Key Wealth Matters Podcasts

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, June 12th, 2026. I'm Brian Pietrangelo and welcome to the podcast. another robust week if you are a sports fan again the Stanley Cup NHL competition in full swing we've also got the NBA finals with some great competition there but also more special than others we have the FIFA World Cup underway with many games friendlies and then also on to the competition round soon and next week also on a patriotic note as we head into the weekend on Monday June 14th we celebrate Flag Day Flag Day is an annual observation created in the United States back on 1777, I should say, in a resolution by the Second Continental Congress, and it honors the adoption of the first official U.S. flag known as Stars and Stripes, which originally featured 13 alternating red and white stripes and 13 white stars on a blue field to represent the original colonies. So just like other holidays for the United States, it might be a great idea to fly the flag on Monday in observation of Flag Day. 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 data, we've got three key economic releases for you this week, two on inflation and one on employment. Other than that, it was a pretty light week for economic releases. So first up we have the announcement from the Bureau of Labor Statistics on the Consumer Price Index known as CPI for the month of May. Not a surprise here, the numbers did increase a little bit above expectations for the all items came in at 4.2% year over year for the month of May. and that was above last month. When we take out food and energy, it was up 2.9% over the last 12 months. Again, up a little bit from the prior month. Not a surprise there that some of the drivers of that increase were energy prices and consideration of oil. In addition, the following day we also received the producer price index, which showed again significantly elevated data for the producer price index for final demand rose significantly in May, roughly the largest increase we had seen since November of 2022. If we take that in terms of the overall annual rate, we look at the largest advance for the 12 months ended in May, moved up 5.1%, the largest 12 month increase since October of 2022. So again, a lot of inflation data continuing to show elevated numbers as a result of oil increases and other derivative factors. And we will continue to take this into consideration for what this means for the economy and the Federal Reserve. And 3rd or finally, just yesterday as well, the weekly initial unemployment claims report came out for the week ending June 6th, and it came in at 229,000 for the week, which was mildly above the week prior, but again continues to remain stable for mostly the last 2 1/2 years in this arena. So ultimately we take into consideration some small bit of inflation data plus some jobs data as we look forward to the Federal Open Market Committee meeting next week, which will be the first for Kevin Warsh as the new chair. In other news, we have more news on what's going on in Iran with some back and forth with Iran and the United States on a military action as well as something close to a memorandum of understanding. We'll talk to George about that. And today, Friday, June 12th, is the launch of SpaceX IPO. We'll get Steve's take on that as well as a general conversation with Rajiv on what's happening in the bond markets. So, George, let's turn to you first to get your quick update on what's happening in Iran as well as what's happening in the economy relative to inflation that we just discussed. George.

George Mateyo [00:04:52]

So, Brian, there's lots of process this week with respect to the situation in Iran, and I think to some extent not too much has changed, although it does need noting, I guess, that we kind of started this week with a likelihood or a possibility anyway of some re-escalation, if you remember where we were just four or five days ago or so now, Monday or so, late Sunday night last week, there was some thought that maybe we'd probably see bombs going off again and missiles being dropped and maybe the risk of a broader conflict as well. But in the past few days or so, there's been a lot of rhetoric and maybe this somewhat nullifies the concept of a ceasefire. One could debate that, I guess, in many ways. But as of Lately yesterday, on Thursday afternoon, it seemed to suggest the president had struck a deal. He talked about this memo of understanding that suggests that maybe the two parties have come together. Incidentally, the Iranians have not responded. And furthermore, I think the Israelis have kind of backed away from that too, in the sense that they said they were somewhat surprised by the president's comment that things were pretty much all wrapped up, I think was the quote. So I think it's fair to say that there's still a lot of uncertainty with the situation. I think it's fair to say that we probably are getting closer to some type of thaw. While this is kind of the ultimate end of the conflict, I think it's far to be seen. But I think it's also fair to say that neither party want to see a real protracted conflict. In other words, when we start to see tensions a little bit, they're very quickly brought down again. So maybe it's the theory of re-escalating to de-escalate. And that probably provides maybe Some context for how we might think about going forward is since there's kind of an on again, off again debate about this. And I think the bigger question, of course, is really the downstream economic impact from this that will probably take many weeks, if not months, to really sort through, even if there is a final resolution reached. So while we can all play geopolitical strategist in our spare time and think about what this might mean, I think for most portfolios, it does suggest that there's probably getting some volatility, we saw this, of course, this week. in the sense that the markets were a little bit soft beginning of this week, and then they rallied pretty strongly in the back half of the week once they thought the markets kind of responded to some thoughts that maybe we would see some relaxing of tensions. The bigger question, I guess, as I think about those, we think about once we get through this noise, of course, has to do with inflation. And some of the numbers out this week as we've been arguing now for quite some time, will remain a bit sticky. The overall, I think, producer price index, which looks at corporation inflation trends and so forth, that was a pretty hot report in the sense that we saw a pretty big jump across the board in terms of where we saw inflation in the energy sector. But beyond that, energy, of course, is the big item. But certainly, we're starting to see price pressures from the continued build out of AI. Capital spending, of course, is really a big part of that. And that was also quite elevated in many factors as well. I think it's also fair to say that things like airlines and some foreign demand from airlines especially was kind of called out in terms of inflation. Maybe that's the World Cup or other things, it's hard to say, but of course, there's also food inflation. We've seen tariffs now can be kind of applied as well. So altogether, I think inflation is still the issue that markets have to contend with. And as far as we see, it doesn't seem like it's coming down rapidly. So the thing that is kind of interesting is at the same time that we have a new Fed share, we have a new maybe Fed regime. The Fed incoming Fed share is probably on that keen on tightening rates and taking them up. But at the same time, I think at some point he has to address inflation. So we'll have to see how that plays out. Rajiv, maybe I'll get your thoughts on that in the sense that of course next week is an important week in the sense that it's Kevin Warsh's first meeting as chair. So how do you think about all this? What do you think the Fed might be thinking as well? And what do you think it means for the bond market, broadly speaking?

Rajeev Sharma [00:08:55]

No, George, it's very interesting. Maybe Kevin Warsh's first meeting. I think all eyes will be on that. The latest CPI and PPI reports that you pointed to, they really do push the Fed further away from any rate cutting bias. It keeps the Fed in more of a hawkish bias mode. Headline inflation is almost entirely being driven by the spike in energy prices and the Fed has to keep all that in mind and its inflation target in mind as well. So the Fed can't ignore the CPI and PPI reports. Core CPI is still somewhat close to the Fed's target. But the PPI jump is then, that's the number the Fed will be more concerned about amongst two reports because that's going to put a lot of pressure on consumer inflation later, which will impact the PCE report. And that PCE report is the one that the Fed is most sensitive to when making monetary decisions. PCE at 3.8% currently is still far above the Fed's target. And you mentioned PPI. I mean, that was the fastest move we've seen since 2022. These kind of moves forced the Fed to stay restrictive, and I think that makes Kevin Warsh's debut even more complicated. I think if you step back and think about overall monetary policy, you have Kevin Warsh and the Fed has to look at the latest inflation reports. These point to the fact that the Fed is not going to be cutting rates anytime soon. The Fed is also not likely to hike rates at next week's FOMC meeting. So these reports kind of give the Fed and Kevin Warsh some cover that they need to pause at next week's Fed meeting. And the Fed would need multiple months of data to assess before making really any decision on which direction they want to go. The markets, meanwhile, they should continue to expect rates to stay higher for longer. That keeps pressure on treasury yields and will keep them elevated, particularly in the front end, which is most sensitive to monetary policy. My anticipation of next week's FOMC meeting, yes, Kevin Warsh will be there. I anticipate him to have a press conference. We will get the summary of economic projections. We will get the latest dot plot. It's going to be very interesting to go through that data, even if. If the Fed is going to pause next week, which is expected, I think those pieces of information are being very important for the market. The dot plot is going to show us how many Fed members are dissenting right now, how many think that we should raise rates, how many Fed members think we should go status quo. That's going to be really important because if you think about what Kevin Warsh's future is going to be and what his inclination is going to be as far as monetary policy, he's going to need to build consensus in the Fed. You’re going to need voting Fed governors that are going to be on his side, whatever direction he starts to lean towards. And I do think, obviously, the Fed is going to pause next week. But what investors should really look out for when they see the meeting or when they hear from the meeting next week is the language of the Fed statement on the 17th of June when that report, when that statement is released. You should expect to see more hawkish language. You should expect to see a gradual shift in the language from an easing bias to a tightening bias. Investors should really look at the statement and start to see some pushback against the expectations of rate cuts and what the Fed is anticipating about energy prices and its impact on inflation. All these little pieces of evidence that we'll see in the statement, the press conference, the summary of economic projections are all extremely important. They will be market movers. Right now, the market does not expect the Fed to make any real moves at next week's meeting. The market does not expect the Fed to really do anything at the July and September meeting either right now. But the market is still putting close to 80% odds that we will have a rate hike by the end of the year. Now, if we look across the pond, the latest ECB action was very clear. It was a hawkish pivot. The ECB, the European Central Bank, they delivered their first rate hike since 2023 and they lifted all three key policy rates by 25 basis points. And their statement was very clear. It was all about energy driven inflation. So the move really makes the ECB the first major central bank to resume tightening in response to the energy price surge that we've seen from the war in the Middle East. So I think these things are very important. I mean, if you take another step and change Change tracks a little bit and look at credit spreads. It was a very interesting week on credit spreads. We saw absolutely nothing. Spread stayed exactly where they started the week out. There was no real big moves in credit spreads for both investment grade and high yield. In a way, that's a very good thing because it shows that that's a very healthy market. The corporate bond market's very healthy. Deals are getting done. Investor appetite is still there. You still want to keep an eye on some kind of investor complacency. But I really do think it's important for the credit markets to continue to be well-functioning, liquid that does help other risk assets as well.

