WEBVTT - Markets Plummet as Tariff-War Woes Fuel Exodus From US Assets 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg Business Week Daily reporting from the magazine 0:00:13.240 --> 0:00:17.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.880 --> 0:00:22.760 and trends shaping today's complex economy. Plus global business finance 0:00:22.800 --> 0:00:26.120 and tech news as it happens. The Bloomberg Business Week 0:00:26.239 --> 0:00:33.600 Daily Podcast with Carol Masser and Tim Steneveek. On Bloomberg Radio, Our. 0:00:33.479 --> 0:00:36.159 Gina Martin Adams warned us yesterday that yesterday's rally did 0:00:36.200 --> 0:00:38.960 not give her too much comfort. I think I'm saying 0:00:39.000 --> 0:00:42.239 it's safely based on our models, their data dependent. Her 0:00:42.320 --> 0:00:44.480 view and concerns about the equity outlook has not changed. 0:00:44.479 --> 0:00:46.880 So let's just see what our thoughts are today. Gina is, 0:00:46.880 --> 0:00:49.480 of course, Bloomberg Intelligence Chief equity strategists. 0:00:49.520 --> 0:00:51.320 Did I say it right, that's right, all right? 0:00:51.680 --> 0:00:51.800 No? 0:00:51.880 --> 0:00:53.440 But did did I say you're warning you? 0:00:53.560 --> 0:00:53.760 Yeah? 0:00:53.880 --> 0:00:55.280 Yeah, it's close enough. 0:00:55.360 --> 0:00:57.120 You know, it's smitted to a minute these days, Carol, 0:00:57.240 --> 0:00:59.680 So so how do you make sense? 0:00:59.760 --> 0:01:02.840 Yeah, like the rally yesterday, right, it wasn't free. 0:01:03.200 --> 0:01:05.319 She basically you came in, You basically shook your head 0:01:05.840 --> 0:01:07.920 at the rally yesterday and you said, anytime we see 0:01:07.920 --> 0:01:11.280 a move up such as this, it's not a good thing. Yeah, 0:01:11.319 --> 0:01:13.920 And you pointed to two thousand and eight, and you said, 0:01:14.680 --> 0:01:17.400 and sure enough, the superlative was going back to two 0:01:17.440 --> 0:01:19.399 thousand and eight. You reminded all of us the market 0:01:19.440 --> 0:01:22.399 did not bottom until March of two thousand and nine. 0:01:23.120 --> 0:01:23.360 Yeah. 0:01:23.840 --> 0:01:25.920 This is something we did earlier this week is just 0:01:26.000 --> 0:01:29.319 looking at these major capitulation moments in the S and P. 0:01:29.440 --> 0:01:31.880 Five hundred and put them in context of what's happening 0:01:31.880 --> 0:01:34.800 in the fundamentals. And what you do find is that 0:01:35.280 --> 0:01:38.919 the big, big sell off vic Spike's capitulation moments, whatever 0:01:38.959 --> 0:01:42.800 you want to call it, in the midst of economic distress, 0:01:43.040 --> 0:01:47.240 tend to happen way earlier than the ultimate bottom occurs. 0:01:47.280 --> 0:01:51.920 Whereas you can use things like capitulation vix, pairwise correlations, 0:01:51.960 --> 0:01:55.640 whatever technicals you love to show capitulation, you can use 0:01:55.680 --> 0:01:58.200 those for timing bottoms when the bottoms are of little 0:01:58.400 --> 0:02:01.720 minor ten percent correction that are not necessarily affiliated with 0:02:01.880 --> 0:02:06.640 major economic distress. But the simple fact that we're in 0:02:06.680 --> 0:02:10.320 this period of extraordinary uncertainty, and our other models are 0:02:10.360 --> 0:02:14.360 more fundamentally oriented models are telling us that the economic 0:02:14.400 --> 0:02:16.880 downside has really yet to be fully priced in the 0:02:17.000 --> 0:02:20.120 S and P five hundred. That kind of context would 0:02:20.120 --> 0:02:22.520 suggest to us we could be in for a longer 0:02:22.560 --> 0:02:25.519 and more extended period of volatility, even if the volatility 0:02:25.560 --> 0:02:29.519 never reaches the levels that we got with Liberation Day. 0:02:29.760 --> 0:02:32.800 So even though we're like off our lows, I mean, like, 0:02:32.880 --> 0:02:34.840 how how are you thinking about like how we end 0:02:34.960 --> 0:02:37.960 up today and what's important coming off of yesterday's rally. 