WEBVTT - US PCE Data, Zelenskiy Meeting 0:00:02.759 --> 0:00:10.560 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.600 --> 0:00:18.520 Eastern on Applecarclay, and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.880 Listen on demand wherever you get your podcasts, or watch 0:00:21.920 --> 0:00:23.880 us live on YouTube. 0:00:24.120 --> 0:00:26.480 John Tucker sitting in for Alex Steele. I'm Paul Sweeney. 0:00:26.520 --> 0:00:29.120 We are live here in our Bloomberg Interactive Broker Studio 0:00:29.120 --> 0:00:31.560 in New York City. We are streaming live on youtubees 0:00:31.560 --> 0:00:34.320 ahead over to YouTube dot com search Bloomberg Podcast Live, 0:00:34.680 --> 0:00:36.320 and that's where you'll find if we get some economic 0:00:36.400 --> 0:00:40.080 data today on the inflation front PCE. The smart folks 0:00:40.120 --> 0:00:43.720 look at that core PCE index month to month up 0:00:43.840 --> 0:00:46.960 zero point three percent, right in line with expectations on 0:00:47.000 --> 0:00:49.600 a year of a year basis two point six percent, 0:00:49.880 --> 0:00:52.000 again right in line with expectations in a little bit 0:00:52.000 --> 0:00:54.600 lower than last period. That's the number, you know. It's 0:00:54.600 --> 0:00:56.000 one of those numbers that the Fed would like to 0:00:56.000 --> 0:00:59.080 see closer to two percent, So maybe a little bit 0:00:59.160 --> 0:01:01.639 more work to do. They're pre Misery Joints, Fixed and Come. 0:01:01.640 --> 0:01:05.680 Portfolio Manager, JP Morgan Asset Management. What did you make 0:01:05.720 --> 0:01:08.000 of the inflation data. More importantly, how do you think 0:01:08.000 --> 0:01:09.520 our friends at the Federal Reserve are going to view 0:01:09.560 --> 0:01:09.840 this data? 0:01:11.440 --> 0:01:15.240 So I think the Fed realizes that inflation is above target. 0:01:15.440 --> 0:01:17.800 They like it to be closer to two percent. It's 0:01:17.840 --> 0:01:19.880 a two point six year over a year, so there's 0:01:19.880 --> 0:01:22.920 still more room for it to come down. But when 0:01:22.959 --> 0:01:25.520 we look at the details off the PC report, we 0:01:25.600 --> 0:01:28.600 are seeing improvements across the board. There are a couple 0:01:28.640 --> 0:01:31.280 of components that are high, but they're heading lower. So 0:01:31.800 --> 0:01:34.360 I think it's good news came and kind of as expected. 0:01:35.160 --> 0:01:37.120 It tells us that the Fed is in no rush 0:01:37.280 --> 0:01:39.520 to cut rates and they're going to stay on hold. 0:01:39.720 --> 0:01:42.320 We're actually I think the market's focus is moving away 0:01:42.319 --> 0:01:45.800 from inflation now more to growth and all the policy uncertainty. 0:01:45.880 --> 0:01:48.000 But at least it was good news in the sense 0:01:48.040 --> 0:01:50.440 that it didn't pick back up, which was a concern 0:01:50.560 --> 0:01:53.400 late last year that inflation may be reaccelerating. I think 0:01:53.400 --> 0:01:55.800 we can put that fear aside now. I think the 0:01:55.840 --> 0:01:57.560 fears are shifting to the growth side. 0:01:58.040 --> 0:02:02.920 The Atlanta Fed GDP now tracker of Q one GDP 0:02:03.080 --> 0:02:07.240 growth now forecast at negative one and a half percent. 0:02:08.480 --> 0:02:10.640 I mean that's recessionary territory. 0:02:10.720 --> 0:02:15.000 Your take on that, you know, I think today's trade 0:02:15.000 --> 0:02:18.680 deficit came in so much weaker than people were expecting. 