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Investing strategies, Biden takes on medical debt: Wealth!

On today's episode of Wealth!, host Brad Smith delves into the day's market trends (^DJI, ^IXIC, ^GSPC), sentiments after the Federal Reserve's interest rate policy decision on Wednesday, and the latest developments in US medical policies.

Markets take center stage as the Fed announced its decision to maintain interest rates at their current levels, despite the highly anticipated dot plot hinting at the possibility of at least one rate cut before the year's end. Amid this uncertainty, Burns McKinney, the managing director of NFJ Investment Group, joins the show to provide guidance on where investors should allocate their funds.

Shifting gears, the episode explores the Biden Administration's efforts to bring relief to those burdened by medical debt. Yahoo Finance's Anjalee Khemlani joins the discussion, breaking down the details of the proposed policy.

To round out the show, Yahoo Finance contributor Ross Mac joins the conversation, offering investing strategies tailored specifically for new investors.

This post was written by Angel Smith

Video transcript

Welcome to wealth everyone.

I'm Brad Smith and this is Yahoo Finances guide to building your financial footprint.

Our community of experts will give you the resources, the tools, the tips and the tricks that you need to grow your money on today's show.

The latest economic data show signs, inflation is moderating, but it still remains above the fed's target rate.

So we're going to talk about some of the investment ideas to hedge against sticky prices and investment decisions.

How do you pick a sector to invest in and make sure that you're keeping up with its moves?

We're gonna ask Yahoo finance contributor Ross Mack for some tips.

Plus the number of Americans filing for unemployment benefits is rising.

We'll explain what it means for your job hunt all that much more.

Throughout today's show, big news on Wall Street.

The fed has left its key interest rate unchanged as it continues its mission to fight inflation.

However, the fed did make a change to projections of future.

The central bank pricing in only one cut this year.

Yahoo finances Alexandra Canal has more on the dot plot.

Yes, Brad Wall Street is Abuzz with the talk of the fed and this dot plot, but it's not uncommon to feel a little bit confused when talking about this kind of data.

So we wanted to break it down in an adjustable way for viewers and answer this one question, what is the dot plot and what it simply the dot plot is a chart that tracks each one of the 19 benefit projections for the federal funds rate.

And as you can see here, you'll have a collection of dots from 2024 2025 2026 and then longer term here.

And essentially this data is telling us where fed officials think that that funds rate will be heading in the future.

It's released only four times a year, usually at the end of each quarter and each dot represents a specific FO MC member, but they are all anonymous.

So this do here that could be fed Chair Jerome Powell, the other one over here that could be Chicago.

That president ain go be the whole point here is that we don't know now if we do in to 2024 you'll see four F officials right up here.

They think the F fund it's going to stay where they are.

We're currently in a range between 5.25% and 5.5%.

So for they see that rates are going to be unchanged throughout the year.

However, if we look a little bit lower, we see all of these, that officials think that rates are going to come down seven, believe that we're going to see one cut eight, think we're going to see two cuts.

And then if you aggregate the median, that is just one cut that is pricing in for this year.

And again, this is just a projection from the fed and then turning over to 2025 1 loan fed official things, interests are gonna stay where they are not come down at all.

And then we have this guy all the way down here, that's pricing in 10 cuts.

And then you have a lot of just here since it becomes a little bit more difficult to predict rates into the future, since we don't have the economic data yet.

So all of this may seem a little bit intimidating, but this can be a good tool to help you inform yourself about certain financial decisions.

Of course, as we know, interest rates affect various investment areas including mortgage rates, savings accounts and treasury yields among many others.

But it is important to remember that this is just a projection.

It's a guide where fed officials think interest rates should go.

That doesn't necessarily mean that's where interest rates will go.

But it is an important tool when we think about transparency since the dot plot was first introduced in the aftermath of the 2008 financial crisis, when many investors were nervous about the future path of interest rates.

So the dot was created to give that transparency and you can think of it as the Feds crystal ball of sorts.

But again, like I alluded to, there is plenty of criticism surrounding the use of the dot plot that chair Jerome Powell himself.

He has tried to get people to understand that it is simply a projection and should not be taken as gospel yet.

It does remain a highly anticipated release every single quarter brad.

All right, excellent breakdown.

Thanks so much.

We are more than 90 minutes into the trading day and right now stocks are mixed, major averages.

You're taking a look at on your screen here.

We've got both red and green territory as the dow right now is down by about seven tens of percent and fractional declines for the S and P 500 as well.

The NASDAQ holding on to gains just barely this all as it is a huge week on Wall Street investors digesting new data out today PPI a measure of wholesale prices showing evidence that inflation is moderating.

This comes after May's consumer price index.

CP I as you know it in your household and in your hood perhaps we also saw that showed inflation cooling, but there are still some sticky areas of inflation and the fed is now projecting only one rate cut for the year.

