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Speaker 1: Let's get to Eva Autos, who is the chief investment

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Speaker 1: strategist at the share She's on the line from Boston. Eva,

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Speaker 1: thanks for being with us. A lot of positivity in

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Speaker 1: the equity trade today. It seemed a little tentative kind

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Speaker 1: of midday. We did have the Goldman results kind of

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Speaker 1: kicking us off on a little bit of this positivity,

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Speaker 1: but boy, we got a strong tale went after the bell, Netflix,

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Speaker 1: United Airlines, JB Hond, Adobe, all with positive commentary. How

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Speaker 1: do you read this market right now? Well, companies have

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Speaker 1: been setting um thirdly modest expectations for this quarter and

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Speaker 1: for the next year, so it's not that hard to

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Speaker 1: beat them. We expect to see um the sevent beat

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Speaker 1: rade that we have as of now. We expect that

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Speaker 1: rate to to be maintained throughout this earning cycle, and

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Speaker 1: we we we do expect that, you know, like companies

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Speaker 1: will be conservative when it comes to their expectations for

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Speaker 1: the next year. So um, you know, it's a volatile

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Speaker 1: market and it makes that managers and companies are conservative

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Speaker 1: with their expectations. What did they generally saying about the future,

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Speaker 1: which is leaving behind the era of free money and

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Speaker 1: the pain may be inflicted by higher interest rates. So

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Speaker 1: I think more people are now concerned because the last

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Speaker 1: CPI UM reading was elevated. So what we know is

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Speaker 1: that there will be upward pressures on the next CPI

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Speaker 1: reading due to energy prices. Open cut production by two

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Speaker 1: million barrels a day. That immediately, so a spike in

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Speaker 1: energy prices about five to eight percent, So that will

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Speaker 1: have an upward pressure on the next CPI. Housing is

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Speaker 1: also a lagging indicator. It usually lacks by about twelve months.

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Speaker 1: That will affect the next CPI reading. And so we are,

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Speaker 1: you know, concerned that the next CPI will be elevated

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Speaker 1: and probably the one after that too. I think, you know,

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Speaker 1: more and more investors are focusing on that now. But

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Speaker 1: that being said, before the open event, we saw the

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Speaker 1: market appreciates significantly as we thought that inflation is getting

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Speaker 1: under control. Yeah, we have Neil Cash current tonight saying

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Speaker 1: the FED cannot pause at a FED funds rate of

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Speaker 1: four and a half percent if inflation is still rising.

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Speaker 1: I was struck by the Bank of America strategist looking

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Speaker 1: at their fund manager survey and concluding that the FED

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Speaker 1: is going to pivot as soon as the first half

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Speaker 1: of next year, b of a looking at an equity

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Speaker 1: rally in three do you think that's misguided? Very quickly,

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Speaker 1: I don't think it's misguided. I think we might see

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Speaker 1: Christmas rally from not another rally in As they said,

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Speaker 1: I think core inflation has not been this this guys

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Speaker 1: is two. But doing too little to fight inflation is

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Speaker 1: worse than too much, and the FED is going to

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Speaker 1: probably maintain their hotness rhetoric if we were talking about

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Speaker 1: what Corpus is likely to be saying, and what how

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Speaker 1: they're dealing with higher interest rates and inflation and before

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Speaker 1: the break, but looking ahead, what are they really talking

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Speaker 1: about when it comes to jobs. I mean, we've seen

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Speaker 1: that perhaps there's a tendency to hold onto staff right

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Speaker 1: now for fear of them having a being difficult to replace,

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Speaker 1: and that's something of course they learned from the pandemic

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Speaker 1: when they did further a lot of people, yes, definitely.

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Speaker 1: But here's our contrarian view. Many people think that unemployment

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Speaker 1: will significantly increase from where it's now due to the

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Speaker 1: contraction of GDP in the US. However, we have a

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Speaker 1: different view here. We think that unemployment might increase, but

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Speaker 1: slightly and that's because of the eighty millillion baby boomers

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Speaker 1: we have, where four point two million a year come

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Speaker 1: to retirement age, and that will help keep unemployment level slow.