Brian Pietrangelo [00:13:46]

Hey, Rajeev, if you think about the Fed, a couple other comments for our listeners as we'll be off next week. is that the dot plot no longer includes Stephen Myron all the way at the bottom. And it'll also be a new dot with Jay Powell, so to speak, in a different chair seat because he's no longer the chair. He's just a Fed governor. And also we talked about last week's strong employment report, which for the dual mandate puts even more pressure on a possible rate increase. Any color there?

Rajeev Sharma [00:14:12]

Yes, I do think the dot plot is going to be extremely important. You don't have Stephen Myron anymore who's really calling for rate cuts. He was the loudest voice that was calling for rate cuts. you're gonna start seeing a gradual shift towards at least being more neutral and more neutral in monetary policy. You'll start seeing some voices that are saying that we should have a rate hike by the end of the year because of inflation being so stubborn and moving in the wrong direction. We're not seeing any disinflationary trends. So that's gonna be an interesting piece of information. And again, as I mentioned, to build consensus at the Fed, that dot plot's gonna be very important. It'll show you exactly How many members are on the side of being hawkish? How many are dovish? The dovish voices have definitely gone away with Steve Meyer leaving. In fact, we even had Christopher Waller come out and say that he's also pointing towards we should be more neutral in our bias. So I think it's pretty very important.

Brian Pietrangelo [00:15:06]

So Steve, let's turn to you on the equity market in terms of some pretty interesting volatility this week a little bit and then the overall arching day today for the launch of SpaceX IPO.

Steve Hoedt [00:15:18]

Yeah, it was an interesting week. we pulled back and we bottomed earlier this week, right around the 50 day moving average. And we had talked before how with the market having basically been on a one way St. for the last three months, that we wouldn't be surprised to see a pullback. And it was good to see the decline stop in a shallow place at the 50 day. We turn around and we're bouncing right now. We did see volatility pick up, but what was really interesting to me was, for all the talk about the volatility explosion last Friday, we went back to, guess what, the long term. averages. 19 1/2 is the long-term average. We got as high as 22 during this explosion of volatility. And right now, today, we're at 1903. So we're sitting slightly below the long-term average for volatility. So I think people have gotten used to this idea that volatility is supposed to be low. And the truth of the matter is that what you see right now is really average. What really struck me this week about overall equity markets was that as we sit here this morning, we have the equal weight S&P 500 moving to a new all time high. So we're seeing equal weight outperform the broad market cap weighted index For I think it's one of the one of the first times in quite a long, quite a long while. I know George has talked about the broadening out and seeing things change here as we've seen the mag 7 we talked about on our national call earlier this week. It has been kind of a laggard since last October. That looks like it's continuing here. And you know, when you think about Mag seven weakness, it's a good segue to talk about SpaceX. You know, SpaceX priced its IPO last night at $135. Looks like it's going to open at some point today. Might be three o'clock this afternoon, might be noon, could be anytime between now and then, which is normal, by the way, for our listeners to have these big IPOs be delayed in opening on their first day of trading. looks like it could open north of $170, which would be great for those folks who managed to get shares. My understanding was there weren't too many people other than large sovereign wealth funds and a few large global funds that got shares. I think you're going to see people raising cash by selling stuff that is similar or has a similar exposure profile in order to put capital into that name. if people want to do so, which means likely you'll see some selling pressure on Mag 7, probably see selling pressure likely on Tesla, which is, you know, obviously you've got the Elon Musk true believer crew who is in Tesla, if they want to sell some of that to buy SpaceX, that will be happening too. So I think that what we see here is this idea that broader market exposure is probably the way to go right now and not be focused so much on these mega cap names that you're going to hear lots and lots about in the financial media over the coming few days.

Brian Pietrangelo [00:19:02]

Thank you, Steve. Appreciate the update. George, any closing remarks for our listeners today?

George Mateyo [00:19:07]

Well, as always, Brian, there's probably a lot we could summarize. Again, the way we kind of see things playing out is what Steve just said. is that the market continues to broaden out. And that actually is maybe a theme that we've talked about now for over a year. And it's good to see that finally coming to fruition to some extent because it's something we have been concerned about. We have been concerned about this rising level of concentration, meaning when you have a broad market narrative, and this is not to say we're bearish on AI or artificial intelligence as a theme, but when you have this one dominant theme that really takes hold of the overall investment landscape, It's important to understand that when that narrative does shift for whatever reason, as Steve pointed out, maybe it's a new company coming public and it really takes a lot of the energy from other parts of the market. Maybe it's the thing itself becomes a little bit tired and maybe it becomes somewhat old, if you will, and stale. It is important to stay diversified. And that's, again, something we've talked about a little bit, frankly a lot. It's a cliche to even talk about diversification, but it's one thing I think that up until the last year or so, it really was a little bit underappreciated. And I think now we're starting to see the benefits of really maintaining that focus on and staying diversified and also really kind of sticking to your knitting, right? I think there's probably an argument that some people are chasing performance a little bit in these markets. And I think to some extent that usually turns out to be a fool's errand in the long run. So staying diversified, staying disciplined, I think is going to be really important in these market environments. But overall, as we talked about, it's still staying invested, right? That doesn't mean to abandon your overall strategy because as Steve pointed out, and as Rajeev mentioned too, there's still a fair amount of tailwinds behind the economy and those things can really support earnings, which I'm sorry, which can in turn support stock prices. So that's how I would summarize where we are right now.

Brian Pietrangelo [00:20:54]

Well, thanks for the conversation today, George, Steve, and Rajiv. We appreciate your insights. And before we close the podcast, a quick program note, we'll be off next week on June 19th in observation of the holiday known as Juneteenth. So thanks to our listeners for joining us today and 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 in two weeks to see how the world and the markets have changed and provide those keys to help you navigate your financial journey.

