1 00:00:02,720 --> 00:00:08,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio news, joining. 2 00:00:08,440 --> 00:00:11,920 Speaker 2: Us tow Mike Wilson with Morgan Stanley with s exceptionally 3 00:00:12,600 --> 00:00:15,800 Speaker 2: intelligent views on the market. He has not been a 4 00:00:15,920 --> 00:00:20,200 Speaker 2: raging bull. He's been someone who has participated but done 5 00:00:20,239 --> 00:00:22,920 Speaker 2: it with a bit of angst and caution as well. 6 00:00:23,320 --> 00:00:27,320 Speaker 2: There's the Mike Wilson word. Mike Wilson nimble. If I'm 7 00:00:27,440 --> 00:00:30,280 Speaker 2: nimble after five days down in a row or whatever 8 00:00:30,360 --> 00:00:32,920 Speaker 2: it is, how nimble am I into Monday? 9 00:00:33,000 --> 00:00:37,240 Speaker 1: What do I do now? To reposition with confidence? 10 00:00:39,440 --> 00:00:41,919 Speaker 3: Welcome morning, Tom, Look, I think and happy New Year. 11 00:00:42,000 --> 00:00:44,159 Speaker 4: I you know, I think what you said earlier is 12 00:00:44,200 --> 00:00:46,720 Speaker 4: listening to your chatting about. 13 00:00:46,520 --> 00:00:48,760 Speaker 3: Do I get in now? Do I? What do I do? 14 00:00:49,200 --> 00:00:51,960 Speaker 4: And that's really not ever the right strategy. The right 15 00:00:52,000 --> 00:00:55,639 Speaker 4: strategy is to have something committed at all times and 16 00:00:55,720 --> 00:00:59,320 Speaker 4: be balanced in your portfolio so that you can ride 17 00:00:59,320 --> 00:01:01,960 Speaker 4: out turbulent times when they arrive. 18 00:01:02,120 --> 00:01:03,760 Speaker 3: And look, we've had a we've. 19 00:01:03,600 --> 00:01:05,120 Speaker 4: Had a little bit of a of a bad stretch 20 00:01:05,160 --> 00:01:08,679 Speaker 4: here since the beginning of December, which doesn't really surprise 21 00:01:08,800 --> 00:01:11,600 Speaker 4: me given the run that we had. You know, post 22 00:01:11,640 --> 00:01:14,039 Speaker 4: election is just a lot of euphoria. So we're having 23 00:01:14,080 --> 00:01:17,119 Speaker 4: a bit of correction here. I do think the first 24 00:01:17,160 --> 00:01:20,119 Speaker 4: half of twenty twenty five will probably be a bit 25 00:01:20,160 --> 00:01:23,959 Speaker 4: more challenging, and then the second half sets up pretty well, 26 00:01:24,400 --> 00:01:27,800 Speaker 4: assuming that you know, a forecast around the economy and 27 00:01:27,920 --> 00:01:32,959 Speaker 4: earnings come through. Everybody knows the market's expensive. Everybody knows that. 28 00:01:33,080 --> 00:01:36,040 Speaker 4: You know, we've had and sentiments crazy right now, and 29 00:01:36,080 --> 00:01:37,880 Speaker 4: that's just part of the game. I mean, you have 30 00:01:38,040 --> 00:01:40,720 Speaker 4: to you know, you have to deal with that, and 31 00:01:40,760 --> 00:01:43,160 Speaker 4: that's why you have diversification in your portfolio. 32 00:01:43,480 --> 00:01:46,280 Speaker 2: You look at factors. I think of lizzaone, Saunders over 33 00:01:46,360 --> 00:01:49,360 Speaker 2: Schwud as well. Which is the factor now with the 34 00:01:49,440 --> 00:01:51,680 Speaker 2: closest Mike Wilson's study. 35 00:01:53,520 --> 00:01:55,320 Speaker 4: Well, we look at all of them obviously, and I 36 00:01:55,320 --> 00:01:57,440 Speaker 4: would say it's been the you know, the factor that's 37 00:01:57,480 --> 00:02:01,760 Speaker 4: been most in favor has been quality and momentum, and 38 00:02:01,800 --> 00:02:04,240 Speaker 4: then recently both of those came off a bit because 39 00:02:04,240 --> 00:02:06,800 Speaker 4: that's where people were positioned. Okay, that doesn't mean that 40 00:02:06,840 --> 00:02:09,480 Speaker 4: those aren't still the places to be. It just means 41 00:02:09,480 --> 00:02:11,720 Speaker 4: that we're having a bit of a pullback in here. 42 00:02:11,840 --> 00:02:15,280 Speaker 4: And like I think, I think going into twenty twenty five, 43 00:02:15,680 --> 00:02:17,680 Speaker 4: there are some areas that got probably a little bit 44 00:02:17,800 --> 00:02:21,040 Speaker 4: overdone some of the you know, some of the growth areas. 