So here to break down what this all means for your investment portfolio, we've got Burns mckinney who is the NFJ Investment Group, managing director and senior portfolio manager.

Great to have you here on the program.

So, you know, as you're really digesting all of the data that's come out over the course of this week, what, what is the portfolio playbook that you are pondering or perhaps even enacting right now?


Well, there, there certainly has been a lot of very important economic data and that was, that was a great explanation that we just received on the Fed's dot Plot.

And, you know, one of the things that one of the reasons we, we, we take a little bit of what they do with the dot plot with a grain of salt is that a lot of what the Fed governors are doing is also trying to manage investor expectations.

For example, it's it's easier to, to suggest maybe we're only gonna have one rate cut and then surprise the market with two rate cuts than it is to do the opposite.

You know, I was, I was road trip with my family over the weekend and I, I thought the drive might take four hours.

But yeah, I suggested, well, maybe we should expect about a 4.5 hour drive to my family just to kind of help manage those expectations and bake in some room for contingencies.

And you know, likewise, we had, you know, with the CP I print that was fairly dovish inflation is pulling back and we do expect that the fed should get room to cut rates later this year.

That said uh with respect to your question about how investors should position portfolios.

Uh You know, we do feel that interest rates whereas they may be pulling back some, they probably are going to remain a little bit elevated relative to what they've been over the last 10 or 15 years.

And so as a result of that, with a little bit higher inflation, a little bit higher interest rates, you know, we're suggesting investors should put their portfolios into shorter duration instruments.

Um you know, areas where, you know, you're getting your cash up front and then you can reinvest it.

And you know, that makes a great case for stocks in companies that are paying dividends and really, especially companies that are raising dividends because dividend growth oftentimes is faster than inflation.

Are, are you seeing investors pile into a few specific names with that theme in mind?

Well, the, the beauty of it is that investors really haven't gotten there yet.

Uh This has been very much of a risk on market.

You still see investors really flocking to what's been working over the last year, which has been, you know, your magnificent 77 and your big uh you know, your big high growth tech names, which tend to actually be the opposite.

They're a little bit longer duration and you know, they've been flocking to those and what we do expect to see as the fed starts to, you know, maybe, you know, finally get a chance to, to lower interest rates is a little bit of a, a broadening of investor returns, you know, a little bit more breadth towards, you know, away from that magnificent seven and towards, you know, maybe some of that mundane 493 some of those areas of the market that have lagged over the last year, despite the fact that earnings have continued to grow.

And as a result of that lagging, uh you get better valuations than we've had in quite some time and some of those other pockets of the market.

And so with that in mind, as you're thinking about and evaluating some of the forward earnings that you are hearing from companies, what does that spell out for what investors should be expecting as we get into the second half of 2024 and then even look even further out to 2025 we're certainly seeing signs of, despite the fact that, you know, inflation is pulling back, you know, we, we have been looking at a little bit of a goldilocks type scenario whereby, you know, economic growth has been very resilient that said, um, you know, some of the fed rate hikes that we've seen over the last couple of years are starting to have a maybe slower than expected impacts.

But nonetheless, an impact here, we've seen unemployment climb to you know, it's still at historically low levels, but it's starting to come up a bit, you're starting to see, you know, rises in consumer uh credit card debt.

And so, uh you know, we, we feel that the economy is probably slowing somewhat but nevertheless, at a, at a sustainable pace.

And as a result of that, you know, between that and the fact that um investors have been treating things very risk on, I think that, you know, the mantra had really has been, you know, mission accomplished with respect to um having a soft landing from these hikes.

And so as a result of that, um you know, people have kind of moved away from some of the defensives.

Uh you know, the way, you know, sort of, you can think about it is that, you know, when the sun is shining, people are, are heart and going out buying, uh you know, you can actually get umbrellas at a, at a reasonable price.

And so, you know, some of those umbrellas type umbrella type areas of the market, you know, would be things like some of the defensive areas, things like like utilities.

Uh you know, they've lagged over the last year.

And as a result of that, you get great valuations, you get attractive dividend yields that um again, help investors keep up in an inflationary environment.

Burns mckinney who is the NFJ Investment Group, managing director and senior portfolio manager.

Thanks so much for taking the time here today.

Kicking off the show with us.

Appreciate it.

Well, rates remaining high this week.

Federal Reserve officials scaling back their expectations for rate cuts this year.

But what does this decision mean for your money to break this down?

We've got Yahoo Finance's very own.

Jennifer Shan Burger here with us.

Hey, Jennifer, good morning, Brad.

That's right.

High inflation to push the Federal Reserve to hold interest rates.

Steady Wednesday at the highest level in over two decades.

With few signs, the central bank could lower rates soon for now.

The move is expected to keep borrowing costs higher on everything from homes to cars.

If you're in the market for a home, it's going to remain expensive for now.

Mortgage rates have already backed up on expectations.

