1 00:00:02,440 --> 00:00:07,160 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,120 --> 00:00:10,360 Speaker 2: Mike Wilson's capitulated, he's moved from forty five hundred to 3 00:00:10,520 --> 00:00:12,520 Speaker 2: fifty four hundred and all of that. Can we just 4 00:00:12,560 --> 00:00:15,240 Speaker 2: start with the skub the wide range of outcomes, because 5 00:00:15,240 --> 00:00:17,520 Speaker 2: that was the headline of the piece, the back case 6 00:00:17,640 --> 00:00:19,919 Speaker 2: versus the bull case. Has it ever been this wide? 7 00:00:20,040 --> 00:00:22,599 Speaker 3: Well, not for us, I think for other people they've 8 00:00:22,600 --> 00:00:25,560 Speaker 3: had wider skews. And look, it just reflects the uncertainty 9 00:00:26,040 --> 00:00:28,080 Speaker 3: that has been the case for the last several years. 10 00:00:28,480 --> 00:00:30,960 Speaker 3: And quite frankly, I wouldn't be surprised if we hit 11 00:00:30,960 --> 00:00:32,760 Speaker 3: both sides, you know, I mean, like, that's kind of 12 00:00:32,800 --> 00:00:35,000 Speaker 3: the world we're in, which is, you know, think about 13 00:00:35,000 --> 00:00:36,400 Speaker 3: this year, and we talked about this at the beginning 14 00:00:36,400 --> 00:00:37,920 Speaker 3: of the year, which is we had three sort of 15 00:00:37,960 --> 00:00:40,839 Speaker 3: equally similar opera you know, sort of outcomes. One was 16 00:00:40,960 --> 00:00:43,000 Speaker 3: a soft landing is the goldilax, which is kind of 17 00:00:43,000 --> 00:00:45,400 Speaker 3: consents us now and that's our house view. Then you 18 00:00:45,440 --> 00:00:47,680 Speaker 3: have the no landing, which is kind of a reacceleration, 19 00:00:47,800 --> 00:00:51,239 Speaker 3: the stickier inflation even maybe a stagflationary outcome, which is 20 00:00:51,240 --> 00:00:53,720 Speaker 3: what the market was thinking about in April and now 21 00:00:53,720 --> 00:00:55,320 Speaker 3: you're back to a soft link, but you still can't 22 00:00:55,360 --> 00:00:57,720 Speaker 3: rule out of recession either, right, So like all these 23 00:00:57,760 --> 00:01:00,200 Speaker 3: are very possible, and you know they could help. All 24 00:01:00,240 --> 00:01:03,880 Speaker 3: happened with a higher than normal degree of certainty. 25 00:01:04,240 --> 00:01:06,080 Speaker 4: So that's that's really. 26 00:01:05,800 --> 00:01:07,959 Speaker 3: The headline that should have been out is that, look, 27 00:01:08,000 --> 00:01:10,399 Speaker 3: nobody knows anything, right, I mean, and particularly at a 28 00:01:10,400 --> 00:01:13,160 Speaker 3: point in time. And I think maybe maybe our mistake 29 00:01:13,240 --> 00:01:14,920 Speaker 3: is just admitting that we don't know as much as 30 00:01:14,920 --> 00:01:19,000 Speaker 3: maybe everybody else claims to. That's called humility, something that 31 00:01:19,000 --> 00:01:20,560 Speaker 3: we've learned the hard way over life. 32 00:01:20,959 --> 00:01:22,119 Speaker 4: But anyways, the point here. 33 00:01:22,040 --> 00:01:24,319 Speaker 3: Is that the meat of our report this year or 34 00:01:24,360 --> 00:01:26,520 Speaker 3: this this update was really more about how do you 35 00:01:26,560 --> 00:01:30,760 Speaker 3: make money in an environment we have basically zero percent 36 00:01:30,840 --> 00:01:33,040 Speaker 3: upside and the base case and you could have twenty 37 00:01:33,040 --> 00:01:34,800 Speaker 3: percent upside or twenty percent downside. 