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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, June 5th, 2026. I'm Brian Pietrangelo, and welcome to the podcast. As you might be able to tell by my voice, allergy season is in full swing as I am experiencing a little bit of an allergy relative to cottonwood trees. At the same time, it is exciting because we know that summer is approaching very, very quickly in the next two weeks. Also on a fun fact basis, today is National Donut Day. So those of you that are fans of donuts, be sure to have one at your favorite establishment. Mine happens to be chocolate frosted. 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, and maybe even their favorite donut. 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 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 have 4 economic releases to share with you today, beginning with some production-oriented information, and then we'll cover it on the employment side. So first up, according to the Institute for Supply Management, the manufacturing index came in an expansionary category for 54 as they're reading up from April. So May pretty constant at 54, and this was the 5th consecutive month of expansion. Now this continues to be good news. That is the highest reading since May of 2022 and if you recall us from previous podcasts over the years, the manufacturing side of the economy had been in contraction for almost five years. So having 2026 show 5 consecutive months in terms of manufacturing is pretty good. On the services side of the economy again came in at 54.5 which was the 23rd consecutive month of overall expansion and this continues The roughly again five-year run on this side of the economy where services has been expanding for that considerable amount of time. And second, we have Wednesday's report which came out known as the Beige Book, which is the Federal Reserve's report for activity across the 12 districts in advance of the upcoming Federal Reserve's Federal Open Market Committee meeting on June 16th and June 17th. The report showed that economic activity increased at a slight to moderate pace for 10 out of the 12 federal districts while one district reported a slight decline and one reported no change. Now what's interesting to me is the last few months that we've been reporting this information it seemed to be like a 50-50 split and now it's getting a little bit better to 10 out of 12 districts showing increased or slight to moderate pace of economic activity. On the consumer side, there is evidence that higher-income households remain resilient and less sensitive to the price inflation increases, while middle-income households and lower-income consumers showed greater financial strain. Some of that financial strain shows itself in increased use of credit cards as well as fewer retail visits and stronger demand for necessities. And third, earlier in the week we got the JOLTS report from the Bureau of Labor Statistics, which is the Job Openings and Labor Turnover Survey report, which showed for April the job openings part of that report came in at 7.6 million job openings from employers, which was up from the prior month's 6.9 million. And finally, or 4th, the report that came out just this morning at 8:30 (AM EST) was probably the bigger news item for the week and that is the employment situation where we get new non-farm payrolls and the unemployment rate. For the month of May, there were 172,000 new non-farm payrolls created in the United States and the overall unemployment rate remained unchanged from the prior month at 4.3%. So the 172,000 new jobs was a greater number than expectations. And in addition, if you look back, the revisions for the months of March and April were revised up in a positive way with 93,000 more jobs than originally expected in the original release. Now this is one of the few times that I can remember that the revisions have been staggeringly positive. On most occasions there's a little bit of negative revision. So all in all, 172,000 new jobs for the month of May in the preliminary estimate, plus revisions on the positive side, showcase a pretty strong report here on the employment picture for the month of May. So let's get right to Steve for our opening conversation where we'll get a little bit of a recap on this week's news on Iran and what's going on with oil and then dive a little bit deeper into what's going on with the markets. So Steve, what are your thoughts?

Steve Hoedt [00:05:16]

Well, Brian, it's been another week where the markets have largely ignored what's been going on in the Middle East. And there have been some interesting developments. When you look at the number of cargo ships that have crossed through the Strait of Hormuz. Do you have any idea what the number was this week?

Brian Pietrangelo [00:05:40]

I don't know, like 10.

Steve Hoedt [00:05:42]

Actually, yeah, it's like 10. It's like 2 boats per day, right? So effectively, we're at the same level of crossings that we were on March 15th in the middle of this situation over there. So really there's been no fundamental change in terms of the impact on global markets from all the machinations that have been going on behind the scenes between the administration here in the US and the regime in Iran. So there's been some news this morning that there were some warning shots fired at some US destroyers. The CENTCOM is saying that no, there weren't shots fired. So who knows exactly what's going on over there. I think that the real thing for the markets is to focus on when and if are there going to be some more oil and gas getting to market. And right now it seems still not. I think that where we'll start to see this is when we get deeper in the summer and we get closer to what commodity market observers call the bottom of the barrels. So essentially the world has been drawing on inventory levels over the last two to 2 1/2 months in order to smooth out the disruptions that have come from shipments from the Middle East. And we're getting to levels where operationally speaking, it could start to cause some stockouts in various global energy supply chains. So that'll be interesting to watch as we move through the summer. Are we really going to get to those levels? And then what's going to happen when we do? I think that could impact economic activity, obviously, if we start to see things like diesel fuel or jet fuel get so tight that you have to start to see flight cancellations or you see other types of traffic get rerouted, things like that. So it's going to be very important to pay attention to, but largely the market has chosen to ignore this. And from an equity markets perspective, the market basically believes that this was over the day that the ceasefire was declared.

Brian Pietrangelo [00:07:58]

Great updates, Steve. Thanks for bringing our listeners up to speed on that. And let's pivot back to some activity that happened during the market this week.

Steve Hoedt [00:08:05]

Yeah, so the markets had a couple different things going on. So we've started to see the first kind of cracks in some of the AI trade here in the last couple of days. So And I'll mention a couple of stocks, one of them domestically, one of them internationally. So yesterday, Broadcom had reported earnings the night before and had mentioned that their guidance for 2027 was going to stay the same. They're the largest maker of custom silicon for the AI trade. So it made people kind of go, and you saw their stock sell off. But not only that, it kind of impacted the whole broader ecosystem for AI. And you saw a very, very large rotation. In fact, one of the largest performance differentials in the last 15 years in daily trading between technology and financials. So you saw a huge rotation between those two areas in the last day. And then overnight last night, we saw SK Hynix, which is one of the largest makers of memory in South Korea, one of these companies that's been driving this incredible performance in the Korean Kospi index for our listeners. They're down 10% in trading today, talking about similar, there are some similar issues with them. So, you know, here's like the first two kind of things that we've seen over the last few months that are making people, at least from an investment perspective, start to question the legs underneath this AI thing. And then on top of that, we've got the largest IPO in the history of planet Earth coming next week with Space Act. And you've got market participants trying to prepare to figure out how to handle that.

Brian Pietrangelo [00:10:05]

Steve, we began talking about it two weeks ago, and we're going to talk about it today and then next week when they actually launch, pun intended. And so has there been any update on pricing or what the overall look is?

Steve Hoedt [00:10:17]

So we did get pricing indications. They're looking to price the deal at $135 a share. So kind of, we had ballparked the range at 125 to 150. So they narrowed that down. And so we were in the range. So they're going to price it at a $1.77 trillion market cap. They're going to raise about $75 billion in the offering. And all indications are that it's going to be oversubscribed. So we'll see how this goes next week. Talking with some strategists that I value on Wall Street, it sounds like the source of funds for this is going to come from two different places. One, a lot of managers have been letting cash inflows build up here on a very near-term basis. So, just from a market plumbing perspective, when investors put capital into a fund structure, the fund manager would typically put that capital to work on the day that they get it. Now what we've seen over the last few weeks is instead of putting that money to work immediately, the fund managers have been letting it build up in cash so that they'll have cash in reserve to be able to go in and put a position on. That's much less disruptive. from a market perspective than if they had to sell something to buy something. The other thing that we do think is likely to happen, though, is that as we get these mega cap IPOs, and I'm not just focusing on SpaceX next week, but we've got two more likely over the course of the summer with OpenAI and Anthropic also in the pipeline here. And those are the two largest AI vendors in terms of a product, I would I think that you're going to see some rotation out of some of the MEGs, Devon, mega cap tech names in order to fund this. That to us is really the likely the likeliest market impact that we're going to see where that can cause problems for the S&P 500 is that 40% of the market is still tied up in these mega cap names. So any rotation out of it selling pressure at all will cause problems for the headline index for the S&P 500. So don't be shocked if it's difficult for the S&P 500 to make headway over the next two or three months as we move through the typical summer doldrums period as we see these IPOs come out and we see some capital rotate.

Brian Pietrangelo [00:12:53]

And Steve, maybe it'd be helpful for our listeners if you could talk a little bit about how a stock like this post IPO gets included in an index.

Steve Hoedt [00:13:02]

Sure. So it's been really… The rules are changing, let's put it that way. So the index providers, whether it's NASDAQ, Russell or S&P, all have sets of rules on how things get included. And they include things like seasoning, meaning how long it's been public, liquidity, how much of the float is actually available to trade, and then, oh, wait, profitability for some of them. Russell and the NASDAQ have both changed their rules or waived rules to make it so that there's a fast track for inclusion for these large mega cap IPOs. The S&P announced in the last couple of days that they are not going to change their rules. The S&P ones have a profitability focus in them. And basically, if you're not profitable for the four quarters prior to inclusion, you're not going to be included. So that's going to keep these stocks on the outside of the S&P 500, but they will likely be included in the Russell 1000 index. And for sure, they're going to get included in the NASDAQ 100. So there's not as much in terms of ETF flows tied to the NASDAQ 100, just the triple Qs, which people which people trade. It's much more of a trading vehicle than it is an investment capital vehicle. Russell, though, is a different story. There are a lot of managers in the large cap land who are tied to the Russell 1000. And so there will have to be some buying pressure there. But I have to say, I'm very happy they didn't include it in the S&P 500 and changed the 500 rules to me that the elimination of the profitability constraint on inclusion in the 500 would have been a bridge too far.

Brian Pietrangelo [00:14:56]

Steve, two final questions for you. We've talked about a lot in the past, but it's quieted down a bit this year recently, but what are the trends you're seeing in gold? And then we'll finish with your favorite donut. I don't think you're a donut person, Steve, but what is it?

