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Speaker 2: Stephanie Roth of will three Search. Stephanie, good morning. And
Speaker 2: reaction to this data so far.
Speaker 3: Yeah, I mean it's an interesting one.
Speaker 4: And like Mike just said, a lot the weakness came
Speaker 4: from the Northeast, which is kind of interesting. It bounced back,
Speaker 4: it came week after a strong month in September.
Speaker 3: There's just a lot of sort of noise going on
Speaker 3: in the data.
Speaker 4: I think what we're going to see is it's the
Speaker 4: housing market's going to have trouble bouncing back with mortgage
Speaker 4: rates having increased after the even the FED has been cutting.
Speaker 2: Why do you think rights have been going up, even
Speaker 2: though the Fed's been counting.
Speaker 4: It's all about the election, and it's all about the market. Certainly,
Speaker 4: the market trades Trump as a yield curve steepener. We've
Speaker 4: seen that to some extent. There are concerns about the deficit.
Speaker 4: I don't think that's the primary driver. I think it's
Speaker 4: the market's getting excited about a better growth outlook, and
Speaker 4: for twenty twenty five, I think that's fair. For twenty
Speaker 4: twenty six, I'm worried about the tariff impact on the economy.
Speaker 5: Okay, I'm trying to understand this.
Speaker 1: So if yields go up, makes mortgage more expensive, makes
Speaker 1: it more difficult for people to afford homes because prices
Speaker 1: aren't necessarily coming down.
Speaker 5: At the same time, we saw confidence.
Speaker 1: Yesterday among homebuilders rise to the highest level going back
Speaker 1: seven months. And this whole idea is well, because of
Speaker 1: the election, regulations will be get stripped back, the economy
Speaker 1: will be going will be doing better than it otherwise
Speaker 1: had been. So which is it.
Speaker 4: I think there's an element of this animal spirits coming back.
Speaker 4: So you saw for n to be it was driven
Speaker 4: by expectations. This week we saw Empire fed increase a
Speaker 4: three standard deviation move. There's probably an element that people
Speaker 4: are feeling better about the Algho's right or wrong, but
Speaker 4: that actually has an important impact of the economy, and
Speaker 4: I think that's what's going to be driving an above
Speaker 4: trend growth for next year until we start worrying about
Speaker 4: tariffs again, probably not to the end of the year.
Speaker 6: But why do you think the worry for terriffs comes
Speaker 6: at the end of the year twenty twenty six when
Speaker 6: that is the one thing we know that Donald Trump
Speaker 6: can do unilaterally.
Speaker 4: So our base case is that one he probably wants
Speaker 4: to play this game with the number of the different
Speaker 4: countries like he did last time, having a number of
Speaker 4: meetings throughout the tariffs. We also think he'll probably wanta
Speaker 4: to attach it to some sort of investigation which will
Speaker 4: require comment period, And it makes sense for them to
Speaker 4: tie it to T to t extending TCJA, whether or
Speaker 4: not they explicitly included in a bill or he just
Speaker 4: there's a handshake deal about let's include the revenue savings
Speaker 4: for this bill.
Speaker 3: It makes sense for them to do it around the same.
Speaker 2: Time if that connected to the tax bill. What is
Speaker 2: the true objective of these tariffs?
Speaker 4: I guess it depends who you're asking. I mean, I
Speaker 4: guess they're f From Trump's perspective, there's two benefits. I
Speaker 4: think they're pretty risky, but from his perspective it's too
Speaker 4: bad if it's one you can stick it to China
Speaker 4: and and two they can raise trillions of dollars on
Speaker 4: these on these tariffs at least a the way they
Speaker 4: if you assume sort of static estimates se.
Speaker 6: So you see both the good things and the bad
Speaker 6: things that the market has to digest. When it comes
Speaker 6: to Trump policy being connected in terms of he wants
Speaker 6: to extend TCJA, he wants more tax cuts, and he's
Speaker 6: going to say I'm gonna pay for this with tariffs,
Speaker 6: so they all get rolled out at the same time,
Speaker 6: so the sequencing is actually in parallel.