0:02:18.960 --> 0:02:21.920 We've heard that the gold imports from the rest of 0:02:21.919 --> 0:02:24.280 the world is one of the factors. So I'd say 0:02:24.320 --> 0:02:26.800 it's less about like a big slowing in growth if 0:02:26.840 --> 0:02:29.680 it's all driven really by trade. But you know, I 0:02:29.680 --> 0:02:32.519 think the market is reacting to the fact that there 0:02:32.600 --> 0:02:35.960 is policy uncertainty. There's tariffs. We know tariffs are a 0:02:35.960 --> 0:02:40.359 stack creationary shock. What is doage doing? So I think 0:02:40.400 --> 0:02:43.880 there are growth fears. I would put aside some of 0:02:43.520 --> 0:02:47.200 the Atlanta fed recession fears. I think the hard data 0:02:47.280 --> 0:02:49.040 so far tier one data, and we're going to get 0:02:49.040 --> 0:02:51.120 a lot of it next week. We're keeping a very 0:02:51.120 --> 0:02:53.840 close watch on the labor market. Particularly the hard data 0:02:53.880 --> 0:02:57.680 has been Tier one data has been still strong. I 0:02:57.720 --> 0:03:00.800 think where the concern is some of the intimate data. 0:03:01.040 --> 0:03:04.320 Business uncertainty indices are picking up, you know, I think 0:03:04.360 --> 0:03:07.680 does this way on business investment, business hiring? That's the 0:03:07.760 --> 0:03:10.960 question market. I think the market's pricing in that side 0:03:10.960 --> 0:03:14.280 of the distribution, the growth risk side of the distribution, 0:03:14.320 --> 0:03:16.960 which I think the market was not really concerned about 0:03:16.960 --> 0:03:19.960 the last few years. That's picking up, But I would 0:03:20.000 --> 0:03:22.400 ignore the Atlanta fat I think we're not close to 0:03:22.440 --> 0:03:25.680 a recession. Let's see how the actual data is turning out. 0:03:25.680 --> 0:03:28.040 You have to do the seasonal adjustment, make sure you're 0:03:28.080 --> 0:03:32.079 accounting for what's happened with the LA wildfires. Let's look 0:03:32.120 --> 0:03:35.640 at the actual data when it comes out. I would 0:03:35.640 --> 0:03:38.640 say the economy is okay, but there are downside risks 0:03:38.680 --> 0:03:40.440 that are building. And that's why I think you're seeing 0:03:40.440 --> 0:03:42.440 the rates market react the way it has the last 0:03:42.480 --> 0:03:43.040 few weeks. 0:03:43.360 --> 0:03:46.880 Yes, we've seen rates come in here. So for your portfolio, 0:03:47.480 --> 0:03:50.400 what kind of changes, if any, have you been making recently? 0:03:52.080 --> 0:03:56.160 So we were leaning long duration closer to four and 0:03:56.200 --> 0:03:59.800 a quarter. We actually think duration looks fair. Now if 0:04:00.000 --> 0:04:03.880 the Tier one data starts to show things weakening further, 0:04:04.320 --> 0:04:06.240 then that you know we may be looking to go 0:04:06.280 --> 0:04:09.320 long duration. I think rates look very fair here. What 0:04:09.360 --> 0:04:12.560 we've been doing, though, is moving up in quality. So 0:04:12.640 --> 0:04:15.720 within our credit spectrum, trimming a little bit of high yield, 0:04:16.160 --> 0:04:20.240 moving up in quality investment grade. Just because with uncertainty, 0:04:21.440 --> 0:04:24.400 maybe it stays in the uncertainty mode, risk premium should 0:04:24.440 --> 0:04:27.040 be higher. And we should get paid to take that 0:04:27.200 --> 0:04:29.800 extra risk, which we don't think you're getting paid necessarily 0:04:29.800 --> 0:04:32.920 in every segment of the market. So we're looking at 0:04:32.920 --> 0:04:36.320 the portfolio, particularly the credit part of the portfolio, very closely, 0:04:37.040 --> 0:04:39.680 moving up in quality, making sure that the companies, the 0:04:39.680 --> 0:04:42.800 sectors we own are less sensitive to some of the 0:04:42.800 --> 0:04:45.560 headline risks that's out there. So just doing more of 0:04:45.600 --> 0:04:47.960 that credit work, but staying with it. I think we're 0:04:48.000 --> 0:04:51.400 in a soft landing and so you know, when the 0:04:51.440 --> 0:04:53.040 tenure was closer to four and a half, it was 0:04:53.080 --> 0:04:55.240 attractive to own duration. I think at this point we 0:04:55.279 --> 0:04:58.440 can be neutral duration and be careful with the spread 0:04:58.440 --> 0:04:59.560 product that we're buying. 