WEBVTT - Surveillance: Debt Ceiling Concerns with Stealey 0:00:05.120 --> 0:00:09.280 Welcome to the Bloombergs Surveillance Podcast hometom Keene. Along with 0:00:09.320 --> 0:00:13.080 the Jonathan Ferrill and Lisa are Brownwitz Jaylie, we bring 0:00:13.119 --> 0:00:17.119 you insight from the best an economics, finance, investment and 0:00:17.239 --> 0:00:23.320 international relations. Fine Bloomberg Surveillance and Apple podcast SoundCloud, Bloomberg 0:00:23.360 --> 0:00:30.080 dot Com and of course on the Bloomberg terminal. The 0:00:30.160 --> 0:00:33.680 instally of JP Morgan as management alongside us today. Great 0:00:33.680 --> 0:00:35.000 have you with us in the building. I wanted to 0:00:35.000 --> 0:00:36.920 start here because I think this is really important in 0:00:36.960 --> 0:00:39.160 the United States. Ask about the debt ceiling and people 0:00:39.200 --> 0:00:41.199 shake their heads and they're like, not this again. Is 0:00:41.200 --> 0:00:43.200 anyone asking about that? When you go around and see 0:00:43.200 --> 0:00:45.400 clients in London and UK across Europe, are they asking 0:00:45.479 --> 0:00:48.200 about it? To be completely honest, No, not not really. 0:00:48.240 --> 0:00:52.040 Maybe there's the the odd person is starting to think 0:00:52.080 --> 0:00:54.120 about it. But I get the sense there's a case 0:00:54.160 --> 0:00:56.319 if we've been here, we've seen the movie, there will 0:00:56.360 --> 0:00:58.320 be a bit of twoing and throwing, but the reality 0:00:58.440 --> 0:00:59.760 is at the end of the day there will be 0:00:59.800 --> 0:01:03.320 some resolve around it. Do you think they should care? Um? 0:01:03.360 --> 0:01:05.920 Not yet. I think ultimately you need to get you 0:01:05.920 --> 0:01:07.640 need to wait until we get into the stage where 0:01:07.720 --> 0:01:10.319 actually there is going to be a material impact that's 0:01:10.360 --> 0:01:11.920 going to be later over the course of this year. 0:01:11.920 --> 0:01:13.640 I always look at the bill market to see there's 0:01:13.640 --> 0:01:16.440 any spikes in certain certain maturities. We're not seeing yet 0:01:16.680 --> 0:01:19.679 that yet, so the market's not really particularly focusing on it. 0:01:19.720 --> 0:01:22.839 And I feel that we've had over the last few years. 0:01:22.959 --> 0:01:25.240 This isn't the first time we've had these these conversations. 0:01:25.240 --> 0:01:26.520 There's a lot about there's a lot of other things 0:01:26.560 --> 0:01:28.360 going on in the world before we get to probably 0:01:28.360 --> 0:01:30.720 worrying about the Well the Ottoman test of that is, 0:01:30.959 --> 0:01:33.320 if the debt ceiling hits the fan, do we buy 0:01:33.319 --> 0:01:36.319 the ten year treasury? The answer in years gone bias yes. 0:01:36.480 --> 0:01:38.560 Do you see the answer changing probably even more so 0:01:38.640 --> 0:01:40.679 now just because actually you've got some yield on the 0:01:40.680 --> 0:01:42.200 ten uere treasury. We were happy to buy the ten 0:01:42.240 --> 0:01:45.039 year treasury back in twenty eleven when there wasn't much 0:01:45.120 --> 0:01:46.600 yield on on the ten year and at this time 0:01:46.600 --> 0:01:48.360 there is, so I definitely think that will be the case. 0:01:48.360 --> 0:01:51.160 In the flight to quality, will will favor those those bonds, 0:01:51.240 --> 0:01:52.880 you know where there hasn't been any yield and hasn't 0:01:52.920 --> 0:01:54.960 been for several decades is Japan. I know it's a 0:01:55.000 --> 0:01:56.600 massive focus for a lot of people here in London 0:01:56.680 --> 0:01:59.440 for you as well, looking at fixed income. There was 0:01:59.480 --> 0:02:03.240 a meeting back in December. We had the meetings minutes 0:02:03.440 --> 0:02:07.120 and it suggested that the government official they're actually requested 0:02:07.120 --> 0:02:10.120 a recess suspended the meeting. What do you think is 0:02:10.160 --> 0:02:11.800 going on at the b O J and do you 0:02:11.840 --> 0:02:14.480 think the government is happy with it? I think the 0:02:14.520 --> 0:02:17.160 reality is when you look at where inflation is in Japan, 0:02:17.240 --> 0:02:19.320 it's not what we've seen in the US, it's not 0:02:19.360 --> 0:02:21.000 what we've seen in Europe, but it's it's going up 0:02:21.520 --> 0:02:24.720 and at the moment, their policy looks at odds with 0:02:24.720 --> 0:02:27.200 with what's happening. The reality though, is they don't want 0:02:27.200 --> 0:02:30.120 to cause untowards volatility in the market. I'm not I 0:02:30.120 --> 0:02:32.040 don't want to liken what's happening in Japan to me 0:02:32.120 --> 0:02:33.880 what happen in the UK a few months ago, But 0:02:33.919 --> 0:02:36.280 they don't want to see that level of volatility. So 0:02:36.320 --> 0:02:37.840 I think what we've learned from the Bank of Japan 0:02:37.880 --> 0:02:39.639 over the last couple of months or so is that 0:02:39.800 --> 0:02:41.400 I think we're going to get there, but they're going 0:02:41.440 --> 0:02:43.760 to do it on their own terms. They obviously widened 0:02:43.760 --> 0:02:46.079 the band when the market wasn't expecting it. The market 0:02:46.120 --> 0:02:48.120 was hoping for something last week they didn't, And they're 0:02:48.120 --> 0:02:50.200 actually doing these facilities at the moment to try to 0:02:50.360 --> 0:02:53.640 keep financial stability. We're going to get there, it's inevitable, 0:02:53.720 --> 0:02:55.840 I think, but they also want to do on their 0:02:55.840 --> 0:02:57.360 own terms. The two words I want to talk about 0:02:57.400 --> 0:03:00.480 normal and market. Those two words I could with Jeremy 0:03:00.480 --> 0:03:02.400 Stretch in the last couple of hours of c ib 0:03:02.520 --> 0:03:04.760 C and he said, Japan's the next one to normalize, 0:03:04.800 --> 0:03:06.480 And I said, what's normal? I've got no idea what's 0:03:06.480 --> 0:03:09.120 normal in Japan when they've been doing this now for decades. 0:03:09.600 --> 0:03:10.920 The other world I want to talk about with you 0:03:10.960 --> 0:03:14.040 as well is the word market. Is there a market, 0:03:14.560 --> 0:03:19.760 a sufficient market with private demand both domestically and internationally 0:03:19.800 --> 0:03:22.680 for Japanese debt for when this bo j backs away? 0:03:22.760 --> 0:03:25.000 Does it exist? Is there any sign of the one 0:03:25.080 --> 0:03:28.959 actually being there right now? Um, that's going to be 0:03:29.000 --> 0:03:31.919 a challenge because obviously the Bank of Japan own a huge, 0:03:32.360 --> 0:03:35.240 huge piece of the market, particularly in the in the 0:03:35.240 --> 0:03:37.520 shorter dated ten years and in where they've obviously been 0:03:37.520 --> 0:03:40.240 looking to control control yields. So I think that's an open, 0:03:40.320 --> 0:03:42.960 open debate. Obviously we're going to see the market repriced 0:03:43.000 --> 0:03:45.080 to where to where it should should do. But the 0:03:45.120 --> 0:03:47.960 reality is there is a huge amount of securities owned 0:03:48.000 --> 0:03:51.760 by by the bank repriced too. If we don't know 0:03:51.960 --> 0:03:53.880 if there's a market that actually what you get. What 0:03:53.960 --> 0:03:56.800 you can do is if you track the tenure j 0:03:56.880 --> 0:03:58.640 GB yield and put it on top of the ten 0:03:58.720 --> 0:04:03.000 year treasury year and you see treasury yields move higher 0:04:03.240 --> 0:04:06.040 over the course last year, the tenure j GB suddenly 0:04:06.120 --> 0:04:09.880 hit hit the upper bound. If you before then there 0:04:09.920 --> 0:04:13.120 was a pretty good relationship. So if you reach continue 0:04:13.120 --> 0:04:16.320 to track that, you're talking somewhere seventy seventy five basis points. 