Speaker 3: Yeah, kind of.
Speaker 4: I think for now it's a better growth outlook for
Speaker 4: twenty twenty five, better confidence, and then we start getting
Speaker 4: into the twenty twenty six tax cuts, and then I
Speaker 4: think it's it's a negative for the market because at.
Speaker 3: That point it's tariffs.
Speaker 4: And by the way, the tax cuts aren't really that large, right,
Speaker 4: They're expensive, but it's really just extending current policy. The
Speaker 4: incremental tax cuts that we're projecting is something like five
Speaker 4: hundred million dollars, which isn't that big. It's things like
Speaker 4: no tax on tips, or of the very narrow corporate
Speaker 4: tax rate cut which is just for domestic manufacturers.
Speaker 3: The rest of it is just a very expensive.
Speaker 4: Bill to extend TCJA, which is not a stimulus to
Speaker 4: the economy.
Speaker 1: So, before we get there and going back to home building,
Speaker 1: because I'm still trying to wrap my head around Okay,
Speaker 1: you've got the tariffs and how this affects inflation, I'm
Speaker 1: trying to get back to does this cause a revival
Speaker 1: in the housing market at a time where everything that
Speaker 1: you just painted does not suggest interest rates going down
Speaker 1: that much? At the long end, can you see a
Speaker 1: revival in housing in some of the basic staples that
Speaker 1: people have been basically complaining about that they don't have
Speaker 1: access to?
Speaker 7: You?
Speaker 1: Can you see a revival if you have mortgage rates
Speaker 1: that say at these levels?
Speaker 3: Probably not. It's a tough one.
Speaker 4: I think the part of the economy that's going to
Speaker 4: do better is on the investment capex investment.
Speaker 3: Side, so less about less about housing.
Speaker 4: I think mortgage rates are still going to be a
Speaker 4: bit of a headwind could see a bit of an improvement.
Speaker 4: The builders are excited from the regulatory front, and that's fair.
Speaker 3: But I think the bigger stimulus.
Speaker 4: For the economy is going to be on the corporate
Speaker 4: investment side, because that's where the deregulation is going to
Speaker 4: be important, and the sentiment is absolutely critical.
Speaker 2: Before you go December portal cut.
Speaker 4: It's a tough one base cases that they're gonna cut,
Speaker 4: but I think it's fair for the market to be
Speaker 4: pricing fifty fifty.
Speaker 3: The most important thing is going to be.
Speaker 4: Payrolls, and we'll get a hint of that today when
Speaker 4: we get SAT employment at ten.
Speaker 2: Payrolls coming out a little bit later December sixth, in
Speaker 2: the next few weeks, and then December eleventh for CPI
Speaker 2: that FED decision December eighteenth, Stephanie could to see you
Speaker 2: to see it as I catch a number the Stephanie
Speaker 2: Roth of Wolf Research. Let's have that conversation right now
Speaker 2: which I've found of Tawsei Advisorycruit Joe, welcome to the show.
Speaker 2: Following those numbers from Walmart, I'm gonna still lease this
Speaker 2: question to kick off the conversation. What is Walmart these days?
Speaker 2: And how much has that company changed.
Speaker 7: Yeah, So Walmart is a terrific retailer that's grown its
Speaker 7: ecosystem and it's much more than just a retailer these days.
Speaker 7: I think, you know, they have become more similar to
Speaker 7: what an Amazon is in terms of offering a marketplace,
Speaker 7: offering advertising, and effectively selling across the board online, in stores,
Speaker 7: and they've grown their whole ecosystem. As a result, They've
Speaker 7: been able to capture a more affluent consumer. They're still
Speaker 7: satisfying that lower income consumer that needs the low prices
Speaker 7: on a day to day basis, and so they're really
Speaker 7: serving the American customer very broadly right now. And this
Speaker 7: quarter was very strong and I think it just shows
Speaker 7: those results.
