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Speaker 1: So let's get to our guest, Carry Craig, global market

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Speaker 1: strategist over at JP Morgan Asset Management. So, Carrie, it

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Speaker 1: turns out Google is no snap. I think we probably

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Speaker 1: should have known that anyway, But there wasn't really all

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Speaker 1: that much in the earnings report to be pleased with.

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Speaker 1: In in Alphabet's results, it's kind of less bad than feared. Um.

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Speaker 1: That can only get you so far. But against that,

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Speaker 1: you've got a whole bunch of other companies like Coke, McDonald's,

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Speaker 1: three M T I and others that produced really strong earnings.

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Speaker 1: So net net, what I'm saying is the big picture

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Speaker 1: doesn't get much clearer. Your thoughts on that, good morning, Brian. Yeah,

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Speaker 1: it's a case of less bad but not good. I

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Speaker 1: think when it comes to the earnings out of the

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Speaker 1: US at the moment, it's pretty much bag. That's some

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Speaker 1: pretty clear messages, even though when we had about a

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Speaker 1: quarter of companies reported UM. Clearly the down train coming

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Speaker 1: through in terms of consumer spending is is pretty clear.

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Speaker 1: And the way that consumers are reacting to prices UM

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Speaker 1: and there's spenning habits will probably continue over the second

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Speaker 1: half of this year. And it's also very clear that

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Speaker 1: the US dollar strength and of the course this year

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Speaker 1: is is a big hit one for for US earnings.

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Speaker 1: And again, I think coming into this earning season, it

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Speaker 1: wasn't necessarily going to be around exactly how much companies

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Speaker 1: reported in terms of their growth and earnings. There was

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Speaker 1: always going to be that guidance in terms of what

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Speaker 1: they saw happening for the rest of the year, and

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Speaker 1: those trends are being confirmed in terms of the slowing

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Speaker 1: outlook and the fact that analyst earnings expectations for the

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Speaker 1: full year for earnings for the US were probably a

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Speaker 1: bit elevated and compared to what we were actually going

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Speaker 1: to deliver um, and that's just going to lead to

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Speaker 1: a bit more downward pressure and equities in our mind.

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Speaker 1: Carry this is Stephen Angle. Here, are there areas within

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Speaker 1: the tech as we get all these big tech companies

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Speaker 1: reporting and they're giving different kinds of signals, are there

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Speaker 1: areas of tech that would be more attractive to whether

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Speaker 1: this storm if you will? Uh, you know you just

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Speaker 1: mentioned about the dollar that hurt Microsoft as they repatriate

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Speaker 1: their earnings from abroad. Yeah, there's a future ins to

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Speaker 1: to look for. I think obviously that the off shore

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Speaker 1: revenues and their dollar strength. I mean, you can debate

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Speaker 1: whether the dollars are going to continue to strength in

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Speaker 1: that environment or whether it's probably getting near the top um.

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Speaker 1: And the other thing to look at is obviously the

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Speaker 1: rise in the cost of labor. You know, that's a

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Speaker 1: big cost for a lot of these tech companies. Will

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Speaker 1: you see further layoffs being announced and when they try

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Speaker 1: and control those costs through through that means. So I

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Speaker 1: think that approaching the text sector is something that we

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Speaker 1: always take from a longer term viewpoint because they fit

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Speaker 1: into those secular friends cloud computing, AI. But the cost

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Speaker 1: pressures on these companies right now are pretty high, and

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Speaker 1: so we'd be thinking about the valuations that have come down,

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Speaker 1: but you know, in the US and in the tech

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Speaker 1: broadly still being quite elevated though compared to many other

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Speaker 1: markets in terms of the opportunities there. So I think

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Speaker 1: the focus really is bottom up in terms of how

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Speaker 1: much can these companies control costs and how much of

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Speaker 1: their revenues be heard by that strong dolerance. So before

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Speaker 1: the break we talked a lot about the earnings results

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Speaker 1: and doug with that, but that would be remiss not

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Speaker 1: to ask you about the FED. Obviously, as Dog just mentioned,

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Speaker 1: pretty much a seventy five basis point hike is baked

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Speaker 1: in right now. Do you believe though, that J. Powell

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Speaker 1: and company can navigate a soft landing or are we

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Speaker 1: heading for a recession? Well, I think it comes down

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Speaker 1: to your deficient definition of a soft landing, and I

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Speaker 1: think the FITS view involved recession would be a soft landing.

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Speaker 1: So the recession is disinflationary if you want less inflation.

