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Speaker 1: All right, let's get to uh to our next guest

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Speaker 1: in joining, is that Joe Gilbert Portfolio Manage It Integrity

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Speaker 1: Asset Management, Jee, thank you for joining. Is where are we?

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Speaker 1: I mean, if we look at the SNPs, you know

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Speaker 1: it's evaluations reasonable, They're not cheap by any stretch of

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Speaker 1: the imagination. You know, how do we trade US equities

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Speaker 1: given the week that we just had as well? No, well,

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Speaker 1: thanks for having me first, um Lee. I think that

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Speaker 1: we're right now we're at a pivotal point here because

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Speaker 1: I think that, um, you know, the market reacted very

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Speaker 1: strongly to the CPI number, and I think going into

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Speaker 1: the number of the market was coiled just for any

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Speaker 1: bit of good news, UM, and the market definitely was

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Speaker 1: seeing with more with his heart instead of his head.

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Speaker 1: So so I think right now we're we're really probably

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Speaker 1: to the top end of arrange um as far as

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Speaker 1: peaker valuations earning, ustiments are going to have to come down,

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Speaker 1: and with that that's going to probably be a different

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Speaker 1: change in leadership in the market. UM. But what we

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Speaker 1: do actually get got a little glimmer of how the

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Speaker 1: market will react once the Fed does decide that it

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Speaker 1: is going to downshift materially from an interest rate increases,

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Speaker 1: and we may be getting close to that. I mean,

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Speaker 1: we had FED Governor Chris Waller speaking earlier today in Sydney.

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Speaker 1: He was saying, yeah, on one hand, the FED does

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Speaker 1: have a long way to go before it stops raising entirely.

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Speaker 1: But fifty basis points in terms of rate hike maybe

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Speaker 1: on the table at December's meeting or or the one

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Speaker 1: after that, Joe. But I'm wondering, do we go back

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Speaker 1: to test the June low of thirty s in the SNP?

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Speaker 1: Is there that much risk for that kind of downside

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Speaker 1: here in the equity market? You know, I'm always hesitant

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Speaker 1: to say that, you know, the lowest end um. I

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Speaker 1: think to your your your first point that that we're

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Speaker 1: they're more interest rate hikes are behind us than in

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Speaker 1: front of us, and we're obviously getting closer to the end.

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Speaker 1: I think actually after next month um rate hike, if

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Speaker 1: a fifty basis point, I would like for them to

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Speaker 1: actually stop and hold there UM because I think, you know,

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Speaker 1: we're actually getting to the point where they're where they're

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Speaker 1: doing too much UM. But but with that, all of

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Speaker 1: that being said, we really have to be cognizant that

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Speaker 1: the you know, the FED is really gung ho and

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Speaker 1: trying to make sure that the markets understand that they

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Speaker 1: are really concerned about interest rates UM and and inflation.

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Speaker 1: And so I think that as long as they keep

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Speaker 1: job owing the market, that will actually prevent the market

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Speaker 1: from really breaking out of it. But I think that

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Speaker 1: as far as we're visiting June lows I, I don't

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Speaker 1: see that being in a card. I mean, Jeff, you know,

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Speaker 1: I still not talked about that much, but you see

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Speaker 1: some pressures in the bond market. And it's not just

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Speaker 1: from you know, the liquidity angle, because the goodity is

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Speaker 1: being drained await by q T amongst our whole host

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Speaker 1: of other factors. How is that affecting things beyond what's

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Speaker 1: going on in fixed income? No, well, I mean I

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Speaker 1: think that as as we came through the you know,

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Speaker 1: the first three quarters of the year UM where you've

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Speaker 1: had negative quarterly performance in fixing come and it within equities,

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Speaker 1: I mean, then you've had this bifurcation where commodity markets

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Speaker 1: have been stronger, and and that's because of you know,

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Speaker 1: more of you know, concern about Russian Ukraine's war and

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Speaker 1: and how supply chains are going to be UM somewhat compromised.

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Speaker 1: But I think overall markets are generally traded very correlated UM,

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Speaker 1: meaning that you know, you usually don't have fixed income

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Speaker 1: and equities trading so much in lock step. So I

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Speaker 1: think that that is probably suggesting that the market is

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Speaker 1: overall is not healthy UM. We're trying to get to

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Speaker 1: this point of adjustment, which I think we've repriced a

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Speaker 1: lot of risk and repriced a lot of UM FED

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Speaker 1: at this point. So I think that that's that does

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Speaker 1: give us a good set up for next year for certain,

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Speaker 1: and we're really constructive about next year for FORT classes

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Speaker 1: in the US. I mean, I'm somewhat surprised because we

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Speaker 1: were talking about the downside risk to earnings guidance going forward.

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Speaker 1: I'm wondering, given everything we're talking about, a FED pivot

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Speaker 1: maybe or at least a softening on aggression, perhaps that

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Speaker 1: lays the foundation for a week or dollar going forward.

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Speaker 1: I'm wondering whether you want to be exposed in any

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Speaker 1: way to EM right now, particularly in Asia like the

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Speaker 1: Chinese market. We know now that that there seems to

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Speaker 1: be a little bit of relaxation on some of the

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Speaker 1: controls happening not only for COVID but for the property

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Speaker 1: market as well, and so maybe there's some upside. Do

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Speaker 1: you think that's the case? No, I definitely agree there.

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Speaker 1: I think that they are Asian markets are definitely a

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Speaker 1: coiled spring similar to the US markets. I think that

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Speaker 1: just what we really have is is kind of a

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Speaker 1: first and first out market us UM equity. You know,

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Speaker 1: us SS underperformed a lot sooner um at the beginning

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Speaker 1: of the year because the FED was more aggressive, So

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Speaker 1: you know, I see them rebounding sooner. But also I

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Speaker 1: think on the other side of that, you have a

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Speaker 1: lot of um upside that can be had in em

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Speaker 1: because once the FED actually really gets to the point

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Speaker 1: whereas done raising rates and the doll revort versus course

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Speaker 1: um you know continually think then that actually gives a

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Speaker 1: real strong tale win to those assets. Do Is it

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Speaker 1: now time, actually, Joe, to be looking at some of

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Speaker 1: those industry groups which have been suffering the most, either

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Speaker 1: ones which have been sold off, you know, I'm talking

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Speaker 1: about the likes of tech and and others, perhaps even

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Speaker 1: consumer discussions. It's time to be perhaps they dipping your

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Speaker 1: toe in there. Yeah, I mean that's that's what we're

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Speaker 1: that's our playbook right now. We're we're being um, somewhat contrarian. UM.

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Speaker 1: We we think that consumer discretionary names, which you know,

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Speaker 1: really underperformed with the rise and interest rate environment. UM.

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Speaker 1: Thus uh, you know, the valuations there have gotten cheap enough. Uh.

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Speaker 1: We think also there are some opportunities selectively within tech,

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Speaker 1: probably more so on the software side, where you have

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Speaker 1: more re recurring revenue. Not really certain with bel Semi's yet,

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Speaker 1: We've probably got another quarter there before those will actually,

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Speaker 1: you know, really find a floor. But then also you

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Speaker 1: have the industrials which are more short some of those

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Speaker 1: shorter cycle names which I've underperformed this year, which were

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Speaker 1: most likely rebound a lot sooner than they actually the

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Speaker 1: estimate revisions bottom. Joe, good stuff, Thank you so much

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Speaker 1: for being with us. Joe Gilbert there. He is portfolio

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Speaker 1: manager at Integrity Asset Management, joining from Ohio tonight