0:04:16.480 --> 0:04:19.160 Given where the tenure treasury is, that probably seems as 0:04:19.160 --> 0:04:21.080 a as a good started point. As I said, inflation 0:04:21.080 --> 0:04:22.560 in Japan isn't what it was in the U S 0:04:22.600 --> 0:04:24.279 and Europe, but it's going up. We've got, you know, 0:04:24.320 --> 0:04:27.640 wage negotiations coming up in April. I think they're going 0:04:27.680 --> 0:04:29.200 to have to let that go. So don't find the 0:04:29.200 --> 0:04:30.880 fair used to be the phrase I know they've been 0:04:30.880 --> 0:04:33.720 reflected on that. Should I fight the b J I 0:04:33.720 --> 0:04:35.480 think the interesting thing is, as I said, they want 0:04:35.520 --> 0:04:37.240 to do on their own terms. So there at the 0:04:37.279 --> 0:04:39.360 moment they're trying to push some of the shorts out 0:04:39.440 --> 0:04:41.680 of out of the market. If you've got a long 0:04:41.760 --> 0:04:43.679 term view, I think you can hold that and actually 0:04:43.760 --> 0:04:46.359 yields will be higher over the medium medium term. What 0:04:46.400 --> 0:04:48.720 kind of number are you thinking about on the yields, 0:04:48.760 --> 0:04:50.280 I think only five base points on the tenure. I 0:04:50.320 --> 0:04:52.200 think then they go beyond that kind of number. Though. 0:04:52.320 --> 0:04:54.400 In Japan, I'm looking at the things right now that 0:04:54.520 --> 0:04:56.839 are taking place across fixed income and with central banks. 0:04:56.839 --> 0:04:58.480 You're talking about the b O J backing away from 0:04:58.480 --> 0:05:01.560 the YELD curve control. These eb is doing QT. They've 0:05:01.560 --> 0:05:03.760 got officials running out all over the place. Sound fifty 0:05:03.760 --> 0:05:06.040 basis points? Fifty basis points? I think the bank agrees 0:05:06.080 --> 0:05:08.560 pushed back a little bit in that world. Is that 0:05:08.640 --> 0:05:11.240 bullish your bearest for fixed income at a time where 0:05:11.279 --> 0:05:13.719 I've got pretty much everyone is fixed incomes saying buy bonds, 0:05:14.040 --> 0:05:16.200 all these things taking place Japan, the e C b 0:05:16.480 --> 0:05:19.080 QT all over the place, is that bearish your bullish 0:05:19.360 --> 0:05:21.280 fixed income? It depends what part of the fixed income 0:05:21.279 --> 0:05:24.160 market you're talking about. Because the US, where people are 0:05:24.240 --> 0:05:26.920 looking to buy bonds, has seen the bigger repricing. We've 0:05:27.000 --> 0:05:29.599 got more evidence over the last week or so that 0:05:29.640 --> 0:05:32.320 we are having a slow down retail sales. We're gonna 0:05:32.320 --> 0:05:34.719 have the FED who want to slow down from their pace, 0:05:35.320 --> 0:05:37.240 the European Central Bank, the Bank of Japan, they're behind 0:05:37.279 --> 0:05:39.640 the FED. We've only just got too neutral in Europe. 0:05:39.760 --> 0:05:41.720 Is as you said, what is neutral in Japan? Maybe 0:05:41.760 --> 0:05:44.280 we'll find out got no idea, So they need to 0:05:44.320 --> 0:05:47.000 do a little bit more. And I actually think Europe 0:05:47.040 --> 0:05:50.200 is particularly interesting at the moment because we were in 0:05:50.200 --> 0:05:52.919 a world where they were hiking rates to deal with inflation. 0:05:53.680 --> 0:05:56.040 Now inflation is coming or likely to come off because 0:05:56.080 --> 0:05:58.200 what's happening in energy prices that should be good for 0:05:58.240 --> 0:06:00.600 the economy. Growth is supposed We're supposed to be be in 0:06:00.600 --> 0:06:02.720 recession in Europe at the moment, and we're not. So 0:06:02.839 --> 0:06:04.640 are The e C began and maybe have to go 0:06:04.760 --> 0:06:07.320 slower but further as they tried to battle this. So 0:06:07.320 --> 0:06:09.400 I definitely thin there's a dynamic between wanting to own 0:06:09.760 --> 0:06:12.200 US fixed income and then being a little bit more 0:06:12.200 --> 0:06:14.040 cautious and some of the other markets around the world. 