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Speaker 1: A guest is Sylvia Cholonsky, co founder and CEO and

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Speaker 1: c i O at Defiance E T S. Sylvia today

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Speaker 1: might go down in history as a major inflection point.

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Speaker 1: The writing would seem to be on the wall. First

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Speaker 1: the markets get hit, then earnings, then the economy and

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Speaker 1: sell now ask questions later, your thoughts. Hi, you good evening,

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Speaker 1: Great to be here. Um, well, it certainly feels like

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Speaker 1: the hopefully the last shoe. Um, but um, you know,

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Speaker 1: the last shoe dropped a little bit this week with

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Speaker 1: you know, with with the major market generals, the leaders

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Speaker 1: of the last decade falling and you know, sort of

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Speaker 1: disappointing us. And I think, you know, I had gotten

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Speaker 1: into this week thinking that the market is either going

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Speaker 1: to just absolutely rip and rally if these if these

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Speaker 1: companies you know, Microsoft, Google, Amazon, Alphabet just just kind

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Speaker 1: of met expectations and how to you know, decent or

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Speaker 1: not so terrible outlook, And I thought that it would

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Speaker 1: just sort of crash and burn if I if you

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Speaker 1: had to pull back, and I think we're seeing the

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Speaker 1: ladder unfortunately. Um, you know, these these names, I mean,

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Speaker 1: Amazon's a great example. They're an indication of of you know,

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Speaker 1: the outlook for enterprise spent and the consumer consumer se GDP,

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Speaker 1: and you know that tells us that you know, there's

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Speaker 1: there's something to worry about next year. So you know,

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Speaker 1: the good news is is that a lot of things

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Speaker 1: have actually been pricing to the market, whether it's you know,

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Speaker 1: FED FED hikes, inflation slow down, um, you have all

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Speaker 1: of these kind of you know, softening um pieces of

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Speaker 1: data now in terms of inflation potentially falling um. But

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Speaker 1: earnings was the last last straw. So if I mean

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Speaker 1: also you know, uh hit Brian of course, just mentioning

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Speaker 1: an infection point. You know, also look at the bod market.

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Speaker 1: I mean we've got yields on the ten now three point.

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Speaker 1: It was just about a week ago that we were

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Speaker 1: looking for nearly four and a half. Yeah, yeah, we

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Speaker 1: have Sylviage bloods and I think you know, go ahead,

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Speaker 1: Oh sorry, I lost you guys there for a second.

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Speaker 1: The GDP read seemed to to boost the down in

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Speaker 1: the SMP five dreds historically been you know, nearly a

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Speaker 1: clincher for recession. You know. To me, I think I

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Speaker 1: don't think a whole lot has changed, right, I do

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Speaker 1: think that we expect some sort of slow down potentially,

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Speaker 1: you know, a small procession, whether it's a soft landing

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Speaker 1: or harder landing, and all of the data just continues

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Speaker 1: to point that it's that it's probably going in that direction. Um,

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Speaker 1: talk a little bit better the first two weeks of

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Speaker 1: earning season, where you had six names coming out with

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Speaker 1: positive earnings, you know, Banks, even caterpillarly great. But you know,

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Speaker 1: there's sort of too much falling falling apart now in

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Speaker 1: terms of the real leaders of the market. Yeah, it's

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Speaker 1: I'm sure it's an unintended consequence of the FED actions.

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Speaker 1: But when you have revenues at the at the biggest

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Speaker 1: cap companies so wobble. When labor costs are up like this,

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Speaker 1: not only the company that problem, but the whole country

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Speaker 1: has a problem. And pension funds, endowment funds, the market

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Speaker 1: itself is really in question. When you have a company

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Speaker 1: like Amazon dropping in a day. Oh and yeah, I

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Speaker 1: mean you know, year to year to date, I mean,

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Speaker 1: prior to this week, we saw about thirteen trailing of

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Speaker 1: value wiped out of the market, and this week, you know,

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Speaker 1: seven trillions reporting. So when you see Amazon down to

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Speaker 1: your point, that's that's a real issue for the for

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Speaker 1: the average retail investor. But in terms of the kind

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Speaker 1: of the inflection point about selling go away, you know,

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Speaker 1: I didn't do that. I know. Okay, we'll pick up

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Speaker 1: on that theme in a moment. Sylvia Jablonski with us

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Speaker 1: from Defiance E t F. Not time to sell and

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Speaker 1: go away? This is Bloomberg. All right, let's get back

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Speaker 1: to our guests for the half of Silvia Giblong. It's

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Speaker 1: good found us and ce Io defines ets this discussing

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Speaker 1: the latest on the markets. And what did you make

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Speaker 1: of the GDP read overrule? Sylvia, I sort of had

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Speaker 1: two thoughts. I thought, Okay, this is good. You know,

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Speaker 1: perhaps this this is a sign of a soft landing

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Speaker 1: being a possibility. And then my second thought was, oh,

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Speaker 1: the feat is now involved in to keep going. So

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Speaker 1: you know what I think is, you know, it was

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Speaker 1: a pretty decent number backward looking. I do think that

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Speaker 1: you know you're going to start um seeing that soften

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Speaker 1: up in in the future. I think that was probably

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Speaker 1: a little bit of a high water mark. So you

