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Speaker 2: John Stolfus APCO, We're thrilled that he could join us today.
Speaker 2: What are you writing this morning? I mean, my head
Speaker 2: is spinning over the last forty eight hours. Just give
Speaker 2: us a summary of the Stolfus. It's cast in stone,
Speaker 2: it's in granite out. What are you writing this morning?
Speaker 3: Well, actually we're not writing yet because I'm sitting here.
Speaker 3: But I can tell you what we have done this
Speaker 3: year thus far is we have not made any changes
Speaker 3: on our outlook for the year. We continue with an
Speaker 3: eighty one hundred target for the S and P five hundred.
Speaker 3: Our favorite sectors continue to be information technology, communications services,
Speaker 3: consumer discretionary industrials, and financials, all of which have been
Speaker 3: hurt over the period of the year since the market
Speaker 3: hit the top I think it was in January twenty seventh,
Speaker 3: and we think that we're going to get back to
Speaker 3: business here. That said, we have to say that you know.
Speaker 3: This is we've been at many different points in the
Speaker 3: history of this country since we boomers have been around,
Speaker 3: when it looks like pieces in the Middle East and
Speaker 3: that it doesn't actually come to fruition or it is
Speaker 3: very tentative. I think the markets remain sensitive to the
Speaker 3: news flow on a day to day basis, but overall,
Speaker 3: I think this today, what we know, at least for
Speaker 3: today is certainly calls justifies a rally, but we think,
Speaker 3: you know, it's like John McLaughlin the guitar and his
Speaker 3: acoustic album once set a thousand years ago. My goal
Speaker 3: is beyond.
Speaker 2: Our goal is.
Speaker 3: Beyond as intermediate to longer term investors. So that's why
Speaker 3: with all that occurred, we keep looking ahead and we
Speaker 3: have to think that this situation in the Middle East
Speaker 3: is so extraordinary that it had to be dealt with
Speaker 3: in some fashion, and the fact that there's a different
Speaker 3: play in terms of the allies. If you consider Saudi Arabia, Arabia,
Speaker 3: the UAE, of a variety of very major players in
Speaker 3: the Middle East that are on our side here and
Speaker 3: have been attacked by around this is a very different situation.
Speaker 3: They always say, be careful when you say this time
Speaker 3: is different, but I think in so many ways, the
Speaker 3: way we were is no longer the way we are today.
Speaker 4: Believe it or not, we're going to get back to
Speaker 4: some fundamentals next week, whether we like it or not.
Speaker 4: Earnings are going to start here again. What are your expectations?
Speaker 4: What do you think we're going to hear from companies?
Speaker 4: Is they try to navigate this uncertainty. They've kind of
Speaker 4: navigated terrorists. That was the last year's story. Now it
Speaker 4: seems like war is going to be this year's story.
Speaker 4: You know.
Speaker 3: I think it will, and I think in many cases,
Speaker 3: what we'll likely see is how technology and the experience
Speaker 3: of solid managements being able to have over the last
Speaker 3: eighteen years, gotten over the financial crisis, COVID, the variety
Speaker 3: of intensity and supply chain disruptions. I think we'll actually
Speaker 3: hear some very positive things from many companies. The initial
Speaker 3: I think only seventeen companies are reported thus far, But
Speaker 3: if you look at the EA page, it's a little wild.
Speaker 3: I mean, the growth looks so good in some areas
Speaker 3: and others it doesn't, but overall it's.
Speaker 2: Very good so far.
Speaker 3: I think we'll get plenty of positive surprises. I do think.
Speaker 3: You know, we've always got to remember, just like with
Speaker 3: the non farm payroll number, the one prior to this
Speaker 3: one was a negative one. There's all is volatility. It'll
Speaker 3: be a mixed bag, but I think overall it'll be positive.
Speaker 3: I think we continue with good growth.
Speaker 2: Have you ever seen in your arched career, Glen back
Speaker 2: to Les Paul, have you ever seen a decline in
Speaker 2: multiple like we've enjoyed in Microsoft?
Speaker 3: You know, not that I can think of off of
Speaker 3: the top of my head, because I wasn't prepared to
Speaker 3: answer this question without taking a look at the multiple
Speaker 3: going back over the years.
Speaker 2: Let's go prominent.