45 00:02:21,320 --> 00:02:23,880 Speaker 4: Uh that that factor in particular, probably people are paying 46 00:02:23,960 --> 00:02:26,160 Speaker 4: up for that too much. I think some of the 47 00:02:26,240 --> 00:02:28,639 Speaker 4: size factors, you know, people are rotated probably a little 48 00:02:28,639 --> 00:02:31,399 Speaker 4: bit too much into the small cap area and they're 49 00:02:31,400 --> 00:02:34,040 Speaker 4: giving some of that back now too. So that's just 50 00:02:34,160 --> 00:02:37,680 Speaker 4: one sort of arrow in our in our quiver. And uh, 51 00:02:37,720 --> 00:02:40,320 Speaker 4: you know, but but it's definitely something we watch closely. 52 00:02:40,880 --> 00:02:43,639 Speaker 5: Hey, Mike, I'm reading your your more most recent note 53 00:02:43,680 --> 00:02:46,480 Speaker 5: about the breadth of the market. It gets gets me 54 00:02:46,520 --> 00:02:48,000 Speaker 5: to thinking, here, I got the s and P five 55 00:02:48,720 --> 00:02:51,320 Speaker 5: twenty four is up like twenty three twenty four percent, 56 00:02:51,400 --> 00:02:54,160 Speaker 5: Yet the equal weighted SMP up only like you know, 57 00:02:54,200 --> 00:02:58,359 Speaker 5: ten or eleven percent. A what does that tell you? 58 00:02:58,440 --> 00:03:01,200 Speaker 5: I mean, is and how can earning is that for you? 59 00:03:03,000 --> 00:03:04,120 Speaker 3: Well, I mean it's not really. 60 00:03:04,240 --> 00:03:07,800 Speaker 4: Remember, breath is a symptom, okay, of what's going on, 61 00:03:07,919 --> 00:03:11,600 Speaker 4: not the cause. And so the weaker breath tells us that, 62 00:03:11,800 --> 00:03:13,520 Speaker 4: you know, certain things are going and we think we've 63 00:03:13,600 --> 00:03:16,480 Speaker 4: this is something we think we've gotten very right over 64 00:03:16,480 --> 00:03:18,239 Speaker 4: the last several years, which is that it's a very 65 00:03:18,320 --> 00:03:21,680 Speaker 4: government heavy, you know economy, right so if you actually 66 00:03:21,680 --> 00:03:24,760 Speaker 4: look at the private economy, the private economy has been 67 00:03:24,880 --> 00:03:28,600 Speaker 4: sort of languishing, whether it's manufacturing or housing. Some of 68 00:03:28,639 --> 00:03:31,639 Speaker 4: the consumer goods areas, I mean, they're actually intercession. They've 69 00:03:31,680 --> 00:03:35,280 Speaker 4: been intercession for two years. And the government, heavy handed 70 00:03:35,680 --> 00:03:38,840 Speaker 4: former government, whether it be fiscal or monetary policy, has 71 00:03:38,920 --> 00:03:40,080 Speaker 4: kind of kept things buoyed. 72 00:03:40,520 --> 00:03:41,840 Speaker 3: And the market has figured that out. 73 00:03:42,000 --> 00:03:44,200 Speaker 4: And of course you have things like AI, you know, 74 00:03:44,240 --> 00:03:46,800 Speaker 4: maybe weight loss drugs, you know, certain themes that are 75 00:03:46,880 --> 00:03:50,120 Speaker 4: very specific to certain areas, and those areas have carried 76 00:03:50,120 --> 00:03:50,440 Speaker 4: the day. 77 00:03:50,720 --> 00:03:52,400 Speaker 3: Okay, So I think I think the. 78 00:03:52,280 --> 00:03:56,920 Speaker 4: Weak breath is symptomatic of this very unbalanced economy that 79 00:03:56,960 --> 00:03:57,720 Speaker 4: we're dealing with. 80 00:03:57,800 --> 00:03:57,960 Speaker 2: Now. 81 00:03:58,200 --> 00:04:00,040 Speaker 4: One thing to point out, however, is the second and 82 00:04:00,160 --> 00:04:04,760 Speaker 4: half really since September, the breath improved tremendously, and actually 83 00:04:04,800 --> 00:04:06,800 Speaker 4: the breath in twenty twenty four is still way better 84 00:04:06,800 --> 00:04:08,680 Speaker 4: than it was in twenty twenty three. So it's not 85 00:04:08,800 --> 00:04:12,400 Speaker 4: all bad, but it is a like I said, it's 86 00:04:12,440 --> 00:04:15,360 Speaker 4: a symptom of what I think is a very unbalanced 87 00:04:15,760 --> 00:04:17,720 Speaker 4: kind of recovery that is ongoing. 