0:02:38.040 --> 0:02:39.960 I think the most important thing to watch right now, 0:02:40.040 --> 0:02:42.960 frankly is fundamentals. I think that the market is going 0:02:42.960 --> 0:02:45.240 to be volatile. I think it's going to jump around. 0:02:45.400 --> 0:02:47.960 It's you know, I wouldn't be surprised in any given 0:02:48.040 --> 0:02:50.120 day if we're up five thousand and down five thousands. 0:02:50.120 --> 0:02:52.280 BIX kind of tells us that, right, hold on, hold 0:02:52.280 --> 0:02:54.520 and say that again, up what five thousand. 0:02:54.240 --> 0:02:56.360 Or down five thousand on the Dow, not the S 0:02:56.360 --> 0:02:58.360 and P F which of course is at five thousand. 0:02:59.360 --> 0:03:00.880 It's a huge move. 0:03:01.080 --> 0:03:03.880 Yeah, So I would not be surprised to see extreme 0:03:03.960 --> 0:03:07.080 volatility because our sensitivity levels to any kind of policy 0:03:07.160 --> 0:03:10.359 movements right now are enormous. Right we saw that yesterday. 0:03:11.120 --> 0:03:13.280 What I think we want to keep our eye on 0:03:13.400 --> 0:03:16.920 now is what are companies telling us throughout this earning season? 0:03:17.080 --> 0:03:19.400 Are they going to start pulling guidance, because that's usually 0:03:19.480 --> 0:03:24.160 a sign of pretty extraordinary uncertainty. How are they navigating 0:03:24.200 --> 0:03:27.080 this crisis? Are they planning to push costs onto the consumer? 0:03:27.160 --> 0:03:30.000 And then further, are they starting to change their operations 0:03:30.600 --> 0:03:32.360 in response to the tariffs that are ax. 0:03:32.440 --> 0:03:35.000 We've kind of heard that that's happening already. We heard 0:03:35.040 --> 0:03:39.320 Carmas and Delta this week. Amazon CEO Andy Jasse said, 0:03:39.960 --> 0:03:41.880 and I'm going to get this. I'm not looking at 0:03:42.000 --> 0:03:43.960 exactly what he said, but the gist of his comments 0:03:43.960 --> 0:03:48.440 where we think that producers will pass along the increased 0:03:48.480 --> 0:03:50.880 cost to consumers. Yep, that's happening. 0:03:51.120 --> 0:03:54.640 Yeah, And I think they'll try and then the next well, 0:03:54.680 --> 0:03:56.600 I think they'll try to put those prices out on 0:03:56.600 --> 0:04:00.920 the market below and we have accept those prices, right? 0:04:01.160 --> 0:04:03.000 Or also is there a substitution? 0:04:03.280 --> 0:04:03.440 Right? 0:04:03.480 --> 0:04:05.720 I think that this is very interesting in the context 0:04:05.800 --> 0:04:08.320 of China in particular, which provides an enormous amount of 0:04:08.360 --> 0:04:09.360 our consumer focus. 0:04:09.520 --> 0:04:10.440 Is there a substitution? 0:04:10.520 --> 0:04:13.080 There is there a substitution? Does the consumer have to 0:04:13.120 --> 0:04:15.760 take the price and then the consumer only has so 0:04:15.840 --> 0:04:19.120 much disposable income to go around. What are the alternative 0:04:19.160 --> 0:04:21.360 categories that they have to cut back on in an 0:04:21.400 --> 0:04:23.960 environment of accelerated price Because we know wages are only 0:04:24.000 --> 0:04:27.200 growing at a single digit pace, tariffs are already coming 0:04:27.240 --> 0:04:30.040 in at twenty six percent on average. That's a whole 0:04:30.040 --> 0:04:32.640 lot faster than wage growth is, and especially for the 0:04:32.680 --> 0:04:35.919 lower income consumer, could be very very meaningful at driving 0:04:35.960 --> 0:04:38.640 the ultimate pie and how they slice up that pie 0:04:38.640 --> 0:04:39.640 of income in their. 