Speaker 3: Company, whatever done twenty one, I would have to say,
Speaker 3: I don't think so. It is extraordinary. And what I
Speaker 3: find that in many ways today, and it might have
Speaker 3: to do with social media, is the large s that
Speaker 3: is given to all kinds of negativity and projections on
Speaker 3: companies and what has what has hit that company? For example,
Speaker 3: when when you think about how powerful their position is
Speaker 3: and being deeply embedded in the lives of both business
Speaker 3: and the consumers and their financial standing. The idea that
Speaker 3: companies that are investing large sums of money in AI
Speaker 3: have to be profitable on those investments immediate. It gives
Speaker 3: me the question of where were they? When were these
Speaker 3: people born? I mean, profitability usually takes time to come around.
Speaker 2: John stulf is with us and we will continue a
Speaker 2: headline we have anticipated. I'm sure the Secretary of Defense
Speaker 2: is anticipated as well. This from Iran state television. First
Speaker 2: ship passed through Harmez since cease fire. We'll see what
Speaker 2: that does to the market. We haven't really seen that
Speaker 2: tone yet. We need confirmation of that, of course, but
Speaker 2: there it is a tentative lift to the market here
Speaker 2: at futures up one hundred and seventy eight points down,
Speaker 2: features up one thousand, two hundred and sixty six points
Speaker 2: two point seven percent. Good morning across America. We continue
Speaker 2: Paul Sweeney with John Stolphus of OpCo.
Speaker 4: John, what'll be doing in the bond market here these days?
Speaker 4: I mean people are clipping some nice coupons just in
Speaker 4: the treasury market. Do they need to take credit risk here?
Speaker 2: Do you think? You know?
Speaker 3: I have to think when it comes to the bond market,
Speaker 3: the bond market, within the community, within the bond market,
Speaker 3: the trades there tends to be an obsession with keeping
Speaker 3: durations shorter rather than longer, and that seems to us
Speaker 3: to be the right thing. With stickier than expected inflation,
Speaker 3: plus the exasperation that people are feeling related to higher
Speaker 3: oil prices, that are likely to take longer to work
Speaker 3: out of the system than one would like to see,
Speaker 3: but at the same time probably getting resolved sooner than
Speaker 3: the skeptics and the most parish would expect to be.
Speaker 3: But we'd have to think, you know, when it comes
Speaker 3: to fixed income, our take is we are overweight equities
Speaker 3: in our position in the portfolios, but with fixed income,
Speaker 3: we see it as a great diversifier and means to
Speaker 3: get current income other than simply dividends, and you just
Speaker 3: have to watch your duration. Is the quality the opportunity
Speaker 3: and tax frees still look very attractive? Does in high
Speaker 3: tax vicinities?
Speaker 4: How about the It doesn't look like the Fed's going
Speaker 4: to give us any help this year. I mean, I'm
Speaker 4: just looking at the Bloomberg terminal and the warp function.
Speaker 4: They've at market priced taken away and maybe any any
Speaker 4: rate cuts this year. Can a market still work in
Speaker 4: that kind of environment?
Speaker 3: I think so based on what we've come to see.
Speaker 3: I mean, we've we've been living now for two years
Speaker 3: in succession with just three cuts after what eleven hikes
Speaker 3: and fourteen pauses at the higher end of that. And
Speaker 3: the economy has shown remarkable resilience. Job growth has shown
Speaker 3: remarkable resilience, even though it's slowing somewhat it could be expected,
Speaker 3: but that we think that the operative word remains resilience here.
Speaker 3: Don't look for robust things, but look for resilience is key.
Speaker 2: What are you hearing from upgo? Your research has been
Speaker 2: so sophisticated over the decades. There's almost a calmness there.
Speaker 2: Are they calm or is there some sweat going up? Well,
Speaker 2: I'm flattered what you just said. Thank you. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 2: Golder Mountavali is our definitive reporter on her Persia, her around,
Speaker 2: and we're thrilled that she could join us from Queen
Speaker 2: Victoria Street this morning. Golnar, there is Revolution Square, there
Speaker 2: is Freedom Square, there are roads where there are protests
Speaker 2: hiding from security, there are protests often from the rooftop.
Speaker 2: What can you guess is the mood in your Tehran?
