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Model portfolios have evolved from a one-size-fits-all solution.
In a recent roundtable conversation, Jeffrey's safe of BlackRock and Alessio DeLaunches of
Invesco break down what's driving the next model moment.
Discussing how a deeper level of customization is producing a better alignment with investor
goals and creating a practice differentiator for financial advisors.
Education held study in February, but the bigger question is what comes next.
Plus, why the U.S. military isn't helping oil tankers get through the
straight-of-war moves.
What American defense officials are looking at is saying, like, if we send our people in there,
they're going to be in the line of fire themselves. It's not safe for them either.
So that's why they're not currently offering that to the oil-ershipping industries.
And Democrats are pitching tax cuts for millions of Americans to try to win over voters.
It's Wednesday, March 11th. I'm Alex O'Sullet for the Wall Street Journal.
This is the PM edition of What's News, the top headlines and business stories that move the world today.
A new report out today from the Labor Department showed that consumer prices rose 2.4%
in February from a year earlier. That's the same pace as in January and pretty much what
economists expected. But these numbers are from before the U.S. and Israel attacked Iran,
and the war threatens to raise a lot of prices.
WSJ investing columnist Spencer Jacob joins us now to discuss the question on everyone's mind.
Just what can February's numbers tell us?
Spencer, under normal circumstances, these numbers would have been a key reading on what
prices are doing. How does the Middle East war change that?
Well, yes, it changes a lot. It's a bit like saying, you know,
other than that, how did you like the play Mrs. Lincoln? I mean, there's a big, big thing that's
happened since these numbers were compiled for February. This war, if it lasts a long time,
will have an impact, not just on energy prices, but on food prices because it affects a lot of
the world's fertilizer supply, a lot of transport generally in the world. What does the Fed do when
you have a big energy price shock? Well, they're kind of scarred by the memories of the 1970s
when they tried to initially cut the economy back into health, which turned out to be a mistake.
And really, the answer central bankers have for this is to do nothing, you know,
unless there's a very severe recession or whether the war creates other recessionary effects,
they tend not to try to use monetary policy to deal with a commodity price shock.
So as the conflict continues, what are some of the numbers that you're going to be keeping an
eye on just to gauge a bit of the economic impact? One thing to look at is what's happening in
the real world to prices. For example, gasoline prices, those are already up substantially,
and those have a big effect, especially on middle and a working-class households, you know,
spend a lot of money on gasoline in the United States, but also psychologically, it's a price
that everyone knows, it's a price everyone sees, you know, if the price of milk and bread and
things like that start to go up as well, which they could. Those are the ones that people get
angry about and are aware of, and it affects their behavior and other ways it affects their
propensity to spend, for example. That was WSJ Investing columnist, Spencer Jacob,
thanks, Spencer. Thank you.
This morning, we told you the International Energy Agency was proposing a record release
of oil reserves to try to bring down crude prices. The IEA has now agreed to do so,
and its member countries will release 400 million barrels of oil from emergency stockpiles.
This is a major action aiming to elevate the immediate impacts of the disruption
in markets. But to be clear, the most important thing for a return to stable flows of oil
and gas is the resumption of transit through the state of Hormuz. That was the IEA's executive
director Fati B. Roll speaking this morning. Meanwhile, the Strait of Hormuz that critical
shipping lane for the world's oil supply is still effectively closed. Today, three commercial
ships were hit around the strait. This spokesman for Iran's armed forces said the country wouldn't
let quote a single leader of oil pass through the strait for the benefit of the U.S. and its allies.
President Trump said today that oil companies should use the strait. However, they're not likely to
do so until it's safe. I'm joined now by WSJ Middle East correspondent Jared Malson.
Jared, the president suggested that there will be military escorts to help ships cross the strait.
But the journal's reporting that the U.S. military has turned down requests to escort ships
through the strait. Why is that? So the administration wants to call the oil markets down.
They're under a lot of pressure to do that right now because of the surge in oil prices.
So the Trump administration has said it is prepared to offer military escorts for ships
if necessary and when the conditions are right. The conditional phrases on that statement
are very important here because what we understand from our reporting is that
the Department of Defense and the military are not currently planning to escort any ships
until it is safe to do that. The Iranians are attacking ships in the strait and
what we understand from our reporting from U.S. officials is that they do not want to send
the Navy into escort any ships as long as that is still a very real risk. Iran still has the
capability to strike using missiles, drones to mine the strait. It's just very dangerous for
any ships to go through there. What are the conditions in the strait that make this so challenging?
So it's a very narrow strait. It's somewhere in the range of 24 miles wide,
meaning the Iranian coast is very close by and what one former Navy official told me is that
when it comes to the missiles and drones that the Iranians could potentially fire,
the U.S. or Allied Navy personnel that would be there would potentially only have seconds to
respond to those. One of the analysts my colleagues spoke to compared it to a kill box essentially
and so what American defense officials are looking at is saying like if we send our people in
there they're going to be in the line of fire themselves. It's not safe for them either so that's
why they're not currently offering that to the oil or shipping industry. What would it take to
reopen the strait? What analysts have been telling me is that only a cease fire along with some
explicit assurances from the Iranians that they're going to stop shooting at these ships.