Speaker 1: Yeah, Walmart's online sales now represent about eighteen percent of
Speaker 1: the company's business. They also have things like coupons for
Speaker 1: loyalty members to places like Burger King. I'm just wondering, Joe,
Speaker 1: if there is still the read through from a Walmart
Speaker 1: results to the rest of retailers. Do we get a
Speaker 1: real sense of the consumer and the health therein Yeah.
Speaker 7: No, I do think there's still a good read through.
Speaker 7: I mean, Walmart is still the largest retail in the world.
Speaker 7: And you know, they are still, especially in America, the largest,
Speaker 7: and they're capturing customers day to day. I mean, over
Speaker 7: around two thirds of their businesses groceries, and so they're
Speaker 7: seeing that customer come in once a week. And their
Speaker 7: grocery business was amid single digits in the Walmart US operations,
Speaker 7: so the customer is still coming in on a regular basis.
Speaker 7: They're seeking value. Their private brands have done well. As
Speaker 7: I said, they've captured a more affluent consumer. So it
Speaker 7: just seems like I do think it's still a good
Speaker 7: read on the broader consumer. But what's really interesting here
Speaker 7: is they do so much more now than just sell
Speaker 7: stuff out of the store, and I think that's what's
Speaker 7: gotten investors very excited. And you can see the strength
Speaker 7: and the market share games that they've had with the
Speaker 7: reports that they just did this morning.
Speaker 1: Is their gain taking away from Amazon or is it
Speaker 1: basically taking away from Target from all the other retailers
Speaker 1: that are a bit smaller and less advantaged than they are.
Speaker 7: Yeah, I think that the big guys kind of go
Speaker 7: to battle with one another, but really the.
Speaker 8: Share gains are coming from all those smaller, regional, local players.
Speaker 7: I think that's where you still see a lot of it,
Speaker 7: you know, because Amazon's operating quite well. I mean, they
Speaker 7: have very good earnings recently, and they're expected to have
Speaker 7: another good fourth quarter.
Speaker 8: I think Target's been operating quite well.
Speaker 7: We'll see tomorrow for sure, but I would expect, you know,
Speaker 7: some similar directional trends that we got out of Walmart today.
Speaker 7: But it's really as you go down. You know, the
Speaker 7: dollar stores have been under a lot of pressure this year.
Speaker 7: A lot of people believe that the Walmart's taking share
Speaker 7: from some of the dollar stores.
Speaker 8: I think that's somewhat true.
Speaker 7: Again, they are capturing a more affluent consumer, so that's
Speaker 7: coming from somewhere, you know, maybe the traditional grosser out there.
Speaker 7: So the prices are so good at Walmart, they're so sharp,
Speaker 7: and what's amazing is they're driving their business with increased traffic,
Speaker 7: increased unit sales. Those are the good things you want
Speaker 7: to see. It's not just ticket. Ticket's part of it,
Speaker 7: but it's really because they're getting more people and doing
Speaker 7: more frequently.
Speaker 5: Jill, I want to talk about strategy.
Speaker 1: Is the new strategy to start Christmas shopping in October
Speaker 1: next year?
Speaker 5: Is that what we're going to be talking.
Speaker 8: About Yeah, I think we may be already happened this
Speaker 8: year quite honestly.
Speaker 7: I mean with Amazon Prime Day back in October, and
Speaker 7: then Walmart did an event right around it, Target did
Speaker 7: an event Best Buy.
Speaker 8: Everybody else in retail tried to capture that week.
Speaker 7: And you know, we've been seeing Black Friday ads for
Speaker 7: quite a while now, and you know it started to
Speaker 7: kick in even a little bit more. Just yesterday we
Speaker 7: noticed a lot more emails and pushing that. So that
Speaker 7: holiday season has definitely gotten stretched out.
Speaker 8: Now.
Speaker 7: This year is kind of unique because there are five
Speaker 7: viewers days between Thanksgiving and Christmas, so that does compress
Speaker 7: the season a little bit, and I think that a
Speaker 7: lot of the retail has tried to take advantage by
Speaker 7: elongating it on the front end. But it just seems
Speaker 7: to us that you're going to see this continue for
Speaker 7: some time now. Where you made to late October is
Speaker 7: when things start really for the holiday season.