Speaker 5: From what I'm hearing from people, there's I think, a
Speaker 5: real mood of relief. I think a lot of Iranians,
Speaker 5: particularly those in the urban centers like Tehran, like Sfahan,
Speaker 5: cities like Tabres, that were seeing a lot of bombardment
Speaker 5: from US and Israeli air strikes. I think from what
Speaker 5: I heard, particularly towards the end of this period, right
Speaker 5: now that we have coming off of this tentative ceasefire
Speaker 5: is exhaustion. I think even if there was a sense
Speaker 5: in the beginning that people, some people, all large numbers
Speaker 5: of the youth, welcome the air strikes because they are
Speaker 5: exhausted with the regime and they really want a change
Speaker 5: in the leadership, I think the extent and the breadth
Speaker 5: and the scale of the bombings caused a kind of
Speaker 5: a change in attitude amongst many. And while I think
Speaker 5: that opposition fundamentally to the theocratic system still holds, I
Speaker 5: think people just don't want or they don't want to
Speaker 5: be attacked again like this ever again. And I think
Speaker 5: while there's a sense of relief, I think there's going
Speaker 5: to be a lot of realization of the damage that's
Speaker 5: taken place and what they now have to do to
Speaker 5: repair and recover emotionally as well as economically, which is
Speaker 5: going to be difficult for Iran obviously because it's so
Speaker 5: heavily sanctioned.
Speaker 2: Goner. We have a widely read morning note from Mike
Speaker 2: Allen at Axios. This is Neil Rothschild folks this morning
Speaker 2: in Axios, and the key data point that they report
Speaker 2: on Gonor Montevali is that the Supreme leader, we believe
Speaker 2: injured out of the picture, clearly had instructed the negotiators
Speaker 2: for the first time since the war began to move
Speaker 2: toward a deal. With your reporting and context, would you
Speaker 2: suggest that the architecture of traditional leadership is still in place.
Speaker 5: That's a very interesting question. I think the scaffolding is
Speaker 5: still there. But I think what has happened with the
Speaker 5: killing of the previous Supreme leader, Ali Harmenee, and with
Speaker 5: the fact that his son has succeeded under extremely difficult
Speaker 5: circumstances during war, it's kind of put the country generally
Speaker 5: in a force majeure situation over the past six weeks
Speaker 5: and the leadership structure that has had to change in
Speaker 5: response to an extraordinary set of events. We've seen a
Speaker 5: kind of this so called mosaic structure of leadership where
Speaker 5: personalities like Ali bath have become very important and very powerful. Earlier,
Speaker 5: before he was killed, Ali Larajani was very influential. I
Speaker 5: think we might see elements of this stay because moj
Speaker 5: Taber Harmonae, the current Supreme Leader, he hasn't been seen,
Speaker 5: he hasn't been heard, and already there is a sense
Speaker 5: that the office of the Supreme Leader itself is not
Speaker 5: the same type of office and doesn't have the same
Speaker 5: level of authority perhaps that it did while Harmonae the
Speaker 5: Elder was still alive. So that points to possibly in
Speaker 5: the future, fundamental changes in the way that the regime
Speaker 5: itself is structured in terms of its leadership. But not
Speaker 5: on the question of whether the regime is going to
Speaker 5: remain in place, I think it's going to stay where
Speaker 5: it is. I think it's going to stay firm. That
Speaker 5: there may be an internal evolution as a result of
Speaker 5: this war.
Speaker 4: Conard, given that uncertainty as to perhaps the leadership structure,
Speaker 4: how far do you think the Iranians can go in
Speaker 4: terms of negotiating peace with the US? Can they can
Speaker 4: they meet the US demands? How much leverage do you
Speaker 4: believe that they have given maybe some of the uncertainty
Speaker 4: in their government.
Speaker 5: I think right now, the feeling, or at least the
Speaker 5: impression that the hardline leadership in terror wants to give
Speaker 5: to the Iranian population, to its own loyal base of supporters,
Speaker 5: and to the world more broadly, is that they're on
Speaker 5: the front foot, that they're the party in the war
Speaker 5: that has managed to get concessions out of Trump in
Speaker 5: the way that this ceasefire or was agree to. Whether
Speaker 5: that's true or not tactically strategically is a separate question,
Speaker 5: but I think on the ground they feel emboldened by
Speaker 5: what has happened because they have managed to extract significant
Speaker 5: major shifts, especially in terms of how the strator formals
Speaker 5: is managed.
