STOCK MARKET TODAY: Dow Leads Markets, Earnings Roll In, Powell on Inflation

I just had a nice post-earnings chat with Robin Vince, Chief Executive Officer of BNY Mellon (BK). BNY Mellon announced its quarterly results this morning, and its stock is up 2%.

I appreciate his views on interest rates and markets (below), which I think are inflationary!

"As I think about interest rates, there are things happening in the world. Obviously, we have geopolitical risks, and as of today, the ongoing [Israel/Iran] conflict is likely to escalate-which is obviously a risk. Inflation in the U.S. has been relatively high, and that's obviously a risk as well. So the interest rates are in question. We are facing fiscal challenges in the U.S. In terms of volume, the U.S. Treasury bond issuance has been [higher]. That's good for our business, but as a citizen and a taxpayer, you have to worry about the sustainability of the U.S. debt. So there's a lot to do.

"Now, I'm also going to turn it around and say that because we're looking at really strong fundamentals in the U.S. economy, that's not to say that the stock market won't have a correction at some point - that's likely to happen. It's not to say that we won't have a recession at some point. That's inevitable. But if you look at the advantages that the U.S. has right now, it has a lot of relatively important advantages around the world. It is a great investment destination. You can hear that from the international mat executives. You can see it in the way that investors are putting money into the U.S. You can see it in the way that the stock market is performing, and there's a lot of "tailwinds" coming into the market right now. So I think this is a place where you have to be prepared for all eventualities. Maybe we'll see the Fed stay put. Will the Fed cut rates this year? Possibly. Will the Fed raise rates? Not impossible. You have to be prepared, but at the same time, the fundamental development of the U.S. is very positive.