0:05:00.000 --> 0:05:03.159 The administration is talking about tax cuts. Can I ask 0:05:03.160 --> 0:05:06.560 you how how much in tax cuts can this bond 0:05:06.640 --> 0:05:07.360 market stand. 0:05:08.920 --> 0:05:11.560 I'm glad you bring that up. I think the expectations 0:05:11.560 --> 0:05:15.239 of tax cuts were much higher, you know, a month ago, 0:05:15.720 --> 0:05:19.280 and I think the market realized that the administration has 0:05:19.320 --> 0:05:22.800 a constraint both politically as well as a market constrained, 0:05:23.160 --> 0:05:25.920 and I think expectations of those tax cuts have come down. 0:05:26.000 --> 0:05:28.479 You see the House past bill, Let's see what the 0:05:28.520 --> 0:05:30.960 Senate does with it. But I think the expect. Our 0:05:31.080 --> 0:05:34.200 expectation is all we'll really get is an extension of 0:05:34.240 --> 0:05:38.760 the twenty seventeen tax cuts. That's not net new stimulus. Now, 0:05:38.800 --> 0:05:41.680 that does increase the deficit, but I think that is 0:05:41.760 --> 0:05:44.599 priced into the bond market, so we're not expecting and 0:05:44.640 --> 0:05:47.160 I think the market's priced for not a whole lot 0:05:47.200 --> 0:05:49.200 more in terms of tax cuts. I think we're going 0:05:49.240 --> 0:05:52.320 to spend all year trying to find those pay fores, 0:05:52.880 --> 0:05:55.200 making sure that you know, we can at least just 0:05:55.320 --> 0:05:57.960 extend that twenty seventeen tax cuts. I don't think we're 0:05:57.960 --> 0:06:02.159 getting any more because to your point, the bond market 0:06:02.279 --> 0:06:04.760 is going to push back. And we know the president, 0:06:05.080 --> 0:06:07.040 you know Secretary Best and they care about the tenure. 0:06:07.080 --> 0:06:10.440 They realize that the tenure impacts the economy, it impacts 0:06:10.520 --> 0:06:12.680 risk assets. So I don't think they'll be able to 0:06:12.720 --> 0:06:15.159 get much because it's going to be tricky. Where do 0:06:15.200 --> 0:06:18.200 you get to spending cuts to offset just the extension 0:06:18.200 --> 0:06:22.200 of the TCJA is four trillion in deficits. So I 0:06:22.240 --> 0:06:24.920 think all we get is that extension, and I think 0:06:24.920 --> 0:06:26.080 that's in the market. 0:06:26.200 --> 0:06:26.480 All right. 0:06:26.480 --> 0:06:28.400 Prea, thank you so much for joining US Pria Israel. 0:06:28.480 --> 0:06:31.040 She's fixed in come portfolio manager over there at JP 0:06:31.200 --> 0:06:35.200 Morgan Asset Management, joining us from a New York City. 0:06:35.440 --> 0:06:38.560 She'd just say, I'm not getting a salt text deduction, Raist. 0:06:38.800 --> 0:06:41.599 I think that's still on the table, but I don't know. 0:06:41.680 --> 0:06:43.800 We'll have to say. That's a lot of the tri 0:06:43.920 --> 0:06:47.159 State lawmaker said, we're not voting for anything unless that 0:06:47.279 --> 0:06:49.640 solvet thing back in here to some degree. 0:06:50.520 --> 0:06:54.239 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:54.320 --> 0:06:57.640 weekdays at ten am Eastern on Applecarclay and Android Otto 0:06:57.800 --> 0:07:00.719 with the Bloomberg Business app. Listen on the and wherever 0:07:00.760 --> 0:07:03.839 you get your podcasts, or watch us live on YouTube. 0:07:04.640 --> 0:07:04.880 John. 0:07:04.920 --> 0:07:07.680 As you know, the White House, as for every president, 0:07:08.040 --> 0:07:10.880 puts out a daily schedule for the president, what meetings 0:07:10.880 --> 0:07:13.560 here he has, and so on and so forth. He'll 0:07:13.600 --> 0:07:15.400 be jetting off to mar Alago this afternoon. 0:07:15.440 --> 0:07:16.880 And I would do the exact same thing. 0:07:16.880 --> 0:07:19.880 I mean, it's cold, go down to Florida, man, why not? 0:07:20.200 --> 0:07:22.679 I mean, I played that golf course way way way 0:07:22.680 --> 0:07:25.080 back in the day. It's pretty good, so why not 0:07:25.080 --> 0:07:26.800 go down there and play some golf, jump into the water. 