88 00:04:18,880 --> 00:04:22,080 Speaker 5: So I guess you think about twenty twenty five, Mike, 89 00:04:22,120 --> 00:04:25,120 Speaker 5: I think a lot of folks are saying this, Really, 90 00:04:25,200 --> 00:04:27,320 Speaker 5: if there's gonna be any performance in twenty twenty five, 91 00:04:27,320 --> 00:04:30,640 Speaker 5: it really has to be driven by earnings growth, because 92 00:04:30,640 --> 00:04:32,480 Speaker 5: maybe the Fed's going to cut a couple of times, 93 00:04:32,520 --> 00:04:34,880 Speaker 5: but I'm not sure how much more than that. Are 94 00:04:34,880 --> 00:04:38,320 Speaker 5: you concerned that the earnings leg of this story is 95 00:04:38,960 --> 00:04:40,160 Speaker 5: maybe a little ahead of itself. 96 00:04:41,520 --> 00:04:43,720 Speaker 3: Well, I mean, look the markets are they get ahead 97 00:04:43,760 --> 00:04:44,160 Speaker 3: of that? Right? 98 00:04:44,200 --> 00:04:47,719 Speaker 4: So the markets, you know, multiple you know, rallied because 99 00:04:47,720 --> 00:04:50,839 Speaker 4: it anticipated in earnings recovery. Of course, this summer we 100 00:04:50,880 --> 00:04:53,960 Speaker 4: had some turbulence and then the fall things picked up again. 101 00:04:54,040 --> 00:04:56,080 Speaker 4: We think most of the of the rally in the 102 00:04:56,080 --> 00:04:59,280 Speaker 4: second half was driven by sort of liquidity factors and 103 00:04:59,400 --> 00:05:02,040 Speaker 4: you know, to send picking up around the election, just 104 00:05:02,120 --> 00:05:04,799 Speaker 4: hitting that behind us, you know, at the definitive outcome, 105 00:05:04,839 --> 00:05:07,240 Speaker 4: et cetera. And so now we're a little bit ahead 106 00:05:07,240 --> 00:05:09,520 Speaker 4: of ourselves. So multiples probably have to consolidate a bit. 107 00:05:09,920 --> 00:05:12,479 Speaker 4: The key for this year is are we going to 108 00:05:12,520 --> 00:05:15,279 Speaker 4: get a broadening out in the earnings participation? Okay, so 109 00:05:15,360 --> 00:05:18,320 Speaker 4: earnings have been pretty lousy for most companies over the 110 00:05:18,400 --> 00:05:20,719 Speaker 4: last two years for the reasons I mentioned earlier. Okay, 111 00:05:20,760 --> 00:05:23,440 Speaker 4: interest rates are too high, for most businesses, Government is 112 00:05:23,480 --> 00:05:25,919 Speaker 4: crowding out a lot of smaller businesses and even larger 113 00:05:25,960 --> 00:05:28,720 Speaker 4: businesses to some extent, the global economy is still kind 114 00:05:28,720 --> 00:05:31,080 Speaker 4: of stuck in the mud, so a lot of multinationals 115 00:05:31,120 --> 00:05:33,320 Speaker 4: are not doing well. So the key for next year 116 00:05:33,440 --> 00:05:36,280 Speaker 4: is can we see a broadening out of that earning recovery. 117 00:05:36,279 --> 00:05:38,480 Speaker 4: We think we can, and that's our job. Our job 118 00:05:38,560 --> 00:05:40,040 Speaker 4: is to figure out where is that earning is going 119 00:05:40,080 --> 00:05:42,719 Speaker 4: to pick up. Financials is one area where we've gotten 120 00:05:42,720 --> 00:05:46,279 Speaker 4: more constructive recently because of the earning story, specifically. 121 00:05:45,839 --> 00:05:48,160 Speaker 1: Mike Wilson with US with Morgan Stanley. 