Steve Hoedt [00:15:10]

Well, my favorite donut would be Timbits, but we're not going to talk about that. And that's for Tim Horton's, for those of you who don't know. But I would tell you that From a gold markets perspective, we've continued to see backing and filling here. And honestly, it wouldn't surprise us a bit if we were to see this backing and filling push us all the way down toward 4,000 as we head through the summer. Things have really come off the boil there. It's not something that we see a lot of inbound questions on anymore. Six months ago, everybody was gold, gold, gold. And now it's now nobody cares about gold. Now everybody's talking about SpaceX. There's probably a clue for market participants there or our listeners to think maybe if nobody cares about gold and everybody cares about SpaceX, I should be buying gold and I shouldn't be buying SpaceX. But I think that that's one of those things where we think that gold has a pretty good long-term outlook over a multi-year period from here. But we got really cooked off to the upside on that parabolic move earlier this year that we talked about. Parabolas don't always end well. This one has now moved sideways to down. That's long-term a positive thing, but I wouldn't be surprised at all to see 4,000 by the end of the summer. Great.

Brian Pietrangelo [00:16:33]

Thank you, Steve, for that fantastic update. And we'll start with Rajeev and come right out of the gate with your favorite donut, and then we'll move to things like Federal Reserve policy.

Rajeev Sharma [00:16:42]

Oh, the donut question is probably easier. I do think that my favorite probably be a coconut crunch. donut that goes very well, pairs very well with English breakfast tea. So that's probably what I would go with.

Brian Pietrangelo [00:16:53]

Outstanding!

Rajeev Sharma [00:16:54]

But if we talk about the markets, you know, we got those job growth numbers. They topped all the forecast in May, seeing the strongest three month advance that we've seen in more than two years. You have a labor market that is firming up that boosts the bets now that the Fed will consider a rate hike this year to contain inflation. So the Fed will start really squarely focusing on inflation. We see the immediate impact on the yield curve with Treasury selling off. The two-year was up about nine basis points right on the jobs report. We have a yield there on the two-year around 4.13%. If you look at interest rate swaps, traders are now fully pricing in one rate hike by the end of the year. So with labor markets not really a concern, again, the Fed is going to be focused on inflation, and so that puts the traders to start pricing in about 24 basis points of hikes by October and 41 basis points of hikes by the end of April next year. A week ago, we saw the markets pricing in about 25 basis points by March of next year. So things have changed pretty quick. Now you also have Kevin Warsh, the new Fed chair. He's gonna be coming in, having his first policy meeting on June 17th. No one really expects the Fed to do anything at that meeting, but you could see a signal from the Fed that More officials are leaning towards a rate hike. That being said, most investors expect Kevin Warsh to sound pretty neutralized first press conference. There really is no urgency for the Fed to do anything at this Fed meeting, but we will see some of economic projections. It'd be very interesting to see how many dissents we have with the policy statement that comes out that day. And if you keep all this in mind, you have treasuries moving through breakout levels right now. You have yields on the 10-year, they've moved to 4.5%. That's the midpoint of where we were in May. You have no buyers really coming in and stepping in right now. So we could see higher yields ahead. You could see some pressure to keep yields higher where we are right now. And the other part of the fixed income market that I focus on is the credit spreads. We did see some modest widening this week. Investment grade spreads were wider by about a basis point. Yield is wider by about two basis points. So really nothing terrible happening in the credit markets right now. We still remain at multi-decade tights, and the new issue calendar is doing very little to dent that picture. And we've seen a lot of new issuance in investment grade, and these new issues are getting placed. They're doing well. There just continues to be inflows into the investment grade market. And with those inflows, you're going to see, again, investors looking for those high quality names at very decent yields right now. So junk bond spreads, we're at near historic tights. Leveraged loans have climbed above pre-Iran war levels. This is important because it shows the market sentiment. And credit markets have remained resilient during the Fed's last tightening cycle. The biggest risk I see right now for investors in the credit markets would be some kind of stagflation that might happen. But if you look at where spreads are, I don't think that fear is really there yet. And I really do think that as long as the new deals do well, as long as there's liquidity in the credit markets, I think that, you know, investors continue to pour in to try to find those higher yields that they've not seen for a while. And you're again talking about blue chip companies that are giving you a close to 5% yield. It's very hard for investors to not get excited about that.

Brian Pietrangelo [00:20:19]

Yeah, Steve, sorry, Rajeev, when we're talking about the Fed, next week we'll get CPI report, then we have the Fed meeting, and then after the Fed meeting, we'll get PCE report in terms of inflation. It's very hard to think about a scenario in which they could cut rates. What do you think would have to happen? Iran war would get wrapped up, oil would come down, then maybe the trimmed mean version of inflation instead of the normal version of inflation. What are your thoughts on what would have to occur?

Rajeev Sharma [00:20:46]

Yeah, it's a very good question, Brian. And I really do think that a lot of those factors that you mentioned would have to happen. But again, even if the Iran war ends, The impact that's going to already have on inflation, I think that's still going to keep rates higher, kind of keep rates around where they are right now. Again, I don't see the Fed having a lot of catalyst to start cutting rates. Big, big change in market expectations from the start of the year where many investors are thinking five to six rate cuts this year. That didn't happen. I can't imagine the picture getting so great that the Fed starts thinking about cutting rates again. At most, you could just see higher for longer.

Brian Pietrangelo [00:21:25]

Final question for you, Rajeev, is that there's private credit in the news again, but it doesn't seem to be affecting the public credit in terms of the credit spreads that you just mentioned. Do you see any carryover or any nervousness in the public markets?

Rajeev Sharma [00:21:39]

You know, the biggest nervousness that I think that's there right now, I mean, you're absolutely right, private credit was a big story a couple of months ago. You did see spreads start to gap out a little bit in the public markets. Right now, I think the biggest fear in the public markets right now is no longer really private credit at this point. I think it's more about complacency in the market. If you're seeing spreads at these multi-decade tights. Is the market missing something? And I think some investors are starting to really pick and choose where they want to be in the markets right now. Do you really want to go down the credit spectrum to pick up a few basis points of yield? I don't think you do. High yield has obviously been more impacted by private credit and some of the woes that we saw in private credit. But I do still see that high yield has outperformed investment grade all year. And I think a lot of that has to do with the shorter duration of high yield. I think that's helped the high yield markets. The lack of new issuance in the public markets for high yield has also helped high yield markets. But where we sit, I really don't think it makes a lot of sense at these levels to really start playing with those lower quality names because private credit obviously has a way of poking its head up again. And there are still jitters out there in the market about private credit. So I really do think that right now the market's focused on trying to be the upping quality trade.

Brian Pietrangelo [00:23:02]

Well thank you for the conversation today, Steve and Rajeev. We appreciate your perspectives. And before we close the podcast, our final reminder for our upcoming National Client Call on June 9th, Tuesday next week at 1 P.m. Eastern and 10 A.m. Pacific, we will be going over our mid-year economic and market outlook from the Chief Investment Office covering geopolitics, artificial intelligence, inflation and interest rate, and the equity markets and the consumer. So if you haven't received an invitation, please reach out to your relationship manager, see if you can get that invite, and be happy to have you join us. Again, national call Tuesday, June 9th at 1 P.m. Eastern, 10 A.m. Pacific. So as always, thanks to our listeners for joining us today and be sure to subscribe to the Key Wealth Matters podcast through your favorite podcast app. And we consistently remind folks that 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 [00:24:18]

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.