Speaker 2: Gonner One final question here, and this goes to the
Speaker 2: heritage of Matthew Winkler, the founder of Bloomberg News, and
Speaker 2: John Minchleswade, our editor in chief. We try to stay
Speaker 2: out of the debate, and Paul and I folks are
Speaker 2: killing ourselves trying not to insert our thoughts at this
Speaker 2: historic moment for America, for Israel, for Iran Goner, I'm
Speaker 2: absolutely flabbergasted by the lack of coverage of Israel in
Speaker 2: the last forty eight hours. How is Israel perceived, not
Speaker 2: by the theocracy, not by the military, how is Israel
Speaker 2: perceived by the people of Persia.
Speaker 5: That's a complicated question. As you know, Historically there was
Speaker 5: a relationship between Iran when it was under the Shah,
Speaker 5: when it was under the monarchy, and Israel. At the
Speaker 5: same time, I think I think the Shah also criticized
Speaker 5: Israel quite heavily for its policy towards the Palestinians, and
Speaker 5: I think he was unofficially not happy with the way
Speaker 5: that Israel conducted itself, particularly in the nineteen seventies following
Speaker 5: those wars. The examp Republic we know, has almost its
Speaker 5: foreign policy has been completely defined by a strong hostility
Speaker 5: towards the very existence of Israel, and a lot of
Speaker 5: that has been based on also the fact that Israel
Speaker 5: occupied Lebanon and that Iran helped fund and established and
Speaker 5: train Hezbolah in the very early nineteen eighties. But that's
Speaker 5: very much the political perception of the establishment in the
Speaker 5: Islamp Republic. I don't think ordinary Iranians feel that way.
Speaker 5: I think many many ordinary Iranians would like to see
Speaker 5: not just a normalized relationship with the whole region, but
Speaker 5: they want to see themselves. They want the world to
Speaker 5: see their country as a normal country in quotes whatever
Speaker 5: that may or or may not mean. But I do
Speaker 5: think that I think this war, Before this war, I
Speaker 5: think there may have been a sentiment, particularly amongst younger
Speaker 5: educated Iranians who maybe have more experience traveling overseas, of
Speaker 5: friendship or just a sense of neutrality and openness towards Israel.
Speaker 5: But I don't know with this bombardment, with the past
Speaker 5: six weeks, with the extent of the air strikes and
Speaker 5: the types of targets that have been hit, I don't
Speaker 5: know whether that has changed, whether it has gone backwards again.
Speaker 5: I think that's something that's too early for us.
Speaker 2: Generous with your time here on an historic day for Iran.
Speaker 2: Glenor Montevali reporting from Queen Victorious read in London. Stay
Speaker 2: with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch US live
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Speaker 4: Max Kattner joins US chief Multi asset Strategists at HSBC. Max, again,
Speaker 4: here's just another day of the twists and terms of
Speaker 4: geopolitics inserting itself in financial markets. Here, give us just
Speaker 4: a sense of some of the conversations you've had with
Speaker 4: your institutional clients around the world over the last six weeks.
Speaker 6: Yeah, there's the big question. Those nations that we had really,
Speaker 6: i would say in the last week week and a half,
Speaker 6: and that is when you really realized that not only sentiment,
Speaker 6: not only what people would telling you, but the actual
Speaker 6: positioning was getting much, much, much lighter. So in terms
Speaker 6: of our positioning framework, where we track around twenty five
Speaker 6: different indicators, short term indicators across systematic and discretionary positioning
Speaker 6: as well, that has now become as light as it's
Speaker 6: last been around Deliberation Day SAGA last year. And that
Speaker 6: of course is then allowing these s reps that we're
Speaker 6: seeing this morning.
Speaker 4: So Max, I guess one of the questions for a
Speaker 4: lot of folks, is just what is safety are? What
Speaker 4: are safe havens here? How do you think about it
Speaker 4: in these times?
Speaker 5: Here?
Speaker 6: I think the US dollar overall, right, the green bag
Speaker 6: has really demonstrated that, even though that was coming from
Speaker 6: the US and even though you could argue, well, does
Speaker 6: it maybe call into question the institutional credibility of the dollar?
Speaker 2: You could have.
