin Worst, the Fed chair, visited Washington, D.C. this week to give his testimony to the House and the Senate for the semi-annual report on monetary policy. Most of the questions that he received and he did answer were related to his thoughts on inflation still being elevated and continues to call the inflation that we are at right now unacceptable and will do what he can to contain that number. The other half of the questions that were received were around Fed independence and whether Kevin Warsh would operate without the executive branch and its oversight, so to speak, and any pressure on that. And Kevin remained fairly steadfast in his answers. that the Fed would be independent.
Third, we've also got an update from the Fed, which is its Beige Book report, which comes out every time, two weeks in advance of the upcoming Federal Open Market Committee meeting, which will occur on July 29th, two weeks from Wednesday of this week on to the 29th, and that's the normal cycle. In a pretty decent report overall for the 12 districts, economic activity increased at a slight or moderate pace in 11 of the 12 Federal Reserve districts. So one district reported no change. So that's been an increase overall in the last few Beige Book reports, so heading in the right direction. Several districts noted declines in spending on discretionary items because of the increase in previous months in gas prices, which again is no surprise. And the labor markets in the 12 districts was kind of a so-so report with just under half of the districts or five of the districts which reported modest or moderate solid gains in employment with the remaining 7 experiencing little to no change.
And finally the 4th update for the week is the report that came out known as the Advance Report on Retail Sales and the number for June 2026 was an increase of 0.2%. Now again, that number sounds pretty small, but it is fairly typical to be around that type of increase on a monthly basis as compared to last month, which was May, which was actually revised upward a little bit, but then it came in at a full 1.0%. Now, the caveat with this number, as we report to you every time it comes out, is that this is a nominal number which includes inflationary price increases, where we would rather see the increases coming from volumes of spending. So all in all, not too much of a surprise to see the number go back to a small increase in June after a big increase in May, also somewhat related to the decline in prices in gasoline. So if you exclude gasoline prices and prices in auto-related manufacturing, you've got a 0.4% increase for the month of June. So all in all, that's a pretty healthy dynamic from a spending standpoint. We'll continue to monitor this as we go throughout the year in terms of consumer spending remaining healthy as it does relate to GDP. So now let's turn to our panel, and we'll start with George to get his reaction on the economic data and ask the question, do you think that the United States economy has a position to steam forward like a strong locomotive, or will we slow down a little bit for a couple hazards on the tracks?
George Mateyo [00:08:43]
Well, it's interesting that you use that metaphor, Brian, to start our call today in the sense that many people are comparing today's AI build out a comparable buildup to what we saw in the railroad industry some 150 or 60 years ago or so. And I think there are some parallels in the sense that we are laying a tremendous amount of track, so to speak, to try and build out the infrastructure on AI. But your question, I guess, first and foremost, is the momentum poised to continue? I think in the short term, yes, I still think we've probably got some decent tailwinds behind us. Again, a lot of it is, of course, driven by artificial intelligence. And should we see some faltering or some maybe slow down in that momentum, if you will, that could probably be problematic for a lot of things because I personally think that AI is now driving the economy, it's powering the stock market, it's fueling the credit market, and it really has become a pervasive theme. And anytime when you have one pervasive investment theme, it rarely lasts forever. So I think we have to be mindful of that first and foremost.
The broader question you also asked about just kind of where we kind of stand with respect to certain indicators, I think things are, again, are in pretty good shape. The consumer seems to be holding in. Of course, you often reference jobless claims as kind of a near-term signal with respect to labor market trends. And there we saw some continued improvement there or continued support for the overall labor market, which is important because that is responsible for, of course, consumers and consumer spending. And people have jobs, they tend to spend money. And I mean, again, we saw that kind of play out in terms of some decent activity for retailers this past week.
But of course, the big thing that we have to watch, I think first and foremost, again, is the inflation situation. And again, I think as we saw this week, inflation did seem to cool off a little bit. I don't think it's the point where it's completely cooled because I think to some extent we're probably in this situation where we're unfortunately in this on again and off again situation with Iran that's probably having some implications for energy prices as well. I think inflation has been studied right in this year because of things other than energy. We've talked about this on this conversation in other places, too. And you know, to some extent that again kind of goes back to that kind of maybe just if you can stick around. AI. And I think, again, the build out of AI has been really responsible for things kind of boiling over in terms of inflation beyond energy. Now, this past month, again, we saw some of those prices come down a little bit. And I don't think that it's sustainable to see the prices increase that we've seen semiconductors and other places continuing for forever. So again, I would suspect some moderation might be likely there too. But again, we also have not seen price increases from some consumer tech companies, namely Apple, which of course is a big provider of cell phones, and they've talked about price increases as well.
So again, I think there's probably this notion that things are in pretty good shape right now. But again, I think overall inflation, in my view, is still somewhat sticky. It probably doesn't necessitate an action for the Fed right now, but I don't think the Fed's in a condition right now to cut either. So I think rates are probably on hold for a while longer. At the same time, we're likely to have some continued geopolitical events from time to time, which, again, feeds into our thoughts about rising nationalism and other things that are probably more on a structural basis. So again, Rajiv, if I were you and thinking about what the Fed might be thinking, I think the Fed is probably in a best position right now just to sit there and do nothing. And they would probably be perfectly fine with that, at least for the next few months. But how are you thinking about that? And also, what are your thoughts also, Rajiv, on the credit markets as relates to AI?