Speaker 2: Joe, We're all living it. We're hearing the music. We
Speaker 2: start hearing the music about a month or so ago, Joe,
Speaker 2: I wanted to talk about a theme that we've been
Speaker 2: discussing on this program for quite a while now, is
Speaker 2: how battle hard and how battle test did these companies
Speaker 2: have been the retailers over the last let's say eight years.
Speaker 2: They had the pandemic in the Trump first term president
Speaker 2: like Donald Trump will get a second term, they could
Speaker 2: face the same again, the tariffs the pandemic as well
Speaker 2: when they manage inventory. Joe, how have things changed over
Speaker 2: the last several years for these retailers given the tests
Speaker 2: that they've had, the unique tests over the last decade.
Speaker 7: Yeah, one of the biggest things that's changed is that
Speaker 7: the supply chain finally normalized in the past two years,
Speaker 7: let's say, and as a result, the retailers have been
Speaker 7: able to get back to more of that just.
Speaker 8: In time ordering.
Speaker 7: And we've seen the inventories be run very lean really
Speaker 7: for the past year year and a half for many
Speaker 7: of the retailers. You saw that again today even with Walmart,
Speaker 7: where they don't need to necessarily order early. Now when
Speaker 7: events happen like you know, the East Coast port strikes
Speaker 7: that happened and by the way, we haven't resolved that
Speaker 7: the contract has not been signed in the next round
Speaker 7: is January. The retailers did bring in inventory a little
Speaker 7: bit ahead of that. I know there's concern if and
Speaker 7: when the new tariffs get put in place by the
Speaker 7: new president Electroma. I think there is some concern that
Speaker 7: we might see some inventories get accelerated prior.
Speaker 8: To those terrffs. That makes sense.
Speaker 7: The retailers have definitely gotten smarter about how they're ordering,
Speaker 7: where they're ordering from. They've shifted their distribution or their
Speaker 7: supply chains beyond China. They're much stronger in other parts
Speaker 7: of Southeast Asia at this point and other parts of
Speaker 7: the world. So there's a little less reliance than the
Speaker 7: first go around with the tariffs back in twenty eighteen
Speaker 7: twenty nineteen, but it's still going to be a big
Speaker 7: pressure and it's going to likely pass on to the consumer,
Speaker 7: and we see it as somewhat of attacks on the
Speaker 7: consumer quite honestly, because it does it's likely to raise prices.
Speaker 7: All the retailers are telling us they're going to have
Speaker 7: to raise prices at the end of the day, maybe
Speaker 7: not for the full amount of the tariff, but definitely
Speaker 7: for a good portion of that, and we see that
Speaker 7: as an inflationary impact as well.
Speaker 1: Just to build on that, there is this feeling and
Speaker 1: every time we see a tariff announcement retailers sell off
Speaker 1: the most, and there are view to sort of sort
Speaker 1: of ground zero when it comes to potential companies that
Speaker 1: are most exposed to tariffs. Are you saying that maybe
Speaker 1: that's already baked into some degree and that people have
Speaker 1: basically prepared for that and these retailers have already plans
Speaker 1: in place to offset that.
Speaker 7: I think the retailers, the better ones at least, have
Speaker 7: definitely been planning for it. It was interesting, you know,
Speaker 7: the day after the election, the way the market trade,
Speaker 7: and I know there was that the Trump trade and
Speaker 7: everything went up. I think the market was up two
Speaker 7: and a half percent that day. The retailers that have
Speaker 7: more exposure to China were down that day in a
Speaker 7: pretty big way, and so you saw that initial reaction.
Speaker 7: So I think the market is already starting to think
Speaker 7: that way, who has more exposure?
Speaker 8: Where do they have to lighten up?
Speaker 7: But we cover quite a few companies that, you know,
Speaker 7: there's one example I have where, you know, several years
Speaker 7: ago they had.
Speaker 8: Fifty percent of their product coming out of China.
Speaker 7: Today it's twenty Actually, it's probably getting close to twenty.
Speaker 8: It was twenty five percent last year. It's probably twenty
Speaker 8: ish this year.