Speaker 6: Made that case maybe, yeah, But even there then actually
Speaker 6: the US dollar really really worked the best as pretty
Speaker 6: much the only safe haven there was in an environment
Speaker 6: where it's pretty much liquidation across the asset classes, which
Speaker 6: we have seen in four to five days in March,
Speaker 6: where gold sold off, where treasure is sold off, where
Speaker 6: equities sold off, credit em everything except for the US dollars.
Speaker 6: So the US dollar as as a safe haven still
Speaker 6: reigned supreme.
Speaker 2: You know, Max heritage here of the Hong Kong and
Speaker 2: Shanghai Bank is a research combine. You know. I can't
Speaker 2: say enough Paul about this of Ben Ladler years ago
Speaker 2: and David Bloom in Mexican or and all the rest
Speaker 2: of them. You guys nail global correlation like no one.
Speaker 2: Are the markets correlated now? Are they vibrating in a
Speaker 2: constructive way?
Speaker 6: I would say well, today they are in a constructive way.
Speaker 6: I think today is the kind of day where no
Speaker 6: one will complain about positive correlations. If you own rates,
Speaker 6: if you own em if you own equities, if you
Speaker 6: you know your own gold, even everything goes up. Now
Speaker 6: that of course can go the other way, like we've
Speaker 6: seen in the last six weeks, and that is the really,
Speaker 6: really tricky thing. So I think in terms of correlations,
Speaker 6: it is as you've said, when you are pressing in
Speaker 6: a higher likelihood of stagflation. Stagflation is the poisonous pill
Speaker 6: for financial markets because there is nothing where you can
Speaker 6: really hide out except for cash in the green back,
Speaker 6: in US dollar, but everything else, from gold, from precious
Speaker 6: metals to equities, to credit to em everything sells off
Speaker 6: in light of rates selling off, in light of rates
Speaker 6: volatility going higher, and that really spreading pain across the
Speaker 6: asset classes. So in that light, correlations still are unfavorably
Speaker 6: and uncomfortably positive.
Speaker 5: Max.
Speaker 4: How about geographic here we had seen in twenty twenty
Speaker 4: five certainly pretty much all boats lifting with the type,
Speaker 4: but particularly markets outside of the US doing even better.
Speaker 4: How do you think about maybe the US versus rest
Speaker 4: of the world, world.
Speaker 6: Here still very much preferring the rest of the world
Speaker 6: right now, tactically, I think I want to be buying
Speaker 6: most Europe and Asia. I really want to, you know,
Speaker 6: start to pay what we've seen in the last five
Speaker 6: six weeks that you want to buy into Japan. Think
Speaker 6: about how often have you guys talked in the last
Speaker 6: six weeks about the fiscal story in Japan, about the
Speaker 6: aftermath of the Japanese election, Like not not that I'm
Speaker 6: going to put words in your mouth, but I guess
Speaker 6: the answer is not at all. How often have you
Speaker 6: talked about, you know, the really really strong earnings growth
Speaker 6: story earning career career's got one hundred and seventy percent
Speaker 6: twelve month forward earnings growth. Right we're talking about valuations
Speaker 6: of a twelve month formerd P below nine. Those things
Speaker 6: have completely been forgotten.
Speaker 2: This is this a bullish max retur I think it is.
Speaker 2: Explain Europe, Explain Europe, Max ken Her.
Speaker 6: I mean, Tom, I would say I wouldn't characterize myself
Speaker 6: as bullish. We've we've shifted about three and a half weeks,
Speaker 6: we've shifted to maximum bullish and equities, so I cannot
Speaker 6: be more bullish than I am right now there is
Speaker 6: I can't even write by the dip anymore because I
Speaker 6: don't have capital left. I'm as bullish as it can
Speaker 6: get now. In Europe, look look what we are saying today.
Speaker 6: We are seeing guilts rally. We are seeing front end
Speaker 6: guilts rally, the most front end European government bonds ECP
Speaker 6: pricing really really reversing lower. That s deepens the curtain.
Speaker 6: What does that help them? Helps the European banks, whether
Speaker 6: it's UK banks or Eurozone banks. The story around europe infrastructure, stimulus,
Speaker 6: capital goods, defend spinning. None of those stories are going away.
Speaker 6: So it's the banks, it's the industrials. Really, those two
Speaker 6: things that in Europe have been so forgotten I think
Speaker 6: in the last month and attending like it doesn't exist. Next,
Speaker 6: I think that's the stuff you want to buy again.
