Shownotes Transcript
On the Tape.
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Welcome to the Risk Reversal Podcast. I'm Dan Nathan, joined by Guy Adame. Guy, how are you? Well, it's a fascinating evening underway. We're here Sunday night doing this podcast. We wanted to wait for the futures to open. And given what's transpired over the last 48 hours,
I don't think a lot of people anticipated this. I thought a lot of people thought we'd be seeing a lot higher price levels, but here we are, Dan. Yeah, so you're talking about the futures. They just opened up here, I think around 6.15 p.m. on the East Coast. We're going to talk a little bit about some of the drivers, I guess, for enthusiasm, I guess, to start the weekend off, maybe less enthusiasm. This is all
on tariff exemptions, at least headlines coming out of the administration that seem to be as clear as mud guy. There's also some Fed speak this week, Fed Chair Powell speaking Wednesday afternoon. We have a little bit of data here. I think maybe the most important thing on the data front is what the ECB has to say later on in the week when they speak. And then there's a bunch of earnings here, continuation of some of these bank stocks.
Let's start with what we saw Friday afternoon. Shortly after the close, they were talking about exemptions for electronics, specifically iPhones and the like, and some semiconductors. And a lot of folks immediately were saying, hey, listen, this is why Tim Cook was in the game here. This was why he had that $500 billion announcement over the next four years of this, that, and the other thing. And so just thoughts really quickly, because it seemed like
You know, talking about that on Friday or Saturday with market people like, oh, the market's going to rip on Monday. But here we are. And again, it's just probably like trading the like. But the fact that we're only up 35 handles in the S&P 500 guy is not particularly impressive. No, I don't think so. And listen, every single administration that I've been aware of has leaks all over it and
you know, if you looked at the price action on Friday as the market sort of came to, you know, within from noon until the close, the move in Apple seemingly came out of nowhere. And then obviously the answer was given to you in the subsequent hours afterwards when you heard that
that announcement. Again, I don't know if that's an announcement or not. It's really hard for me to understand exactly what it was. But seemingly, companies like Apple are going to be exempt from all this. And if you've read over the weekend, especially on Saturday, people saying we're going to see the mother of all rallies and technology and the setup was such, and this is going to get Apple back on the horse and all of those things. I think that was probably all somewhat true until you heard a bit of a
180 or so today being Sunday through the words of Howard Lutnick. Now, I don't know if there's a game plan here and I'm not trying to be dismissive or I'm not trying to be derogatory in any way, but clearly there's a lot of mixed messaging going on. I think one of the reasons we're seeing sort of this benign price action is because maybe it's not the all clear sign that the market thought a couple of days ago. Yeah.
Yeah, and I guess, you know, Apple, we all long thought would be, you know, one of the last battles fought in any sort of trade war. When you think about just the manufacturing capabilities that, you know, 95% of iPhones are made in China. We know that there's an extensive supply chain that exists there, right, for all the components and the like, and then they get shipped out of there. So if they're coming to the U.S. and they don't have this exemption, then a $1,000 iPhone is basically going to be...
$2,500. I mean, that's based on the existing sort of tariffs there of about 145% or so. So I guess it also goes, Guy, to the point where you were just saying about the leaks potentially on Friday, then they kind of backtracked a little bit on Saturday, and then Howard Lutnick comments
on Sunday is basically saying, well, that's not exactly the case. There's going to be more tariffs. And then Trump has some tweet out, and I'm just going to read it here. Nobody is getting off the hook. Trump said in a social media post Sunday, issued shortly after he finished his Sunday golf game. I love that. The exempted products are just moving to a different tariff
And the administration said they'll be taking a look at semiconductors and the whole electronics supply chain. So, Guy, one of the things I just mentioned is like no matter what you took away from the Friday night report, the Saturday night, the tweet today, the level of uncertainty.