The fed will hold rates higher for longer.

The 30 year fixed rate mortgages hovered around 7% just below its recent highs and analysts say buckle up and get used to it.

The Fed's benchmark interest rate has stood within the range of five and a quarter to 5.5% since last July.

But mortgage rates track the 10 year treasury yield which has been trading in the range of 4.3 to 4.6%.

Keeping mortgage rates in that 7% range.

Meanwhile rates on auto loans and credit cards have jumped and are likely to remain high as well.

But higher rates are good news for savers who earn a higher return on their savings.

And while the vet is holding interest rates steady for now, officials signaled at least one rate cut later this year with many on the interest rate setting committee penciling in two cuts.

Now a quarter percentage point cut on the defense benchmark interest rate would certainly ease mortgage rates and other loans off their highs and a second quarter percentage point cut would ease that further.

But for the fed to cut two times this year, which was essentially be 50 basis points or half a percentage point cut, that's not gonna bring mortgage rates back down to those pandemic era, lows of 2 to 3% brad.

We really need to see a severe recession for that to happen back to you, Jennifer.

Uh let's let's hope it's not too severe.

Um But we certainly have been discussing with some economists over the course of this morning.



Thanks so much Jennifer.

Appreciate it.

Well, if we learned anything from Wednesday's inflation, print prices are slowly coming down, but Americans are still dealing with high costs, especially when it comes to health care.

Biden is looking to help consumers get some relief.

Here in the this week, the Biden Harris administration announced new actions to protect consumers and lessen the burden of medical debt on American families leaves.

Now, the proposed plan would ban such debt from credit reports here to weigh in on what this means for you and your finances.

We've got Yahoo Finance Health Report.

Hey, hey, Brad, that's right.

So the Consumer Financial Protection Bureau did introduce this new proposal this week and it is of course, open to public comment and we're going to see what uh, the push back is on that.

But the reason why it has been put uh in, into the public sphere is because we know that medical debt continues to be a problem.

It was a problem pre ac a and continues to be a problem.

Now, even with the increased use of insurance, you can see on your screen, the amount of medical debt still more than 10 $1000.

Uh On average, most Americans are facing that amount and are not able to pay it off.

It is impacting their credit.

Therefore, uh the the uh protections do cut off at some point, there are uh credit bureaus that don't necessarily report under $500 in debt or uh if you pay it off within a year, it doesn't impact your credit score, but there are longer term impacts.

And this has a lot to do with.

As you can see on your screen, the map of where this debt is.

Uh it doesn't necessarily fully match where Medicaid is not expanded.

But that has been one of the issues that folks have focused on is that Medicaid expansion was supposed to help reduce the amount of debt by allowing those that are 138% of the poverty line to also qualify for coverage at the uh Medicaid level.

Meanwhile, we know the Affordable Care Act has also done a lot to help ensure insured Americans.

But there is still a lot going on with that.

We I spoke to a Princeton professor who told me that it's not just the uninsured uh that are part of this equation.

It is also insured individuals that are contributing to this, you can see on your screen there.

Uh Meanwhile, we're looking at what this exactly means.

So states have already and some cities as well as counties have already introduced some rules and new laws that would help uh pay off this debt.

So New Jersey, for example, one of those states that introduced the COVID funding that it received and in a one time shot allow $10 million to pay for approximately $1 billion in medical debt.

It would effectively cancel that debt, then it they were targeted so that it's only those who qualify below or at 400% of the poverty level.

And as I mentioned, they're using that one time shop with the funds.

Now it doesn't fully uh you know, erase the problem.

We still see medical debt as an issue in the country but some states are starting to do this.

The Biden administration has encouraged more states to jump on board.

We know Connecticut and Arizona are also of doing this and So that is where sort of the crux of the problem is.

And so while, uh you know, they can't erase the debt altogether, at least keeping it off the credit reporting and allowing individuals who still face that one time burden of medical debt debt to still continue getting homes, getting cars and you and getting loans.

Uh that is the goal of this rule.

So we will definitely wait to see if it becomes a rule.

Yeah, especially when so much medical debt is incurred, not knowing what fully paying for as well here.

So this slightly addressing that issue as well.

Angelee while we have you, there's new data out from the federal actuaries projects.

Medicare enrollment will drive up annual health care spending to $7.7 trillion by 2023.

Why is Medicare the culprit here?

So Medicare, we remember there, that's the older population.

So they need more care, they need more drugs.

So it's all a part of the package of why prices are going up.

This is why Medicare has been so adamant of trying to fight drug costs.

And we know that the aging population is also increasing and that will attribute to that growth you see on your screen, not just Medicare but also private health insurance.

So that's the commercial population which we know is funded through employers in large part will contribute to this.

So price of drugs is an issue as well as the increased growth.

