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Speaker 1: Let's get to our guest, Mark Chandler, chief market strategist

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Speaker 1: and managing partner at Bannockburn Global. Mark, the dollar down

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Speaker 1: and yields down today, that's kind of a moderating FED story,

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Speaker 1: as Doug mentioned, uh, And we had the Bank of

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Speaker 1: Canada to to thank for a little bit of that

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Speaker 1: today and and actually it proved as a good offset

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Speaker 1: on a day when we had a lot of earnings

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Speaker 1: weakness from the mega caps. But in any case, that trend.

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Speaker 1: Do you see that trend of of the dollar down

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Speaker 1: and yields down continuing, Well, I think that is the driver.

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Speaker 1: I mean, I think that was has listed the dollar

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Speaker 1: for more than a year now, has been this idea

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Speaker 1: that the Fed continues the ratchet uprates. And I think

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Speaker 1: that was seeing the peak of that. Uh. You know,

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Speaker 1: I think that's party why the two years off and

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Speaker 1: so I've been looking for the dollar to turn here,

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Speaker 1: and I thought that Sterling's low back in leak September

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Speaker 1: during that turmoil at one oh three fifty, I think

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Speaker 1: that was it. And that's when I thought the most

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Speaker 1: constant about it. Now I think the others are turning.

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Speaker 1: But you know, this movie is quite deep already. You know,

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Speaker 1: you think about sterling bottoming at one or three fifty,

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Speaker 1: and today we got up almost one sixteen and a half,

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Speaker 1: quite a big move, and so I'm afraid that we

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Speaker 1: might consolidate now. Maybe even the dollar firms up. Maybe

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Speaker 1: it's after tomorrow's GDP number, Maybe it's with the Fed

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Speaker 1: next week, maybe it's with the jobs data. But so

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Speaker 1: I'm looking for the daughter generally to trend high, excievely

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Speaker 1: the dollar to trend lower, but in a very short

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Speaker 1: term maybe correct a little bit. Well, some corford certainly

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Speaker 1: gonna welcome move back to some sort of normality for

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Speaker 1: the dollar, given the effect it's having on these bottom lines. Yeah,

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Speaker 1: you know that's what we typically have, right, and when

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Speaker 1: the dollar is strong, Uh, corporations complain about it, but

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Speaker 1: you know, when you really look at the profitability of

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Speaker 1: US corporates throughout this dollar rise over the past year,

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Speaker 1: it's quite remarkable. It's only now that they're really beginning

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Speaker 1: to like blame with the dollar more. But remember the

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Speaker 1: US economy and the global economy are slowing down, and

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Speaker 1: that would be a hit at earnings or a drag

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Speaker 1: on earnings in any event. Yeah, I I know that

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Speaker 1: you know, we all know you as a as a

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Speaker 1: currency guy, but you know your hat now is chief

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Speaker 1: market strategists. So fair enough to talk to you a

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Speaker 1: little bit more about macro um. I love Mike Wilson

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Speaker 1: at Morgan Stanley, but it's it's hard to make one

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Speaker 1: market timing call, much less four. And I want to

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Speaker 1: run run by you what he's saying. He's saying that

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Speaker 1: the market will rally here in the short term, then

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Speaker 1: resume the bear market, then bottom in the first quarter,

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Speaker 1: and rally from there only to face pressure late next year. Now,

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Speaker 1: I know that you have nuanced positions as well. If

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Speaker 1: you look at if you look at equities over the

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Speaker 1: next year, what sort of ride do you see? Well,

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Speaker 1: I think for me it's really these, these patterned in

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Speaker 1: some in some ways, these are the macro guide I

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Speaker 1: really liked. Right, we're looking for patterns, and I often

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Speaker 1: see the S and P five hundred having bottomed a

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Speaker 1: couple of quarters before earnings bottom. And so when do

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Speaker 1: we think earnings are going to bottom? Maybe the middle

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Speaker 1: of next year. So it makes sense to me that

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Speaker 1: after after a huge down movie that we've seen this year,

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Speaker 1: that we begin stabilizing. And I like this level that

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Speaker 1: we've we broke out about the SNP earlier this week,

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Speaker 1: atten Mark, I mean amazing moves by the dollar. We've

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Speaker 1: also got the ECB and perspective today as well, and

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Speaker 1: why they expected to deliver a seventy five basis point

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Speaker 1: in hike. How much was that to do with the

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Speaker 1: dollars full? And is that largely because it's been I

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Speaker 1: thought it had already been priced in, but perhaps it happen't. Yeah, No,

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Speaker 1: I think you're right. I mean that the uh, why

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Speaker 1: is the ECB raising interest rates when the head of

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Speaker 1: for recession? Partly because inflation is high? And what's the

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Speaker 1: cause of inflation? I I'd agree, of course a little