122 00:05:48,839 --> 00:05:52,960 Speaker 2: If I need breadth to go higher, Mike Wilson is 123 00:05:53,040 --> 00:05:57,640 Speaker 2: healthcare is so dominant that if healthcare doesn't perform, I 124 00:05:57,720 --> 00:06:00,000 Speaker 2: don't see an intelligent gain in the market. 125 00:06:02,160 --> 00:06:03,840 Speaker 3: No, I don't think so, Tom. I mean, healthcare has 126 00:06:03,880 --> 00:06:05,040 Speaker 3: been languishing for a while. 127 00:06:05,560 --> 00:06:08,120 Speaker 4: It's been you know, there's been some big home run winners, 128 00:06:08,160 --> 00:06:10,320 Speaker 4: and as I mentioned earlier, some of the weight loss 129 00:06:10,360 --> 00:06:14,200 Speaker 4: drug winners, et cetera. But healthcare has been languishing for 130 00:06:14,240 --> 00:06:15,440 Speaker 4: the better part of a year and a half in 131 00:06:15,480 --> 00:06:18,320 Speaker 4: a relative basis, and the market's been fine. So I 132 00:06:18,320 --> 00:06:21,520 Speaker 4: don't think it's necessary condition. It would be helpful. We'd 133 00:06:21,600 --> 00:06:24,880 Speaker 4: like to see it happen. I think for healthcare specifically, 134 00:06:25,400 --> 00:06:28,200 Speaker 4: you know, with the appointment of Bobby Kennedy, Well, let's 135 00:06:28,200 --> 00:06:29,720 Speaker 4: see how that goes. I mean, I think that the 136 00:06:29,960 --> 00:06:32,640 Speaker 4: sector is probably going to remain under pressure until that confirmation. 137 00:06:32,760 --> 00:06:35,360 Speaker 4: Hearing interesting, and then I think from there we might 138 00:06:35,400 --> 00:06:36,200 Speaker 4: get a bit of a bounce. 139 00:06:36,360 --> 00:06:40,839 Speaker 2: Yeah, Mike Wilson, tell me about the necessary condition for 140 00:06:41,000 --> 00:06:44,279 Speaker 2: breath to work. What is the single item that you're 141 00:06:44,320 --> 00:06:47,760 Speaker 2: studying with your team to say we have good breadth. 142 00:06:49,360 --> 00:06:51,440 Speaker 4: It's what you said earlier, Tom, we need we need 143 00:06:51,480 --> 00:06:53,840 Speaker 4: better breath of earnings revisions. I mean, this has been 144 00:06:53,880 --> 00:06:55,640 Speaker 4: a theme of ours for the last two years. 145 00:06:56,000 --> 00:06:56,159 Speaker 3: You know. 146 00:06:56,160 --> 00:06:58,760 Speaker 4: One of the reasons why we weren't maybe as enthusiastic 147 00:06:58,800 --> 00:07:01,880 Speaker 4: as others in terms of the rally we've had is 148 00:07:01,880 --> 00:07:04,520 Speaker 4: because we thought it would be narrow. In fact, our 149 00:07:04,560 --> 00:07:08,080 Speaker 4: forecast suggested that that the earnings recovery itself was driven 150 00:07:08,320 --> 00:07:11,080 Speaker 4: by heavy cost cutting in the mag seven and then 151 00:07:11,120 --> 00:07:13,960 Speaker 4: of course they had AI which helped a handful of companies. 152 00:07:14,520 --> 00:07:16,280 Speaker 4: You had a few of the themes that were driving 153 00:07:16,600 --> 00:07:19,800 Speaker 4: you know, growth, You had government support, for infrastructure, spend 154 00:07:20,160 --> 00:07:22,320 Speaker 4: things along those lines, and so it was very narrow. 155 00:07:22,720 --> 00:07:25,320 Speaker 4: So in order for the market breath the price breath 156 00:07:25,320 --> 00:07:27,040 Speaker 4: to get better, you need earnings breath to get better. 