We saw a huge spike in health care use because of the pandemic and the increase and the continued use of health care services as a result of that, as people got more comfortable, continue to go, there's also telehealth and more ways to access the health care system that is all contributing to the drive up in cost.

Right now.

The spend I think is about 4.7 0.4 0.8 trillion.

And then you're gonna see that jump in a few short years.

Wow, Yahoo Finance Zone, Angelique Kani, thanks so much for breaking this down.

Very important personal finance matter for a lot of households out there coming up, everyone looking to get into the housing market.

Well, we may have some legal advice for you free that's coming up.

Are you looking to get into investing?

But don't know where to start.

One option could be to focus on a specific sector but which sector should you choose?

Yahoo Finance contributor, Ross Mack joins us now to help and share some of his top ideas.

Hey, Ross, how are you doing?

Doing phenomenal Brad?

Thanks so much for having me.

I think, you know, when a person is thinking about investing and actually going into a specific sector, one, I always want you to own all the sectors and I was gonna start, you know, with an ETF but if you're saying, OK, my next step is I own the overall sector now I wanna get some alpha, I wanna go into a particular sector.

I think you always want to start off with what you know, right.

What products am I consuming and using on a daily basis?

That can be, you know, just your household, consumer staples that can be health care.

Another thing I want you to do is actually identify trends, those trends could be technological, economic.

I think we all defer, you know, what is everybody talking about?

What's the way of the future?

That might be artificial intelligence?

Then another thing you got to understand is why, what's the cyclicality of that sector, right?

What's the demand?

What's the elasticity of that?


If you're thinking about consumer discretion, ask yourself when we see inflation or if there's a recession, are people actually gonna still be buying these luxury items?

Another thing to think about what's when we're talking about the way of the future, right?

Are there any kind of political or regulatory shifts?

I think we've all have heard, you know how big electric vehicles are, but now you're saying, hey, some states, some countries might be outlawing combustible gas engine cars by the year 2030 year, 2035 or so.

So maybe, you know, you could look at it from that way.

Another thing obviously is just risk assessment.

You obviously want to get a sense of just how volatile these particular sectors might be.

All right, Ross great breakdown there and certainly a lot to keep in mind as you're identifying which sectors to really lean into based on your own portfolio.

Exposure, Ross, it looks like you wanted to add something else.

Yeah, we gotta come back, right.

So now if we were to give you an example, right?

Say we were to look at and I think the hottest sector on the planet right now is semiconductors, right?

So you've been hearing, OK, I don't know what NVIDIA is, but I'm hearing about semiconductors.


So what do you do?

I think Google is always gonna be your best friend, right?

So what I would first do is Google, what are semiconductors next, I would say, you know, and a keyword with Google is outlook or forecast.

So the very next thing I would do is say, you know, on Google semiconductor outlook.

Now you're gonna wanna read up on it, right?

You want to see some reputable names on Wall Street or consulting, right?

You might see and I Googled it today just to see what will pop up.

There's gonna be a Deloitte 2024 outlook.

I would definitely read that the next thing especially when it comes to, you know, actually investing in the sector, you want to see what ETF S are actually owning this, right?

And so I would literally Google semiconductor ETF S, then I would literally look at the top 10 holdings.

This is always gonna be your best friend because you're gonna get a sense of just how many people that I deem smarter than all of us, meaning right?

People that this is their daily job or you want to see, OK. Is Blackrock on this is fidelity owning that.

And then the next thing, right?

Let's see what that top name is.

Maybe it is NVIDIA.

Then you want to go to Yahoo Finance.

It literally has some of the best technology when it's all said and done.

And actually look at what NVIDIA is, look at the charts, look at the finances.

You want to get a sense of, you know, year over year, are they growing?

And then obviously just put on your Google alerts and you just want to continue to become consumed in it, right?

I think we're conditioned in this society to follow our favorite celebrities and our favorite companies now utilize Google for the same exact reason, utilize Yahoo Finance to really take a deep dive and understand how this company is gonna continue to innovate.

And that should actually give you some good advice when you're moving forward to investing in a sector.

All right, somebody must have shown you the Google alerts that I have set up, Ross.

I appreciate it.

Thanks so much.

My man take care.


Well, buying a house has never been more expensive according to Redfin, the median US home sale price hit an all time high of $394,000 in the four weeks ending June 9th.

But with yesterday's CP I report giving hints that inflation may be cooling.

There is some optimism that mortgage rates may become more friendly in the months to come.

So if you're thinking now maybe the time to jump into the market, you may want to stop and fully think through all of the potential hidden costs and legal issues that you may face to help us break down those issues.

Let's bring in Mike Fiffick, who is the legal shield provider, lawyer and managing partner of the law group.

Great to have you here with us today, Mike.

All right.

So a lot of people are trying to figure out if they're gonna be paying some of these high average home prices legally where they need to make sure they're covered along the way.

What's the number one legal thought that people should have as they're entering in to a home contract?