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Speaker 1: bit of it coming from the dollar, but I think

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Speaker 1: that the real problem is higher energy prices, and that

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Speaker 1: is more to do about what's happened with Russia and

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Speaker 1: the policy response, and it is about the dollar. But

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Speaker 1: for sure, on the margins of dollar, dollar don't hasn't

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Speaker 1: helped them very much. It is interesting the point you're

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Speaker 1: making before the break about stocks actually being more of

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Speaker 1: a forward looking indicator, not not not following. So, in

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Speaker 1: other words, if we're heading into recession, it's not normally

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Speaker 1: that the stock market then bottoms later than that that

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Speaker 1: it happens a bit earlier. So what are some of

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Speaker 1: the things that you're looking at to bear out that argument,

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Speaker 1: something that you can bet on. Yeah, I think that's

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Speaker 1: tough right now. I mean, because if you know, this

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Speaker 1: could just be another one of those bearer market rallies.

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Speaker 1: And those bearer market rallies tend to be very, very

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Speaker 1: dramatic and catches a lot of us people looking for

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Speaker 1: a bounce. We get a beer market rally, and we

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Speaker 1: think it's the real thing. But I think that what

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Speaker 1: we wanted. What I mean, it sounds kind of gruesome

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Speaker 1: in a way. We want to see the economy weekend

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Speaker 1: and for inflation to come down, and I do think

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Speaker 1: inflation is going to fall. I think that's the big surprise.

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Speaker 1: Here's what it looks like to me, inflation CPI average

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Speaker 1: should be anualized rateing Q one, annualized rate, in Q two,

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Speaker 1: annualize rate here in you three. I think they're gonna

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Speaker 1: be looking at, say more than a percentage point off

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Speaker 1: of CPI before the end of the year. That will

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Speaker 1: reinforce his theme about the set slowing down its tikes.

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Speaker 1: Whether in the beginning in December or early next year,

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Speaker 1: they'll set up the stage for a stronger stock market recovery. So, Mark,

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Speaker 1: is that largely done to base effects? What's the deal here? Well,

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Speaker 1: part of the space effect, But I think there was

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Speaker 1: seem like prices they're falling. I think that, you know,

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Speaker 1: you know, see a lot of things are taking place, right.

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Speaker 1: The set has been raising reach are quite for six

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Speaker 1: months now, and there is a lag time, and so

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Speaker 1: four to six months not so bad for monetary policy.

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Speaker 1: The dollar, as we talked about, has been strong. Demand

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Speaker 1: is weakening. We see this from all these corporate earnings, right,

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Speaker 1: they're saying, yeah, we raised prices to make up for

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Speaker 1: lower volumes. Yea. So so if if you're right, if

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Speaker 1: the trend ultimately for the dollar is down, that the

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Speaker 1: dollar has peaked, and that equities have have bottomed, what's

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Speaker 1: the best way to play it? I mean, do you

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Speaker 1: do you have the safest way to play that for

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Speaker 1: let's say an audience that's listening to every word. Yeah,

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Speaker 1: I think that, you know, for a lot of Americans,

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Speaker 1: I don't know about you know, the average the per

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Speaker 1: capter income of your listeners, But I think the most

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Speaker 1: American households. The best thing to do right now but

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Speaker 1: cash is buying an I bond bonds the US governmentselves

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Speaker 1: directly to people ibond dot com. I can confided on

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Speaker 1: the government website, and this is an inflation link bond

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Speaker 1: that up until recently it's been really institutional investors. This

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Speaker 1: is available to retail investors with a ten dollar limit.

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Speaker 1: But the amazing thing about it, it's right now it

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Speaker 1: pays over nine risk free from the US government the

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Speaker 1: coupon or the So the inflation premium gets reset next month,

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Speaker 1: but the CPI over eight percent. It's not going to

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Speaker 1: go down that that's far okay, So gives a sentence

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Speaker 1: then overall here of what that means for markets. They're

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Speaker 1: looking ahead. Yeah, So I mean I think that you know,

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Speaker 1: we've step into this like horrible shocks we with COVID

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Speaker 1: the war trying to reprice assets, and there was like

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Speaker 1: seventeen or eighteen trillion dollars of negative yielding bonds to say,

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Speaker 1: there's hardly any the markets had this. So we're not

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Speaker 1: only having the geopolitical shocks, but then the shock of

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Speaker 1: having to repriced asset with a positive interest rate. The

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Speaker 1: good news is that's behind us. We've we've largely done that.

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Speaker 1: If anything, maybe interesting are closely to your peak and

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Speaker 1: they are to the floor, and so I think that

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Speaker 1: I know there's a there's a lot of cards to

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Speaker 1: be pessimistic. Mark, thank you very much in need Mark

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Speaker 1: johnald is that chief market strategist and the managing part

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Speaker 1: at the Bandittment, a global