38 00:01:34,840 --> 00:01:37,240 Speaker 4: And that's what clients pay us for, right. It's the process. 39 00:01:37,440 --> 00:01:39,560 Speaker 3: It's understanding, Okay, what kind of environment and how are 40 00:01:39,600 --> 00:01:41,400 Speaker 3: we going to navigate that and manage that. So we 41 00:01:41,440 --> 00:01:43,679 Speaker 3: spent a large part of the report yesterday talking about 42 00:01:43,680 --> 00:01:47,840 Speaker 3: trade ideas, specific sector ideas. That's not the headline that 43 00:01:47,840 --> 00:01:50,480 Speaker 3: people wanted to write about. That's fine, and it's your prerogative, 44 00:01:51,040 --> 00:01:52,320 Speaker 3: but that's what we want to talk. 45 00:01:52,160 --> 00:01:53,960 Speaker 2: About that was never going to fit in the headline. 46 00:01:54,120 --> 00:01:55,760 Speaker 2: We will talk about some of that stuff in just 47 00:01:55,760 --> 00:01:58,360 Speaker 2: a moment. Let's talk about the headline just brieflake Sure 48 00:01:58,240 --> 00:02:00,600 Speaker 2: a youth the emphasize in the fifty four hundred. Are 49 00:02:00,600 --> 00:02:02,440 Speaker 2: you saying it's a price target? It's not actually that 50 00:02:02,480 --> 00:02:04,200 Speaker 2: important to you in affirm what is that? 51 00:02:04,360 --> 00:02:05,960 Speaker 4: Well, it's not important to most clients. 52 00:02:06,120 --> 00:02:08,720 Speaker 3: Institial clients don't care about the target on the S 53 00:02:08,720 --> 00:02:10,320 Speaker 3: and P five phnals to being honest say they're trying 54 00:02:10,320 --> 00:02:12,480 Speaker 3: to pick stocks and look. One of the most important 55 00:02:12,480 --> 00:02:14,560 Speaker 3: things we talked about in the report is alpha generation. 56 00:02:14,639 --> 00:02:17,200 Speaker 3: This year has been spectacular. The way we measure it 57 00:02:17,240 --> 00:02:19,720 Speaker 3: with our client our client base, which is significant. Is 58 00:02:19,760 --> 00:02:22,440 Speaker 3: this the best alpha generation alpha capture we've seen since 59 00:02:22,440 --> 00:02:24,560 Speaker 3: we've started recording it since twenty ten. 60 00:02:25,040 --> 00:02:26,320 Speaker 4: So that's what people care about. 61 00:02:26,600 --> 00:02:29,840 Speaker 3: We're trying to help them in their process of Okay, 62 00:02:29,840 --> 00:02:32,760 Speaker 3: what kinds of stocks work in this environment? Oh, by 63 00:02:32,800 --> 00:02:35,280 Speaker 3: the way, when we skew from these different outcomes, you 64 00:02:35,360 --> 00:02:37,480 Speaker 3: need to be ready to pivot towards different types of 65 00:02:37,560 --> 00:02:40,880 Speaker 3: securities right now, like our house call is it's a 66 00:02:40,880 --> 00:02:45,000 Speaker 3: soft landing goldilocks outcome. We're not that confident that we 67 00:02:45,040 --> 00:02:46,760 Speaker 3: want to make that bet fully, like, we think it's 68 00:02:46,760 --> 00:02:49,920 Speaker 3: still late cycle, which means quality okay, large caps over 69 00:02:50,280 --> 00:02:53,960 Speaker 3: small caps. Still, we like staples over discretionary. We have 70 00:02:54,040 --> 00:02:57,600 Speaker 3: two defensive sectors overweight utilities and staples because that kind 71 00:02:57,600 --> 00:03:00,160 Speaker 3: of protects against slowing growth risk. So there's a bunch 72 00:03:00,200 --> 00:03:02,560 Speaker 3: of different things, but the main factor. 