157 00:07:27,160 --> 00:07:29,240 Speaker 4: I don't think it's that complicated. And that's what we 158 00:07:29,280 --> 00:07:33,480 Speaker 4: think should happen in twenty twenty five, assuming once again 159 00:07:33,520 --> 00:07:36,160 Speaker 4: that you know, we don't get some policy changes that 160 00:07:36,240 --> 00:07:38,640 Speaker 4: are maybe negative for the market in the near term. 161 00:07:38,720 --> 00:07:40,720 Speaker 4: And that's really our concern the short term is that 162 00:07:40,800 --> 00:07:43,320 Speaker 4: we think some of the policy changes are probably going 163 00:07:43,400 --> 00:07:45,280 Speaker 4: to be more negative in the beginning and then more 164 00:07:45,280 --> 00:07:46,559 Speaker 4: positive in the second half. 165 00:07:47,480 --> 00:07:49,840 Speaker 5: Hey, Mike, as we all know, the S and P 166 00:07:49,920 --> 00:07:51,960 Speaker 5: five hundred over each of the last two years has 167 00:07:52,120 --> 00:07:55,360 Speaker 5: grown north of twenty percent. I'm not sure earnings have 168 00:07:55,440 --> 00:08:00,280 Speaker 5: grown to that extent, are we? What's the valuation call 169 00:08:00,320 --> 00:08:00,640 Speaker 5: right here? 170 00:08:00,680 --> 00:08:04,680 Speaker 3: As you think about the market here, Mike, it's expensive. 171 00:08:04,760 --> 00:08:07,840 Speaker 3: I mean, that's not a great insight. 172 00:08:08,240 --> 00:08:11,400 Speaker 4: I mean, this is probably the single biggest miss by 173 00:08:11,640 --> 00:08:13,880 Speaker 4: I think everybody in the last twelve months. I don't 174 00:08:13,920 --> 00:08:16,240 Speaker 4: I don't recall anyone saying they thought we would trade 175 00:08:16,240 --> 00:08:18,640 Speaker 4: to twenty three times earnings. But of course everybody rode 176 00:08:18,680 --> 00:08:21,520 Speaker 4: the wave, including us, and you're happy to take it. 177 00:08:22,200 --> 00:08:24,160 Speaker 4: And so now you're sitting here twenty two twenty three 178 00:08:24,200 --> 00:08:26,800 Speaker 4: times earnings and you're like, oh, you know, well, now 179 00:08:26,800 --> 00:08:30,080 Speaker 4: we need to see the earnings actually surprised to the upside. 180 00:08:30,120 --> 00:08:32,640 Speaker 4: And you're exactly correct on the fact that earnings have 181 00:08:32,800 --> 00:08:36,600 Speaker 4: not been the main driver of the returns. The main 182 00:08:36,679 --> 00:08:40,559 Speaker 4: driver of the returns has been equity evaluations, right. And 183 00:08:41,360 --> 00:08:43,280 Speaker 4: there's been some specific names that have done a great 184 00:08:43,360 --> 00:08:46,680 Speaker 4: job in earnings and those are unique, but overall, this 185 00:08:46,760 --> 00:08:49,160 Speaker 4: has been probably one of the biggest multiple expansions we've 186 00:08:49,200 --> 00:08:51,520 Speaker 4: ever seen x, you know, coming out of a recess. 187 00:08:51,559 --> 00:08:52,880 Speaker 1: Okay, so what does it do with cash? 188 00:08:53,000 --> 00:08:57,280 Speaker 2: For Mike Wilson, for Lisa Shallatt and Morgan Stanley Wealth Management? 189 00:08:57,800 --> 00:08:59,440 Speaker 1: Is cash your friend right now? 190 00:09:01,679 --> 00:09:04,240 Speaker 4: Well, I think you know, short duration fixed income in 191 00:09:04,280 --> 00:09:06,640 Speaker 4: general has been our friend for the last several years. 192 00:09:07,240 --> 00:09:10,400 Speaker 4: Being underweight you know duration, whether that's two years or 193 00:09:10,440 --> 00:09:12,959 Speaker 4: one year or cash, they're all doing the same thing 194 00:09:13,000 --> 00:09:15,120 Speaker 4: for your portfolio time but giving you a nice four 195 00:09:15,160 --> 00:09:18,800 Speaker 4: to five percent return with very little risk. And so 196 00:09:18,880 --> 00:09:20,880 Speaker 4: that's a great place to have some of your money. 197 00:09:20,920 --> 00:09:23,640 Speaker 4: Once again, not all of your money. You know, we're 198 00:09:23,720 --> 00:09:28,080 Speaker 4: probably five to seven percent coming in that cash rate region, 199 00:09:28,080 --> 00:09:29,080 Speaker 4: which is two years and end. 200 00:09:29,640 --> 00:09:31,480 Speaker 3: And and that's fine. That's a good place to be 201 00:09:31,520 --> 00:09:33,880 Speaker 3: when you're getting compensated. I mean, just recall two years 202 00:09:33,920 --> 00:09:36,080 Speaker 3: ago you were getting zero on that cash. 203 00:09:36,160 --> 00:09:38,640 Speaker 4: Now that's a bad deal, but today you're getting actually 204 00:09:38,640 --> 00:09:42,040 Speaker 4: a pretty positive return. And there's a place in every 205 00:09:42,120 --> 00:09:44,640 Speaker 4: portfolio for something like that. Just ask Warren Buffett. 