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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, May 29th, 2026. I'm Brian Peterangelo, and welcome to the podcast. So thanks to our audience for rejoining us. If you're an avid listener, you know that we were off last Friday in observance of the Memorial Day and Memorial Day weekend. So again, it is our honor to take a moment of silence as we remember all of those that gave the ultimate sacrifice, all the men and women in the military over all of those years that really helped us be the United States of America and what we are today by giving their lives. In addition, we would like to also honor the families of the fallen as it is a significant travesty for those families as they get through those difficult times and it's our opportunity to help support them. Thank you for joining us in that moment of silence. Now as we transition to some lighter topics for the past week, we've got the Indy 500 race was held. We've got the NBA playoffs and the NHL playoffs in full swing, getting closer to the championship series. And then also today, interestingly enough in the financial world, May 29th is 529 by the month and the date, and it marks the 529 day, which is section 529 of the Internal Revenue Code, which allows for pre-tax and tax-free savings into college and high school educational opportunities. And I recall back earlier in my career in the late 1990s, almost 30 years ago, I recall when the 529 Act first came out and it's been a tremendous savings tool that is ability for parents and also grandparents and also other individuals to help those save for college education. With that, I would like to introduce our panel of investing experts today 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 actually have two weeks to cover because we were off last week in observance of Memorial Day. So we'll cover both weeks for you in three quick hitters. Three from last week and three from this week. And starting with last week, first up we received the Federal Open Market Committee meeting minutes from the April 29th meeting, which again had a significant discussion around removing the easing bias in Federal Reserve policy due to the inflation in the system as a result of the Iran war. Now this may or may not be a step towards raising interest rates, which became a possibility due to this persistent inflation, but it's not yet meaning that interest rates will go up. It just means the policy is decided to be removed and it was debated. And second, the University of Michigan Consumer Sentiment Survey shows that sentiment continues to decline and the main culprit in that is rising inflation and oil prices and prices at the gas pump. And third, on Friday, May 22nd, Kevin Warsh took the official oath to become the new federal chair of the Federal Open Market Committee and the Federal Reserve, replacing Jay Powell, whose term expired in May. Now, the interesting part about that is that Jay Powell will continue on as a governor for an undetermined period of time, but Kevin Warsh is in the Fed chair seat. So welcome, Kevin, to the Federal Reserve. Now, moving to this week, we've got 3 updates for you, including first, the initial unemployment claims for the week ending May 23rd were 215,000, which remains extraordinarily stable for the last 2 to 2 1/2 years. Next up, we have the second estimate for real GDP in the United States for the first quarter of 2026. Now the second estimate came in at an annual rate of 1.6% for the quarter, which was a revision downward. The original estimate was 2%. So the 0.4% haircut came into consideration due to the fact that it reflected downward revisions to investment and consumer spending. And third, also yesterday from the Bureau of Economic Analysis, we received the Personal Consumptions Expenditures measure of inflation, also known as PCE inflation, for the month of April. Now month over month there was a 0.4% increase which was quite high and excluding food and energy it was only 0.2%. Obviously this includes the Iran war implications for the price of oil and overall inflation as a result of it increasing in the month of April. On A year-over-year basis, those numbers equate to 3.8% for April and 3.3% excluding food and energy for April. So those numbers continue to be elevated above the Federal Reserve's target, which continues to be an ongoing conversation about inflation embedded in the economy. So now let's turn to George to get his thoughts and as Russ at the panel on their thoughts overall on what's happening in the markets and the economy. But first starting with George, an update on Iran. Based on some recent news wires, we seem to be closer to a peace deal, but not quite there yet. What are the implications of that? And then George, we'll get your thoughts on the economic data that we talked about. George?

George Mateyo [00:05:59]

As it relates to the Middle East, Brian, I think it is probably fair to say that things are calming down a little bit and maybe we're inching closer to a deal. The question remains, what is a deal? There's a lot of debate about that. I won't get into the politics of it, but I think from just the sake of what it means for investors and for people who follow the economy, I do think we're probably at a pretty important point in the sense that we've seen now the price of oil hover where it is. It's come down a little bit, obviously, and we've kind of seen that reflect at the gas stations. But I think we're at a point right now where the price of oil needs to come down a bit further because there are stresses that are starting to emerge as we've seen inventories drawn down. In other words, we've had a pretty good situation up until this point where inventories have been somewhat elevated. And coming into this conflict, they were more elevated than they were in past crises, which is good. And we've talked about the fact that the US specifically is left dependent upon foreign oil relative to past cycles. But I think it is a point right now where inventories are coming down. And if we don't address the situation in the Middle East and have the strait fully open, we can essentially see some of those stresses start to emerge. More specifically, if you look at things like consumer confidence, we've talked about this too. Consumer confidence is near all time lows. I think that's a reflection of what people are experiencing at the gas station and at the grocery stores. I think at the same time, you see more recently, consumer delinquencies start to rise a little bit. So credit card debt this week was reported actually have moved up a little bit, which again is somewhat cautionary. At the same time, the savings rate, the actual rate that people measure or maybe the overall stability and the strength of the consumer has turned down a little bit, meaning that the overall savings cushion that consumers have is less of a factor. On that side though, I wouldn't spend too much time worrying about that at face value, because to some extent, what the savings rate measures essentially is the overall rate of income relative to somebody's spending. And what it does not account for, or what's not included in that are things like savings accounts and 401k plans, You mentioned 529s, so other retirement vehicles are not including that. And of course, most people's stock portfolios are not including that. So we have, I think to some extent, a bit of a cushion, probably more so than we might think because the wealth effect has been so strong as the stock market continues to levitate higher. Now, that doesn't help everybody broadly. So I think some people are not going to be as well off because not everyone has a stock portfolio. But overall, the economy can look at this in an aggregate level and maybe take some comfort there. The other thing I think it's important to note that if things do get worse, maybe it can generate with the overall stock market, if we start to see some type of decline for whatever reason, the wealth effect is going to matter a lot more than maybe it did in the past too. So we have to treat that as a grain of salt to some extent. But I do think the overall picture based on where we are now is pretty okay. I wouldn't call it gangbusters. I wouldn't call it great. I think the overall strength economy is still somewhat barbelled and really driven by AI and other things as well. But for right now, it's okay, I would say, and it's not deterring in a major way, which I guess is a positive. Now, at the same time, Regime, of course, we know that the Fed is changing leadership and they're inheriting a pretty uncertain economy. I think there's also some uncertainty with respect to how long inflation might be. We've seen a couple of people maybe get ahead of the FOMC meeting next month and talk about their thoughts on interest rates, meaning that maybe that lower interest rates are no longer the base case. But how do you square this circle with respect to what the economy is doing and what the Fed might be thinking going forward, given some of the complexities we just talked about?

Rajeev Sharma [00:09:44]

Well, George, I really do think that we have to keep into account the GDP and inflation reports. They're really telling the Fed whether the economy is running too hot or too cold. If you get a stronger GDP and a higher inflation print, then you have a Fed that's going to be pushing towards at least keeping rates steady or maybe even hiking. A weak GDP and a cooling inflation gives the Fed some room to cut. The latest data that we're seeing is pushing the Fed to delay cuts. But not only that, it's also going to compel the Fed to maybe change their easing bias in their statement to one of a tightening one. We have a lot of Fed members that are coming out and giving the narrative that, first of all, there's no rush to cut rates. Second of all, there's actually possibly an opportunity to raise rates. Earlier in the week, we did see the odds of a rate hike reach around 72, 73%. We're around 55% right now. So it's really a coin toss right now what the Fed's gonna do by the end of the year. Obviously in June's meeting, I don't think anybody's thinking the Fed's going to be doing anything, but we will have a glimpse at what the Fed's thinking is. And I do think that the Fed's gonna mention that inflation has reaccelerated. They'll mention that GDP remains resilient, but the labor market has not cracked. So the Fed really doesn't really need to do anything right now. You have the PCE inflation report that came out this week. That's the Fed's preferred measure of inflation. It's at the highest that it's been in three years. That tells that the Fed has no reason to point towards any disinflationary trend. Without that, the Fed cannot cut rates. Consumer spending remains firm. Growth is not slowing down enough to justify cuts. Labor market is normalizing, but not breaking. So again, the pressure is off the Fed to cut rates right now, but I would say the pressure is on Kevin Warsh, who's taking over as Fed chair, to kind of create his own direction, create his own consensus. You're going to need consensus to do anything, and I really do think that there's not enough voices at the Fed right now that are pushing towards a rate cut. There are more voices that are pointing towards inflation being stubborn and sticky and the uncertainty about how long this war goes on and what the impact of inflation is on the economy, I think that's a big part. So I really do think that rates are likely to stay for the Fed's funds range around 3.5% to 3.75% for the rest of this year. I really don't think there's any incentive for the Fed to cut rates at all at this point. There's going to be growing consensus for Fed to maybe hike rates. And so right now, in the next 10 months, you're looking at least one rate hike. So this is a very, very different situation than where we started the year. Obviously, we've talked about in our outlook, we've talked about geopolitical risk being an X factor, and we got that X factor this year. So we're working with that, but I do want to point out that credit spreads, which is also a big part of the corporate bond market and big part of the fixed income markets, have been extremely resilient. We have blue chip companies offering over 5% in yield right now, which I think a lot of investors are excited about. And I really do think that that's going to continue. Even with the influx of new issue supply, that has not deterred investors from investing in corporate bonds, especially high quality corporate bonds. We do know that high yield has outperformed investor grade this year, but at the same time, I don't see any compelling reason to go down the credit spectrum and start buying risky assets if you can get over 5% in very high quality, great balance sheet, liquid, high quality names.