73 00:03:02,240 --> 00:03:03,480 Speaker 4: That's been working is quality. 74 00:03:03,600 --> 00:03:05,679 Speaker 3: Quality has been the most consistent factor, and we don't 75 00:03:05,680 --> 00:03:06,400 Speaker 3: see that changing. 76 00:03:06,600 --> 00:03:07,840 Speaker 1: I just want to say that if you wrote a 77 00:03:07,880 --> 00:03:09,880 Speaker 1: headline saying nobody knows anything, I mean, we could do 78 00:03:09,880 --> 00:03:12,600 Speaker 1: that every day, but it probably wouldn't really gain that 79 00:03:12,680 --> 00:03:16,000 Speaker 1: much attraction. I am wondering if there are certain areas 80 00:03:16,040 --> 00:03:18,680 Speaker 1: that would win in either scenario, the fifty four hundred 81 00:03:19,080 --> 00:03:20,200 Speaker 1: or the forty five hundred. 82 00:03:20,840 --> 00:03:22,680 Speaker 3: Well, I think that we laid it out once again, 83 00:03:22,840 --> 00:03:25,640 Speaker 3: that's our bare case. A forty five hundred scenario is 84 00:03:26,120 --> 00:03:27,760 Speaker 3: that's not really our bare case. That's our base case 85 00:03:27,800 --> 00:03:30,440 Speaker 3: for a year end Originally that obviously has proven to 86 00:03:30,440 --> 00:03:33,640 Speaker 3: be wrong, mainly because of multiples. Right, I think this 87 00:03:33,720 --> 00:03:36,720 Speaker 3: is the main thing said that people have either gotten 88 00:03:36,800 --> 00:03:38,680 Speaker 3: right or wrong in the last twelve months. Is that 89 00:03:39,080 --> 00:03:43,120 Speaker 3: I mean, a twenty one multiple is in the top 90 00:03:43,200 --> 00:03:45,480 Speaker 3: death style of the last eighty years. I mean, that 91 00:03:45,600 --> 00:03:48,880 Speaker 3: is an expensive multiple. So the question I think investors 92 00:03:48,920 --> 00:03:51,400 Speaker 3: have to ask themselves is is that a fair multiple 93 00:03:51,440 --> 00:03:54,400 Speaker 3: to be paying well in the goaldilocks, you know, perfect 94 00:03:54,440 --> 00:03:57,360 Speaker 3: soft landing. I think that's plausible, but that's where we're trading, 95 00:03:57,360 --> 00:03:59,360 Speaker 3: and that's why there's not a lot of upside at 96 00:03:59,360 --> 00:04:00,200 Speaker 3: the index level. 97 00:04:00,240 --> 00:04:03,400 Speaker 1: Which raises this question, are there specific sectors that win 98 00:04:03,640 --> 00:04:06,720 Speaker 1: regardless of the overall index? Do you see certain areas 99 00:04:06,720 --> 00:04:09,680 Speaker 1: that are kind of independent of this overall shift of 100 00:04:09,720 --> 00:04:12,480 Speaker 1: whether there is this momentum and international money that pours 101 00:04:12,520 --> 00:04:14,600 Speaker 1: in and keeps valuations high and sends them higher. 102 00:04:14,680 --> 00:04:15,760 Speaker 4: It's large camp quality. 