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Speaker 1: We saw that with the last unemployment reading. In fact,

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Speaker 1: unemployment did not increase. It dropped from three point seven

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Speaker 1: percent to three point five percent. And it's interesting that

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Speaker 1: many people think you cannot have a con traction in

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Speaker 1: GDP growth and low levels of unemployment. But if you

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Speaker 1: look back after World War Two, we had a similar

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Speaker 1: scenario to what we have now. We had inflation running

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Speaker 1: about eight percent UM, a contraction in GDP and unemployment

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Speaker 1: at three point six percent. Significant and similarities here between

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Speaker 1: those two periods that we should not disregard. So let's

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Speaker 1: pivot if we can talk a little bit about opportunities

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Speaker 1: that you're seeing offshore and particularly in Asia. It's kind

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Speaker 1: of striking. Yesterday we were expecting publication of a lot

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Speaker 1: of the key data in China. That didn't happen. It's

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Speaker 1: been delayed, obviously. The Party Congress is happening this week.

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Speaker 1: It was kicked off with that speech from the Chinese president.

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Speaker 1: She did you hear anything in that speech that would

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Speaker 1: cause you to put money to work in UH in

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Speaker 1: relation to China, I know, in fact the opposite. I

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Speaker 1: you know, I've been burish on China for the last

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Speaker 1: year and continue to be. I think China is entering

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Speaker 1: an unfamiliar state of flat economic growth. It has actually

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Speaker 1: joined the global economy in this global economic malaise, and

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Speaker 1: the sluggish real estate market, which historically fueled much of

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Speaker 1: the economic growth, is now struggling, and I would say

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Speaker 1: it's on the version of severe contraction. At the same time,

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Speaker 1: you also have reduced product output due to the zero

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Speaker 1: COVID policy and also the slow global demands. So I

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Speaker 1: see this pattern continuing in three and you know it

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Speaker 1: will probably return to normal growth in the subsequent years.

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Speaker 1: This is really also as we got Britain under the

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Speaker 1: European Union facing a slowdown as well, contriving together to

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Speaker 1: reduce global growth altogether, which then has of course knock

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Speaker 1: on effects. Does it not? Definitely? And there is um

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Speaker 1: to your point. It's a it's a global economic malaise.

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Speaker 1: There's a two percent contraction in GDP in Europe that's

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Speaker 1: probably considered a recession as of now. That's spilling over

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Speaker 1: to the US partially, and the use we have two

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Speaker 1: consecutive quarters of you know, the client of GDP, which

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Speaker 1: technically is a recession, although that determination stands with the

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Speaker 1: n B E R. But it's a global it's a

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Speaker 1: domino effect. One market affects the other when you have globalization,

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Speaker 1: and so that that also does not help China in

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Speaker 1: particular since most of the a lot of the economic

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Speaker 1: growth was because of the high demand from Europe and

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Speaker 1: the U S which is coming down now. So generally speaking,

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Speaker 1: then even do you favor fixed income over equities in

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Speaker 1: the current environment, definitely no, I think bonds will do

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Speaker 1: bad when inter streets rise. But that being said, I

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Speaker 1: do favor short term treasury builds such as the three

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Speaker 1: months and the six months. Most of the action is

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Speaker 1: happening between the three months and the six months. Then

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Speaker 1: you see the yield card flattened and actually see invert

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Speaker 1: earth between the when when the ten years actually under

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Speaker 1: the two years which you mentioned before too, So that

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Speaker 1: shows that most of the action isn't the short term,

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Speaker 1: and then we'll probably have either a recession or um

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Speaker 1: you know, inflation will come down. If I thank you

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Speaker 1: so much for joining us. If A CEO and chief

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Speaker 1: investor schalities that e shares,