0:07:27.240 --> 0:07:29.000 I would do the same thing, particularly if I had 0:07:29.040 --> 0:07:31.320 a jet in my disposal like Air Force one. 0:07:31.360 --> 0:07:32.120 Why wouldn't you. 0:07:32.440 --> 0:07:35.880 Well Truman called it the Winter White House down at Florida. 0:07:35.960 --> 0:07:40.720 Okay, very good, Yeah, I don't know. All right, let's 0:07:40.800 --> 0:07:43.440 check in on what's happening down in DC, because again, 0:07:43.480 --> 0:07:46.720 mister Zelenski is scheduled to be at the White House 0:07:47.160 --> 0:07:50.040 this morning, right now as we speak, speaking with President Trump. 0:07:50.440 --> 0:07:52.680 Doctor Aerol Cohen joins us he's a senior fellow at 0:07:52.680 --> 0:07:59.040 the Atlantic Council. A. Realistically, if you're mister Zelenski, what 0:07:59.040 --> 0:07:59.880 are you hoping to achieve? 0:08:01.800 --> 0:08:05.800 I try to get as much or as many. 0:08:05.640 --> 0:08:09.840 Security guarantees from the United States and also put on 0:08:09.880 --> 0:08:13.320 the table the following in order to keep Russia at bay. 0:08:14.200 --> 0:08:17.280 If they go to a ceasefire now or maybe eventually 0:08:17.320 --> 0:08:17.600 to a. 0:08:17.560 --> 0:08:22.760 Peace three, they will need about ten brigades of peacekeepers 0:08:22.800 --> 0:08:26.800 in Ukraine, well armed and potentially backed up by the 0:08:26.880 --> 0:08:28.000 nature nuclear umbrella. 0:08:28.600 --> 0:08:31.040 This is a conversation that needs to happen in the 0:08:31.080 --> 0:08:35.680 Oval right now. Anything short of that, Zelensky is giving 0:08:35.760 --> 0:08:42.760 Trump something which is very vague about critical minerals rare earth. 0:08:43.720 --> 0:08:45.200 We don't know where they are. 0:08:45.480 --> 0:08:49.120 Some of these rare earth are under Russian occupation in 0:08:49.120 --> 0:08:54.400 the eastern Ukraine called don Bas. And in the end 0:08:54.440 --> 0:08:57.320 of the day, the market for rare earth a three 0:08:57.640 --> 0:09:03.800 point five billion. Sixty five percent of mining is dominated 0:09:03.840 --> 0:09:08.480 by China, eighty five percent of processing is dominated by China. 0:09:08.600 --> 0:09:10.439 So we're not talking big bugs. 0:09:11.440 --> 0:09:18.760 If on the other hand, Trump tells his audience, his electorate, look, 0:09:19.160 --> 0:09:23.040 I got this wonderful agreement. Now we need to back Ukraine. 0:09:24.000 --> 0:09:28.560 That is a Trump political domestic achievement. And if that's 0:09:28.600 --> 0:09:32.040 where he's going, more power to him. But in the 0:09:32.120 --> 0:09:36.040 end of the day, the long term American interests do 0:09:36.160 --> 0:09:39.680 not change based on who's in the White House. We 0:09:39.960 --> 0:09:44.960 the United States have an interest in keeping Russia out 0:09:45.000 --> 0:09:50.040 of Europe, keeping Europe from being dominated by one hostile power, 0:09:50.320 --> 0:09:54.600 being Nazi Germany or Kaiser's Germany, or the Soviet Union 0:09:54.880 --> 0:09:57.720 or Russia. And as long as mister Trump keeps that 0:09:57.800 --> 0:10:01.040 in mind, he can run with a policy and do 0:10:01.120 --> 0:10:01.760 whatever he wants. 0:10:02.320 --> 0:10:06.320 Is there a historical precedent for getting something like a 0:10:06.360 --> 0:10:10.000 mining deal or whatever it is metals deal in exchange 0:10:10.040 --> 0:10:13.240 for yeah, we'll protect you now sounds a little like extortion. 0:10:14.520 --> 0:10:20.360 I did not hear the language of exchange for protection. 0:10:21.040 --> 0:10:23.559 What Trump is saying, it's kind of implicit. 0:10:24.600 --> 0:10:30.679 No, No, the United States, Trump says, gave Ukraine assistance. 0:10:31.160 --> 0:10:35.400 There's a huge debate how much. Trump said five hundred billion, 0:10:35.440 --> 0:10:39.280 then he's a three hundred billion. The Europeans did the calculation, 0:10:39.400 --> 0:10:42.320 said it's more like maybe one hundred and twenty billion. 