103 00:04:15,880 --> 00:04:17,560 Speaker 3: I mean that, I mean that is what's continues to 104 00:04:17,560 --> 00:04:19,040 Speaker 3: and by the way, it's not just high growth. It's 105 00:04:19,080 --> 00:04:21,800 Speaker 3: also cyclicals can work in that. But it's still up 106 00:04:21,839 --> 00:04:24,120 Speaker 3: the quality curve, and we show it in the note 107 00:04:24,200 --> 00:04:26,680 Speaker 3: very clearly. I mean, it's just it's it's the it's 108 00:04:26,720 --> 00:04:29,600 Speaker 3: been the best carry factor for the last year, year 109 00:04:29,640 --> 00:04:31,920 Speaker 3: and a half, which is a classic late cycle winner, 110 00:04:32,040 --> 00:04:35,120 Speaker 3: which is where we are so you know, don't overthink 111 00:04:35,160 --> 00:04:37,440 Speaker 3: that and don't try to be cute and say, well, 112 00:04:37,440 --> 00:04:39,479 Speaker 3: I'm going to jump over here because I think there's 113 00:04:39,520 --> 00:04:42,000 Speaker 3: better returns there could be. Look in the small cap 114 00:04:42,080 --> 00:04:45,039 Speaker 3: and in the lower quality areas. You can't own nothing. 115 00:04:45,080 --> 00:04:47,120 Speaker 3: I mean, but it's very idiosyncratic. 116 00:04:47,240 --> 00:04:49,520 Speaker 4: It's very idiosyncratic. It's not a. 117 00:04:49,200 --> 00:04:51,760 Speaker 3: Factor that's carrying well, it's a okay, I have a 118 00:04:51,760 --> 00:04:54,800 Speaker 3: stock specific idea. It's a low quality stock potentially that 119 00:04:54,920 --> 00:04:56,839 Speaker 3: has a very unique story to itself. 120 00:04:57,040 --> 00:04:58,600 Speaker 2: Next me still for this mall case. You know it's 121 00:04:58,600 --> 00:05:01,680 Speaker 2: tomorrow afternoon. We get numbers from and Vidia, megacap Tech. 122 00:05:02,000 --> 00:05:05,120 Speaker 2: What supports that fifty four hundred? What supports it for you? 123 00:05:05,240 --> 00:05:07,119 Speaker 2: Is it mega cap tech? The in videos of this world? 124 00:05:07,200 --> 00:05:07,960 Speaker 2: Is it elsewhere? 125 00:05:08,120 --> 00:05:11,400 Speaker 3: Well, it's basically you're assuming that multiple stay elevated. 126 00:05:11,480 --> 00:05:11,640 Speaker 4: Right. 127 00:05:12,279 --> 00:05:15,040 Speaker 3: You know, we didn't change our earnings forecasts in this report. 128 00:05:15,240 --> 00:05:18,040 Speaker 3: We've had this sort of boom idea that we had 129 00:05:18,200 --> 00:05:20,760 Speaker 3: the boom bust thesis for a while. We probably were 130 00:05:20,760 --> 00:05:23,240 Speaker 3: early in calling for a recovery and earnings this year 131 00:05:23,279 --> 00:05:25,560 Speaker 3: in twenty twenty five, so that didn't change. So you 132 00:05:25,600 --> 00:05:27,480 Speaker 3: have earnings coming from a lot of different groups. Now, 133 00:05:27,480 --> 00:05:31,600 Speaker 3: I would say the biggest contributors have been technology. Energy 134 00:05:31,680 --> 00:05:35,040 Speaker 3: has been a big contributor surprisingly, industrials because of all 135 00:05:35,040 --> 00:05:37,600 Speaker 3: the spending that's going on fiscally. So those are three 136 00:05:37,600 --> 00:05:40,200 Speaker 3: major sectors that are contributed to the earning story. But 137 00:05:40,320 --> 00:05:43,919 Speaker 3: ultimately the fifty four hundred is being supported by policy, 138 00:05:44,200 --> 00:05:48,200 Speaker 3: right by very loose fiscal and monetary policy. Now you 139 00:05:48,240 --> 00:05:50,680 Speaker 3: may say, well, monetary policy is tight, not really. I 140 00:05:50,680 --> 00:05:52,680 Speaker 3: mean we have an incredible amount of liquidity coming in 141 00:05:52,720 --> 00:05:55,440 Speaker 3: to pay for that fiscal So, to me, the risk 142 00:05:55,520 --> 00:05:57,800 Speaker 3: in the story for the next six to twelve months 143 00:05:57,920 --> 00:06:02,960 Speaker 3: is do the market start to balk at this unsustainable 144 00:06:03,240 --> 00:06:06,720 Speaker 3: fiscal policy and the way that they're funding it. 145 00:06:06,800 --> 00:06:08,600 Speaker 4: And we wrote about this, you know in detail. 