Investors are buying Amazon and low-volatility ETFs as uncertainty reigns supreme

(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are looking for opportunities in the Magnificent Seven and for ways to play the potential for more volatility in the market with Middle East tensions continuing. Worldwide Exchange pick: Amazon (AMZN) Jeff Kilburg of KKM Financial said Amazon is a smart buy even in a volatile market and credits its year to date decline to profit taking. "The way they are doing custom chips, the way they are approaching AWS (Amazon Web Services) … I'm excited," said Kilburg. "Going back to Q4, Q1 of this year I was pounding the table concerned about Mag 7 being overconcentrated. What have we seen? A massive repricing, reevaluation of Mag-Seven. Right here, right now it makes sense." According to FactSet, Amazon trades just below 32 time forward earnings. On Jan. 28, it traded at nearly 38 time forward earnings. The Fed and the bond market Philip Straehl of Morningstar sees opportunity in intermediate bonds in the current market environment. "The fiscal backdrop has been a source of some volatility on the long end, we like Treasurys as an investment we, we do favor the intermediate part of the curve," said Straehl. "We continue to think the news cycle around the budget bill that is going to make its way through Congress in the weeks to come is going to provide an impetus for a bit more volatility." Straehl added the short end of the curve could become more attractive if the Federal Reserve has a more hawkish outlook than expected. Lauren Goodwin of New York Life Investments sees continued volatility in the bond market, especially at the long end of the curve due in part to foreign investors reducing their purchases. "The dynamic … is real, it is happening. We are seeing it not only among retail but the most sophisticated institutional investors even if it's just on the margin questioning their geographic allocation," she said. Goodwin added she doesn't expect the Fed to respond to this trend in the near term, but they could take action in the future. "The role that the Fed could play in the long term is a buyer of last resort. Engage in some financial repression with respect to maintaining some Treasury market volatility. We don't think we are anywhere near that stage in policy management of the issue. We anticipate that dollar depreciation will continue on the margin … Treasury market volatility especially on the long end is a reality for investors." Investing in Low Volatility ETFs Steve Sosnick of Interactive Brokers believes investors need to consider investing in low-volatility stocks and ETFs due to the geopolitical uncertainty. "Lower Beta, high divided stocks are definitely a way to stay invested while insulating yourself," Sosnick said. "High Beta is great when the market is going up, but not when the market is floundering. If you want to stay invested dividends provide a lot of ballast." Sosnick highlighted the Vanguard Russell 1000 Value ETF (VONV) along with the Vanguard U.S. Minimum Volatility ETF (VFMV) as two ways to the play the current market environment. Both have outperformed the S & P 500 year to date.

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Bosses want you to know AI is coming for your job

SAN FRANCISCO - Top executives at some of the largest American companies have a warning for their workers: Artificial intelligence is a threat to your job. CEOs from Amazon to IBM, Salesforce and JPMorgan Chase are telling their employees to prepare for disruption as AI either transforms or eliminates their jobs in the future. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. AI will 'improve inventory placement, demand forecasting and the efficiency of our robots,' Amazon CEO Andy Jassy said in a Tuesday public memo that predicted his company's corporate workforce will shrink 'in the next few years.' He joins a string of other top executives that have recently sounded the alarm about AI's impact in the workplace. Economists say there aren't yet strong signs that AI is driving widespread layoffs across industries. 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4 hours ago

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Fannie Mae chief Pulte sends savage one-word message to Fed's Powell