Well, hi, Brad.

It's great to be here and thanks for having me.

Uh, do your homework.

That's what I would say.

Do your homework if you're gonna be a buyer uh, before you get started, uh I would assemble your team, a realtor, a lawyer that is experienced in real estate work in a lender and have a game plan before you start looking for a home because it is very expensive and it's more complicated anymore these days than it's ever been.

Uh Home prices are expensive.

The national association of realtors litigation is changing a lot about how homebuyers uh interact with buyer's agents and how they're going to pay for it, potentially increasing the cost of buying a home.

So it's more complicated now than it's ever been.

And having access to somebody that's got experienced like a real estate attorney is gonna be uh super important for home buyers and give them a real leg up and an advantage in this complicated home buying environment that we're in currently.

And so with that in mind, where are you seeing the biggest hang up that prospective buyers run into, in the legal process for buying a home?

I think that they go into it without a game plan and they don't really understand exactly what they're going to run into.

They need to know what to expect.

And one of the first complications that they're gonna run into is negotiating with their buyer's agent because they're gonna have to have a contract.

That's something new as of August that homebuyers are gonna have to negotiate with the buyer's agent and they may have to agree to pay their buyer's agent, a commission, maybe up to 3% of whatever the sale price is for the home.

And that's going to be something new for homebuyers that it's traditionally been paid by sellers.

So that adds a layer of expense.

Now, we don't know exactly how that's going to work out as we move forward under these new rules and uh this, the, the homeowners are going to have to be able to have some flexibility in those agreements to uh react to.

However, the deal is rolling down, they may also run into problems with home inspections, uh problems that come up with title on the property and they need somebody experienced to help them uh understand what those problems are, what their significance is and how to negotiate with the seller in order to get their deal to the closing table from negotiation and, and submitting the first bid all the way through closing on a home.

What should home buyers really be prepared for in that process?

Uh They should be prepared for things to happen at the very last minute and have a plan to not allow that to happen.

Closings by nature are deadline driven.

So a lot of things happen at the very end and buyers often feel a sense of being rushed, anxiety and stress because everything kind of comes together at the last minute.

And it doesn't have to be that way.

You know, if they have a real estate attorney involved on their behalf, that person can sort of quarterback the project and keep them up to date all along the way so that they feel comfortable and know that uh with their understanding of what's happening in the process and have some confidence and security for really what is the biggest purchase of their lives.

You know, as we're seeing new homes also take on more of a percentage compared to historical averages of the overall home sales as of right now as of this year.

Um, one of the huge things that a lot of prospective buyers may be thinking about is legally, what should I be concerned more about as I'm entering into a contract for a new home versus the existing home that they may have previously owned or they may be selling in order to purchase a new home.

I think that because homes are such a difficult thing to a uh for people to afford with higher interest rates, they don't have as much of a margin for error in the event that they buy a home without doing their homework and they run into problems, right?

That home has some kind, some type of a big defect in the property that wasn't disclosed by the seller or that they didn't realize whenever they did the inspection.

So they really need to spend some time doing their homework.

And that might mean asking the seller through the uh sales agreement to give them more information than it might not typically do including what's called a clue report, which is a report based upon the um insurance claims that were made in relation to that house.

You know, that's available to sellers and buyers can ask sellers to get that and provide it to them.

So doing some extra homework so that they don't end up with a surprise after they move in, I think would be really important for people because of affordability issues.

We also have a lot more people who are buying homes that aren't married.

So we've got a lot of co ownership that's happening.

Now, mar couples are waiting to get married longer or there are more unrelated couples that are buying properties because they can't afford it on their own.

So before you would buy a home with somebody to whom you aren't married, it is really important in advance to get some type of a co ownership or cohabitation agreement in place because it is very difficult for unmarried people to get out of a property that they own together because the laws really don't.

There really aren't very many good laws for uh division of property by unmarried people.

Michael Fiffick, who is the legal shield provider, lawyer and managing partner of FIC law group.

Thank you so much for taking the time here with us on the day, Mike.

Appreciate it.

Thanks, Brad.

Take care.

Coming up, everyone.

More Americans made initial claims for unemployment benefits last week.

Then economists were expecting, we'll tell you what this means about the state of the economy.

That's next.

Being your own boss isn't always all it's cracked up to be, believe it or not, business owners face a lot of challenges.

Not only do you need a strategy for managing personal assets, but you also need to consider what will happen to your business in the long term.

And here to weigh in on the stressors and tips for navigating state planning is Jerry Doyle, who is the BNY wealth tax and estate planning strategist, Jerry?

Great to have you here with us today.

All right.

So as people are trying to figure out what small business they're gonna start, what industry they wanna take on and make their name known.

How should they be thinking about their own business planning that sets them up best for estate planning as well?

Or they should be thinking about overall is a succession plan who's gonna take over the business, uh, in the event they decide to retire.