Speaker 7: So like you see the retailers move and reposition through
Speaker 7: the past couple of years, and I think we'll see
Speaker 7: more of that accelerate over the next six months.
Speaker 2: Job, it's going to hear from you, sir, good stuff.
Speaker 2: Joe Foundman there of TAUSI Advisory Group. We'll begin this
Speaker 2: out with equity's lower and bonds running as Ukraine carries
Speaker 2: out strikes in Russia using US weapons. Joining us now
Speaker 2: is Emily Rowland of John Hancock. Emily, welcome to the program.
Speaker 2: I want to turn to a quote that came from
Speaker 2: Lori Calvicina of RBC to kick off the training wig
Speaker 2: and she said this about valuations and positioning and sentiment
Speaker 2: that the US equity market seems to have little capacity
Speaker 2: to absorb bad news. What have we learned this morning
Speaker 2: on that front, Well, we've seen the.
Speaker 9: Modest bid John, for some of the geopolitical hedges out there.
Speaker 9: You know, you're seeing the dollar strengthen you're seeing gold
Speaker 9: catch a bid here, you know.
Speaker 5: Notably, oil prices.
Speaker 9: Are still looking at WTI below seventy dollars in barrel.
Speaker 9: So we saw a big move of course yesterday that's
Speaker 9: moderated a bit today and then again a modest bid
Speaker 9: for treasuries here.
Speaker 5: I think the treasury bond market.
Speaker 9: Has been focused on nothing but the potential for pro
Speaker 9: cyclical policies under the Trump administration. So you're seeing a
Speaker 9: bit of a shift here, but it's certainly nothing that's
Speaker 9: overly notable here given the prospects for heightened geopolitical risk.
Speaker 2: When you think about all these issues on the table
Speaker 2: at the moment, emily, it just feels like it might
Speaker 2: be US driven in this case, a decision to allow
Speaker 2: Ukraine to strike Russia inside Russia with US missiles, but
Speaker 2: it's Europe's problem. Likewise with tariffs, tariffs ultimately Europe's problem.
Speaker 3: This is just.
Speaker 2: Reinforce the view of US exceptionalism. It's next year.
Speaker 5: Well, certainly that's what markets are telling us.
Speaker 9: You know, we've seen massive outperformance from US assets here
Speaker 9: again that dollar strengthening trade. We've seen this almost speculative
Speaker 9: frenzy across risk assets in the United States, everything from
Speaker 9: cryptocurrencies and crypto related assets to lower quality grows stocks.
Speaker 9: I think one of the things that we need to
Speaker 9: think about here is the consensus around the US is
Speaker 9: so overwhelmingly positive right now and when the consensus moves
Speaker 9: to one side of the boat, sometimes it can flip.
Speaker 9: We want to think about, you know, potentially fading some
Speaker 9: of the move that we've seen into more speculative assets
Speaker 9: and redeploying assets into higher quality, more defensive options here,
Speaker 9: given the massive run that we've seen in more speculative assets.
Speaker 1: So emily sell Tesla buy ten year treasure yields.
Speaker 9: Well, you know, I think you got to own some
Speaker 9: of that stuff. You know, Tesla's certainly come a long way,
Speaker 9: you know. We look at, of course, the big event
Speaker 9: after the close tomorrow with Navidia's earnings. Navidia is the
Speaker 9: number one high quality stock. So we want to continue
Speaker 9: to embrace quality, and that's according to quality indices that
Speaker 9: we look at. We want to look for companies with
Speaker 9: great balance sheets, good return on equity, a good ability
Speaker 9: to maintain margins here, but I think the name of
Speaker 9: the game right now is really quality at a reasonable price.
Speaker 9: How can we think about embracing those quality companies but
Speaker 9: not overpaying for them? And so we're following the earnings
Speaker 9: going to be really interesting to see if Navidia can
Speaker 9: once again deliver tomorrow.
Speaker 1: Are we underestimating how much of a macro story and
Speaker 1: video is going to be then basically this could be
Speaker 1: the main event of the week in a pretty significant
Speaker 1: way to send markets in a direction about if they
Speaker 1: can raise and be in the same kind of way.