0:06:14.080 --> 0:06:15.600 I wanted to squeeze this in because I asked this 0:06:15.680 --> 0:06:17.480 question earlier, I'm going to ask it a week. Does 0:06:17.480 --> 0:06:21.880 the ECP hype more than the FEDE Yes, it seems 0:06:21.880 --> 0:06:23.520 to be the takeaway at the moment and stably this 0:06:23.560 --> 0:06:25.400 was fantastic. It's good to see it from JP Morgan 0:06:25.440 --> 0:06:32.599 Asset Management. Right now, Alfia dor Walla joins us with 0:06:32.760 --> 0:06:36.320 Rock Creek Group. They are an exceptionally thoughtful group with 0:06:36.440 --> 0:06:39.840 real hydrocarbon focus and also with an E. M. Bent. 0:06:40.000 --> 0:06:43.880 We're thrilled she could join us this morning. If what 0:06:44.040 --> 0:06:48.160 is cash right now? Is cash an asset? You know? 0:06:48.320 --> 0:06:50.679 Last year cash was definitely an asset. We were overweight 0:06:50.680 --> 0:06:52.920 cash and it helped our portfolios. This year we are 0:06:52.920 --> 0:06:54.880 starting to put a little bit of money to work 0:06:54.960 --> 0:06:59.040 incrementally within fixed income more than anything else. UM a 0:06:59.040 --> 0:07:02.359 little bit too early to be really chasing fixed in cup. 0:07:02.720 --> 0:07:04.320 We think that at some point we're gonna want to 0:07:04.360 --> 0:07:08.360 start extending duration, so fixed income is a big focus today. 0:07:08.480 --> 0:07:10.600 What do you do with the energy is the only 0:07:10.720 --> 0:07:14.559 survivor of an ugly two thousand twenty two You people 0:07:14.560 --> 0:07:18.880 have got terrific natural gas history. How do you how 0:07:18.880 --> 0:07:21.120 do you frame that or how do you bet on 0:07:21.240 --> 0:07:24.400 that out three years? Yeah? And you know, Lisa, you 0:07:24.400 --> 0:07:26.640 mentioned two of our main themes, will the energy shock 0:07:26.720 --> 0:07:29.160 from the war in Europe continue to be contained or 0:07:29.200 --> 0:07:31.200 do we see part two this year? You know, we 0:07:31.240 --> 0:07:34.800 saw winter warmth, We've started seeing European subsidies, We've seen 0:07:34.840 --> 0:07:39.440 the US tapping into the Strategic Patrol reserve support containment. 0:07:39.560 --> 0:07:41.920 And then we see China on the other hand. You know, 0:07:42.040 --> 0:07:45.400 demand for oil is going to increase as China reopens, 0:07:45.480 --> 0:07:47.920 and so we're kind of looking at all of these 0:07:47.960 --> 0:07:50.400 factors and saying, is the second half of the year 0:07:50.760 --> 0:07:52.480 going to be a little bit like we were seeing 0:07:52.480 --> 0:07:54.640 some of the tensions in the last year. So let's 0:07:54.680 --> 0:07:56.880 put those two ideas together. You were saying it's not 0:07:56.960 --> 0:07:59.680 time to lean into duration, but you're waiting too, and 0:07:59.680 --> 0:08:02.000 the cuential for the energy crisis to rear its head. 0:08:02.000 --> 0:08:04.400 What are you waiting for? We've seen a rally already, 0:08:04.440 --> 0:08:06.520 so yields are already almost a percentage point off the 0:08:06.520 --> 0:08:08.920 recent highs for the tenure. What are you waiting for 0:08:09.040 --> 0:08:12.000 to say it is time? Yeah, and it's a continuous 0:08:12.000 --> 0:08:14.680 conversation as markets are moving, But we've seen a disconnect 0:08:14.760 --> 0:08:18.160 right between market expectations and the fed's hawk is announcements. 0:08:18.320 --> 0:08:20.120 The tenure seems to be stuck a little bit around 0:08:20.160 --> 0:08:22.400 three and a half percent because markets think that the 0:08:22.440 --> 0:08:24.480 FED is going to have to pit it and reduce rates. 0:08:24.880 --> 0:08:27.760 We think that the tenure could retrace it around four 0:08:27.840 --> 0:08:30.720 percent at some point early this year, and then that's 0:08:30.760 --> 0:08:34.000 going to signal a good opportunity to slowly start buying 0:08:34.080 --> 0:08:36.920 duration again. We're looking for good entry points to start 0:08:36.920 --> 0:08:39.840 extending duration in our fixtingcome portfolios, but we don't want 0:08:39.880 --> 0:08:42.120 to chase anything because we do think that we're still 0:08:42.280 --> 0:08:45.240 a long way off from the FED really signaling any 0:08:45.280 --> 0:08:47.480 sort of even pause. What's interesting to me is the 0:08:47.520 --> 0:08:50.240 idea of a four percent ten year yield and the 0:08:50.280 --> 0:08:55.080 implication for equities that previously sold off when yields went up. 0:08:55.240 --> 0:08:57.679 But if we have an environment where