146 00:06:08,920 --> 00:06:12,000 Speaker 3: We have these liquidity provisions in place now, the reverse 147 00:06:12,040 --> 00:06:15,000 Speaker 3: repo which everybody knows about. The Treasury General Account can 148 00:06:15,040 --> 00:06:17,920 Speaker 3: be drained if necessary to pay for fiscal stemus in 149 00:06:17,960 --> 00:06:20,080 Speaker 3: a budget if they need to. And the Fed has 150 00:06:20,080 --> 00:06:22,960 Speaker 3: already said they're going to start tapering QT. Well, that's 151 00:06:23,040 --> 00:06:26,479 Speaker 3: like a trillion dollars of liquidity that's pretty loose right 152 00:06:26,520 --> 00:06:28,920 Speaker 3: to pay for the fiscal So to me, does of 153 00:06:28,960 --> 00:06:30,480 Speaker 3: the market and I think this is. This is something 154 00:06:30,520 --> 00:06:34,520 Speaker 3: we're watching very carefully. Last fall, when multiples came down hard, 155 00:06:34,600 --> 00:06:36,840 Speaker 3: it was because rates were going up due to term 156 00:06:36,839 --> 00:06:40,440 Speaker 3: premium widening, meaning the bond market we're starting to push 157 00:06:40,520 --> 00:06:43,080 Speaker 3: back on this strategy right now. 158 00:06:42,960 --> 00:06:43,919 Speaker 4: That's not a problem. 159 00:06:44,200 --> 00:06:45,960 Speaker 3: So one of the things we're going to be watching this, 160 00:06:46,200 --> 00:06:48,240 Speaker 3: you know, to change our view on how things trade 161 00:06:48,240 --> 00:06:50,320 Speaker 3: at the index level is does the term premium start 162 00:06:50,360 --> 00:06:51,119 Speaker 3: to widen again? 163 00:06:51,240 --> 00:06:53,080 Speaker 4: We don't know, but that's what we're gonna be watching. 164 00:06:53,080 --> 00:06:55,400 Speaker 2: So big risk factor is in the bond market, and 165 00:06:55,400 --> 00:06:59,200 Speaker 2: in the bond market, the big focus is November. Does 166 00:06:59,200 --> 00:07:01,400 Speaker 2: this have a political twist to it? An election co 167 00:07:01,720 --> 00:07:02,400 Speaker 2: embedded in it? 168 00:07:02,720 --> 00:07:05,400 Speaker 3: Well, I mean yes and no, because I wouldn't say 169 00:07:05,480 --> 00:07:08,720 Speaker 3: either party has shown any fiscal discipline right So in 170 00:07:08,760 --> 00:07:10,840 Speaker 3: other words, I think we're going to get a strong 171 00:07:11,200 --> 00:07:14,520 Speaker 3: fiscal support no matter who wins the election, both in 172 00:07:14,600 --> 00:07:18,560 Speaker 3: Congress or at the presidential level. The real question for 173 00:07:18,680 --> 00:07:21,240 Speaker 3: markets is how does it get funded? 174 00:07:21,600 --> 00:07:22,400 Speaker 4: How is it funded? 175 00:07:22,720 --> 00:07:25,440 Speaker 3: Can they fund it at a reasonable rate? Right now, 176 00:07:25,520 --> 00:07:29,600 Speaker 3: the bondb market seems very relaxed about that feature, which 177 00:07:29,640 --> 00:07:31,280 Speaker 3: is why multiples have expanded again. 