0:10:42.960 --> 0:10:45.360 And the Europeans are saying they gave us much. 0:10:45.480 --> 0:10:49.400 But Trump is trying to recoup that assistance with his 0:10:49.559 --> 0:10:53.960 deal in a thousand years that that particular deal is 0:10:54.000 --> 0:10:55.680 not going to provide the US with this one hundred 0:10:55.720 --> 0:10:59.520 twenty billion. And Trump is not talking about security guarantees. 0:10:59.840 --> 0:11:04.720 The president I'm thinking about is Franklin Delan Ruslot, by 0:11:04.840 --> 0:11:08.840 all accounts, one of the greatest propagists, maybe the greatest 0:11:09.240 --> 0:11:12.439 prategists sitting in the White House since. 0:11:12.280 --> 0:11:16.679 George Washington and Thomas Jefferson. In nineteen forty. 0:11:17.240 --> 0:11:23.560 When Britain needed these naval destroyers, gave them fifty naval 0:11:23.640 --> 0:11:29.440 destroyers from World War One older ships in exchange for 0:11:30.080 --> 0:11:34.199 nine naval basis in the Caribbean and Newfoundland. 0:11:34.640 --> 0:11:38.560 So it was basis for destroyers deal. The destroyers were 0:11:38.600 --> 0:11:41.320 not for free, and this was the beginning that was 0:11:41.320 --> 0:11:42.679 sort of too pleasley. 0:11:43.280 --> 0:11:45.600 Isolationists in Congress, wasn't it. It wasn't. 0:11:46.240 --> 0:11:48.800 Well, we have isolationists in Congress right now. 0:11:48.920 --> 0:11:53.280 Yes, And the MACA electorate America First is the same 0:11:53.360 --> 0:11:56.520 slogan they had back in nineteen forty. 0:11:56.960 --> 0:12:00.960 Ariel, if you're President Putin, how do you think he 0:12:01.120 --> 0:12:03.800 views what's unfolding a in the United States White House? 0:12:03.800 --> 0:12:07.640 With President Trump coming into office and then you know 0:12:07.840 --> 0:12:10.160 the need for peace at some point, how do you 0:12:10.200 --> 0:12:11.760 think where's mister Putin these days? 0:12:13.080 --> 0:12:14.440 It's a great question. 0:12:14.559 --> 0:12:18.640 Puts In always puts up this, you know, gamer face, 0:12:19.040 --> 0:12:22.040 poker face, and says, oh, Russia is winning, We're doing 0:12:22.080 --> 0:12:22.640 so great. 0:12:23.400 --> 0:12:25.520 In reality, there are reports now that. 0:12:25.720 --> 0:12:28.600 They're sending soldiers and crutches back into frontline. 0:12:28.960 --> 0:12:32.440 They're using some donkeys instead of trucks. I don't know 0:12:32.480 --> 0:12:35.880 how true that is. They try to use North Koreans. 0:12:35.880 --> 0:12:38.320 We saw this as not going any place. 0:12:38.679 --> 0:12:42.480 They're reaching out to Nepalese and the Cubans to send 0:12:42.559 --> 0:12:45.760 to be killed in the frontline. They're not gaining a 0:12:45.760 --> 0:12:50.160 lot of Ukrainian territory, although Ukraine population wise is what 0:12:50.360 --> 0:12:53.840 five times smaller than Russia economy wise, maybe seven times 0:12:53.840 --> 0:12:58.120 smaller than Russia. So Ukraine is putting up the heroic fight, 0:12:58.440 --> 0:13:00.959 but the fight is not about Ukraine. The fight is 0:13:00.960 --> 0:13:06.000 about European security and ergo, therefore the balance of power 0:13:06.120 --> 0:13:09.200 in the world, and to keep that balance of power 0:13:09.200 --> 0:13:11.720 to keep hostile powers such as Russia. 