pausitive, where it's 0:08:57.679 --> 0:09:00.920 a positive look at the economy at could potentially happen 0:09:01.000 --> 0:09:03.640 with growth, is it also couldn't be positive for equities 0:09:03.640 --> 0:09:05.960 in the short run. You know, I think equities are 0:09:05.960 --> 0:09:08.760 gonna be maybe potentially a tale of two halves this year. 0:09:09.040 --> 0:09:10.880 You know, we think kind of middling for the next 0:09:10.920 --> 0:09:12.960 six months, but I think you're gonna have to pick 0:09:12.960 --> 0:09:15.400 your spots. You have to remember the SNP is still 0:09:15.400 --> 0:09:18.920 trading around eighteen times, whereas Europe's trading around twelve and 0:09:18.920 --> 0:09:21.440 a half and e M in certain countries even lower. 0:09:21.600 --> 0:09:23.880 So it could be a valuation story of the half 0:09:23.920 --> 0:09:27.080 of the Here Lifia with you and our Sanny, let's 0:09:27.120 --> 0:09:29.839 just talk about the Vogue again. I believe it was 0:09:29.880 --> 0:09:33.640 a vogue twelve months ago, twenty four months ago, thirty 0:09:33.720 --> 0:09:37.240 six months ago. You get the theme e M in 0:09:37.440 --> 0:09:41.960 international are back. Is this time different? You know, it 0:09:42.000 --> 0:09:44.160 feels like a little bit of a consensus trade because 0:09:44.160 --> 0:09:46.440 you're starting to hear people really talk about it more 0:09:46.679 --> 0:09:49.719 and again. You can't generalize yet. I mean China to 0:09:49.920 --> 0:09:54.680 Brazil to India. These are completely different factors, completely different 0:09:54.679 --> 0:09:57.760 time horizons you have to have. But as an institutional investor, 0:09:57.880 --> 0:10:00.680 you have to be in emerging markets a to some extent. 0:10:00.720 --> 0:10:02.679 You have to get China right because that is the 0:10:02.800 --> 0:10:06.040 still the biggest determinant in a NIM portfolio. Alifa, thank 0:10:06.080 --> 0:10:08.839 you so much. Olivia Dorwalla with Rock Creek Group there 0:10:08.880 --> 0:10:22.720 on the allocation mystery, what we're gonna do right now? 0:10:23.320 --> 0:10:26.400 You speak to someone who invented it. I really can't 0:10:26.440 --> 0:10:29.080 say this enough. I'm gonna go back to the shot 0:10:29.120 --> 0:10:32.560 gun aw of point figure charts of eighteen eighty and 0:10:32.640 --> 0:10:35.320 through the early part of last century, and then in 0:10:35.360 --> 0:10:39.600 the nineteen forties there was dropped upon us someone who said, 0:10:40.200 --> 0:10:43.480 you can plot a stock and you can draw lines 0:10:43.520 --> 0:10:47.280 of support in resistance. His name was John Maggie. One 0:10:47.280 --> 0:10:51.040 of his great disciples was Relf and compora to say 0:10:51.040 --> 0:10:54.880 he's a chartered market technician. Co Farnder barely describes his 0:10:55.040 --> 0:11:01.720 contribution to looking back at what Price tells us about forward? Ralph, 0:11:01.840 --> 0:11:04.400 honored to have you with us today. I want you 0:11:04.440 --> 0:11:10.400 to discuss the modern idiocy over catharsis. We need Catharsis 0:11:10.400 --> 0:11:14.000 to make a bottom in the equity market. Have you 0:11:14.080 --> 0:11:20.480 observed catharsis that drags us out of this bear market? Absolutely? Tom, 0:11:20.520 --> 0:11:23.920 Thank you for that kind introduction. I have to have 0:11:24.280 --> 0:11:30.520 I have to stress Octobert. Tom, the Dow had an 0:11:30.559 --> 0:11:34.800 intra day price wing of fifteen hundred and two points. 0:11:35.760 --> 0:11:40.040 No one's talking about it. In technical parlance, that's called 0:11:40.040 --> 0:11:43.760 a key reversal day when the low of the day 0:11:43.800 --> 0:11:46.600 and the high of the day precede the previous days 0:11:46.679 --> 0:11:50.880 high low, and that to me was a major turning point. 