Uncertainty, this goes back to not just consumers who might be interested in buying an iPhone before the price goes up 150%, but also companies, right? And the way that they kind of buy technology or use the services or the way they think about deploying capital for R&D and CapEx and the like. And that's the thing that the administration is not really going to get
If they keep doing it this way, meaning like the only way they're going to understand it is if investors are fed up and they just sell stocks because they're sick of the uncertainty.
Yeah, I'm not quite sure what the game plan is on that front, because clearly, I think part of the plan is to continue to create this heightened sense of uncertainty. And again, you hear people talk on the networks all the time, the market hates uncertainty. And that's another one that makes me crazy, because quite frankly, I don't know when there's ever certainty out there, at least in terms of what we do. But what the market really doesn't like is a heightened state of uncertainty. I think that's what we found ourselves in.
Over the last couple of months, it's one of the reasons why you saw the VIX trade the way it is. And, you know, maybe the game plan is to keep people sort of guessing, second guessing and basically not being able to get on firm ground for whatever reason, thinking that some sort of
I don't know, negotiating technique. But clearly, the market's not going to behave favorably to that. And I think part of the game is exactly that, having people guess as to what the next move is going to be. The endgame is China, without question. I think all this stuff with Europe and these other ancillary countries, I think that's sort of a sideshow. The endgame has always been about China and trying to get on what they deem to be equal terms or fair arguments.
terms with the Chinese. And that's going to take time, Dan. And there are a lot more chapters in that book left to be written.
Yeah, I push back on the notion that the other stuff is a sideshow, you know, Canada, EU, Mexico, Japan, because if they don't come up soon with some sort of agreement with them, you really can't set your sights on China if you are the US, right? And if you think about the way that we've been negotiating this, or at least the way Trump is, I just don't believe I think they think there's a method to the madness. I think there's a lot of folks around them who do not appreciate this approach, because
I think they believe that they're in a position where they do hold a bunch of the cards. But when you negotiate in this fashion and this expression, you hear a lot when it comes to Trump. The right-leaning media was saying after Wednesday and these Friday night announcements, like, it's the art of the deal. It's the art of the deal. No, man, he always shoots the hostage. Like, whatever, you know, sort of leverage he has, he always says the quiet part first.
out loud. And if you're negotiating against a power like China, who actually hold lots of cards, and we're going to get to the bond market in a second here, you know, the idea of having this sort of approach is not particularly helpful. It just isn't. It's not going to get us to where they think they want to go. And if they're trying to use short term uncertainty to achieve longer term goals,
Well, let's see how long that his base is gonna sign up for that because you've been talking about the stair-stepping potential for unemployment. If we have an economy that's slowing down, there's fragility under the surface. And if you have companies
Again, I'm going to use the term, I know it bugs you, with all of this uncertainty. I get that's a relative point of view. Well, what are they going to start doing after they cut CapEx, after they cut R&D? They're going to start firing people. And a lot of those people are going to be in places where the president really can't afford to lose support, if you think about it, over the next year into the midterms.
Yeah, well, again, yes, all true. I mean, that gets into sort of the politics of it and whether or not he actually cares about what happens in the midterms, which quite frankly, I'm not sure that's the case. But we'll sort of sidebar that for a second. And going back to who holds all the cards, and again, we'd like to think we hold all the cards, and I get it. We're the largest economy in the world, the largest economy in history. The reality is when people own your debt to the extent that
the Chinese and the Japanese do, you don't really have as many cards as you think. And that's playing out, as you said earlier, in the bond market. And I've been concerned about the bond market for quite some time. Sometimes it was seemingly the correct stance, other times not so much. But now everybody seems to be talking about it. And quite frankly, I think the pivot or whatever word you want to use that we saw earlier last week on the back of the stock market was not necessarily on the back of the stock market.
I think the stock market caught people's attention. I think the bond market really scared people because there was clearly a bit of a meltdown going on earlier last week. And I think to a certain extent, cooler heads prevailed. Is that genie out of the bottle now?