0:13:11.400 --> 0:13:16.000 And China away from Europe. This is an American interest, 0:13:16.400 --> 0:13:17.319 but it's also in. 0:13:17.280 --> 0:13:22.240 Our interest that our European allies start putting their big 0:13:22.280 --> 0:13:25.959 boy pants on and paying up. Because the Europeans were 0:13:26.000 --> 0:13:31.319 not sustaining their fair share in native defense. Barack Obama 0:13:31.720 --> 0:13:35.920 and Joe Biden kept telling them that Donald Trump has 0:13:35.960 --> 0:13:36.720 a different spot. 0:13:37.440 --> 0:13:39.160 What kind of shape is NATO in right now? 0:13:41.200 --> 0:13:42.679 NATA is not. 0:13:44.160 --> 0:13:49.839 Having fun because the European and the American military industrial 0:13:49.920 --> 0:13:55.520 production is matching what our needs are, and our needs 0:13:55.520 --> 0:14:01.920 are not only Ukraine but potentially China. Therefore, the defense 0:14:01.920 --> 0:14:05.720 stocks we're doing very well and probably will continue doing well, 0:14:06.120 --> 0:14:08.920 not only because of Ukraine but also because of the Pacific. 0:14:09.760 --> 0:14:11.760 The Europeans need to gether act together. 0:14:12.679 --> 0:14:15.880 NATO needs together their act together, and once they think 0:14:16.400 --> 0:14:20.240 and Trump wants them to think, that we're pulling out Britain, 0:14:20.640 --> 0:14:25.480 Germany and France should find their way to manage NATA 0:14:25.600 --> 0:14:30.240 in Europe and to lead both on the military industrial 0:14:30.720 --> 0:14:34.120 front and on the manpower on personnel front. 0:14:34.400 --> 0:14:38.200 Can they do it? That is the sixty four billion 0:14:38.240 --> 0:14:38.760 dollar quash. 0:14:39.320 --> 0:14:41.560 Arial Cohen, thank you so much for joining us, Arara Coon. 0:14:41.720 --> 0:14:43.960 He's a senior POLM at the Atlanta Council. Joining us 0:14:43.960 --> 0:14:44.760 from Washington, DC. 0:14:45.760 --> 0:14:51.200 Via zoom you're listening to the Bloomberg Intelligence Podcast. Catch 0:14:51.280 --> 0:14:54.360 us live weekdays at ten am Eastern on Apple, Cocklay 0:14:54.400 --> 0:14:57.360 and Android Auto with the Bloomberg Business App. Listen on 0:14:57.400 --> 0:15:01.800 demand wherever you get your podcasts, or live on YouTube. 0:15:02.600 --> 0:15:04.280 Like most investors, I think we're all just trying to, 0:15:04.560 --> 0:15:06.960 you know, kind of shift our way through all the 0:15:07.000 --> 0:15:09.640 news that's out there, particularly coming out of Washington, fast 0:15:09.720 --> 0:15:12.440 and furious, and what does it all mean for markets 0:15:12.440 --> 0:15:14.480 when you try to find the stuff that really matters. 0:15:14.480 --> 0:15:17.480 We had some economic data today, we have earnings of 0:15:17.520 --> 0:15:19.640 course finishing up, but we've got a lot of news 0:15:19.720 --> 0:15:21.680 coming out of Washington in other parts of the world. 0:15:21.720 --> 0:15:24.200 Peter Cheer, he's had a macro strategy. He tries to 0:15:24.200 --> 0:15:27.320 do this as well. He's at Academy Securities. Peter what 0:15:27.360 --> 0:15:30.240 do you tell your clients on kind of how to 0:15:30.400 --> 0:15:33.480 navigate through a lot of the noise that's out there 0:15:33.720 --> 0:15:34.560 in the marketplace? 0:15:35.680 --> 0:15:37.560 You know, I think we're one trying to figure out 0:15:37.600 --> 0:15:39.880 what's the theme that's coming out of this administration that's 0:15:39.880 --> 0:15:42.720 still a little bit unclear, and then okay, what can 0:15:42.760 --> 0:15:45.000 we ignore and more and more. I think where we're 0:15:45.160 --> 0:15:48.320 getting stuck at is basically, even if you believe we're 0:15:48.320 --> 0:15:50.480 going to have good outcomes, or you might believe we'll 0:15:50.520 --> 0:15:52.920 have bad outcomes, I don't see how we don't go 0:15:53.000 --> 0:15:54.920 through a bumpy patch first. So that's kind of my 0:15:55.040 --> 0:15:57.400 current view as everything that's going on is going to 0:15:57.440 --> 0:16:00.040 lead to a slowdown in the economy, either because we 0:16:00.120 --> 0:16:02.880 do things to the economy or because of the threats 0:16:02.880 --> 0:16:05.320 of what we might do. It slows the economy down 0:16:05.360 --> 0:16:07.640 as people kind of put themselves on wait and see. 0:16:07.680 --> 0:16:09.680 So I'm now a little bit burish on the economy, 0:16:09.760 --> 0:16:11.040 and I think market's because of that. 0:16:12.000 --> 0:16:14.880 Lisa just gave us the bitcoin quote. It's right now 0:16:14.920 --> 0:16:18.120 what down three tense about It's around eighty four thousand 0:16:18.160 --> 0:16:21.280 per token, which is kind of a precipitous drop from 0:16:21.280 --> 0:16:27.520 the high. What if any risk does crypto pose to 0:16:27.920 --> 0:16:29.720 stocks my stock portfolio. 