0:04:39.520 --> 0:04:42.880 Spending bankornings, Yes, what are you going to be watching 0:04:42.880 --> 0:04:43.120 it for? 0:04:43.320 --> 0:04:43.480 Oh? 0:04:43.520 --> 0:04:45.479 I think this is going to be really interesting because 0:04:45.520 --> 0:04:48.520 we've seen such a tightening in financial conditions. Our sector 0:04:48.520 --> 0:04:51.680 strategist Mike Casper runs a macro model of financial sector 0:04:51.720 --> 0:04:54.560 earnings and one of the things that that model told 0:04:54.640 --> 0:04:57.560 us earlier this week is to expect financial earnings to 0:04:57.560 --> 0:05:00.320 be about half as much as consensus is anticipating. That's 0:05:00.320 --> 0:05:03.080 in terms of a growth rate. So some sensitivity coming 0:05:03.080 --> 0:05:07.600 for financials because we've seen such tightening in financial conditions. 0:05:07.640 --> 0:05:09.400 So what does that mean? What do we look for then? 0:05:09.920 --> 0:05:13.200 How tight are financial conditions? And are banks starting to 0:05:13.240 --> 0:05:15.640 prepare for a downturn because you would see lone loss 0:05:15.680 --> 0:05:19.520 provisions accelerate you would see bank sort of lending get tighter. 0:05:19.600 --> 0:05:22.200 You would see them talk about the credit quality, what's 0:05:22.200 --> 0:05:25.719 happening with delinquencies and default rates. Those sort of indicators 0:05:25.760 --> 0:05:27.359 are things that we want to watch for in the 0:05:27.400 --> 0:05:28.200 bank specifically. 0:05:28.320 --> 0:05:30.760 Well, we get a little clue right from Jamie Dimond 0:05:31.000 --> 0:05:33.280 being on Fox and talking about the prospect of recession. 0:05:33.360 --> 0:05:37.719 What about basic day to day movement of customer funds, 0:05:37.800 --> 0:05:39.840 what they're doing with their debit cards, what they're doing 0:05:39.880 --> 0:05:42.240 with their credit cards, how they're doing paying this stuff off. 0:05:42.320 --> 0:05:44.080 Yeah, I think that that's a good, great point because 0:05:44.080 --> 0:05:45.720 you can get a lot of that data now in 0:05:45.760 --> 0:05:48.560 today's world of alternative data, you can get a lot 0:05:48.600 --> 0:05:48.760 on that. 0:05:48.839 --> 0:05:51.920 Don't need to wait for the banks, Bank in America 0:05:52.040 --> 0:05:53.960 or Brian one hand to tell us what's going on there. 0:05:54.040 --> 0:05:57.760 How are consumers actually handling this situation? What are they 0:05:57.800 --> 0:06:00.279 spending on? You could get that out of MasterCard, You 0:06:00.279 --> 0:06:01.040 can get that out of. 0:06:01.000 --> 0:06:04.880 Anything, anything, anything of concern there. 0:06:04.920 --> 0:06:06.760 You know, I haven't looked in the second measure data 0:06:06.760 --> 0:06:08.880 that's available on terminal. It's something we'll all put on 0:06:08.880 --> 0:06:10.719 the to do list, the laundry list of to do 0:06:11.839 --> 0:06:14.480 something we should definitely do in advance the consumer sector 0:06:14.480 --> 0:06:18.400 earning season, especially. I think given that tariffs really just 0:06:18.480 --> 0:06:21.440 got implemented, we're at the point where we can start 0:06:21.440 --> 0:06:23.600 to really follow that data series. But it's not something 0:06:23.600 --> 0:06:25.840 I have to admit, it's not something we've really tracked 0:06:25.880 --> 0:06:26.440 too much. 0:06:26.680 --> 0:06:28.760 You do follow the economic data. So what's the next 0:06:28.839 --> 0:06:30.160 data points you're thinking about here? 0:06:30.520 --> 0:06:35.600 Oh? Obviously, so we have consumer prices and producer prices 0:06:35.640 --> 0:06:37.320 this week. We're sort of in the midst of getting 0:06:37.320 --> 0:06:40.080 those indicators out now. I think the FED is going 0:06:40.120 --> 0:06:44.200 to be absolutely critical to watch, you know what times 0:06:44.240 --> 0:06:48.240 of commentary once right now is the market starts to 0:06:48.720 --> 0:06:51.640 acknowledge the recession risk is real. They start to follow 0:06:51.680 --> 0:06:55.080 the earnings numbers, and the analysts will mark down their expectations, 0:06:55.640 --> 0:06:58.600 and then the market will feel so lost and confused 0:06:58.600 --> 0:07:00.479 that it starts to look to save you. Sorry, it 0:07:00.480 --> 0:07:02.320 looks to the FED. And we've already seen how the 0:07:02.320 --> 0:07:04.880 market looked to the White House as a potential savior 0:07:04.920 --> 0:07:07.320 From this, I think the market will start to really 0:07:07.360 --> 0:07:09.560 push on the FED, and how much will the FED 0:07:09.640 --> 0:07:12.280 be able to respond in the environment of inflation and growth. 