Rajiv Sharma [00:12:21]
I mean, really good points there, George. And I really do think that the Fed is looking at every single data piece that's coming out, especially inflation. They're focused on price stability. We've heard that from Kevin Walsh at the last FOMC meeting. So when we see this lower than expected CPI print this week, obviously the markets really took that in stride and they really ignored whatever is happening in the Middle East. any kind of upscale in military action was kind of a backseat when it came to the markets. The market really saw a positive tone this week with that CPI release, both headline and core inflation declining. This kind of like, seriously, this kind of made like the the Fed take notice of it as well. And those rate cut expectations also took notice of it.
You know, we had a July rate hike expectation of 40% before the CPI release. And immediately after the data release, the odds collapsed to just about 20%. Again, that is not zero, but it really didn't just move the July odds. It kind of pushed back the September and October hikes also. So now the market's really, you know, looking at one rate hike. Most likely they're fixated on October. But I think the Fed needs more than just one CPI release, and the Fed is going to look at a trend. If we don't see a trend, if we don't see multiple data releases, we've got the PCE coming out later this month. If we don't see a consistent theme that we're going on a disinflationary trend, the Fed, in my expectations, will keep rates elevated for longer.
And I do think that right now you're looking at a Fed that has Kevin Warsh at the helm, he's the chair. The CPI numbers came out, the market got really excited about it. Kevin Warsh had a testimony this week, and he basically said that it was a testimony before the House panel, and he came out and said that we really have no tolerance for persistently high inflation. And he also referred to the CPI data release and said, mission not accomplished. So I think that that proves two things for me. One, the Fed is going to be fixated on inflation as they should be. Two, Kevin Walsh is not moving the goalpost. He's still reiterating that 2% is where we need inflation to get to. And until we get there, I don't think the Fed can really do much. So we've talked about it before, that rate cuts are off the table. My opinion really is rate hikes are not really on the table until we start really seeing stubborn inflation remain the way it is. So we have to really see every day to report and
Even the market reacted to that. We got that CPI report, the two-year Treasury note, which yields are very, very sensitive to Fed policy. We saw the two-year rise about 11 basis points at that point and then come down. But for the month, rates have been really high for the two-year, the 10-year, and the 30-year. It's not been a market right now that's really considering that the Fed is going to do much right now, in my opinion. And I really do think that if you think about corporate spreads, they've been very, very, very resilient through all of this. And I think that's important to say too, because as long as the credit markets remain resilient and liquid, I think that it bodes well for risk assets.
But if you look under the hood and we talk about AI-related names, There is a lot of debt that's coming to market because of these AI hyperscalers. And it's kind of bifurcated the market for credit spreads. You have the AI hyperscalers and then you have the chip makers. And I think both are very different. But any bit of news, whether it be that AI hyperscalers want to raise more debt or whether there's a downgrade in the space, you will see the reaction throughout the entire sector. So this month alone, communications and telecom, communications and tech have done extremely, they've lagged the entire market. And this comes on the face of Amazon having a jumbo deal that came out, Oracle getting downgraded, just a notch above high yield. All of this really is, it makes the market very sensitive to these names. But you have to realize that AI hyperscalers and all these AI names are going to continue to come to market. They have the capacity to do so. They have the cash flows to do so. And I think that the market is ripe to see more and more of these issues come out. When they do, I don't think the investors are going to be able to play in the names unless they get significant concessions, which causes the entire space, the tech space, to widen them.
Brian Pietrangelo [00:17:23]
Great, Rajeev, thanks for that update on the fixed income market. And we'd like to bring Sam Snyder into the conversation. Sam is a director of our investment research on our equity team. Sam, what are your thoughts on what's going on in the markets this week?
Sam Snyder [00:17:34]
Thanks, Brian. So this week, as we stand now, the S&P 500 stumbled a bit down about 1.2%, but I think the bigger story is that the tech-heavy NASDAQ underperformed that down around 3.2%. as some of the AI-focused names really gave back a lot of their meteoric performance. Speaking of meteors, SpaceX went below its IPO price, and earnings season kicked off.
We've also seen outperformance in healthcare stocks, small caps, value, financials and industrials. It's all connected, and we think it's bullish for the real economy despite the volatility. We're encouraged that it seems as if industrial end markets are all growing together at the same time. The analogy that comes to my mind as a baseball team where every player is hitting and the pitchers are throwing well, that team's really unstoppable, at least in the short term or the intermediate term. We've seen this in the outperformance of smaller, more cyclical stocks.
Due to the construction of the S&P 500, which is market cap weighted, the overall index seems lackluster, but the outperformance of equal weight S&P and smaller cap indices tell the real story of the economy, at least from one perspective. Broadening out generally is good and should lead to a recovering consumer over the next few months.
Brian Pietrangelo [00:19:03]
Speaking of earnings, what's your read on the first week that we've got some big earnings for the second quarter?