0:16:31.360 --> 0:16:33.440 I think it has been posing a greater risk than 0:16:33.480 --> 0:16:35.720 it used to. One there's always the wealth effect, so 0:16:35.760 --> 0:16:38.240 I think the wealth effect is real. So if crypto 0:16:38.280 --> 0:16:40.480 continues to go down and all the oar coins which. 0:16:40.280 --> 0:16:42.720 Have been hit particularly hard, you'll have a wealth effect. 0:16:42.880 --> 0:16:44.640 But the other thing is I think really since the 0:16:44.680 --> 0:16:47.080 advent of the ETFs, you used to have people who 0:16:47.080 --> 0:16:49.040 are in crypto and they held it, say in cold storage, 0:16:49.080 --> 0:16:51.560 or maybe they held it at coinbase. Now they might 0:16:51.600 --> 0:16:54.480 have it in their you know, Adellay Schwab wherever you 0:16:54.640 --> 0:16:57.360 do your brokerage account, and it's mixed in. So I 0:16:57.360 --> 0:17:00.200 think when they see their crypto ETFs go down, it 0:17:00.200 --> 0:17:02.600 makes them respond and possibly sell everything. So that's one 0:17:02.600 --> 0:17:05.119 part that's very different from even a year ago. And 0:17:05.160 --> 0:17:08.639 the second part is that mstr itself. One, they become 0:17:08.960 --> 0:17:10.159 even more wet. 0:17:09.920 --> 0:17:10.679 And tied to crypto. 0:17:10.760 --> 0:17:13.080 Right every single day they talk about their victy yield 0:17:13.119 --> 0:17:15.800 whatever that is, how much crypto they have, so they 0:17:15.880 --> 0:17:17.840 become very tied to that. And they got included in 0:17:17.840 --> 0:17:20.320 the Nasdaq one hundred, so they're only about one point 0:17:20.320 --> 0:17:22.880 four percent waiting about the fiftieth stock in the Nasdaq 0:17:22.880 --> 0:17:25.360 one hundred, but it is now a direct tie into 0:17:25.359 --> 0:17:27.640 the nas BACK one hundred, So I think the correlation 0:17:27.880 --> 0:17:30.040 and the linkage is higher. And I don't like what 0:17:30.080 --> 0:17:31.679 I'm seeing in crypto and I think that's going to 0:17:31.720 --> 0:17:34.080 continue to drag on stocks for the next few weeks. 0:17:34.520 --> 0:17:36.680 So, Peter, we've had a little bit of a pullback 0:17:36.720 --> 0:17:38.879 here from the peak, call it four percent here. 0:17:40.240 --> 0:17:41.040 Do we have more to go? 0:17:41.160 --> 0:17:43.680 Do you think, at least in the short term, until 0:17:43.880 --> 0:17:46.359 maybe the market gets a little bit more comfort with 0:17:46.760 --> 0:17:48.960 this administration in some of the economic policies. 0:17:50.080 --> 0:17:51.879 Yeah, I do think we have more to come. You know, 0:17:51.920 --> 0:17:53.600 we might get a little bounced today. We might get 0:17:53.640 --> 0:17:56.200 some good news out of Zelenski. You know, Trump might 0:17:56.280 --> 0:17:59.359 say that delivering the cartel prisoners to the US gets 0:17:59.440 --> 0:18:02.399 Mexico and other stay of execution on teriffs. But I 0:18:02.400 --> 0:18:04.600 think we are going to go back almost across the 0:18:04.640 --> 0:18:07.360 board to pre election levels. You've already seen that hit 0:18:07.440 --> 0:18:10.560 certain cryptocurrencies. I think Ethereum is back to levels from 0:18:10.600 --> 0:18:13.480 before then. It hasn't hit Bitcoin yet. I think that's coming. 0:18:13.720 --> 0:18:16.040 In the stock market. The rustle two thousands back pre 0:18:16.080 --> 0:18:18.080 election levels, We're not there in the S and P 0:18:18.160 --> 0:18:20.520 five hundred or Nasdaq one hundred yet, but I think 0:18:20.520 --> 0:18:21.280 that's where we're headed. 