The other thing they have to realize is that there are valuation issues with estate planning in your business and there are also issues that you have to deal with with tax considerations.

For example, if you want to sell your business, you're gonna have to pay income taxes.

If you wanna transfer your business during lifetime to maybe your Children, there are gift tax issues.

And if you die with the business, the valuation and a state planning, a state tax issues, people all have to deal with in order to deal with all these things, people ought to have a team in place, uh, which would consist of an attorney CPA, an insurance advisor, a wealth advisor, an appraiser, things like that.

And the, and the most important thing is just to plan up ahead.

Um, keep planning in mind as you grow your business because eventually it's gonna be disposed of.

You know, we've heard in the past from other strategists and people who run some of this planning with small businesses that they should be hiring the family members, putting their family members on the payroll as there's a tax benefit there.

How, how often is that coming up in conversations on your end?

That comes up a lot.

And it's complicated because a lot of times people want to get their kids involved and the kids may not be competent to handle the business.

A lot of times the parent, the uh first generation has experience, they've grown the business, they know the business and the Children just think just because they're a relative that they have the competency to run that business.

And that's not necessarily.

So, uh maybe what people want to do is get the Children involved early on, bring them up the learning curve, stop them at a lower position and have them gradually grow into the business so they can take it over at some point in time.

But I think the, the big issue is you want to make sure that if your Children are gonna take over the business that they are in fact competent to run the business, if they're not, a lot of businesses want to go out and get professional management, outside professional management, Jerry, there's gonna be a, a critical time frame that people have to think about or at least an event in the near future in the sunset of the 2017 tax law changes there.

What do they need to know there?

Well, I think the big thing with the tax law change that's coming up the sunset is the fact that the estate and gift tax exemption is going to decrease from the current amount of 13 million $610,000 down to probably about 7 $7.5 million.

And a lot of people are thinking now, well, should I take advantage of the increase in the exemption?

Roughly almost $14 million exemption now, before potentially it sunsets at the end of 2020 five.

And we've been telling people, you gotta think about the fact that the exemption is gonna decrease and maybe you want to be in a position where you use the exemption now, maybe to transfer part or all of your business down to a large generation before the exemption decreases down to roughly that 7 $7.5 million amount that I talked about earlier.

And we've been telling people, uh, for a couple of years now use it or lose it.

The problem is that back in 2012, we had the same issue.

The exemption was gonna decrease from about $5 million to 1 million.

It didn't happen.

A lot of people uh, made gifts.

And when the exemption did not decrease, they had givers remorse, they wanted to take the gift back, which they couldn't do because it was irrevocable.

So, as a result, people are looking back at that now and they're saying, well, you know, I probably want to wait until, uh, next year, 2025 to see what's gonna happen before I pull the trigger and make it decision.

That may be bad advice because next year, everybody may be trying to do the exact same thing.

Attorneys and appraisers may all be very busy and they may not have time to um, do any work for you.

The other thing, people have to worry about.

A lot of closely held businesses are what we refer to as flow through entities.

The income flows through from them to the, from their business to their individual income tax return.

And what they have to worry about is right now, there's this 20% deduction called the section 199 a deduction.

That deduction is gonna go away if the sunset actually happens and that's gonna cause flow through entities to have a higher tax than regular C corporations which have a maximum tax rate of 21%.

So there's gonna be a big disparity between closely held businesses and how their tax and regular big C corporation business is publicly traded stocks, Jared Doyle, who is the BNY Wealth tax and estate planning strategist Jerry.


So much for taking the time here today.

Thank you.


Coming up our very own, Dan Alley joins forces with an Apple executive to break down the new features, messages via satellites.

That's on the other side of this break.

All right, we're here with Kurt Knight.

He is the senior director of product platform marketing for I OS, ipad, Os and Mac Os.


Thank you so much for joining us.

What can you tell us about satellite for messages?

Thank you.

I am so excited to be here.

Um Messages via satellite is a feature we just introduced yesterday.

It is part of a set of satellite features that we have introduced over the years.

And this is all about when you are off the grid, you don't have cellular, you don't have Wi Fi, you'll still be able to text and message your friends.

And then I guess, you know, when you're outside of the regular cell phone range, how does, how does it work?

How does it pick up what you're doing?

How does it know when you're in range of the satellite is absolutely incredible in that the phone can tell when it's off a cellular network and when you're off cellular networks turns out satellites are available everywhere and it's able to talk directly from your phone up into space to a satellite and then that satellite can then beam the information back down to earth again.

It is incredible technology.

So there's there's the ability to send messages.

But I mean, how, how many can you send?

What, what can you send?

Is it, is it limited to just text?

It's just like sending a message today and that you can send as many as you want.

There's not a limitation on it.

So you see, we've got this prompt automatically on the lock screen, it knows I'm off grid.

Um And so I can just tap here and it's gonna bring up this connection assistant.