0:07:12.280 --> 0:07:14.800 It's going to be absolutely critical. I think the job 0:07:14.840 --> 0:07:18.240 market is also really really interesting right now. Challenger layoffs 0:07:18.640 --> 0:07:23.280 are levels we only usually see in recession experiences already, 0:07:23.320 --> 0:07:25.640 So we're getting the layoffs there, but we're not seeing 0:07:25.680 --> 0:07:27.720 it in the non pharma. Why are we not seeing 0:07:27.760 --> 0:07:29.400 in the non farm employment? Why are we not seeing 0:07:29.440 --> 0:07:32.040 the unemployment rate? Some of it I think is just survey, 0:07:32.960 --> 0:07:35.240 some of it is we're still creating some jobs to 0:07:35.280 --> 0:07:38.640 offset those layoffs. Will we see job creation then start 0:07:38.680 --> 0:07:42.120 to slow and will we also ultimately see the unemployment 0:07:42.200 --> 0:07:44.080 rates start to rise? Because those are really key triggers 0:07:44.080 --> 0:07:44.520 for the FED. 0:07:44.600 --> 0:07:46.200 I'm going to ask you the question that I asked 0:07:46.200 --> 0:07:48.160 you yesterday, but a day has passed and we have 0:07:48.280 --> 0:07:51.320 new data. Yes, are you more or less concerned today 0:07:51.520 --> 0:07:53.360 than you were when you walked in yesterday? 0:07:53.400 --> 0:07:55.840 Oh? I'm still very concerned. I don't think it's changed 0:07:55.880 --> 0:07:57.840 a whole lot of you know. I think, if anything, 0:07:57.880 --> 0:07:59.880 the only thing that I can say is, at the 0:08:00.200 --> 0:08:02.600 very least, it does look like we had our panic. 0:08:02.680 --> 0:08:07.720 Our major first big capitulation event has happened. Yeah. Does 0:08:07.760 --> 0:08:09.840 that make me feel really better that we won't have 0:08:09.920 --> 0:08:13.720 another one? Not necessarily? You know, I think that this 0:08:13.800 --> 0:08:18.040 whole the tariff situation is just incredibly uncertain. We're still 0:08:18.080 --> 0:08:20.760 we still have average tariffs to contend with of twenty 0:08:20.760 --> 0:08:23.960 six percent. Even if it's ten percent on everybody, that 0:08:24.120 --> 0:08:27.080 still is a big sea change for the economy to contend. 0:08:27.240 --> 0:08:28.080 That's what we're thinking about. 0:08:28.160 --> 0:08:29.840 Or we had some guests yesterday, maybe it was you too, 0:08:29.880 --> 0:08:32.120 who just said, let's not forget ten percent in any 0:08:32.120 --> 0:08:34.760 given environment, tariffs would be a big deal. 0:08:34.880 --> 0:08:37.439 Yeah, huge deal, considering we're coming from an average tariff 0:08:37.480 --> 0:08:38.800 pace that had been close to three. 0:08:38.960 --> 0:08:40.640 All Right, we're gonna leave it there, Gina, Thank you 0:08:41.000 --> 0:08:43.600 so appreciate it. Geena Martin Adams, chief equity strategis at 0:08:43.600 --> 0:08:46.040 Bloomberg Intelligence, are go to every day in terms of 0:08:46.080 --> 0:08:46.800 the trade. 0:08:47.120 --> 0:08:50.679 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:50.760 --> 0:08:54.199 live weekday afternoons from two to five pm Eastern. Listen 0:08:54.240 --> 0:08:57.800 on Applecarplay and the Android Auto with the Bloomberg Business app, 0:08:57.920 --> 0:09:01.559 or watch US live on YouTube. 