I think it is. And I think they're going to try to stem the tide for a period of time. But, you know, I think the bond market's going to be the story for the next couple months for sure. Yeah, and to your point, I mean, the 10-year U.S. Treasury yield, I think the high the other day on Thursday was 4.59. I think it closed the week at 4.49. And it brings me to this whole idea of leverage, right? So,
If you are China and you're the second largest holder of our debt, right? And so when you buy that debt, you're also buying dollars, right? And you have the ability to sell that debt. You have the ability to sell those dollars. And we've seen a really weak dollar and we've seen yields go higher because that's being sold. Now, I had a conversation yesterday with a guy who's a pretty senior guy at
at a big bank and we were talking about all this and he actually thinks the opposite. He thinks there's nothing wrong here. He thinks the movement that we've seen in the yields has just been, you know, something that you're going to get in a volatile period like this. He doesn't believe the Chinese or the Japanese are selling. And listen, it was over a couple months
pints in a pub guy. I know you love to get all up in there and have a few pints. Probably watch a football match or something. Yeah. I pushed back a little bit at first. Then I was like, you know what? On a Saturday afternoon, this is not interesting conversation over a couple of beers. But it's just interesting that those folks at banks who are dealing with corporates and they're looking at all this move around and they have a lot at stake here. They're just every single
Maybe the beginning of any crisis, and I'm not saying we're in a crisis, but this thing could clearly spiral out of control. If you see the dollar going lower, yields going higher, stocks going lower, the economy slowing down, unemployment going up. This would be like the first inning of something. And I'm not suggesting that's happening, but talk to me about how things could go out of control with the dollar careening lower and yields going higher.
Yeah, there are a lot of different ways. I mean, first of all, what we've seen, I think, is proof positive of how things can go pear shaped pretty quickly. That's number one. Number two, remember, there's still a couple of credit agencies out there that make decisions, obviously Standard and Poor's as well as Moody's. And given what's going on here in the United States,
I don't want to say we're on the precipice of a credit downgrade, but I think things continue sort of in this direction. I think there's an inevitability to that as well, which obviously is not bullish for the bond market. I do think the world is starting to think about, hey, maybe we should think about other forms of safety instead
instead of US treasuries. And quite frankly, I think what we've been seeing for a long period of time, and we've been talking about this on our shows, is people, again, probably getting out of treasuries and using whatever the proceeds are to buy gold. There's a reason why gold's had the move that it's had
over the last couple weeks. Gold's going up with rates going lower, dollar going lower, dollar going higher, rates going higher. It doesn't really seem to matter. The gold market's been on the move. Now, maybe there's a pause coming in the gold market, and maybe there's some profit-taking at some point, but over the last six months, every time there's been a bit of profit-taking in gold, within days, it's right back on the horse, and I think that's what we're seeing now. But the final piece of this puzzle, and I do think this is something, I don't want to say that it's inevitable, but I definitely think it's being discussed,
is what's the fate of Jerome Powell? And when President Trump declared an economic emergency, I don't know if it was last week or the week before, I sort of lose track of time. I don't know what that means. I mean, I know what the words mean, but I don't know exactly what he was getting at there. But I think the game plan is, or what was set in motion was, if in fact we're in an economic emergency, the Federal Reserve needs to lower rates. And if the Federal Reserve is unwilling to lower rates,
underneath or under an economic emergency, then we have cause to fire the Fed chair. And I think to a certain extent that could be the setup here. Now, I'll tell you, if that were to happen, I think that would be I'll use the word catastrophic to the bond market and to the dollar as well. I think bonds would sell off and I think the dollar would sell off. And I think
People would really say what's going on in the United States for the first time in a long time. So that's a lever that I think they're thinking about pulling. But I would think twice if, in fact, they did or if, in fact, they should. I mean, listen, I think you've been laying this out for the last few weeks or so, and it's kind of been on the tip of my tongue for a couple of months now. I'd like if.