Speaker 9: Yeah, I mean, I think it's just because of the
Speaker 9: sheer size of the stock.
Speaker 5: It's got to be critical. You know. I've been spending
Speaker 5: a lot of time.
Speaker 9: With investors over the course the last few weeks contending
Speaker 9: with some of the issues around, for example, emerging market
Speaker 9: equities and what to do with those positions. I've gotten
Speaker 9: a lot of questions about you know, India for example,
Speaker 9: and we've had those conversations. But it's like, look, Navidia
Speaker 9: is twenty times a side of some of these markets.
Speaker 9: So that's why it's so critical here to portfolios. Again,
Speaker 9: we want to be there because the earnings are delivered
Speaker 9: and it's high quality. We've got to think about diversifying
Speaker 9: that exposure and finding areas of the market that are
Speaker 9: still going to give us quality. Make paps industrials for example,
Speaker 9: what that actually are trading at more reasonable valuations.
Speaker 6: Emily, in your notes you talk about and you're talking
Speaker 6: about here that you push back against this consensus, this
Speaker 6: idea against higher inflation, higher growth narrative.
Speaker 3: Then what do you.
Speaker 6: Look at when you think about these policies that potentially
Speaker 6: we're going to see next year, which many say they
Speaker 6: actually could be inflationary.
Speaker 5: Well, Amory, I.
Speaker 9: Think potentially is the right word, and I think a
Speaker 9: lot of us have been paying the word potentially over
Speaker 9: the last couple of weeks.
Speaker 5: Here.
Speaker 9: You know, we looked back at the last Trump administration
Speaker 9: and yes, there were some different dynamics from a macro perspective,
Speaker 9: but core PCE, which you know is a FED preferred
Speaker 9: measure of inflation average one point seven percent in the
Speaker 9: last Trump administration. If these tariffs are more targeted, you
Speaker 9: may see the impact to inflation be much more muted,
Speaker 9: maybe a.
Speaker 5: Tenth of one percent.
Speaker 9: Per a lot of the economists that we've talked to
Speaker 9: about this issue, the impact of these potential immigration issues
Speaker 9: actually are going.
Speaker 5: To possibly way on growth. So we're looking at some
Speaker 5: of the.
Speaker 9: Things that the bond market's really not sniffing out right now.
Speaker 9: For one, wage growth that is coming down meaningfully, quits,
Speaker 9: job quit rates are down, which should put downward pressure
Speaker 9: on wage growth and corporate profits. Housing supply is increasing
Speaker 9: significantly right now, which should cause that tricky shelter component
Speaker 9: of inflation to finally moderate in our view. And then
Speaker 9: the commodity story, which we mentioned earlier. If you're expecting
Speaker 9: some kind of nineteen seventies boom and inflation, that has
Speaker 9: to come alongside higher commodity prices, and we simply aren't
Speaker 9: seeing it now, especially given more muted demand out of China.
Speaker 9: So we think every backup in bond yields represents a
Speaker 9: nice opportunity to lean into the income that's available, which
Speaker 9: is now close to five percent on the aggregate bond inducks.
Speaker 6: Two policy proposals you didn't mention. I'd love to get
Speaker 6: your view on the idea of we're going to see
Speaker 6: tax cuts at the end of next year, and also
Speaker 6: that this is a president that wants to see deregulation
Speaker 6: throughout the Washington complex.
Speaker 9: Yeah, the deregulation story, I think you're primarily seeing in
Speaker 9: the outperformance of financials. Regional banks are on an absolute tear.
Speaker 9: Same thing happened post the twenty sixteen election. That trade
Speaker 9: lasted for a couple of months after the election and
Speaker 9: then basically moved sideways.
Speaker 5: Not to say there wasn't value.
Speaker 9: There, but really the bulk of the outperformance came on
Speaker 9: the news. You know, we're also looking at corporate tax
Speaker 9: cuts potentially again potentially, and that one's very accreative to
Speaker 9: corporate earning. If you look at the S and P
Speaker 9: five hundred next twelve month earnings growth, you saw spike
Speaker 9: in twenty seventeen once those once those tax cuts went through.