0:09:03.200 --> 0:09:06.319 Well, Ryan Dietrich has been a US stock optimist and 0:09:06.520 --> 0:09:09.040 right about his market in recession calls over the last 0:09:09.080 --> 0:09:11.400 couple of years. He nailed it in twenty twenty three 0:09:11.400 --> 0:09:12.880 and twenty twenty four, and when we talked to him 0:09:12.880 --> 0:09:16.200 in December. He said the bullmarket had more room to run. 0:09:16.280 --> 0:09:18.760 So given the volatility and the declines that we've seen, 0:09:18.800 --> 0:09:20.920 including today, it's time to check in with him again. 0:09:21.280 --> 0:09:23.920 Ryan Dietrich is a chief market strategist at the Carson Group. 0:09:24.200 --> 0:09:27.000 They've got about forty two billion dollars in assets under management. 0:09:27.040 --> 0:09:30.439 He joins us from Cincinnati, Ohio. Ryan, are you still bullish? 0:09:32.120 --> 0:09:34.360 Boy? First off, thanks for having me back. You know 0:09:34.720 --> 0:09:35.160 we are. 0:09:36.360 --> 0:09:38.960 I know it's been rough. I know we did not 0:09:39.120 --> 0:09:41.560 expect to see a near bear market this year. I 0:09:41.559 --> 0:09:43.240 know I came on with you guys earlier this year 0:09:43.280 --> 0:09:45.480 said maybe we could get between ten and fifteen percent 0:09:45.520 --> 0:09:48.600 correction after not seeing one all of last year. 0:09:48.640 --> 0:09:50.360 But clearly with everything like everyone's talking. 0:09:50.200 --> 0:09:52.920 About, and we got a nineteen correction. 0:09:53.120 --> 0:09:55.160 Yeah, we were all. We were close in your day. 0:09:55.160 --> 0:09:55.839 I know we were there. 0:09:55.840 --> 0:09:57.640 We can get into a lot of lott of the 0:09:57.760 --> 0:09:59.280 lot of the different things here, but I think the 0:09:59.360 --> 0:10:02.280 key thing that we're really stressing is, yes, we like 0:10:02.360 --> 0:10:03.640 stocks are going to do okay when all of a 0:10:03.640 --> 0:10:05.599 sudden done this year, but you know, to be diversified. 0:10:05.600 --> 0:10:08.040 I know it's kind of boring to say, but you know, 0:10:08.160 --> 0:10:10.280 just yesterday, right, you manage. We manage a lot of money, 0:10:10.360 --> 0:10:13.720 right just yesterday, we actually went into a little more 0:10:13.800 --> 0:10:16.679 international stocks. We specifically like Europe here. We think, you know, 0:10:16.720 --> 0:10:19.439 when times of stressed uncertainty, you want to be diversified. 0:10:19.480 --> 0:10:21.760 We have some bonds, we've had some gold for a while. 0:10:21.760 --> 0:10:23.840 We've had gold for two years now, okay, and it 0:10:23.880 --> 0:10:26.679 wasn't quite as popular. So be diversified here when things 0:10:26.679 --> 0:10:27.160 are like this. 0:10:27.280 --> 0:10:29.760 But at the end of this year, do you see 0:10:29.760 --> 0:10:32.120 the S and P five hundred having a gain or 0:10:32.160 --> 0:10:33.040 a loss? 0:10:33.320 --> 0:10:35.600 No, I'd say again, and that's really unique because we 0:10:35.600 --> 0:10:37.640 were just down fifteen percent for the year, not that 0:10:37.800 --> 0:10:40.000 long ago. You look in history when you're down at 0:10:40.080 --> 0:10:43.199 least fifteen percent at any point during the year, it's 0:10:43.280 --> 0:10:43.800 kind of rare. 0:10:43.800 --> 0:10:44.600 You're looking at like. 0:10:44.520 --> 0:10:47.320 Eighty two, two thousand and nine, and twenty twenty, and 0:10:47.320 --> 0:10:49.079 I think by memory that might be about it years 0:10:49.080 --> 0:10:50.720 that were down at least fifteen percent for the year 0:10:50.760 --> 0:10:51.800 to come back to positive. 0:10:51.960 --> 0:10:54.319 But we can get into the weeds of it. There's 0:10:54.440 --> 0:10:55.680 so much negativity. 