If there is no norm, if there is no law, if there is no sort of rule set in place that the president cares about, and clearly he doesn't, why would he not try to go do that? And you just made the point that some of the language in which they've used or an executive order declaring some sort of economic emergency, that kind of sets the case for it. Now,
this would be challenged in court. Let's see how long it goes. The other thing I'll say, it's really interesting guys. Like you just mentioned Moody's and S and P and the possibility, you know, of a downgrade. We did see one, I want to say at least 10, 12 years ago, right? This is back. I want to say in 2012 or so. And at the time that,
caused markets to go haywire for a bit. But if you think your S&P or Moody's and you got the guts to downgrade U.S. debt right here in front of what you're looking at in this administration, look at the way they've gone after universities, look at the way they've gone after law firms, look at the way they've gone after former employees of the administration. There's not a chance in hell those two companies are going to downgrade U.S. debt. One last thing before we move on to some of the other stuff, guys.
What do you think of the notion? And I don't buy it, but we keep hearing it that, you know, they're trying to really crash the economy and crash the stock market. So therefore, and it gets to what you were just kind of leading to the push for lower yields. They said they're targeting yields. I just don't believe that anyone around the president would endorse that sort of philosophy. Do you know what I'm saying? And therefore, because I think if it just goes wrong a little bit,
like just at least like the little nudge that you're trying to get to get yields lower, to get the economy to slow down a little bit. That's the job of the Fed here. They got a dual mandate, like stable prices and full employment. And so far, I think they're doing a good job. But if the administration is looking to undermine that and targeting yields without the Fed in the same camp, I think that's also where you run the risk of some really bad accidents happening. Well, it's clear they're not in the same camp on this one without question. And I don't think
i mean tanking the stock market tanking the economy i think what they're attempting listen when you're 37 trillion dollars in debt you know there's they obviously aware of that problem i think treasury secretary besant is keenly aware of it he's talked about it one of the ways to sort of
help that problem is to devalue your currency and to get interest rates lower. And I think whether or not they want to admit it or not, as much as they want to talk about the sanctity of the dollar and a strong dollar policy, what helps you in this situation is have a weaker currency. And by the way, a weaker currency is a tax is a hidden tax on the people of this country. If your dollar is worth less, your buying power is worth less. That's inflationary as hell. Number one. Number two,
I think they feel that if they get the rate picture correct, if they get rates lower, everything else will take care of itself. The stock market will take care of itself. The housing market will take care of itself. I think there is that belief. I don't adhere to that.
getting there is going to create a problem not only in the stock market, but in the labor market, as you pointed out as well. And we've talked about this. I think there's an inevitability to the unemployment rate going higher here. And I don't necessarily think people see that coming or the market sees that coming. And again, when you have an economy that's predicated and built on people buying stuff, that's problematic if people start losing their jobs.
Yeah, I guess the main point that I should have added there as far as the administration, the treasury targeting the dollar, targeting yields. I mean, the idea is that if they have $9 trillion of our debt, those about 37 trillion, does that sound about right? That needs to be rolled this year. The idea of doing it at rates where they are here or higher, that debt service is massive. Like if you think about the change, right? So, and you've been talking about that for over a year.
All right. Well, I think we surrounded that. I think the important thing can be underestimated. If you watch all the different cable shows now, regardless of network, almost, you know, they're talking about the move in the bond market. So sort of the mainstream is picking up on this as well. And a
somewhat non-political way. I think they're just trying to point out, hey, wait a second, there are really weird things going on in the bond market. And by the way, the bond market is something these people never talk about. They hate talking about it because they think it's too wonky for the audience, but they're forced to talk about it now because that's top of mind for everybody.