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Speaker 1: I think the fit is is definitely sort of pushing

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Speaker 1: the economy in that direction. And a lot of the

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Speaker 1: inflation is caused by things that they can't control the

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Speaker 1: supply side, from from energy prices and food, so they

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Speaker 1: can only bring down inflation by distracting that demand, and

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Speaker 1: that would necessarily push the economy into that sort of

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Speaker 1: very low growth or even contractionary period. So I think

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Speaker 1: you're ready hitting for it for a mild recession in

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Speaker 1: the US at some point. It doesn't mean it's going

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Speaker 1: to happen this quarter or next quarter, but I think

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Speaker 1: that's going to be be the outcome. But I think

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Speaker 1: more importantly, as we look for the impact of markets,

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Speaker 1: that policy growth mix is probably becoming a little bit

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Speaker 1: more balanced in terms of rather being focused strictly on

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Speaker 1: the inflation outlook. It's it's becoming a little bit more

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Speaker 1: around the weakening and growth, and I expect to hear

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Speaker 1: a little bit more about that from from how we

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Speaker 1: do get the statement and in the press conference we

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Speaker 1: did see copper rise for a third day, and it's

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Speaker 1: just we moved the story yesterday in our early Indicators

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Speaker 1: on China that China's growth picked up pretty significantly in July.

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Speaker 1: Confidence coming back obviously business activities guide going again? Is

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Speaker 1: that enough? Is is it improving China enough to kind

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Speaker 1: of flip the story on the on the global recovery.

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Speaker 1: We have a pretty positive view on on China compared

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Speaker 1: to the rest of the world, at least the developed

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Speaker 1: world at the moment um. And it does come back

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Speaker 1: down to how they handle further outbreaks around COVID and

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Speaker 1: the restrictions that get imposed and whether they are something

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Speaker 1: that's more tactical or something that's going to be across

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Speaker 1: whole cities. And I think that's what you're seeing at

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Speaker 1: the moment, that you are seeing a little bit more

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Speaker 1: um flexibility when it comes to that, and that's important

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Speaker 1: for thinking about how consumers will behave, how companies will invest,

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Speaker 1: and that's really going to be the determining factor for

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Speaker 1: us because clearly plenty of physical, physical support coming through,

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Speaker 1: and so I think that that's enough, but you do

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Speaker 1: really need to get people out there spending, and that

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Speaker 1: can only happen if they aren't restricted to their homes.

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Speaker 1: Right Well, what what specifically then really gives you that

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Speaker 1: optimism on China? Obviously there there are signs that they're

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Speaker 1: relaxing some of the regulatory pressures that we've seen on technology.

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Speaker 1: Also there's talk of these property funds to support that

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Speaker 1: big pillar of the economy, but again trying to still

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Speaker 1: a closed economy right now with the COVID restrictions that

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Speaker 1: you've just mentioned. I think it's the combination of those factors.

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Speaker 1: So you have huge amounts of fysical support coming through.

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Speaker 1: Compared to the first half of one you had like

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Speaker 1: the one and a half trillion dollars in local government

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Speaker 1: special bonusuents, the first half of the year had like

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Speaker 1: three points four trillions eating it a lot more of

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Speaker 1: that ramp up in the fiscal side. You are having

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Speaker 1: that same focus on deliveragy in the housing market, but again,

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Speaker 1: you've got that support there, so it doesn't really become

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Speaker 1: a systemic issue in terms of what's happening with the

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Speaker 1: mortary payments. Um, you do have that shifting narrative in

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Speaker 1: terms of how restrictive they're going to be, and when

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Speaker 1: it comes to those COVID lockdowns, and again that regulatory

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Speaker 1: environment becoming a little bit better as well. Those things

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Speaker 1: all add up for an economy that's definitely focused on

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Speaker 1: growth more and the biggest spited second. But the Ali

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Speaker 1: Baba's story yesterday is kind of another sign that the

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Speaker 1: US and China are pulling further apart. Um. We just

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Speaker 1: heard we just got word that President she and President

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Speaker 1: Biden will meet on Thursday. What might we expect from that? Yeah,

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Speaker 1: I think there's there's different cases to say that you

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Speaker 1: know that we're moving to a world that's got multi

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Speaker 1: polar and how it operates, and that you know the

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Speaker 1: companies are going to be caught in the middle of

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Speaker 1: those a lot of this politics. I think out of

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Speaker 1: those meetings you'll be looking for something that's probably a

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Speaker 1: little bit of given take when it comes to some

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Speaker 1: of the tariffs have been imposed, some of the funny

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Speaker 1: acentual regulation that's been looked at the c C and

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Speaker 1: how the company's going to operate. But you know, I

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Speaker 1: wouldn't expect any massive announcements that's coming out of this meeting,

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Speaker 1: but I think it's positive at their meeting. Yeah, absolutely, Kerry,

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Speaker 1: thank you so much for joining us. Kerry Craig, Global

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Speaker 1: market Strategist the JPMorgan Asset Management