0:10:56.120 --> 0:10:58.560 We we think if any potential good news, we saw 0:10:58.559 --> 0:11:00.800 what happened yesterday, do we go into recession or not, 0:11:00.880 --> 0:11:03.319 it's still our base case. No, you know, but again 0:11:03.559 --> 0:11:05.640 I get, we get all of the worries. Now, let 0:11:05.679 --> 0:11:07.240 me just touch one thing. I know you guys talking 0:11:07.240 --> 0:11:10.480 about technicals here. Yesterday we look at the NYC New 0:11:10.520 --> 0:11:12.880 York Stock Exchange. I've got data back to nineteen eighty 0:11:12.880 --> 0:11:15.640 on this. If you look at the volume up versus down, 0:11:15.679 --> 0:11:19.080 it was sixty eight times up volume versus down volume. 0:11:19.120 --> 0:11:21.600 That's a record. We've never seen a day with that 0:11:21.679 --> 0:11:23.320 much up volume versus down volume. 0:11:23.360 --> 0:11:24.079 What does that mean? 0:11:24.559 --> 0:11:27.000 Well, listen, you're talking like August of eighty two, you're 0:11:27.040 --> 0:11:29.280 talking like March of two thousand and nine. Those are 0:11:29.320 --> 0:11:32.480 some other times we saw days like yesterday, which kind 0:11:32.480 --> 0:11:34.520 of tells us the sellers went on strike. And I 0:11:34.559 --> 0:11:36.160 know the sellers came back a little bit today. 0:11:36.240 --> 0:11:40.240 It wasn't a lot of it's short covering yesterday. Yeah, 0:11:40.320 --> 0:11:42.240 I mean, this is what we've talked about with our team. 0:11:42.280 --> 0:11:44.160 I mean, there was a lot of short covering going on. 0:11:44.240 --> 0:11:47.960 No, they're exactly right, and that's how bottoms start. We 0:11:48.040 --> 0:11:50.280 hear that every time it's short covering, it's short covering, 0:11:50.320 --> 0:11:52.240 and then it tends to go a little bit further. 0:11:52.280 --> 0:11:54.040 So it's a fundamental trade. 0:11:54.040 --> 0:11:56.120 It's not like you're, Okay, I'm buying this because I 0:11:56.120 --> 0:11:58.080 think you know, their earning's outlook is great. 0:11:58.200 --> 0:11:59.600 It's I got to cover my short. 0:12:00.400 --> 0:12:03.000 Yeah, you're right in the for the shorts, that's true. 0:12:03.000 --> 0:12:05.880 But again, what's the market doing right right, Carol? It's 0:12:05.880 --> 0:12:07.440 all what's baked And by the way, you said it 0:12:07.440 --> 0:12:10.520 feels like Friday. I think Monday morning felt like Friday, 0:12:10.520 --> 0:12:13.160 didn't it Just like wait, wait is it Friday around here? 0:12:13.200 --> 0:12:15.520 But anyway, you know what's baked in what's not. I 0:12:15.559 --> 0:12:18.040 mean there is some all your guests a point of 0:12:18.040 --> 0:12:20.640 these things out huge, but the call ratio spikes over 0:12:20.679 --> 0:12:22.679 the top negative sentiment rightfully, So, I mean, look a 0:12:22.760 --> 0:12:25.280 look at the headlines, and it's been unfortunate what's happened 0:12:25.320 --> 0:12:28.160 for a lot of investors. At the same time, we're stressing, 0:12:28.440 --> 0:12:31.120 your best days of the year tend to happen around 0:12:31.160 --> 0:12:32.680 your worst days of the year. So if you just 0:12:32.720 --> 0:12:35.040 sold because you had a ten percent drop Thursday and Friday, 0:12:35.040 --> 0:12:37.240 then boom, you have a nine percent bounce just yesterday. 0:12:37.360 --> 0:12:39.840 I mean, that's some important things to remember. And again 0:12:39.880 --> 0:12:41.520 to us, what's being priced in is so over the 0:12:41.520 --> 0:12:44.600 top negative that there's probably still more a good deal 0:12:44.679 --> 0:12:46.960 more upside. To be honest, maybe it's not gonna happen tomorrow, 0:12:47.120 --> 0:12:49.000 but when we look up and avoid a recession, we. 0:12:48.960 --> 0:12:51.079 Think things are still gonna be okay. When all of 0:12:51.080 --> 0:12:52.040 a said and done this year. 0:12:51.920 --> 0:12:54.480 What changes your view? What would have to happen between 0:12:54.480 --> 0:12:56.920 now and let's say six weeks from now when you 0:12:56.960 --> 0:12:59.600 come back on with us and I ask you, Ryan Dietrich, 0:13:00.480 --> 0:13:02.480 are we going to end the dear with the S 