George Mateyo [00:13:36]

Well, I mentioned the wealth effect earlier, Steve, and I talked and maybe referenced vaguely the overall elevated stock market. And of course, it doesn't mean just because we've seen new all-time highs doesn't mean we can't see additional new all-time highs. But as you think about what we're experiencing in the stock market, how do you characterize things today? Are stock prices justified at these levels? Are you concerned about any signs of speculation? anything that you can think about as relates to investor behavior. I'm kind of curious to get your thoughts on that.

Steve Hoedt [00:14:08]

So, George, I think that there's a tale of two markets going on right now because if you look at the situation earlier this year and the situation today, it's very different. So, I would say that for the first three plus months plus the last couple months of last year, we had started to see a broadening out of the market. We'd started to see other sectors perform well. We'd seen industrial stocks and healthcare stocks and consumer staple stocks and other things like this performing better than the market and acting a bit as market leadership as we had some rotation away from the MAG7 and the tech themes. And then We had the sell off in March, which ended up being very shallow. And then off of that March low, the market has ripped to new all time highs and done so on the back of incredibly strong performance from technology in general, but a subset within technology in particular, namely things like memory and others. And when you look at that, We've seen industrials, materials, financials, healthcare, all the stuff that had been participating in the broadening out before has kind of moved into a laggard status now. So this market is incredibly narrow as we sit here on Friday at yet another all-time high for the market. And I think that there are signs for concern. I think you and I had talked recently about some of our flashback memories back to the 99 through 2001 period. And what's very different today is market structure. So like back then speculation would be reflected in people buying pets.com and yahoo.com and other things like this. and companies that didn't have any earnings and that kind of stuff. You could see it in the fact that those stocks were ripping. Today, you don't really see it in the stocks themselves. It's become evident in an esoteric corner of the options market called the zero days to expiration options market. The volumes of these zero DTE options have just exploded. So that's where the speculation has migrated. That's where the retail participation is today. And the retail investors are a bit more sophisticated that are playing these games than they were back then in the late 90s or early 2000s in that they figured out that that they can cause what's called a gamma chase with the dealers who are selling these options to them. In effect, what happens is the dealers need to hedge when they create an options contract and sell it to an investor, they need to hedge their exposure. And they do that by buying shares. And effectively what that does is it creates this upward pressure on these high flying stocks in, you know, when you look, I just get flashbacks about stocks going parabolic and parabolas never end well for stocks like parabolas don't, trees don't grow to the sky. That's the old maxim. And when you look at these parabolic moves, it does start to get me really concerned. Now, I can't tell you where they're going to stop. It could be another 50 or 100% from here. But the parabolic move will stop at some point, and it will be an ugly mess when it does. But I don't know when that's going to happen. So you look at earnings. Earnings have been moving up. I can't tell you they haven't been. The earnings expectations this year have been massively exceeded, again, driven largely by a lot of the tech earnings that we've had over the last month. So valuations don't look extended. We're actually a little bit cheaper on a forward multiple basis than we were in January and February this year. But I'm telling you, when you look at some of the speculative corners of the market, we are starting to see some behavior that gives us cause for concern.

Brian Pietrangelo [00:18:36]

So Steve, think about things going to the sky, as you mentioned, the upcoming conversation around SpaceX IPO. Why don't you give our listeners some thoughts on that this week and maybe we'll do the same thing next week.

Steve Hoedt [00:18:48]

Yeah, this is going to be front and center over the next couple of weeks. I mean, I was just talking with Kathy Hutkar, head trader, and she's just fielding questions left and right from people regarding this name. And look, I think that the deal is definitely going to go. It will have an unprecedented valuation when it goes there, probably north of $1.8 billion or in that ballpark, give or take. I got to tell you, trillion, trillion, trillion. Yeah, trillion, 1.8 trillion, not billion and billions, but trillions and trillions. When you look at the S1 that was filed this week, that was the real newsworthy event. I encourage all of our listeners to download a copy of it and read it. It's out there publicly available. To use George's word, there is some fanciful stuff in there. And I still look at the total addressable market that they are talking about in terms of the scope of what they think that they can achieve. And they're talking about a total addressable market for all of the services that they sell of over $30 trillion. And just those numbers are mind boggling. And that doesn't even discount some of the commentary in there about adding to the human consciousness and all this other kind of business, which to me is just it's a bit of a bridge too far. But look, at the end of the day, Mr. Musk has a lot of people who believe in his ability to that I see the future and be creative. And you can't argue with some of the past track record, but I'm telling you, like talking about Mars bases and things like this, I've never seen anything like it in terms of something coming into the public markets. So it's going to be an interesting 2 weeks.

Brian Pietrangelo [00:20:50]

Well, thank you for the conversation today. George, Steve, and Rajeev, we appreciate your insights. And before we close, we've got a reminder on our upcoming national client call being held in less than two weeks on June 9th, Tuesday, at 1 P.m. Eastern and 10 A.m. Pacific. It is our 2026 mid-year economic and market outlook from our Chief Investment Office. During the call, we will be covering geopolitics and global risk, artificial intelligence, inflation, interest rates, and the Fed, and certainly what's going on in the equity markets. So again, if you have received the invitation, please register and join us. If not, please reach out to a relationship manager or financial advisor for an invitation to the national client call. Again, June 9th, 1 P.m. Eastern and 10 A.m. Pacific. So thanks to our listeners for joining us today and 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 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 [00:22:08]

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

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, May 15th, 2026. I'm Brian Pietrangelo, and welcome to the podcast. We have a tremendous amount of content to share with you this morning, so thanks for joining us. We start off today by taking a moment to honor those in the police force and local law enforcement, as today is Peace Officers Memorial Day. Now, Peace Officers Memorial Day honors the federal, state, and local law enforcement officers who made the ultimate sacrifice. It is held annually during National Police Week, which is this week, and we certainly have an opportunity to take a pause and honor those that have died in service. So thank you for that quick moment of silence. And we also thank all of those that are out there in service on a daily basis, helping to serve and protect. Thank you so much. And on an exciting note, here in our own Cleveland, Ohio police force, we have an opportunity to congratulate all of those that were recently promoted, including Dan Day, promoted to lieutenant in the police force within Cleveland. Thanks so much and congratulations to all. And also on the celebration front, we are in the season of graduation. So congratulations to all the graduates at all levels, including, most specifically, also high school and college graduates as they transform from their academic seasons to another chapter in their lives, whether it's more school or on to the professional world. Either way, we do congratulate them and congrats to all the parents out there helping their kids along the way. 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. Rajeev Sharma, Head of Fixed Income, Michael Kehoe, Senior Lead Research Analyst, and John Simmons, Senior Research Analyst. 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 news, we've got three key economic releases to share with you, plus two other updates on what's happening around the world. First, earlier in the week, we have existing home sales, which increased 0.2% month over month in the month of April, and that was a little bit subdued as mortgage rates continue to remain elevated. As you might recall, Mortgage rates had actually dipped prior to the Iran conflict, and with the inflation component of what we've seen in the last two months, rates have gotten backed up again. So 30-year mortgage rates are above 6 and a little bit in that arena, which continue to be a little bit apprehensive. In addition, forecasts tell us that the spring selling season is likely to be soft. And second, probably the most important report of the week, we got the CPI Consumer Price Index measure of inflation and on a month-over-month basis for the month of April, all items were up 0.6% and core, excluding food and energy, up 0.4%. Now not much of a surprise that this is the second month that CPI inflation data was elevated due to the increase in oil and other pass-through entities from oil and the crisis in Iran. When you translate that to inflation year over year, it comes in for April at 3.8% for all items and 2.8% for core excluding food and energy, again, higher than the previous months. Again, this has implications for Federal Reserve policy. We'll check in with Rajeev on that component when we get to that part of the podcast. We also received the producer price index or PPI data for the month and it continued to increase as well, which is not a surprise. When you take both CPI and PPI numbers, it flows through to the PCE, or personal consumption expenditures measure of inflation, which we get at the end of the month, which is the Fed's preferred measure of inflation. So we'll see a little bit of an increase there, likely to be expected. And third, just yesterday we got the report for the advanced monthly retail sales, which for the month of April increased at a 0.5% clip. Now, looking under the hood, a lot of that has to do with price increases. And the advanced retail sales report is a nominal report. So, when prices get inflated, it increases the number. So, we tend to discount that. And looking at the number, a 0.5% increase, if you take out some of the inflationary pressures on the prices of gasoline, overall advanced retail sales for the month of April 2026 were effectively flat. Now that comes off the heels of two pretty decent months in March and February, so we will continue to monitor this and determine whether this is a trend where there's true consumer spending that is slowing, or there are fluctuations due to price increases, or if the slowing in consumer spending is due to higher price increases. We'll look at that on an overall basis in the next coming months. In addition, two other newsworthy items this week on Wednesday, we had Kevin Warsh, who was nominated and has now fully been confirmed by the Senate to be the next Federal Reserve chair. Now this coincides with Jay Powell's expiration as Fed chair today on May 15th, so there'll be a smooth transition to Kevin Warsh as the new federal chair. For the Open Market Committee, however, we have the news that we released a couple weeks ago that Jay Powell has decided to stay on as Fed Governor because his term at Fed Governor stays through 2028, and he doesn't know exactly how long he'll stay, but will continue to watch this as the makeup of the Federal Open Market Committee is now intact for the next upcoming meeting on June 17th. And finally, we've got the trip by President Trump over to China to meet with President Xi Jinping. And the conversation seems to be going well, but they're sticking to their topics of conversation. And we'll get more on that update when we have our deep dive today into the international markets with Mike and John. So stick with us as we've got a special segment in our podcast today, delving into the deep side of what's happening in the international markets, what's going on in performance, what are the trends that we're seeing. So we'll have a nice, robust conversation with both Mike and John on that topic. But first, let's turn to Rajeev to get his take on what the CPI and PPI inflation reports mean for the Fed. Also, more comments on Kevin Warsh and what's going on in the bond market this week. Rajeev?