Yeah. And so really quickly, just to lay out where the S&P is and where we think there's some levels that might be interesting for some of you that care about that sort of stuff. The S&P went out at 53.63 on Friday. It was up 1.8%. I think it was up for the week for the first time.
in four weeks. The high on February 19th was $61.47. The intraday low guy just a couple of weeks ago on the 7th, I guess, was $48.35. So here we are, we're kind of locked in this kind of $5,400-ish range, which looks like really interesting technical resistance. We've talked about that a little bit, Guy. It was a September low, but it was also the level in which we broke down from in early August, where we had that a bit of a crescendo the last time we saw the VIX.
at 60. Anything interesting to you about the S&P and levels? And is there a gap to be filled to the upside that might make you think that maybe we're out of the woods? Yeah, I don't think we're out of the woods. And what we've said for a while, and it goes back to a chart that Carter Worth showed us, and we showed everybody, I think it was on Monday of last week, that on that move lower, that significant move lower in the S&P, we basically traded down to about a five-year uptrend on
that we've been in and we held support pretty much to the penny. Maybe we got through it a little bit, but you know, you split in hairs a little bit. So the bounce, and again, we talked about this last week, the bounce has been noisy, but to a certain extent, it makes a little bit of sense. The question you have to ask yourself is how high does it go? And I've said for a while, maybe 5,500, 55, 50 ish.
which would be a 50% retracement of this prior all-time high of 6,100 and change and this recent low. That makes sense. And then I think we get back on the horse to the downside. Historically, the most vicious rallies take place in the markets that I think we have just found ourselves in. As a matter of fact, and I think we put this in the show notes last week, if you look at 10 of the 15 largest percentage rallies in history,
Most of them took place between 1929 and 1933. And I'm not trying to make corollaries there, but I think we all know what was going on at the time. Kind of the biggest updates happened during the Great Depression. There was a couple in 73, 74. We're in a bear market. There was the 87 crash right after that. There was obviously the dot-com and the financial crisis and COVID. And then the third largest one-day move was last Wednesday when we had that supposed boom.
pivot if you will. All right. So guy, I kind of intimated earlier that ECB meets, I think on Thursday. And so one of the things that I find kind of interesting and, you know,
We can all make our own guesses about what's the first deal, what's the first important trade deal that's going to get done here. Supposedly, that was one of the reasons why they made a 90-day push out of this stuff, because they had so many incoming calls, guys, that they needed to hunker down and do all these bilateral deals. But it'll be interesting to see what the ECB has to say about the current situation.
environment what they're seeing in their yields what they're seeing in their currencies you know i mean the stability of employment there and the like anything from the ecb that you probably want to be focused on if you're kind of trading our markets here you know they they have their own issues as well but you know what what i will focus on is the aftermath in terms of the currency moves i mean the euro euro us dollar move has been again historic and you'd be like what are you talking about well
currencies don't move at least these currencies should move in the way they are and if you look at the euro probably trading either side of sort of 102 or so in early february well we just got ourselves up to about 113 and a half 114 and that doesn't sound like a big deal but in developed market currency moves that's a huge deal and we're at levels now that we've stalled at a number of times over the last couple years so if we were to close above 115 in the euro
That's a key level. By the way, that means the dollar is weakening, the euro is strengthening. The other side, since you mentioned Europe, I'm going to quickly go to Japan. The weakness in the dollar against the yen has been noteworthy as well over the last couple months. A precipitous drop at levels that the market got really concerned about, if you remember the equity market in August of last year.
Dollar Yen through 143, I think that's a critical level. So you got to watch as much as it sounds like why we have to bother with this stuff. In today's world, these bond moves and currency moves are going to dictate what happens here in the United States. So you got to be aware of that.
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Yeah. So as we switch gears a little bit to earnings that we're going to get this week, if you are a U.S. multinational, usually this week dollar would be something you would be welcoming. Right. And that's part of the whole situation that you're talking about a little bit as you talk about, you know, yes, it worsens prices.
purchasing power, right for citizens, but it's not a bad thing if you're selling stuff overseas, right? And so you get more of that opposite currency. But let's focus on some of these names. It's a continuation of banks, you know, out of the gate guy, we saw, you know, some results that were pretty good. And you saw some
commentary there wasn't a lot of specific guidance from some of these bank ceos but we could kind of mention this heading into earning season that expectations had just gotten dramatically lowered right the expectation that these companies would be able to offer some clear guidance and commentary in around the current environment was not going to be great and they didn't do that and they shouldn't be doing that if they don't have a lot of clarity right and so i'm just curious how you think about coming into this week we have goldman i think
As you're listening to this, it's probably already out, but we have a bunch of other banks reporting over the course of this week. I'll just tell you, we have Citi, Bank of America, PNC. That's Tuesday before the opening. Let's talk about banks, and then we can kind of move on to some of these other names that I think are economically sensitive also.