206 00:09:45,520 --> 00:09:49,120 Speaker 5: Hey, Michael, it seems like the market's discounting too FED 207 00:09:49,280 --> 00:09:54,520 Speaker 5: rate cuts this year. Is the market okay with that 208 00:09:54,880 --> 00:09:56,760 Speaker 5: or do they need to think the market needs to 209 00:09:56,760 --> 00:09:58,560 Speaker 5: see a little bit more or do you think the 210 00:09:58,559 --> 00:10:00,480 Speaker 5: market is fairly discounting too it cuts. 211 00:10:01,640 --> 00:10:04,360 Speaker 4: Well, first of all, let me just make an opening 212 00:10:04,360 --> 00:10:06,800 Speaker 4: statement about that. I mean, if there's one thing that 213 00:10:06,840 --> 00:10:09,360 Speaker 4: the markets have been more wrong about than FED cuts 214 00:10:09,360 --> 00:10:10,800 Speaker 4: over the last four years, I like to know what 215 00:10:10,880 --> 00:10:14,280 Speaker 4: it is, so you know, I mean, this has been 216 00:10:14,559 --> 00:10:17,720 Speaker 4: probably the single biggest whipsaw, both on the upside and 217 00:10:17,760 --> 00:10:20,679 Speaker 4: the downside, that the markets have gotten wrong. So I 218 00:10:20,720 --> 00:10:22,960 Speaker 4: think looking at the bond market right now, what they're 219 00:10:22,960 --> 00:10:25,640 Speaker 4: pricing in is a waste of time because they don't know. 220 00:10:25,760 --> 00:10:28,160 Speaker 4: The FED doesn't even know what I would say However, 221 00:10:28,200 --> 00:10:29,959 Speaker 4: one of the reasons why the breath is deteriorated. I 222 00:10:30,040 --> 00:10:31,840 Speaker 4: talked about that as a symptom the cause of the 223 00:10:31,840 --> 00:10:34,680 Speaker 4: breath deterioration. One of them is the fact that rates 224 00:10:34,720 --> 00:10:37,520 Speaker 4: have gone up at the back end almost one hundred 225 00:10:37,559 --> 00:10:40,800 Speaker 4: basis points since the FED has cut one hundred basis points. 226 00:10:40,840 --> 00:10:43,160 Speaker 4: Think about that. That means the term premium has really 227 00:10:43,200 --> 00:10:45,880 Speaker 4: gone up sharply, and that's been something we've been focused on. 228 00:10:45,880 --> 00:10:48,080 Speaker 4: When the term premium kind of gets up into this range, 229 00:10:48,360 --> 00:10:50,920 Speaker 4: you actually now are at risk of having an equity 230 00:10:51,679 --> 00:10:55,360 Speaker 4: valuation correction. So we think that's probably the main reason 231 00:10:55,360 --> 00:10:58,480 Speaker 4: why the breath has deteriorated here recently, more so than earnings. 232 00:10:58,920 --> 00:11:01,559 Speaker 4: And I think, you know, two cuts, sure, why not? 233 00:11:02,120 --> 00:11:05,320 Speaker 4: Could we get zero cuts next this year? Possibly could 234 00:11:05,320 --> 00:11:07,800 Speaker 4: we get four or five cuts. Maybe it just depends 235 00:11:07,840 --> 00:11:09,880 Speaker 4: on how things play out, but I think right now 236 00:11:09,960 --> 00:11:12,720 Speaker 4: two cuts is kind of the best guess, and the 237 00:11:12,760 --> 00:11:15,360 Speaker 4: bomb market is probably a little bit suspicious about that 238 00:11:15,440 --> 00:11:16,680 Speaker 4: based on how the back end is training. 239 00:11:16,920 --> 00:11:18,440 Speaker 1: Mike Wilson, thank you so much. Chief. 240 00:11:18,440 --> 00:11:21,320 Speaker 2: You have secuity strategist Morgan Stanley generous to be with us.