Rajeev Sharma [00:06:58]

Well, Brian, we did have two back-to-back inflation reports this week. Both of them were hotter than expected readings, and that definitely impacted the bond markets and caused some shifts in rate cut expectations. CPI for April came in above expectations, and that reinforced the sentiment that inflation is stubborn, it's sticky, and it's well above the Fed's stated 2% target. You also had PPI, which rose 1.4% month over month, and that was also more than double consensus estimates. So with PPI rising faster than CPI, there is a signal on the market that potential pipeline price pressures are working their way to the consumer. How did the bond markets react to this? Not very well. Treasuries sold off sharply. We saw the 10-year treasury note yield hit their highest level since July of 2025. The 30-year also broke through at the 5% level. And there were no buyers in sight that were going to take advantage of 5%. I think 5% was a psychological point for the 30-year. And you'd expect buyers to step in at that point, but they just were not there. The implications for the Fed can be seen in market expectations, where rates traders are now starting to increase the odds of a rate hike over the coming year. This is a complete reversal of just where we were a few weeks ago when rate cut expectations were the consensus. And with that, the two-year treasury note yield, which is most sensitive to Fed policy, rose to 4.07%. And the 10-year currently is trading around 4.55%. So again, we've crossed through the 4.5% point on the 10-year. Again, buyers are not stepping in yet. Inflation remains the overwhelming risk to the economy. We did hear from Fed Governor Michael Barr this week, he pointed out that traders right now are pricing in about a two-thirds chance that the Fed will hike interest rates in December, with the full quarter-point hike now seen by March 2027. This is all becoming a very complicated backdrop for incoming Fed Chair Kevin Warsh, who was narrowly confirmed this week by the Senate to lead the U.S. Central Bank. The path is now pretty clear for Warsh to be sworn in, and outgoing Fed Chair Powell's term ends today. So Kevin Warsh was really chosen with the expectation that he would come in there and push for rate cuts, but the bond market is already pushing yields higher. This essentially tightens financial conditions before Kevin Warsh has taken any action. So the first thing that Kevin Warsh will have to deal with is this growing number of Fed voting members that are calling for the Fed to change its bias from an easing stance to more of a neutral stance. And that would allow the Fed to have a little more flexibility in where they take the Fed policy next. We did hear from Fed President John Williams. He spoke this week. He said that monetary policy is in a good place. He doesn't really see any reason to raise or lower rates right now. He also stated that supply chain pressures are building. That could sustain elevated goods inflation. So all of this is quite a backdrop for the bond market. I would have to also point out here, though, that credit spreads have been extremely well-behaved, even in this backdrop. Both investment-grade and high-yield spreads, they tighten modestly on the weak. That's a resilient sign that even in the backdrop of back-to-back hot inflation prints, rising treasury yields, transition at the Fed, credit spreads just continue to outperform, and there's a strong demand for these investor-grade bonds. In fact, we had 34 investment-grade issuers come to market this week. They raised over $50 billion. All of the deals are priced very well, which shows that investor demand for corporate bonds remains intact.

Brian Pietrangelo [00:10:42]

Hey, Rajeev, before we let you go, let's talk about the bump of Stephen Miran by Jay Powell staying on as Fed governor. And that maybe quashes a little bit of the dissents, but there still might be some. What do you think? I think it's a June 16th, 17th meeting is my reference.

Rajeev Sharma [00:10:56]

Yeah, I think it's a very good point. I mean, Steve Miran has been in there, been a strong advocate for rate cuts. I think his first vote, he voted for a jumbo rate cut of 50 basis points right off the bat. You're not going to have that voice now. And Jay Powell is going to stay on as a Fed governor. So it's going to be very interesting right now. I think that Powell has a lot of goodwill at the Fed. I think a lot of supporters at the Fed, if he's the voice of calm and we should not be doing any rate cuts right now. He's going to get some other Fed governors to side with him. And I think that makes Kevin Warsh's job a little more complicated to drum up the support that he needs for Fed rate costs. Great. Thanks, Rajeev.

Brian Pietrangelo [00:11:41]

Spot on as usual. Appreciate you having me this week. We're going to take a little bit of pause now and pivot. In that, we've got a deep dive conversation today on the international markets and what trends we are seeing in that area. So we're going to welcome two individuals from the Chief Investment Office Research Team into the call. We've got Michael Kehoe, Senior Lead Research Analyst, and John Simmons, Research Analyst within the department. And so welcome to both of you.

Michael Kehoe & John Simmons [00:12:08]

Thanks, Brian.

Brian Pietrangelo [00:12:10]

So John, let's start with you. Let's give our audience members some perspective. Let's start with the performance of what's been happening in international markets. If we go back to 2023 and 2024, the United States markets handily outperformed non-US markets. But then the pivot came. So in 2025, the non-US or otherwise known as international markets performed very well, up 31% versus the S&P that was only up 18%. What drove that outperformance?

John Simmons [00:12:38]

Yeah, Brian, great question. And thanks for having me on the podcast this week. So if we rewind a little bit back to the end of '24 and into early '25, the US was coming off another strong year of outperformance, but we really started to see some tides start to shift. After a long stretch of aggressive rate hikes post-COVID, broadly, the global central banks began moving towards easing. That's generally supportive for equities. And importantly, it helped broaden market leadership beyond very concentrated U.S. markets, particularly the Magnificent Seven, which really drove a lot of the returns in the prior years. Additionally, in early '25, if you can remember back, Germany announced a significant 500 billion euro fiscal package that focused on both infrastructure and defense spending. And this really signaled a real shift towards pro-growth policy that didn't really just impact Germany. It helped re-rate and ultimately bolster European equities more broadly. Specifically, an area to note here is European financials, which is a really large weight within the MSCI EFIE index, which is a standard industry kind of developed international index. That European financial segment really stood out with strong performance. Bank and insurers benefited from strong balance sheets, still somewhat elevated rates, which somewhat in margins, and improved growth expectations tied to ultimately fiscal spending. So there were strong country-level performance, and you saw that Japan as well with a weaker yen, accommodative policy, and improvements from a corporate governance perspective. But ultimately, wrapping all of this up, just the valuation piece was huge. And the starting point of valuations is so important. So really with the macro and policy backdrop improving, it didn't take much to trigger a significant rotation.

Brian Pietrangelo [00:14:52]

So let's move to 2026 year to date now. And basically the United States and the US versus international developed markets that you just mentioned, or about even at up 9% year to date, but emerging markets is up 23%. What's going on there?