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Speaker 1: just before the break said that it's not the time

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Speaker 1: to sell and go away. So we want to pick

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Speaker 1: up on on why, and I want to ask you

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Speaker 1: that against this context again of today being an important

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Speaker 1: day because arguably you could ignore Meta but not Amazon,

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Speaker 1: Microsoft and Alphabet that that takes the whole complex down,

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Speaker 1: doesn't it. And so many people are tied into index

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Speaker 1: funds that you just wonder how, you know, how are

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Speaker 1: they going to be feeling about their spending going forward. Yeah,

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Speaker 1: I think that, you know, it's a great point that

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Speaker 1: these three companies coming out with the earnings that they

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Speaker 1: did software that expected just definitely, you know, definitely tell

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Speaker 1: us that the consumer is not out there, you know,

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Speaker 1: kind of holding holding us up as much as we thought. Right,

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Speaker 1: that's seventy percent of the economy that is obviously putting

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Speaker 1: less into it. So I think in the near term

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Speaker 1: it's going to be a bumpy ride, but to the

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Speaker 1: point of, you know, the longer term, you know, particularly

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Speaker 1: investors have different risk cormns is. So if you have,

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Speaker 1: you know, an investor who's a young investor, like these

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Speaker 1: are great um price points to get in. These names

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Speaker 1: have been massively reset. I think Amazon and things would

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Speaker 1: have followed five percent if if you know, I would

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Speaker 1: I would actually fear you know, I hate to interrupt you,

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Speaker 1: but I would actually fear that young people, uh, millennials

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Speaker 1: who had some money and they poured it into the

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Speaker 1: stock market, you might lose them for a generation. Yeah.

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Speaker 1: I mean, you know, I think that you kind of

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Speaker 1: have to put things into perspective, right, I mean, there

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Speaker 1: have been market crashes before, and the market has recovered

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Speaker 1: from those crashes a percent at the time. It's just

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Speaker 1: a matter of like how long does it sort of

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Speaker 1: take to get back there. So millennials who have money

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Speaker 1: invested in you know, pen you know, sort of for

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Speaker 1: one kay, retirement plans. I mean, they don't really have

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Speaker 1: to worry about this right now. It's unpleasant, but it's

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Speaker 1: it's not necessarily worrisome. You know. Are they in the

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Speaker 1: market now like they were in COVID you of going

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Speaker 1: in and buying up stock. Yes, I agree with you.

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Speaker 1: That's an issue. You're seeing some without liquidity coming out

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Speaker 1: of the market, and it will take time to get

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Speaker 1: that back. So you know that that will impact market

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Speaker 1: in the shorter term, probably well for the next year

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Speaker 1: or two. Sylvit tell me also, you know, what what's

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Speaker 1: it like at the moment in the market for ETFs. Yeah,

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Speaker 1: ets So you know, it's it's it's it's tricky for

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Speaker 1: et F A sures as much as for everybody else.

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Speaker 1: I think. You know, if you're if you're on the

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Speaker 1: side of kind of growth and innovation, you're you're sort

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Speaker 1: of suffering. But if you're on the side of alternative energy,

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Speaker 1: you know, hydrogen solar, you sort of winning. Their um

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Speaker 1: airline related things are doing okay. And then you know,

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Speaker 1: kind of staples defensive. There's an ETF that that represents

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Speaker 1: every sector. Right, so all of the defensive healthcare tape

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Speaker 1: of stuff I think is getting the action and everything.

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Speaker 1: Tech growth, you know, kind of high growth is suffering

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Speaker 1: a lot. You're seeing some mout cloths there. Yeah, well,

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Speaker 1: it's nice to see that Apple is actually trading higher now.

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Speaker 1: So it's not it's not everybody getting slammed, but it

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Speaker 1: does goin of raise the point. The last time we

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Speaker 1: had this May your dislocation with COVID, and you know,

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Speaker 1: the market fell completely down thirty five. You at least

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Speaker 1: had those big solid tech companies that, yes they were big,

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Speaker 1: yes they had high valuations, but they had tons of

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Speaker 1: earnings and they actually got stronger during that dislocation. If

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Speaker 1: you lose them, now you have to wonder why exactly. Yeah,

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Speaker 1: I agree with that. But the point that I keep

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Speaker 1: thinking about, which is just kind of not at the

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Speaker 1: flour of anyone's mind right now, is that tech companies

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Speaker 1: are needed to digitalize the economy. We have to replace

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Speaker 1: workers somehow, we have to automate factors, we have to

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Speaker 1: improve supply chains. You know, all of this comes from

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Speaker 1: companies like Microsoft, Amazon, Google, Apple in different parts of

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Speaker 1: what they do. They're touching cloud, cyber software, supporting AI,

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Speaker 1: supporting digitalization. That the world is going to move forward

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Speaker 1: in the next decade. It has to essentially in order

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Speaker 1: for our economies to expand, and so tech will have

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Speaker 1: it have its heyday again. Sylvia, thank you so much

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Speaker 1: for joining us at Sylvia the co found and chief

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Speaker 1: executive and chief investment officer a defiance e t S.

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Speaker 1: Seeing how the dollars move up slightly, we've got the

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Speaker 1: euro once again below parity and the end on a

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Speaker 1: hundred and forty six point one