The thing that I came away with from the JP Morgan report was the ratcheting up of, of basically loan loss provisions. And how many, I don't know how many times we've talked about that, Dan, and I'm sure people get sick of hearing me say it, but you know,
you know that's another thing that people need to watch delinquency rates have been going up right in front of our eyes nobody wants to talk about it for whatever reason obviously jp morgan's aware if you look at that loan loss provision i think that i want to say it scared people but it certainly surprised a lot of people it didn't necessarily surprise me but it's something you have to take into account and i think you're going to see that from other banks as well and if the world is if the united states is slowing down in the way that i think it is
Banks are cyclical. Regardless of what you hear out there, it is not different this time. They fall victim to the same thing that other cyclical companies do. And if there's a slowdown, they're not going to be protected by it. So by whatever. Now, their balance sheets are a lot better, obviously, than we're in 08 and 09. And I'm not suggesting otherwise, but they don't win in a slowdown. It's just that simple.
Yeah. So Goldman will be interesting to me guy, because away from the money centers, we saw JP Morgan, their trading activities, specifically derivatives was really good and really helped them in that quarter. Banking wasn't as bad as some people expected. So Goldman, we know that the trading will be great. That's just what they do. Right. And then on the banking front, there wasn't a whole heck of a lot of M&A that
weren't a lot of IPOs. If anything, a lot of IPOs have been shelved over the last couple of weeks ago. That one will be interesting to me. And then the other thing that you just mentioned, those kind of loan loss provisions that they're putting in place, just in the event that you see delinquencies starting to pick up, I suspect you'll see that from Citi and Bank America Tuesday morning. The one in the financial space, Guy, that I think is kind of interesting to me is American Express, right? And for the same reasons we just
highlighted a little bit, but the slightly different sort of consumer definitely a bunch of business travel and spending attached to that. There was an article that I thought was interesting. I think it was in the Wall Street Journal talking about multimillion dollar homes that were in contract. You're seeing cancellations of that. I think the through line might be to American Express that you're seeing some stress on a higher end consumer. Well,
Yes. And if you listen to what Walmart has said over the last few quarters, I mean, the trade down to Walmart has to sort of have you at least scratching your head a little bit, understanding that maybe $100,000 income isn't what it used to be. But still, when 70% of their customer base now earns $100,000 or more, there's clearly something going on. And I do think there's going to be delinquencies that American Express is probably not priced. The stock, at least, is not pricing in. So
You know, we've seen it on one side of the equation, clearly on the lower end. The middle class is getting squeezed. I think you're going to start to see it on the upper end of the spectrum as well as delinquency rates start to grow. And you're going to see it in terms of names like American Express to a certain extent, maybe that
discover financials of the world, but you're also going to see it in the home builders, which as much as people want to think it's a rate story, it's not. It's to me, it's an employment and or unemployment story. And at certain points, it's going to be an affordability story. And I think that's why the home builders are traded as poorly as they have.