John Simmons [00:15:09]

Yeah, and it's definitely been a very interesting start to 2026, to say the least. We've had plenty of volatility, whether it's the war in the Middle East, sell off in software, energy concerns, private credit fears, but really like broadly equities have stayed very resilient. And the short answer to your question is, Markets, and especially emerging markets, have been major beneficiaries to anything tied to the AI story. The majority of emerging market outperformance has really been driven by a concentrated bunch at the top of the index. So just to put a few numbers around that and around that comment, and actually not sure many really realize this, but the emerging market index is even more concentrated than the S&P 500. So I'm going to repeat that because I think it's pretty important. The EM index is more concentrated than the S&P 500. And we all thought in the US here as investors, we thought the MAG 7 was very overconcentrated. When you look at the EM index, the top three names, including Taiwan Semiconductor, SK Hynix, and Samsung, make up near 30% of that entire index versus 20% in the US between Nvidia, Apple, and Microsoft. So yes, EM is up 20% plus this year, but it's really been a targeted group around semiconductors, the AI supply chain story, and really just the narrow leadership group. So I think overall, the trend I'm watching here is just, will we see a broadening of overall performance and will this index kind of broaden out. But right now, we're seeing it very concentrated.

Brian Pietrangelo [00:16:57]

That's great context, John, for our listeners. And the last piece of this puzzle is a lot of times markets and economies move at different times, but you would have thought that with the implementation of President Trump's tariffs back in April of 2025, that would have had a negative effect on international markets, but the opposite has occurred. What are your thoughts in this area?

John Simmons [00:17:17]

Yeah, Brian, intuitively, you would expect tariffs to pressure the international markets more than the US. And initially, we saw that. If you think back to Liberation Day last April, when new tariff measures were announced, global markets sold off significantly. The S&P 500 dropped over 10% in two days, and you saw a risk-off move across regions as portfolios were broadly overweight US equities and you started to see investors start to reallocate. But what's interesting here is how quickly that narrative really shifted. It was pretty much a week later, the initial tariff policy was rolled back and investors realized there was probably room for negotiation here. And another reason on this front, both international and EM have held up relatively well, is because countries like China and those within Europe and others were already in a different position than prior cycles. Going back to that Germany example I touched on earlier, there's been a broader shift toward economic self-reliance and fiscal expansion. Countries are broadly better positioned and less willing to be passive in global trade dynamics. So instead of being purely reactive to US policy, you're seeing more localized growth drivers, domestic spending, industrial policy, and just overall more strategic investment in kind of that home country bias.

Brian Pietrangelo [00:18:52]

Perfect, John, thanks for the context. And you mentioned China as one of your thoughts there. Let's bring in Mike Kehoe. to talk more in depth about some of those areas. And most specifically, we can't talk international markets without talking about China. President Trump was just there. There's a lot going on. What are the major themes they see, Mike, going on in China and a little bit about the trip from President Trump?

Michael Kehoe [00:19:14]

Yep, thanks, Brian. China remains definitely one of the most important and arguably more complex stories in overseas markets, as it's really a tale of two economies. On one hand, you have the traditional parts of China's economy that are still under pressure. The property market hasn't fully recovered, consumer confidence remains soft, and demographics continue to be a long-term headwind for the country. At the same time, China is also aggressively repositioning itself around strategic industries. The biggest theme there, of course, are industries related to artificial intelligence. And the Chinese government has made it clear that it views advancements in AI as key to their ability to achieve their stated goal of global tech dominance by 2030. So you're seeing massive investment into data centers, chips, and industrial automation in China by both the government and private sector. Taiwan is also a huge part of the story, of course. Taiwan and TSMC are effectively the backbone of the global advanced semiconductor supply chain. So as AI adoption continues to accelerate globally, the importance of semiconductor manufacturing and Taiwan's role within it becomes increasingly more significant. Although Taiwan seemed to be an area of focus for both sides on President Trump's trip to China this week, there didn't seem to be any major developments one way or another with respect to Taiwan. But overall, I would just frame China as sort of transitioning from one growth model to the next. And while this transition and the related geopolitical tensions have led to volatility in Chinese equity markets, it may also support new long-term themes for global investors to capitalize on.

Brian Pietrangelo [00:20:50]

Great, Mike. And as our avid listeners know, we typically have talked about Iran and what's going on there for about the last eight weeks. Usually the update comes from George, but let's get your take on it. It's got some major implications for not only international markets, but for us, but more so international markets. What are your thoughts and trends there?

Michael Kehoe [00:21:09]

Yep, as you guys have talked about, obviously, the first implication is with respect to oil prices. And higher oil prices matter because they can ripple through the global economy pretty fast, impacting everything from transportation and manufacturing costs to airline profitability, consumer spending, and ultimately inflation expectations as well. What's interesting, though, is that markets so far have remained relatively resilient. So we've seen some spikes in volatility, but overall, investors seem to believe the conflict and its related impacts are more likely to remain relatively contained. I think the second implication, and John talked about this, but is with respect to central bank policy. So, over the last year, markets have increasingly expected easier monetary policy globally as inflation has moderated. But if energy prices remain elevated for an extended period, that complicates the path for rate cuts as central banks aim to avoid a re-acceleration in inflation. From a market leadership perspective, earlier in the year, we saw a rotation into more defensive areas of the market. So, call it energy, consumer staples, utilities, some of the perceived sort of beneficiaries of higher energy and input prices. But more recently, we've seen a resurgence in tech dominance and momentum stocks as optimism around AI has driven rallies in semiconductors and other related areas. I think it's also a good reminder of Ben Graham's famous saying that “in the short run, the market is a voting machine, but in the long run, it's a weighing machine." So in the short term, geopolitical events like the Iran conflict can drive sharp emotional reactions and spikes in volatility. But over long periods of time, markets tend to refocus on fundamentals, things like earnings growth and cash flows. And that's why it's important for long-term investors to maintain the long-term view and avoid overreacting to short-term noise.

Brian Pietrangelo [00:22:57]

Great, Mike. Now to finish up, let's give each of you the opportunity to share with our audience something that's on your mind that you think might be interesting to share with them. And we'll go with John first. What are your thoughts on something interesting?

John Simmons [00:23:08]

Yeah, and I appreciate it, Brian. And I think it's a good piggyback what Mike was just talking about is I would say just, it's a great, this period over the last year, year and a half, where international and EM has done very well. It's a great reminder to be diversified within your portfolios. There are really good companies outside of the US borders, and I think it's important to remember that. And I think another key point here is, just know what you're invested in. I think make it a point to really understand what you're buying and understanding the underlying indexes that are out there. There's not really one-size-fits-all in terms of whether you want to be passive, whether you want to be active, but just understanding what really is underneath the hood is very important. So, this, from our perspective, we definitely tend to favor active management in this space in a way to, it's really a way to avoid the concentration that I mentioned. And at the top of these indexes, many of the managers that we talk with and invest with really are finding compelling opportunities and really just quality businesses but really being selective in particular areas. So that's what I would leave listeners with is just know what you're buying and continue to be broadly diversified.

Brian Pietrangelo [00:24:42]

And Mike, you've got the last thought.

Michael Kehoe [00:24:45]

Thanks, Brian. I think this is not necessarily specific to international markets, but I think one of the more interesting dynamics in markets globally right now is the tension between the AI boom and the fear of technological disruption. So we're seeing incredible enthusiasm, as we've talked about, around AI infrastructure or the so-called halo trade, heavy assets, low obsolescence, where investors are rewarding businesses tied to semiconductors, power demand, data centers, and other physical infrastructure. But at the same time, we've seen a really broad sell-off in software stocks this year as investors try to assess the impact of AI on business models and try to discern which companies stand to benefit and which might be disrupted. I think this is really important because for years, markets rewarded asset light capital-like growth almost indiscriminately. And now investors are increasingly asking themselves, how durable are these business models and how hard are they to replace? And so beneath the surface, I think it's more than just sort of an AI story. I think it's really a market that's trying to reprice durability, scarcity, and long-term competitive advantage against the backdrop of rapid technological innovation. And so we're seeing, I think, both volatility and change in leadership across the board as investors try to pick the winners in this new environment.

Brian Pietrangelo [00:26:03]

Well, thank you for the conversation today. Rajeev, Mike, and John, we appreciate your insights. And before we close, we've got two updates for you. One is to bring attention to you that on June 9th, we will be having a national call where we will be providing our mid-year outlook update for what's happening in the markets and the economy. So be sure to join join us on June 9th, we will continue to provide updates along the way between now and then. And second, when we come to next Friday, on the 22nd of May, we will be taking that day off in observance of the upcoming Memorial Day weekend. And we would be remiss if we didn't take a moment to honor all of those who have given their ultimate sacrifice of life throughout the military and/or organizations across the world, all of those who have, again, given that opportunity for the ultimate sacrifice. Thank you for joining me in that effort, as we will be off next week. So 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 in two weeks to see how the world and the markets have changed and provide those keys to help you navigate your financial journey.

Disclosure [00:27:31]

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