0:13:02.520 --> 0:13:04.720 and P five hundred higher or lower? And you tell 0:13:04.720 --> 0:13:06.120 me lower? Why are you going to tell me that? 0:13:06.960 --> 0:13:07.200 Yeah? 0:13:07.280 --> 0:13:09.200 One of the few great question there. One of the 0:13:09.200 --> 0:13:11.360 things I really like to follow the credit markets. I 0:13:11.360 --> 0:13:12.880 know you've had a lot of good credit guests on 0:13:13.120 --> 0:13:15.240 last several weeks. Also, when you look at spreads right, 0:13:15.360 --> 0:13:18.280 keep this simple, triple B spreads, high yield spreads, they 0:13:18.320 --> 0:13:21.520 are not anywhere near what they were in twenty twenty two. 0:13:21.559 --> 0:13:23.040 So if the smartest people in the room and I 0:13:23.080 --> 0:13:26.120 grew up thinking this is the credit markets, they're not 0:13:26.200 --> 0:13:28.000 as worried right now about a monster under the bed 0:13:28.040 --> 0:13:30.080 as what the stock market is. It's shocking Honestly, it's 0:13:30.120 --> 0:13:32.440 shocking to me. Right now, you're to date high yield 0:13:32.440 --> 0:13:34.520 the corporate bonds are down about three percent. If you 0:13:34.559 --> 0:13:36.440 would say the stock market's done what it's done with 0:13:36.440 --> 0:13:38.640 the headlines we've seen, I would expect to see more 0:13:38.679 --> 0:13:42.520 stress in high yield corporate bonds. Well, we're not seeing 0:13:42.520 --> 0:13:44.920 that now. That can change in a hurry, We get that. 0:13:45.120 --> 0:13:47.400 But I think if the credit markets really spiral out 0:13:47.400 --> 0:13:49.120 of control, tim, that's what would worry me. 0:13:49.160 --> 0:13:51.679 And we're not seeing that ass off today. Knock on wood. 0:13:52.240 --> 0:13:54.319 We do have a headline that crust around two twenty 0:13:54.400 --> 0:13:56.679 US leverage Loan fund seeing a record six and a 0:13:56.679 --> 0:13:59.120 half billion dollar weekly outflow. Just wanted to throw that 0:13:59.160 --> 0:14:04.920 out there. The thing is, you know, we had an 0:14:04.960 --> 0:14:08.199 economy that was doing well. We were still dealing with 0:14:08.320 --> 0:14:09.280 a little bit of inflation. 0:14:11.360 --> 0:14:11.680 We know. 0:14:12.000 --> 0:14:15.120 The game in town right now is concerns about tariffs, 0:14:15.720 --> 0:14:19.160 and if we stay at ten percent, as most people 0:14:19.200 --> 0:14:21.400 have assessed, Ryan, that. 0:14:21.560 --> 0:14:22.760 Is a tricky thing. 0:14:22.840 --> 0:14:26.680 It's you know, any other moment in time where if 0:14:26.720 --> 0:14:30.160 we just impose the United States ten percent tariffs and 0:14:30.200 --> 0:14:32.720 all of our trading partners that's a problem. 0:14:33.040 --> 0:14:34.640 So if that stays in place. 0:14:35.280 --> 0:14:38.080 What does a problem that kind of problem look like 0:14:38.360 --> 0:14:41.560 in terms of the equity trade and the corporate earnings 0:14:41.600 --> 0:14:43.160 trade and the US economy. 0:14:44.400 --> 0:14:46.920 Yeah, you're right. I mean it's the uncertainty factor, right. 0:14:47.000 --> 0:14:49.800 I mean, obviously we got the decent news yesterday with 0:14:49.800 --> 0:14:52.200 the ninety day kind of punt, if you will. 0:14:52.640 --> 0:14:54.440 But the ten percent is still in place. 0:14:55.520 --> 0:14:56.360 It absolutely is. 0:14:56.560 --> 0:15:00.360 And again, nobody for the most part thought nine days 0:15:00.360 --> 0:15:01.640 ago that we'd be here. 0:15:01.520 --> 0:15:02.080 Where we are. 0:15:02.160 --> 0:15:05.080 When President Trump held up that little piece of paper 0:15:05.120 --> 0:15:06.800 with all those countries, all those numbers on it, we 0:15:06.880 --> 0:15:08.600 zoomed in and realized, oh, my goodness, this is an 0:15:08.640 --> 0:15:10.920 effective tear rate of you know, maybe twenty three, twenty 0:15:10.920 --> 0:15:12.840 four to twenty five percent. But you're right, it's all 0:15:12.840 --> 0:15:15.200 about art of the deal and and going back and forth. 