178 00:07:31,480 --> 00:07:33,640 Speaker 1: So if the bond market stays relaxed about this, but 179 00:07:33,640 --> 00:07:35,360 Speaker 1: there's a lot of people prick that it will and 180 00:07:35,360 --> 00:07:37,560 Speaker 1: believe me, I get very excited about auctions, but every 181 00:07:37,560 --> 00:07:40,280 Speaker 1: week people tell me that I shouldn't because there's plenty 182 00:07:40,320 --> 00:07:44,200 Speaker 1: of interest at these levels. If there isn't pushback, then 183 00:07:44,240 --> 00:07:46,240 Speaker 1: fifty four hundred is that too conservative? 184 00:07:46,600 --> 00:07:47,560 Speaker 4: Maybe it could be. 185 00:07:47,640 --> 00:07:49,680 Speaker 3: I mean, look, I can make a case for seventeen times, 186 00:07:49,720 --> 00:07:52,000 Speaker 3: which is when our target was originally for this year, 187 00:07:52,120 --> 00:07:54,200 Speaker 3: seventeen eighteen times. I can make a case for twenty 188 00:07:54,240 --> 00:07:55,880 Speaker 3: one times. I can make case for twenty two times. 189 00:07:55,920 --> 00:07:58,840 Speaker 3: That's the problem, right, We don't know, so that's why 190 00:07:58,840 --> 00:07:59,920 Speaker 3: we have a wider skew. 191 00:08:00,200 --> 00:08:02,120 Speaker 4: And I would say this Lisa, that. 192 00:08:03,040 --> 00:08:06,840 Speaker 3: The target will be more determined, probably by multiples than 193 00:08:07,240 --> 00:08:10,200 Speaker 3: we're going to be wildly surprised on earnings. Okay, unless 194 00:08:10,200 --> 00:08:12,520 Speaker 3: it's recession, of course, then you'll be surprising the downside. 195 00:08:12,560 --> 00:08:14,800 Speaker 3: But I don't like the earnings haven't really moved that 196 00:08:14,880 --> 00:08:17,040 Speaker 3: much for twenty twenty four and twenty five. Right, if 197 00:08:17,040 --> 00:08:19,680 Speaker 3: you think about since October, which is with the low 198 00:08:19,760 --> 00:08:23,880 Speaker 3: last fall, twenty twenty four, earnings estimates are a couple percent. 199 00:08:24,400 --> 00:08:26,640 Speaker 3: You know, the markets at twenty five thirty. So it's 200 00:08:26,720 --> 00:08:29,360 Speaker 3: all multiple. So this is why you just need to 201 00:08:29,400 --> 00:08:32,439 Speaker 3: be alert to things changing potentially in the bombing market 202 00:08:32,480 --> 00:08:34,560 Speaker 3: first and then that will feed into the equity multiples. 203 00:08:34,600 --> 00:08:36,520 Speaker 5: When you talk about fiscal spending, to go back to 204 00:08:36,600 --> 00:08:40,520 Speaker 5: John's point earlier in the election, it's very different what 205 00:08:40,600 --> 00:08:42,959 Speaker 5: the fiscal spending may be used on depending on who 206 00:08:42,960 --> 00:08:45,960 Speaker 5: wins the White House. You're talking about potentially industrials, the 207 00:08:45,960 --> 00:08:48,600 Speaker 5: green energy economy. This is a new industrial policy from 208 00:08:48,600 --> 00:08:51,280 Speaker 5: the Biden administration that could continue or it could stop 209 00:08:51,280 --> 00:08:53,600 Speaker 5: short if it's Trump. How are you thinking about twenty 210 00:08:53,600 --> 00:08:54,120 Speaker 5: twenty five. 211 00:08:54,520 --> 00:08:56,679 Speaker 3: Well, I mean, look, I think the industrial policy will 212 00:08:56,720 --> 00:08:58,959 Speaker 3: remain strong. I mean that's our reshoring thing, which is 213 00:08:59,040 --> 00:09:01,480 Speaker 3: which was part of the Trumpet iministration. So half of 214 00:09:01,520 --> 00:09:04,360 Speaker 3: the industrial policy is potentially green energy and half of it, 215 00:09:04,360 --> 00:09:07,120 Speaker 3: I would say, is reshoring in the de globalization trend. 