0:11:51.640 --> 0:11:57.160 And since that October low to the December thirteenth high, 0:11:57.240 --> 0:12:01.120 that DALLA is up about the S and P s 0:12:01.240 --> 0:12:05.200 up about eighteen. So there's been a nice recovery and 0:12:05.240 --> 0:12:08.320 since then the market has been consolidating. I think we're 0:12:08.520 --> 0:12:11.680 making a bottom long term in this bowl market. Well, 0:12:11.720 --> 0:12:15.240 if the study of technical analysis, with great respect for 0:12:15.360 --> 0:12:18.280 Dow theory and the rest of it, was done of 0:12:18.400 --> 0:12:22.240 a time of non derivative instruments, we now live in 0:12:22.280 --> 0:12:26.800 a world of E t f s, of massive indexation, 0:12:27.040 --> 0:12:31.160 and all to the formulas of support and resistance that 0:12:31.240 --> 0:12:34.720 you helped invent, do they work in this time where 0:12:34.720 --> 0:12:38.040 the New York Stock Exchange really isn't the New York 0:12:38.080 --> 0:12:44.560 Stock Exchange we knew. Yes, I appreciate that question, Tom, 0:12:44.600 --> 0:12:48.240 But remember what technical analysis is all about. It is 0:12:48.280 --> 0:12:52.599 following the laws of supply and demand bias versus sellers, 0:12:52.640 --> 0:12:56.640 and that has never changed. The emotion of investors has 0:12:56.720 --> 0:13:00.120 never changed, fear and greed. It is all manifest and 0:13:00.240 --> 0:13:03.800 what we follow. So if you believe in price, which 0:13:03.840 --> 0:13:07.440 I do, that's I don't own and indicator an own price, 0:13:08.000 --> 0:13:11.120 and I follow the trend of price. Buyers push him up, 0:13:11.160 --> 0:13:14.200 sell us push them down. It's that simple ralph on 0:13:14.240 --> 0:13:18.080 the spectrum of risk versus fear of a risk, appetite 0:13:18.520 --> 0:13:22.840 versus taking all your tips off the table, where are we? Um? 0:13:24.520 --> 0:13:28.640 For me, I've taken I've become a little I've become 0:13:29.040 --> 0:13:33.280 very aggressive coming out of that October thirteenth low, and 0:13:33.400 --> 0:13:37.520 I think since then, if you look at foreign markets 0:13:37.559 --> 0:13:41.839 like Europe, and you look at emerging markets, they have 0:13:41.960 --> 0:13:45.720 been leading the US market. So UM, I think it's 0:13:45.840 --> 0:13:49.240 broadening out. So I'd say, put chips on the table, 0:13:49.600 --> 0:13:52.199 play the game. What makes you feel like this has 0:13:52.240 --> 0:13:54.720 staying power? Like this is the early stages of something 0:13:54.760 --> 0:13:58.800 more sustained versus a head fake ahead of something that 0:13:58.960 --> 0:14:00.920 a lot of people say as an a very byproduct 0:14:01.000 --> 0:14:05.440 of monetary policy. Good question. Um, Remember I was talking 0:14:05.440 --> 0:14:10.280 about October thirteen low and rallied in two much to 0:14:10.600 --> 0:14:16.040 December thirteenth high, and that since December thirteenth we've had 0:14:16.080 --> 0:14:20.320 a pullback. The doll was dropped about uh six percent 0:14:20.440 --> 0:14:22.720 the so I think the SMP had an eight percent 0:14:22.800 --> 0:14:26.200 decline and those levels right there, we are looking at 0:14:26.320 --> 0:14:29.920 that would be a thirty two thousand, five eighty one 0:14:30.000 --> 0:14:33.680 on the Dow and three thousand, seven sixty four on 0:14:33.720 --> 0:14:37.400 the SMP. Those are very short term support levels. That's 0:14:37.440 --> 0:14:39.680 where the buy and she could be in. I I 0:14:39.880 --> 0:14:42.880 keep my eye closely on that on a short term basis, 0:14:43.440 --> 0:14:46.440 and I think we're holding up well. Well. I want 0:14:46.480 --> 0:14:48.800 to get back to the arch issue of the day, 0:14:48.840 --> 0:14:51.600 which is the failure of the American retirement system because 0:14:51.640 --> 0:14:53.400 people are in and out and in and out of 0:14:53.480 --> 0:14:55.800 the market. We're at one of those moments right now. 0:14:55.880 --> 0:14:59.040 We're millions of people are literally saying, how do I 0:14:59.120 --> 0:15:01.840 summon the cur to get back into the market. And 0:15:01.880 --> 0:15:04.440 I'm gonna go to the to the crew that you 0:15:04.560 --> 0:15:06.760 and I are weaned on in Large Mountain, New York, 0:15:06.840 --> 0:15:11.440 Mike Burke, Chartcraft, Mr. Cohen's work, and of course Earl Blumenthal. 