0:18:21.359 --> 0:18:26.359 Unfortunately, let's talk fed two cuts I believe are priced 0:18:26.359 --> 0:18:30.520 in right now, if the markets are correct, Is that enough. 0:18:32.080 --> 0:18:33.080 I'm beginning to think not. 0:18:33.320 --> 0:18:35.840 I would say start of the year, I was thinking 0:18:35.880 --> 0:18:38.639 one to two cuts. I did not think we make 0:18:38.720 --> 0:18:40.520 much progress on the deficit. I'm so not sure we 0:18:40.560 --> 0:18:43.880 will make much progress on the deficit. Having said that, 0:18:44.080 --> 0:18:46.800 I do think the economy is slowing faster. And again, 0:18:46.920 --> 0:18:48.600 you know, we just talked about some of the issues 0:18:48.640 --> 0:18:50.960 with tariffs and how I think we go through a 0:18:50.960 --> 0:18:53.120 bumpy patch. When you look at what dog is trying 0:18:53.160 --> 0:18:54.879 to do. It's going to cut some spending that's going 0:18:54.920 --> 0:18:58.240 to hit immediately. Whether some of it was inefficient, fine, 0:18:58.320 --> 0:18:59.520 maybe that doesn't have an impact. 0:18:59.520 --> 0:19:00.640 But to the extent they trim. 0:19:00.440 --> 0:19:03.719 Anything that was efficiently being allocated, that hits. And then 0:19:03.760 --> 0:19:06.520 the jobs, even if people get laid off are able 0:19:06.520 --> 0:19:08.879 to find jobs, which I'm questioning because I don't think 0:19:08.880 --> 0:19:11.200 the market's that great for jobs. It is still going 0:19:11.200 --> 0:19:13.119 to be this transition period, so I think we're going 0:19:13.119 --> 0:19:16.480 to see economic data hit across the board, and we're 0:19:16.480 --> 0:19:19.440 starting to watch delinquencies rise across the board. I think 0:19:19.480 --> 0:19:22.680 this economy is much more susceptible to pull back than we, 0:19:22.760 --> 0:19:24.280 you know, have talked about for a while. So I 0:19:24.320 --> 0:19:26.160 think we're going to see three to four cuts this year, 0:19:26.240 --> 0:19:28.160 and we're going to start hearing the recession word rear 0:19:28.160 --> 0:19:30.040 it's head again in the next few weeks. 0:19:30.040 --> 0:19:30.520 Interesting. 0:19:30.560 --> 0:19:33.960 Interesting, all right, given that backdrop of Peter fixed income? 0:19:34.000 --> 0:19:36.600 How do you how you playing the bond market these days? 0:19:37.640 --> 0:19:37.840 You know? 0:19:38.480 --> 0:19:40.280 And I was buried in the bond market. I thought 0:19:40.320 --> 0:19:43.120 we could get to four eighty wasn't aggressive, and we've 0:19:43.119 --> 0:19:44.159 been trying to time it. 0:19:44.359 --> 0:19:45.479 I've capitulated on that. 0:19:45.600 --> 0:19:47.560 I think the bond market, you know, four to four 0:19:47.600 --> 0:19:50.480 and a quarter percent on tens, mostly because I really 0:19:50.480 --> 0:19:52.520 capitulated on the state of the economy. I thought we'd 0:19:52.520 --> 0:19:54.399 have a smoother transition with Trump. I think there'd be 0:19:54.400 --> 0:19:57.359 more clarity. It's the lack of clarity that's kind of 0:19:57.400 --> 0:19:59.719 confusing me. So I think yields are going to be okay. 0:20:00.000 --> 0:20:02.080 I think credit spreads start widening. I do like the 0:20:02.160 --> 0:20:04.320 municipal bond market for a lot of our clients on 0:20:04.359 --> 0:20:06.120 the retail side of things when we talk about it, 0:20:06.200 --> 0:20:07.960 but as a whole, I think credits can be okay. 0:20:08.200 --> 0:20:10.920 I am, for the first time in gosh, probably a 0:20:11.000 --> 0:20:13.639 year and a half, a little bit nervous about credit spreads, 0:20:13.640 --> 0:20:15.800 so I've been very calm about credit spreads. I think 0:20:15.800 --> 0:20:17.439 we're going to see some widening if I'm right on 0:20:17.440 --> 0:20:19.680 what's going on in the economy, and further pullbacks in 0:20:19.680 --> 0:20:20.320