Yeah. And on Friday, I think the 30-year trade at the highest level in a few months above 7%. So it'll be interesting to keep an eye on that. One last thing before we get out of here, Taiwan Semi, which actually had some sales data out last week that looked pretty decent, but it might've been a kind of a rush before some of these tariffs go in place. They report, I think on Thursday, we know their biggest customers are Apple at 22%, NVIDIA about 13%, Qualcomm 5%, AMD 5%, Broadcom 5%, Amazon 4.5% or something like
that we know who they're making chips for, right? And Nvidia is a huge through line if you think about it for all the high end GPUs and they make a lot of them there. Do you think that a good quarter and upbeat tone about AI spend and the like is enough to save the space? Because right now Taiwan Semi
It's down 30% guy from its recent highs and its lows about a week and a half ago is down 40% of those. That's something that most folks did not see happening anytime soon, at least for that NVIDIA and the Taiwan Semi.
nvidia traded down to i think the levels we saw and you probably have it in front of you but i think it's the same levels we saw in august of last year this recent low on nvidia so it traded down and held a level that makes a little bit of sense i think it was around 90 bucks or so and you've seen the subsequent bounce do i think it's enough at these levels to sort of stem the tide in the short term yeah probably given how far we've traded off but i don't i think
the pendulum has swung the other way on this entire ai trade and it's going to take a re-acceleration of not only capex of margins as well which i just don't see coming i'm hard-pressed to understand in this environment how that's going to start to re-accelerate to the upside so i think rallies are going to be sold in names i think that makes sense you might have a tradle bottom in the form of nvidia around 90 ish i
I'm not gangbusters bullish here by any stretch of the imagination. Yeah, I had a great conversation with Dan Ives that dropped in the Risk Reversal podcast feed, this fine feed that you're listening to this podcast in. He calls himself a permabull, so I'll call it, from Wedbush on all things MegaCap Tech. And he's a little freaked out by what's going on. So check out that conversation. The other thing I'll just say, Guy, is that
market opens up tomorrow morning and it can't hold, it really means that all of this back and forth from the administration on the tariff stuff is really not doing them any favors. And the more volatility that we get in and around these stories, the less confidence investors have about this process whatsoever. And I just think that's going to be bad for stocks. I would not be surprised in the next week or so, Guy, if we are testing
those prior lows, especially if we get through earnings season. And it's just a bit of a ho-hum because then we're back into the arms of this administration, trying to kind of do things in the economy, trying to reorient global trade, trying to basically keep... I think they really are focused on the stock market. And I think they definitely blink because of the bond market. And it feels like the bond market...
is going to do what bond market wants to do. So to me, I think if you have a weak dollar, you have rising 10 year yields and you have stocks where, you know, the burden of proof is on the bulls. I just think that's a really, really bad setup for the moment. Everything we're talking about is obviously the headline stuff, but you know, the nuts and bolts of the market is earnings and earnings growth, revenue and revenue growth. And
What's happening now in terms of the politics around all this and the tariffs and everything we hear about now 24/7 is being done in the same time that we've had a slowdown in place prior to. Things were slowing down prior to anybody talked about tariffs to this extent. So the timing, in my opinion, couldn't have been much worse.
Earnings coming down. There's no way to get that 13 and a half percent earnings growth. I just don't see it happening. The $273 of earnings that I think is expected on Wall Street for the S&P 500. I think that's a bit of a pipe dream. And then on top of that, you have to ask yourself, what's the right multiple? Now, multiples have come down. That's the good news. But again,
We've seen multiples a lot lower than we are now. So, you know, mid teens multiple on you do the math, maybe $240 or earnings or so. And then you talk about an S&P that probably should be lower than here. - Yeah, and I think a lot of those estimates have been coming down over the last few weeks or so. And you have an S&P that closed down 9% of the year. And if you have S&P earnings that have been ratcheted down
10% from those recent highs at 274, whatever the heck it was. You'll see, you should see a commensurate move lower, in my opinion, in the major indices. All right, Guy, we covered a lot of ground here. We just wanted to set the week up for you. Tomorrow, Tuesday, in the podcast feed, Guy and I sit down with
Cameron Dawson of New Edge. We're going to get her take on all things market and trade and bond market, the whole thing. So enjoy that conversation. And Guy and I will be doing the market call every day, Monday, Tuesday, Wednesday, Thursday, 11 a.m. So we look forward to seeing you on our YouTube page.