Speaker 2: Next sounds like Dick Van Dyke and David Tomlinson and
Speaker 2: Mary Poppins railways to India. Right next? Kenner never change.
Speaker 2: Thank you so much. He is with HSBC. Stay with
Speaker 2: us More from Bloomberg's Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on
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Speaker 2: If Daniel Di Martino Booth joins us right now with
Speaker 2: wonderful and not skeptical, but gently like, what's the BS
Speaker 2: factor on our FED policy? Daniel Di Martino Booth is
Speaker 2: chief strategist QI Research. I got to do an audible
Speaker 2: to private credit as we heard that headline. Mister Diamond
Speaker 2: wrote about it this Annuel letter in the Daniel Di
Speaker 2: Martino Booth Annual Letter. How big a mess is private credit?
Speaker 7: Well, I think we're learning it.
Speaker 8: It's a pretty darn big mess because it's got tentacles.
Speaker 8: And if you don't understand the conduit of non depository
Speaker 8: financial institution loans, which goes straight back into the conventional
Speaker 8: banking system. It's the conventional banks that are making loans
Speaker 8: to the non banks, then you don't have a full
Speaker 8: grasp of the situation. And then on top of that,
Speaker 8: you can weave insurres into this whole private credit mess.
Speaker 8: And these headlines are coming a mile a minute. If
Speaker 8: I pull up my Bloomberg on my phone. The first
Speaker 8: thing that he knows I'm going to search for is
Speaker 8: private credit news.
Speaker 4: So from your mind, is it systemic?
Speaker 5: This risk?
Speaker 1: Here?
Speaker 4: Are they cockroaches?
Speaker 8: I think that there is a risk that it could
Speaker 8: be systemic because there is blowback into the banks. We
Speaker 8: do know that there's been multiple pledging of the same collateral.
Speaker 8: Remember they started back with our Kagos, but we saw
Speaker 8: it with first Brands, we saw it with MFS, we
Speaker 8: saw it with Tricolor.
Speaker 7: And that is you have to stop and say, wait
Speaker 7: a minute.
Speaker 8: If one investment banker had a light bulb go off
Speaker 8: over his or her head, was that across the street?
Speaker 7: Was there a lot of multiple pledging of collateral?
Speaker 2: Paul, let me interrupt and say standard and pour five
Speaker 2: hundred Future's legout new strength up one hundred and eighty
Speaker 2: nine points.
Speaker 4: I look at the WRP function on the Bloomberg Tournament,
Speaker 4: Danielle I failed a reserve, I mean completely hands sitting
Speaker 4: on their hands. Is that what they should be doing
Speaker 4: here for the rest of the year.
Speaker 8: It is what they want to do for the rest
Speaker 8: of the year, certainly until the good Senator till Us
Speaker 8: allow the pathway forward for Kevin Walsh. And I think
Speaker 8: that there's there's a chance that they can look they've
Speaker 8: got a new We know that gas prices go up
Speaker 8: very quickly and that they're very sticky on the way down,
Speaker 8: and so even though it's going to be a supply shock,
Speaker 8: so to speak, you could have kind of this entrenched
Speaker 8: mindset that FED officials can allude to. And by the way,
Speaker 8: if they want to reinvent the wheel today with the
Speaker 8: minutes and say that some people were contemplating hiking rates,
Speaker 8: that's what we got the last time we were on
Speaker 8: a Wednesday FED minutes was a big surprised.
Speaker 2: When we weren't distracted. Daniel. What I want to to
Speaker 2: talk to you about is in the zeitgeist, and I think, folks,
Speaker 2: you'll see a lot of this into the weekend reading
Speaker 2: if we have OMG high inflation, if problems solved, we
Speaker 2: swing to one of two things, a disinflation, a lesser inflation,
Speaker 2: or outright that fear of deflation.
Speaker 4: Which will it be well.
Speaker 8: I think that that is where there's the greatest risk
Speaker 8: right now, because we're seeing an acceleration in the downside,
Speaker 8: whether you're talking about rents or home prices, and that
Speaker 8: is it's very very slow on the way up, but
Speaker 8: once momentum is gained on the way down, Oftentimes in history,
Speaker 8: policy makers have a hard time getting a hold of
Speaker 8: that disinflationary impetus from the shelter side. And we already
Speaker 8: know that the gasoline prices have squeezed away discretionary services,
Speaker 8: inflation and discretionary goods.