That's the only thing that would really restore shipping through the strait.
That was WSJ reporter Jared Nelson. Thanks Jared. Thank you.
U.S. stocks were mixed today. Financial shares fell putting pressure on the Dow which dropped
0.6%. The S&P 500 ended slightly lower while the NASDAQ ticked higher. Oil prices kept rising
with Brent crude the global benchmark closing up nearly 5%. We want to know how volatile energy
prices are affecting you or your business. Let us know by sending a voice note to WNPOD at WSJ.com
or leave us a voicemail at 212416-4328. Make sure to include your full name and location so we
can use your comments on the show. Coming up everyone from Democratic law makers to McDonald's is
trying to win over people watching their wallets. We'll get into how they're doing it after the break.
At CLA we're in your corner and on it. We coach tax strategies and little league first base.
We help you adopt AI data tools and we adopt rescues named buddy. We walked your factory floor
and jog the local 5K. Though sometimes we walk that too. Wherever you're coming from,
we're right there with you. Wherever you're going. We'll get you there. CLA, CPAs, consultants and
advisors. Learn more at CLAconnect.com slash with you.
Democrats are out of power and they're looking for ways to get the attention of voters who are
worried about their finances. So senators are coming up with plans that would get rid of federal
income taxes for millions of people. Maryland Senator Chris Van Holland is preparing a proposal
to end income taxes for people making under $46,000 and married couples making under $92,000.
And New Jersey Senator Cory Booker's pitch would more than double the standard deduction while
increasing the child and earned income tax credits. WSJ Tax Policy reporter Richard Rubin says the
plans are an effort to win over voters. What Senator Booker and Senator Van Holland are doing is
trying to address the concern that lots of voters have about the cost of living and they see a
tax cut as a quick, easy to understand way to do it. We shouldn't sort of underestimate the power
of simplicity. We saw in the 2024 campaign how President Trump talked about no tax on this,
no tax on that. The bumper singer kind of thing. And that's really kind of what they're aiming to do
is like this sort of mass big tax cut idea that's a little different from what we expect from
Democrats. Rich says that the senators are trying not to increase the budget deficit,
which is expected to grow in the coming years. So both the Booker and Van Holland plans
they're designed so that there are tax increases that go along with the tax cuts. Booker is
talked about higher corporate taxes and raising the top tax rates. Van Holland's got a surtax on
very high income people. Their idea is to pay for the things that they're doing. The challenge is
this. Any dollar that Democrats are able to raise a new revenue to pay for this is a dollar that
they can't use for other initiatives. So these frills have generated some pushback from others
in the party who are like, well, wait a minute. Like what should be first on our list? When Democrats
get to 2029, their first chance to really be in control of everything again, what comes first for
the party? Speaking of affordability, we're exclusively reporting that starting next month. McDonald's
is planning to offer a new value menu of items costing three dollars and less. It'll also have
new four dollar breakfast deals. The fast food chain has been pushing for nearly two years to cement
its affordability image. And a shopper boycott against target that has hurt its sales may be ending.
Last year, a group of activists encouraged shoppers to boycott target after it back
away from some of its DEI policies. Now their official work on the boycott will end. The activists
say that's because target privately acknowledged a breakdown in trust with the black community.
Target has reported 13 straight quarters of week or falling quarterly sales. An executive
said shoppers upset over DEI policy changes have played a role. A target spokesman today
said that the company is pleased to be moving forward. Last year, we reported a series about
the boycott and its impact on targets bottom line. We'll leave a link to that series in the show
notes. The journal has learned that the Trump administration is preparing to announce new
tariff investigations over what it considers unfair trade practices. They could result in higher
tariffs on a number of other countries. These tariffs are designed to replace the temporary
10% tariff imposed last month after the Supreme Court ruled that many of Trump's previous tariffs
were illegal. And we're exclusively reporting that President Trump ordered the Justice Department
to reverse course on defending the White House's sanctions against law firms. The Wall Street
Journal reported earlier this month that the department was dropping its defense of executive
orders that outlined punishments against specific law firms. People familiar with the matter say
that Trump said he didn't sign off on that and expressed displeasure with Justice Department
leadership. White House press secretary Caroline Levitt said the president had confidence in
attorney general Pam Bondi and deputy attorney general Todd Blanche. And that's what's news for
this Wednesday afternoon. Today's show is produced by Pierre Biennay with supervising producer Tally
Arbell. I'm Alex O'Soleff for the Wall Street Journal. We'll be back with a new show tomorrow
morning. Thanks for listening.
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