There's mounting tension in Washington, D.C. over the Federal Reserve's interest rate policy. After cutting interest rates by 1% late last year, Fed Chairman Jerome Powell has taken a decidedly different tack in 2025, holding interest rates steady, and frustrating many, including President Donald Trump, who wants rate cuts now. President Trump has called Powell a "numbskull" for not reducing the Fed Funds Rate, and "Mr. Too-Late" because of the risk that the Fed's hesitancy will put it behind the curve, possibly causing stagflation or worse, a recession. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Fed's dilly-dallying on rate cuts means homebuyers will have to wait for lower mortgage rates, a fact that hasn't been lost on housing market experts, including Fannie Mae Chairman Bill Pulte, who is also director of the Federal Housing Finance Agency (FHFA). Pulte knows a thing or two about the housing market, given he's the grandson of the founder of the mega homebuilder PulteGroup and formerly served on PulteGroup's board of directors. This week, Pulte targeted the Fed's monetary policy, delivering a harsh rebuke and curt message to Chairman Powell that has raised eyebrows. Image source: Bartkowski/Getty Images The Federal Reserve has an important mission to encourage low inflation and unemployment by raising or lowering the Fed Funds Rate. The FFR is the rate that banks charge each other when lending excess reserve balances overnight. Unfortunately, its dual mandate is easier said than done. Often, low inflation and unemployment are contrary goals. Higher rates lower inflation but increase job losses, while lower rates decrease unemployment but increase inflation. Related: Fed interest rate cut decision resets forecasts for the rest of this year We've witnessed that dynamic in real time over the past five years. At risk of surging unemployment due to the Covid pandemic, the Fed doubled down on its zero-interest rate policy of low rates. The move worked, helping the U.S. avoid a recession or worse. However, low rates (and stimulus payments) caused inflation to spike in 2021. At the time, Fed Chair Powell initially and infamously referred to inflation as 'transitory;' however, he was forced to switch gears and embark on the most aggressive rate hikes since the 1980s after inflation skyrocketed to 8% in June 2022. The higher rates have sent inflation below 3%; however, they've done so at a cost, given emerging cracks in the jobs market. The U.S. unemployment rate has moved up to 4.2% from 3.4% in 2023, and over 696,000 layoffs have been announced this year through May, up 80% year over year, according to Challenger, Gray, & Christmas. There's also increased evidence that the economy is weakening. ISM's latest manufacturing and services PMIs, which measure economic activity, were below 50, suggesting contraction in May. A concerning job market and potential economic slowing aren't great recipes for consumer and business spending, yet the Fed has kept its finger off the rate cut trigger, citing inflation uncertainty amid recently enacted tariffs. Related: Major housing expert predicts huge change to mortgage rates in 2026 Since February, President Trump has placed 25% tariffs on Canada, Mexico, and autos, a 10% baseline tariff on all imports, and stiff tariffs on China, a significant trade partner that supplies just about everything from clothing to car parts. While China's tariffs have retreated from a sky-high 145% in April that effectively shut down trade, they remain at 30%. Worries that tariffs may cause inflation to reassert itself in the coming months have Fed Chair Powell a bit boxed in, given that rate cuts to shore up the economy may add to possible inflationary fires this year. Fed Chair Powell argues that a wait-and-see approach makes sense, given that unemployment is historically low and the economy, while showing some worrisome signs, is still expected to grow by 3% this quarter. Related: Forget tariffs, Fed interest rate cuts may hinge on another problem "The effects on inflation could be short-lived - reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent," said Powell after holding rates steady on June 18. "Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored." The worry over tariffs isn't shared by Fannie Mae Chairman Pulte. After Powell held interest rates at their current 4.25% to 4.50% range, he blasted Powell, calling for immediate interest rate cuts to lower mortgage rates and support the housing market. "Jerome Powell is a main reason for the Housing Supply Crisis in this Country," wrote Pulte on X. "By improperly keeping interest rates high, Jerome Powell is trapping homeowners in low-rate mortgages and choking off existing home sales - directly fueling the housing supply crisis. He must lower rates." Pulte is, at a minimum, correct anecdotally that the housing market is in a crisis, especially with first-time homebuyers who struggle to come up with enough money for a down payment, given supply shortages have propped up home prices, and can't afford monthly mortgage payments. More Economic Analysis: Federal Reserve prepares strong message on long-term interest ratesMassive city workers union approves strikeAnalyst makes bold call on stocks, bonds, and gold Mortgage rates typically run 2% to 3% higher than the 10-year Treasury note yield, and the Fed Funds Rate highly influences the 10-year yield. As a result, 30-year mortgage rates have risen to roughly 6.8% from 2.7% in early 2021 before Powell raised rates to fight inflation. In April, the median price for a new home exceeded $407,000, up from $310,000 five years ago. Meanwhile, according to Bankrate, the average mortgage payment doubled to $2,207 in 2024. With housing affordability so challenging and the Fed firmly in the "no cut" camp, Pulte sent a powerful message to Powell. "Americans are sick and tired of Jerome Powell. Let's move on!" wrote Pulte. "Funny thing is Jay Powell is talking right now about the housing market - he has no clue what he can do for the housing market. And he's not listening to the people who help lead the housing market." His blunt advice to Powell? "RESIGN," said Pulte. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.