And so in this one space, uh you can see that actually has found us there in Cupertino and it has a set of satellite features available to me.

Um Of course, there's messages via satellite.

We're going to go into that in just a second, there's find my.

So when you're off the grid, you can still be sharing your location to friends and family roadside assistance.

So if you've got some vehicle problems, even if you don't have cell phone connectivity, you can still get some help and then emergency S OS let me show you inside of messages.

You get this experience right here to connect to satellite.

I might can bring this up to get a little bit better view of how I need to do.

So it does a really good job of letting me know what I need to do to stay connected with the satellite.

So I'll close that I'll go here to send a text message to Alex and I will say satellite message incoming and send that along.

And so right now that is going up to space and back down again.

And I'll also go ahead and send an emoji um over as well because you can do text, you can do emoji.

Um Both.

It is absolutely incredible right now it's going 800 miles in space, the satellite's moving 15,000 MPH.

Um As it doesn't you see the scent indicator?

Um It's already gone up and down again.

Um So Alex sees this.

Um He's already replied to me, I can reply to him with a tap back.

There's these new beautiful tap back and I was 18, I can scroll over where you can see.

I can also tap back with an emoji.

Now I'll do the uh Yeah, absolutely.

Um So that is messages via satellite via iMessage.

This also works um in S MS.

So it gets the most broad usage.

Basically, anyone with a phone you can send a message to via satellite.

And I guess what do you see as the use case for this?

Is it?

I went out hiking.

I'm not very good at it and I got lost.

Is it?

I just need to get in touch with someone because I went camping and I, I wanna make sure that I can still get in touch with my wife that I think the great thing about this is it's a great expansion of what we've been doing, we've had um features before like emergency S OS, which are amazing life saving features and this really broadens the aperture of what we're able to do.

You can be maybe out camping and just want to check in and see, you know, maybe how the family is doing.

You can just be saying hello.

Um Or maybe it's something really important.

It's, it's sort of the full gamut of communication, what you might want to use it for?

Thankfully, I only car camp uh because I'm too much of a baby to do real camping.

Um I guess just as a, as a last, you know, what uh is it a subscription service?

How does it, how does it work in that regard?

So this is part of the set of satellite features that we introduced again starting two years ago and as a iphone 14 or iphone 15 user, um you get a free two years of services as part of your phone and then you can just go from there if you want to continue on and then yeah, we will announce more details later on how that goes.

Awesome, Kurt, thank you so much for joining us.

Really appreciate it.

Thank you.


Thank you.


Americans made initial claims for unemployment benefits last week than economists were expecting.

With 24 242,000 people filing 242,000 people filed versus the 225,000 expected.

What does this tell us about the state of the economy?

To explain?

We have our very own Michelle Apo?

Hey Rochelle.

Hey, Brad.

So as you mentioned there, that weekly headline number from the labor department showed that initial jobless claims.

Or that's the number of new filers for unemployment benefits that hit 242,000 for the week ending June 8th.

Now that's up 13,000 from the previous week and it did top expectations.

Now, insured employment or otherwise known as continuing jobless claims for those already receiving unemployment benefits that also rose 30,000 to 1.82 million for the week ending June 1st.

So as we dig into this though, when it's coupled with a rising unemployment rate of 4% it does signal that more people are returning to the workforce but they're not finding a job.

And this is part of the reason that polls show this disconnect between how well the economy is doing while it's increasingly harder for people to find jobs.

Now, weekly, jobless claims data can be very volatile.

Think of things like holidays in between shortened trading weeks and things like that.

So economists do prefer to use the moving four week average.

But even with that in mind, that also hit the highest level since September at 227,000 with the increase of 4750.

So things trending downwards for main street here.

So Rochelle, what should we take away from this data?

So as I mentioned, there's main street, which is obviously the the real people who are here who are potentially not able to find work.

But then you also have Wall Street because higher jobless claims are generally a poor sign for the economy.

But the Federal Reserve is looking for more consistent cooling in the labor market before it cuts interest.

It's part of that picture there and that's something investors have been eagerly awaiting with that in mind that will make borrowing cheaper, perhaps make mortgages a little bit cheaper as well.

But if you are looking for work, the report does also indicate where you might have a harder time finding a job when you look at the number of people filing.

So the list of states with the largest increases in initial claims ending June 8th, that's actually topped by California, followed by Minnesota and Pennsylvania.

Now the largest decreases you saw in North Dakota, Missouri and Tennessee.

And of course, when you look at the list of some of these states, those do include some key election battlegrounds.

When you think of that main street, Wall Street disconnect and people thinking, hearing all this commentary about the economy doing well, but they're not able to find jobs.

It does sort of really paint some of the picture here as to how people feel they're doing in this economy.


Yeah, I heard you mention my home state of Pennsylvania in there, Rochelle.

Thanks so much for the breakdown on this.