0:15:12.040 --> 0:15:15.120 They knew when to have the courage to get into 0:15:15.240 --> 0:15:18.680 the market. How do you get into the market like 0:15:18.800 --> 0:15:24.880 you did in nine Uh, when you say get into 0:15:24.960 --> 0:15:29.240 the market, you mean participating and trading. I'm in cash 0:15:29.320 --> 0:15:31.800 and I need to go long. How do I get 0:15:31.800 --> 0:15:37.440 back into the market if I'm scared stiff? Well again, 0:15:37.560 --> 0:15:40.160 I I again being a technician, I think you gotta 0:15:40.240 --> 0:15:43.640 look at levels, and I think in the days ahead, 0:15:44.080 --> 0:15:47.800 literally excuse me, in the in the very short term, 0:15:47.880 --> 0:15:51.800 the next couple of weeks, just watch because we're in 0:15:51.840 --> 0:15:54.400 the early seasons right now, and we've still got a 0:15:54.520 --> 0:15:57.440 lot of dialogue about whether it's a recession and not 0:15:57.560 --> 0:16:01.120 a recession um and you've got the war in Ukraine. 0:16:01.560 --> 0:16:05.560 If we can hold above that October low, which I 0:16:05.600 --> 0:16:08.840 think we will, that to me would be the final test. 0:16:09.000 --> 0:16:12.640 So the next couple of weeks volatility we hold above 0:16:12.680 --> 0:16:17.920 those loans, I think, looking out towards the second half 0:16:17.920 --> 0:16:19.200 of this year, I think we're going to be in 0:16:19.240 --> 0:16:22.400 pretty good cheap never enough time Ralph and Compourer, they're 0:16:22.520 --> 0:16:25.720 on technical analysis. Just honored to have him on with us. 0:16:29.560 --> 0:16:31.480 I'm happy to say here in London I can catch 0:16:31.600 --> 0:16:34.320 up with Jeremy Stretch, the head of Detail FEC Strategy 0:16:34.360 --> 0:16:36.520 at C I B C. Jeremy great to catch up 0:16:36.520 --> 0:16:38.200 with anybody. Good to see it from page to the 0:16:38.200 --> 0:16:41.280 ft this morning for all to see. Europe can avoid recession? 0:16:41.400 --> 0:16:45.600 The Eurozone can avoid recession? Can the Eurozone avoid recession? Well? 0:16:45.640 --> 0:16:48.760 Suddenly the movie music has materially changed because of the 0:16:48.760 --> 0:16:51.320 retreat that we've seen in European gas prices, and of 0:16:51.360 --> 0:16:53.720 course we've also seen that Chinese reopening narrative which is 0:16:53.760 --> 0:16:57.160 providing a slightly more constructive backdrop for the German exports sector. 0:16:57.200 --> 0:17:00.160 So the combination of these two factors does suggest that 0:17:00.240 --> 0:17:03.240 Europe might and Germany and the leadership of that might 0:17:03.360 --> 0:17:06.159 just avoid that negative GDP print. And that's obviously one 0:17:06.200 --> 0:17:07.880 of the one of the catholics which has really been 0:17:07.960 --> 0:17:11.920 driving this euro recovery narrative, alongside the presumption that the 0:17:11.920 --> 0:17:14.040 ECB is seemingly much more hawkers than the defeat. And 0:17:14.160 --> 0:17:17.600 it's a relative story, isn't it stagnation versus recession? Now 0:17:17.640 --> 0:17:20.840 we need to talk about stagnation versus expansion and recovery. 0:17:20.920 --> 0:17:23.760 It's a big difference between the form and the latter. No, indeed, 0:17:23.800 --> 0:17:25.280 indeed there is so in a sense, I think what 0:17:25.359 --> 0:17:28.040 we had is that obviously, going through the third quarter 0:17:28.119 --> 0:17:30.520 last year, we had an enormous degree of negativity pricing 0:17:30.680 --> 0:17:33.040 or baked into the sort of the Eurozone recovery narrative, 0:17:33.240 --> 0:17:35.000 because of course we were talking about the potential of 0:17:35.040 --> 0:17:37.679 gas rationing. Now here we are at this stage in 0:17:37.720 --> 0:17:39.679 the in the in the winter period. Now it is 0:17:39.760 --> 0:17:42.040 remarkably cold here in London as we know at the moment, 0:17:42.440 --> 0:17:45.520 but the actual winter itself has been relatively mild thus far. 0:17:45.560 --> 0:17:48.120 And if you look at European gas short storage levels, 0:17:48.160 --> 0:17:51.000 it's they're running around twenty above the sort of levels 0:17:51.040 --> 0:17:53.320 you would have expected normally at this time of the winter. 