Speaker 5: So I think investors are betting on that.
Speaker 9: The challenge is a lot of this great news, whether
Speaker 9: it's continued stock prices running, whether it's the economy doing well.
Speaker 5: A lot of that is in.
Speaker 9: The price on the equity side, with the S and
Speaker 9: P five hundred trading at about twenty two times forward
Speaker 9: earnings twenty seven times trailing, which is expensive as stocks
Speaker 9: have ever been third most expensive in history. So we
Speaker 9: want to think about the fact that, you know, can
Speaker 9: we get much more multiple expansion. We've just seen a
Speaker 9: massive ball market that was all driven by multiple expansion.
Speaker 9: Earnings have actually gone pretty much nowhere over the last
Speaker 9: couple of years.
Speaker 5: That's the reason we're thinking about bonds.
Speaker 9: We don't think that their price appropriately for what comes next.
Speaker 5: Ducks are already there.
Speaker 3: Emily I have to say.
Speaker 1: What I'm hearing from a lot of different investors is
Speaker 1: a desire to try to get out from under the
Speaker 1: whipsaw headlines of you know, the Treasury secretary race and
Speaker 1: whether we will get tariffs and how much or how
Speaker 1: not to and all of these kinds of things and
Speaker 1: figure out what you can lean into. That's just sort
Speaker 1: of a constant, is that basically what you guys have
Speaker 1: been doing. How do we strip out the signal from
Speaker 1: the noise and really figure out our strategy independent of
Speaker 1: what some of these policies might be.
Speaker 9: Yeah, and Lisa, You're right, it's tough and it might
Speaker 9: be a little boring to people to you know, kind
Speaker 9: of try to stay away from some of the conjecture
Speaker 9: and think about what really drives markets or time.
Speaker 5: You know, you look at some of the.
Speaker 9: Relative performance under the last two administrations and it's actually
Speaker 9: exactly the opposite of what you might have guessed. For example,
Speaker 9: under the Abiden administration, the best performing asset class by
Speaker 9: far has been energy, Probably not what you would have
Speaker 9: thought given the green energy policies that have been put
Speaker 9: in place under Trump. The first Trump one of the
Speaker 9: best performing asset classes you could have owned was Chinese stocks.
Speaker 9: It's because we were in a period of global sannchronized growth.
Speaker 9: That macro story was far more important than what was
Speaker 9: happening from a policy perspective. So we think if you
Speaker 9: can try to cancel out some of the noise, focus
Speaker 9: on earnings trends, focus what's happening from an economic standpoint,
Speaker 9: that's going to lead you to a better path forward.
Speaker 5: As far as cross asset performance, we.
Speaker 1: Did just get Walmart earnings, we get Target tomorrow.
Speaker 3: We also get in video.
Speaker 1: We've talked about in Vidia. Other than in Vidia, is
Speaker 1: there an earning story that you think is kind of
Speaker 1: a north star of some sort of signal versus just
Speaker 1: simply noise.
Speaker 9: Well, I think it's really about the broader story here,
Speaker 9: and the bar is just going up. You know, analysts
Speaker 9: are penciling in fifteen percent earnings growth in twenty twenty five,
Speaker 9: and we think that's an awfully high bar given the
Speaker 9: fact that we're seeing decelerating growth trends. It doesn't mean
Speaker 9: that there aren't pockets of the market that can achieve that,
Speaker 9: but you've got to be really, really mindful here in
Speaker 9: terms of reaching too far for risk, And again embracing
Speaker 9: those higher quality, more defensive options. We like areas like
Speaker 9: utility companies. We continue to like technology companies at a
Speaker 9: reasonable price. It's really about that internal market rotation and frankly,
Speaker 9: finding an active manager that can identify those stories.
Speaker 2: Emily, I appreciate your time this morning. Thanks for catching
Speaker 2: up with us. Em Many run in there of John Hancock.
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Speaker 8: M