Sam Snyder [00:19:03]
Yeah, so it's early. Early in the season just began to kick off with the banks. So we sift through the transcripts with the earnings calls and try to form our sort of own version of the Fed's beige book. Like I said, still early. Banks just began reporting this week, a couple of tech companies.
We like what we see so far, though. Banks came in strong. IBM stumbled a bit as some of the AI spending at corporations appears to be crowding out a lot of the traditional tech spending from CTOs and CIOs. And the consumer remains challenged in pockets, but overall pretty resilient, as George mentioned earlier. Banks benefited really from, and this goes to some of Rajiv's points, The one, there's a high equity volatility, but capital markets are wide open and the AI boom really has created a lot of debt issuance, equity issuance that's coming in the pipeline that's been super helpful for the banks.
So speaking about some of the AI names, the share price performance of the stocks in the AI ecosystem, it's stumbled a bit. We think part of that is flows from growth to cyclical old economy stocks. given the robust macro backdrop. It isn't really intuitive, but when the underlying economy is strong, growth stocks typically underperform. This is kind of called, people will call this a growth scare, and then value outperforms. The logic is that when the economic growth is weak, investors seek out returns in sectors that have growth of their own. But when economic growth strengthens, the natural part of the economy supports demand for cyclical stocks, which tend to be cheaper.
The other piece that we think is impacting AI related stocks is the increase in equity issuance of other players in the AI space. And that's foreign companies listing in the US, it's foreign companies listing in their domicile, and it's some of the IPOs that are coming down the pike in the US. And this creates a dynamic where the supply of ways to invest in AI simply outpaces demand. And there just aren't enough dollars to go into the new issues that come to market. Said another way, Some themes have what is called, investing themes have what's called scarcity value, value that materializes due to limited ways to invest in that theme. The scarcity value is, at least from our perspective, currently evaporating with the strong new issuance pipeline, at least for now. And some of that widening that Rajiv talked about is likely playing a role in the multiples that we're seeing in the equity market.
So moving on to SpaceX, the company fell below its IPO price. Partly due to some news last night that the company's planned launch was delayed. Prior to this, we're seeing short interest growing. The float's pretty low right now. It's going to increase over time as the IPO process sort of develops and unfolds and the stock becomes more seasonal. I think that, you know, this is an indicator that the market's betting against the stock. Short interest can be real rocket fuel, no pun intended, if there's a pocket of good news. Also known, this is called a short squeeze. And we note that even some vocal bears have decided not to short the stock, given how crowded the short trade is in SpaceX.
I also think the stocks. impacted by the dynamic I mentioned earlier, the interplay between growth and value stocks and how the underlying economy seems to be. Investors want to look for the highest risk reward. And right now, these stocks are priced for perfection. And as the real economy starts to pick up, some of these smaller cyclical value names will do better. And then, you know, really interesting.
Brian Pietrangelo [00:22:48]
Speaking of the underlying economy, Sam, what about traditional healthcare? What's your thought there?
Sam Snyder [00:22:55]
Yeah, so looking at healthcare, this is really kind of almost an anti-AI bet. It's an interesting phenomenon.
We've seen that these healthcare stocks have begun to really turn the corner. From our vantage point, a lot of growth investors are getting skittish about the high-flying AI names, and they've really sought refuge in biotech and healthcare stocks. We've noticed this yin and yang dynamic dating back a while now. We'll see if this persists, but we think there's plenty of room to run now in healthcare names. Just keep in mind that getting along health care has an unexpected and implicit bet against AI stocks, at least in our view.
Longer term, we think health care is going to be a huge beneficiary of AI adoption, could be a boon for new medical discoveries. But all in, look, there's a lot to think about. It's an exciting and dynamic time to be investing. We remain bullish on the overall economy and expect writing out to continue.
Brian Pietrangelo [00:23:50]
thank you for the conversation today, George, Rajiv, and Sam. 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.
Disclosures [00:24:27]
We gather data and information from specialized sources and financial databases, including, but not limited to, Bloomberg Finance LP, Bureau of Economic Analysis, Bureau of Labor Statistics, Chicago Board of Exchange Volatility Index, known as VIX, Dow Jones or Dow Jones News Plus, FactSet, Federal Reserve and corresponding 12 district banks, Federal Open Market Committee, ICE Bank of America Move Index, Morningstar or Morningstar.com, Standard & Poor's, and Wall Street Journal or 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, known as KeyBank. Key Wealth and Key Private Client are also brand names used by Key Investment Services, LLC, known as KISS, member FINRCIPIC, and SEC Registered Investment Advisor. The Key Wealth Institute is comprised of financial professionals representing KeyBank and certain affiliates, such as KISS and KeyCorp Insurance Agency, USA, Inc., known as KIA.
Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual authors, 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 KISS, Member FINRCIPIC and SEC Registered Investment Advisor. Insurance products are offered through KIA and underwritten by third-party insurance carriers not affiliated with KISS. KISS and KIA are affiliates under the common control of KeyCorp. To learn more about KISS's investment business, as well as our relationship with you, please review our KISS disclosure page. Check the background of KISS 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.