0:17:53.680 --> 0:17:56.640 So that eases the burden in terms of the re 0:17:56.640 --> 0:17:58.919 refilling of those gas storage tanks through the course of 0:17:58.960 --> 0:18:02.440 this summer, and US we've seen Germany opening its liquefied 0:18:02.480 --> 0:18:06.639 natural gas UH ports in terms of William's Harving for example. 0:18:06.840 --> 0:18:09.200 So the ability for Germany to get those en ergy 0:18:09.280 --> 0:18:12.600 capabilities or or flows from the US in particular has 0:18:12.640 --> 0:18:15.080 helped to alleviate some of those recession risks far enough, 0:18:15.119 --> 0:18:18.080 coal as well over in Germany well, which is which 0:18:18.160 --> 0:18:19.760 is which is an interesting one. So in the sense 0:18:19.840 --> 0:18:21.480 that's one of the legacy issues. So that's why it 0:18:21.520 --> 0:18:23.440 was as fascinating to see, you know, the great of 0:18:23.520 --> 0:18:27.879 Thumberg narrative being put alongside at the World Economic Forum 0:18:27.880 --> 0:18:30.159 in Davos. You mentioned the CP is a question for 0:18:30.200 --> 0:18:32.679 you three, does the e c V hype more than 0:18:32.720 --> 0:18:35.040 the Fed this year. Yes, I think it does. I 0:18:35.080 --> 0:18:38.119 think we're very much in this steady and significant policy 0:18:38.200 --> 0:18:42.159 narrative the you know, the sort of paraphrase Madame Legarde 0:18:42.200 --> 0:18:45.480 and throw Margaret Thatcher into it's the ladies not for 0:18:45.520 --> 0:18:48.040 turning in terms of the interest rate story from the 0:18:48.119 --> 0:18:50.159 narrative that we saw from last week. So it seems 0:18:50.240 --> 0:18:53.359 likely to go along with the comments and class not 0:18:53.400 --> 0:18:54.800 over the weekend that we're going to see at least 0:18:54.800 --> 0:18:56.960 two fifty bases where most in the from the CD 0:18:57.280 --> 0:18:59.679 the next two meetings. Do they go beyond that in 0:18:59.760 --> 0:19:02.919 terms of into the spring? Possibly? Yes. So that I 0:19:02.920 --> 0:19:04.879 think does suggest that the c B is gonna be 0:19:04.880 --> 0:19:07.160 a little more hawkers than the Fed, because if we're 0:19:07.200 --> 0:19:11.240 if the market is right, and obviously markets attending to be, 0:19:11.560 --> 0:19:13.560 you know, very aggressive in terms of calling for a 0:19:13.680 --> 0:19:16.360 moderation in terms of policy timing for the Fed, then 0:19:16.600 --> 0:19:18.040 that does suggest that the c is gonna be more 0:19:18.040 --> 0:19:20.439 hawk kid Joseph salk Jen this morning, writing in London 0:19:20.600 --> 0:19:22.879 for sock Jen, saying, a spoonful of optimism house the 0:19:22.920 --> 0:19:25.199 dollar go down. You want to play that against the yen, 0:19:25.320 --> 0:19:27.800 against the euro? How do you want to play that story? Well, well, 0:19:27.800 --> 0:19:29.159 I think that I think the yen is is an 0:19:29.160 --> 0:19:31.440 obvious and in an interesting one because again we've we've 0:19:31.440 --> 0:19:34.920 seen a degree of policy uncertainty really written large after 0:19:34.960 --> 0:19:38.400 that adjustment in term of your curve control back in December. 0:19:38.640 --> 0:19:40.640 Now those minutes from the meeting there have been really 0:19:40.640 --> 0:19:43.119 so overnight suggests that a lot of the b o 0:19:43.200 --> 0:19:46.399 J members were worried about the communication aspects of that change. 0:19:46.560 --> 0:19:48.119 But I think it was it was always going to 0:19:48.160 --> 0:19:49.879 be the case, you know, to expect a degree of 0:19:49.920 --> 0:19:52.880 policy normalization from the bo J this year, but more 0:19:52.920 --> 0:19:55.960 so after Corona leaves office, because of course he's only 0:19:55.960 --> 0:19:57.919 got one more meeting to go. So I think, you know, 0:19:57.960 --> 0:20:02.120 I think there is some substantive scope for yet appreciation. 0:20:02.200 --> 0:20:04.320