Speaker 7: Information you're spending on the essentials we have, mister and
Speaker 7: Governor Myron.
Speaker 2: Can a central bank get out front of a disinflationary tendency?
Speaker 7: Probably not?
Speaker 2: I love to buster Chucks.
Speaker 7: Probably not. This is central bank. Again.
Speaker 8: I refer back to the good Senator Tom Tillis, and
Speaker 8: again there is a pathway for there to be more
Speaker 8: than the potential for one rate cut in twenty twenty
Speaker 8: in twenty twenty six, But right now it is an
Speaker 8: institution that is plagued by paralysis.
Speaker 7: How do you think this is going to play out?
Speaker 4: Just for the listeners and viewers out there, fetcherim and
Speaker 4: j Powell is going to step down in theoretically theoretically
Speaker 4: how she says there's.
Speaker 8: Only a twenty eight percent possibility that he's gone by June.
Speaker 4: Wow, So I mean, who blinks? Here is at the
Speaker 4: White House? Is it Senator Tillis. I mean it doesn't
Speaker 4: seem like I.
Speaker 7: Don't think Tillis is blinking. You throw anything at him.
Speaker 9: To cease fire, doesn't joke in the morning, Yes, no, no,
Speaker 9: I think separtcies fire at the Eccos billet between the
Speaker 9: Ecchoes building in the White House.
Speaker 7: So they need to get how much you figure something, how.
Speaker 4: Much of a problem could it be if they don't
Speaker 4: come to some resolution and we've got some paralysis that
Speaker 4: we don't know who the Fed Chairman's going to be.
Speaker 8: Well, but we do know who the chairman of the
Speaker 8: Federal Open Market Committee's going to be because j.
Speaker 7: Powell has been elected for the full calendar year.
Speaker 8: So some might characterize our president as occasionally impulsive, but
Speaker 8: he could end up seeing Chair Powell behind the podium
Speaker 8: through the December meeting.
Speaker 2: Okay, but the reality is the market.
Speaker 4: Functioned, Yes he is.
Speaker 2: I mean yesterday was completely about you know, adjusting this,
Speaker 2: making the markets go. Clearly, his golden ear of the
Speaker 2: Middle East has to do with S and P futures
Speaker 2: up one hundred and sixty four points. Give us you
Speaker 2: your Danny take. I mean, where are the buying vigilantes
Speaker 2: right now? And my answer is they're in full force.
Speaker 7: You know they're in full force.
Speaker 2: Tom.
Speaker 8: But you have to remember what brought us to the
Speaker 8: situation with Iran in the first place. It was the
Speaker 8: Friday that the ten year Treasure's your year yield close
Speaker 8: to three point nine to six percent because there was
Speaker 8: so much concern about private private credit at the time.
Speaker 8: We forget this was just a few weeks ago that
Speaker 8: this happened. But there was downsiding yields because there was
Speaker 8: concern about private credit and the White House needed a great,
Speaker 8: big distraction and they got one. So I would say
Speaker 8: downsiding yields is much more problematic and worries.
Speaker 2: So you're this is I have to question you on this.
Speaker 2: I mean, by a journal, you're linking domestic financial challenges
Speaker 2: to mister Trump's foreign policy.
Speaker 8: I actually just did that, yes, okay, So I would
Speaker 8: link anything any behavior in the standard and Poors five
Speaker 8: hundred to any behavior out of the White House that
Speaker 8: is a known barometer.
Speaker 4: How about for the Fed, it's thought on just the
Speaker 4: labor market here, because we got a strong labor print
Speaker 4: last Friday when everybody was taking the holiday. What did
Speaker 4: you take away from that and how do you think
Speaker 4: the fed took that data point.
Speaker 8: Well, we've only had fourteen consecutive months of negative revisions
Speaker 8: in real time. Okay, so I say dot dot dot
Speaker 8: T be determined. Let's see what happens with revisions.
Speaker 2: I got headlines. I gotta go. Daniel di Martino, QI Research,
Speaker 2: thank you so much their look for her work. We
Speaker 2: protect the copyright of all our guests. Look for her
Speaker 2: work at QI at Research.
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