216 00:09:07,200 --> 00:09:09,240 Speaker 4: So there's going to be spending either way. 217 00:09:09,360 --> 00:09:12,400 Speaker 3: It may be redirected, like I could see maybe the 218 00:09:12,520 --> 00:09:16,439 Speaker 3: energy policy shifting back towards traditional energy, but I would 219 00:09:16,440 --> 00:09:20,800 Speaker 3: be surprised as spending is curtailed in a meaningful way. 220 00:09:20,440 --> 00:09:23,280 Speaker 3: From that standpoint, I think we will see changes or 221 00:09:23,320 --> 00:09:25,679 Speaker 3: differences is in maybe in the tariffs sol though recently 222 00:09:25,720 --> 00:09:28,160 Speaker 3: that seemed to be more aligned. And then, of course 223 00:09:28,200 --> 00:09:30,640 Speaker 3: immigration is a big one, and that was a huge 224 00:09:30,640 --> 00:09:34,280 Speaker 3: surprise this year that really nobody saw coming around the 225 00:09:34,440 --> 00:09:37,320 Speaker 3: label to positive labor shock from immigration. So to me, 226 00:09:37,400 --> 00:09:40,200 Speaker 3: that's a while. That's probably the single biggest wildcard depending on. 227 00:09:40,240 --> 00:09:40,920 Speaker 4: Who wins the election. 228 00:09:41,200 --> 00:09:43,240 Speaker 2: Bigger not tighter is if you coming from men and 229 00:09:43,320 --> 00:09:45,600 Speaker 2: Zenner and the team more and Stanley, this economy can 230 00:09:45,880 --> 00:09:49,600 Speaker 2: grow without it getting tighter and generating inflation pressure. Are 231 00:09:49,600 --> 00:09:51,440 Speaker 2: you saying that could flip the other way pretty quickly 232 00:09:51,559 --> 00:09:52,720 Speaker 2: based on the outcome the election. 233 00:09:53,200 --> 00:09:56,200 Speaker 3: I think that well, depending on how things behave if 234 00:09:56,240 --> 00:09:57,280 Speaker 3: policy really changes. 235 00:09:57,320 --> 00:10:00,000 Speaker 4: But yeah, sure, if you if you all of a sudden. 236 00:09:59,760 --> 00:10:03,960 Speaker 3: Sh borders down and you know, Trump's talking about deporting people, 237 00:10:04,520 --> 00:10:06,680 Speaker 3: that would be a negative labor shock, and then we'd 238 00:10:06,679 --> 00:10:09,120 Speaker 3: be in a reverse situation. So look, right now, I 239 00:10:09,160 --> 00:10:11,000 Speaker 3: think the election is literally a fifty to fifty I mean, 240 00:10:11,000 --> 00:10:13,120 Speaker 3: I mean the polls are right there forty eight, forty 241 00:10:13,160 --> 00:10:15,360 Speaker 3: nine to fifty percent for both sides. 242 00:10:15,400 --> 00:10:17,680 Speaker 4: So this is this is not an issue yet. We've 243 00:10:17,679 --> 00:10:18,480 Speaker 4: talked about this in the. 244 00:10:18,440 --> 00:10:21,920 Speaker 3: Note two, which is that volatility and election years typically 245 00:10:21,920 --> 00:10:24,760 Speaker 3: doesn't start picking up until August September, so I think 246 00:10:24,760 --> 00:10:26,199 Speaker 3: it'll be okay for the next month. 247 00:10:26,280 --> 00:10:27,480 Speaker 4: Or this is not going to be a topic, but 248 00:10:27,559 --> 00:10:27,880 Speaker 4: it can 249 00:10:27,920 --> 00:10:31,720 Speaker 3: Come at us quickly, probably post the conventions.