0:15:15.240 --> 0:15:17.880 But the truth again, that's why we're getting this, you know, 0:15:17.960 --> 0:15:20.800 kind of revaluation right of markets, why we've had one 0:15:20.840 --> 0:15:22.560 of the quickest corrections we've ever seen. 0:15:22.600 --> 0:15:24.240 We were almost in a bear market. 0:15:24.640 --> 0:15:26.320 I'm with you, but again, I mean you have to 0:15:26.320 --> 0:15:29.480 think the resourcefulness of the US, the ingenuity of the US. 0:15:29.560 --> 0:15:31.240 If we if we just know it's ten percent, and 0:15:31.360 --> 0:15:33.720 I think we'll be okay, we can get through that. Yes, 0:15:33.760 --> 0:15:35.680 if it's over twenty Carol, that's that's not going to 0:15:35.760 --> 0:15:37.960 be good. We've all talked about the consumer confidence levels, 0:15:38.000 --> 0:15:40.840 small business conference levels. People are just confused. And when 0:15:40.840 --> 0:15:42.920 you have uncertainty, this is what you have a self first, 0:15:42.920 --> 0:15:45.680 ask questions later mentality. We just need a little more, 0:15:46.560 --> 0:15:48.800 you know, a positive news on this trade front like 0:15:48.840 --> 0:15:51.280 we saw yesterday. They have to be majorly positive news, 0:15:51.280 --> 0:15:52.720 but I think it's just some decent news and one 0:15:52.720 --> 0:15:54.160 one more thing on this, you know, look at the 0:15:54.280 --> 0:15:56.000 labor market. I know this can change in a hurry, 0:15:56.000 --> 0:15:58.320 but we weddential claims today wasn't all that bad, right. 0:15:58.320 --> 0:16:00.560 The labor market is still hanging in there. So it's 0:16:00.600 --> 0:16:02.480 hard to have a recession if you're not laying off 0:16:02.480 --> 0:16:03.120 a bunch of people. 0:16:03.160 --> 0:16:04.720 Now, we get it. That will change. 0:16:04.840 --> 0:16:06.600 That can change. And I should note that we did 0:16:06.640 --> 0:16:08.720 just speak to Gena mar N Adams on our Bloomberg 0:16:08.760 --> 0:16:12.280 Intelligence Team, chief equity strategist, and she noted that although 0:16:12.280 --> 0:16:14.960 the claims are holding up and non farms are holding up, 0:16:15.240 --> 0:16:17.400 she's seeing some weakness when it comes to the challenger 0:16:17.440 --> 0:16:20.440 Grand Christmas numbers that is concerning to her. I do 0:16:20.520 --> 0:16:22.560 want to remind everybody where we are in the trade today. 0:16:22.560 --> 0:16:24.160 The S and P five hundred was down as much 0:16:24.160 --> 0:16:27.080 as six point three percent. It's bounced off those lows. 0:16:27.280 --> 0:16:30.280 We're down three point five percent, the naas that can 0:16:30.280 --> 0:16:32.960 Posit down four point four the Doubt down two point 0:16:33.080 --> 0:16:35.480 six three percent, the RUSS two thousand, those small caps 0:16:35.840 --> 0:16:39.440 down about four percent. Ryan to kind of go with 0:16:39.480 --> 0:16:43.960 Carol's point when it comes to tariffs, you love talking technicals, 0:16:44.560 --> 0:16:48.440 but at what point in your view do fundamentals overrule technicals? 0:16:48.480 --> 0:16:53.600 Because tariffs aren't technical, these are fundamental, and this is 0:16:53.640 --> 0:16:56.040 now affecting companies here in the US. So at what 0:16:56.120 --> 0:16:58.520 point do fundamentals overrule technicals? 0:16:58.760 --> 0:17:01.280 Yeah, I grew up with the old saying, you know news, 0:17:01.600 --> 0:17:05.040 Trump's charts, Trump's being the keyword there, so we know 0:17:05.200 --> 0:17:07.480 news matters, and I mean, believe me, from a macro 0:17:07.600 --> 0:17:10.080 point of view. On the Carson invest Research team, we 0:17:10.119 --> 0:17:13.800 look at technicals, valuations, and fundamentals, So fundamentals are clearly 0:17:13.880 --> 0:17:14.280 in there. 0:17:14.680 --> 0:17:15.920