Appreciate it.

Well, we are just days away from Father's Day this year.

Despite inflation weighing on consumers, people are expected to spend over $22 billion nearly $23 billion during the holiday.

But that's slightly lower than last year's record of nearly $23 billion according to the National Retail Federation to discuss how to get the best gift without breaking the bank, Michael Hack, who is the Wells Fargo Outdoor products and Motor Sports Group managing director is here with us.

Great to see you.

You gotta break down what we're expecting this Father's Day versus years past.

First of all.

Thanks Brad for having me.

I really appreciate it.

I think what we're gonna see is a little bit more um cautious, uh a little more cautious optimism from the retailers.

We've had three really wonderful years in a row of sales.

Um where where consumers are really willing to pay almost anything to get their hands on product.

Now, the retailers have uh plenty of inventory uh at the showroom.

So the consumer doesn't feel as compelled to, to jump at whatever is available.

Plus, you know, three years of run up on the inflationary numbers have made some of the the items themselves is a little bit cost prohibitive and uh manufacturers are are willing to, to discount a little bit to try to grab market share.

So it, it'll be pretty stable year over year, maybe slightly down.

But now with the amount of inventory that's available, um, smart buyers could probably wait it out a little bit and get some better deals.


Uh I was just taking a look at some accounts before we came on here.

I, I don't think that's gonna be getting a boat this year but if there are other boat adjacent things or lawn adjacent things that you feel like people are gonna be gravitating towards one.

What does that mean in terms of the retailers that are poised to benefit?

And two, what are some of the smart shopping gifts that you expect to be perhaps put in play from a kid or, you know, a family level?

Well, for one, we, we hope that folks still do want to buy the larger boat.

Uh There's, there's uh boats available in all sizes and categories right now.

But to your point, the market has softened a bit and the prices have gotten fairly high.

What I would suggest, you know, is if dad already has a boat or an RV or a lawn and garden equipment is to start to really look at the accessories.

Uh They do a wonderful job, whether it's a ski boat or a fishing boat, there's all sorts of things you can bolt on to those things also.

Um lawn and garden equipment themselves, accessories are very important for safety, whether it's gloves protective goggles, um, helmets, ear plugs.

And those are really, I think in the strike zone for the kids to purchase for dad.

Plus, um, it'll help, you know, again, keep dad safe and also it'll, it won't hurt the kids pocketbooks too much.

So, those are the items that I would, I would gravitate towards and, you know, go into your, uh, specialty dealers, uh, in, in your neighborhood, you know, whether it's a motorcycle dealer, your local marina or your or your hardware store, they're always willing to help.

They're typically, they're product experts and they'll know what dad uh could use to help, uh complement what he already has in the garage.

You know, it's interesting.

I was taking a look at your notes and there, there's this rising trend of the outdoor tech dad, you gotta break that down for us and, and what that means, dads are perhaps gravitating towards as, as new activities.

Well, the outdoor tech dad, um, really it kind of centers in a couple of areas.

One there's more and more battery powered equipment out there.


So dads that enjoy that uh for a couple of reasons whether it's the environment um being a little bit, you know, conscious of the neighbors and not being so loud.

Those dads like to use battery equipment.

Now, a lot of handheld equipment is batteries, battery uh powered, excuse me.

And more and more of the larger equipment as, as well the, um, the area that we're really starting to see take off are the E bikes.

Um, the bikes that are, you know, have battery packs in them.

This is really cool for the families they have.

Um, it allows the families to essentially bike together because, you know, everyone has different degrees of ability, uh, larger folks or, you know, more fit folks can ride the bike a little bit faster.

A pedal bike per se, but the ee bike is the great equalizer.

Uh And you can also go on longer distances as a family, you know, go down those paths that are in your neighborhoods and, and check out things another area if, if dad's really into, into tech, uh there's things like autonomous mowers um that you can actually set into your lawn and allow them to cut the lawn on their own, which is pretty far out if you're, if uh, well, folks of my age, you had never expected that I was back at the push mower stage when I was a kid.

But these autonomous mowers are very popular in Europe.

So you can just, um, put them together out in, in the yard and they'll cut uh the property unknown and they're uh very safe, actually, very, a lot of safeguards built into them.

And typically, of course, they're battery powered.

All right, I, I'm with you, Michael.

I remember growing up and we had a large toro push mower.

Uh You thought I would have here, Brad.

You thought I wouldn't have needed to go to the gym as much but still did Michael Hack, who is the Wells Fargo outdoor products and Motorsports Group?

Managing direct?

Thanks so much, Michael.

Appreciate it.

Thanks for having me, Brad.

Appreciate it.


Definitely everyone.

That's it for wealth.

I'm Brad Smith.

Thanks so much for watching.

You can stay tuned for market domination with Julie Hyman and Josh Lipton that's coming up at 3 p.m. Eastern time.

You do not want to miss it.