Transcripts For FBC Making 20240704

Here is charles payne. Charles im charles payne, this is making money i. Breaking now, despite todays little bit of a lull it feels like the rally will go on forever. What do you buy in a pert pell all rally. We have gary kaltbaum, phil blancato, cameron dawson. Theyre all hire. Gloom and doom unbridled optimism. We have two of the best to clear up the debate. How to triple your return on a hot investment. Kip herriage on a potential grand slam in small caps. My takeaway on embracing america and avoiding the fate of germany. All that and so much more on making money. Charles all right, scientists from the very begin having always wanted perpetual motion machine, right . So i read where if you had a flywheel could spin forever with just one push under the right circumstances though. You would have to create a volume of space thats pure, no matter, no gravity, no light, no energy of any kind. Then you place a perfectly balanced flywheel made of a material that has no internal energy, not even its own atoms. You balance it to the placement of individual atoms, you put it on a frictionless axle and then the initial push, all you have to do is push it one time, that one initial push it would spin forever, and ever and ever. I bring this up, a lot of people feeling like just maybe the stock market can go on forever and ever, right . There is a lot of scuttlebutt. Initially the rally began on the notion there woe be a whole lot of Interest Rate cuts. That was going on pretty good. Then wall street sate h said, there wont be any Interest Rate cuts, guess what, the rally kept going on again. The whole thing is the a. I. Revolution, the economy, a whole lot of things but before that was the primary thing moving this perpetual machine. The question, can this last forever. Here is an interesting thing. We know it wont be forever, our man ryan deet tick put this out. This is so compelling folks. Four month return, big returns like the one were in the middle of right now, throughout history it has been absolutely phenomenal. You can see when it happens, four times with the monster returns 20 when it happened you see one year later. That aint too bad. The average of the return, 18. 4 that would be absolutely phenomenal if we could get it. Obviously history suggests that we could. How do you play it, right, particularly if you miss so much of the rally. We have a ton of cash coming in. Small caps are seeing record amount of cash, 3. 6 billion in the most recent week. Large caps getting a lot of money as well. Aggregated bonds 6. 1 billion there, government. Money is coming in going to areas that have obviously done very well. The big bet is small caps. I want to bring in mosaic chief strategist, phil blancato. I have to start with the small caps. They have been on a tear. Look at last weeks performance, small cap growth, 3. 8 , core 3 , value 2 . Blew away Everything Else on the screen. Here is the good news. If youre thinking this way, for the year still trailing s that the place to be right now . Absolutely. I want be to careful, we have plenty of volatility. This is head fake. We had had a head fake in the fall, sell off in january. We had a run right now. Sell charles they were not giving us 3. 8 in a week. But you if you look back were still losing money. Charles smallcap growth is making money. Value is is still losing money. If the chairman comes out saying we keep rates higher for longer we take a hit. It is okay to be late rather than early here. Heres why. Anytime we see five years of underperformance of small caps, what happens the next five years . Significant outperformance, double s p. If youre a little late you will be fine. Charles this has to be on your radar. My number one trade of the year. Charles lets talk about earnings for a moment. What is compelling what weve seen on the revenue side, companies that do majority of business in the United States have had a much bigger return on revenue. This thing gets flipped completely upside down though where the earnings are significantly larger for companies of do ma the joe of business outside the country, hence the weaker dollar. Where are you with the dollar, are you comfortable now or weaker or stronger. I would like it stronger. Europe is still struggling, china is struggling mightily. Beginning to import inflation. Stay home, play the dollar for rest of this year. Charles really . Yes. Charles even though the earnings have been better for companies outside the United States, Earnings Growth . U. S. Consumer is too strong. When you look what is driving the market, 30 of market cap today is just those six companies. Those Companies Posted really impressive revenue in the fourth quarter. Charles right. I want you to take profits of the big six, pivot to mid and small. I still say you make domestic bias for now. Charles everyone has been coming off for a year, maybe longer its values turn, its values turn. From an Earnings Growth point of view it has not been values turn. It underperform, it underperforms, finally it is outperforming. Maybe you focus more on value than growth . Without a doubt. Your opportunity in value will feel a lot less painful if we get any significant correction and youre getting growth because were piv involve thing to buying stuff. Manufacturing has been in a recession for 14 months f im right this summer is more about a balanced consumer, not just consumer services, you win in value, win in dividend, get them cheaper with the big names. Charles we have a minute to go here. This is runaway train, runaway momentum trade. Everyone is talking about cybersecurity. Amazon seems to be mixed right . You have people saying the magnificent seven is now the magnificent five, magnificent four, the terrible two, a lot of folks are dropping this out. You like amazon still . Still cheaper than it has been over the last five years. Consumer will spend and cloud compute something 15 of the total testify revenue. This is becoming more balanced. Charles you dont use a stoploss with a stock like this . I would put a trailing stop order if you made a bunch of money. Charles it has to be 10 other 15 . So volatile, two days later it will be back up. I put 15 on it. We offered this at 100. The reason why i like it, triple digit Earnings Growth next year because of the benefit of a. I. These guys besides come on meshals, progressive numbers. Defense, middle of the road, offense. Charles we know insurance premiums are going through the roof. Because of Interest Rates. Exactly. Charles great stuff. Pleasure to see you. Thanks, buddy. Charles heres the thing, i just got back last night. I was own a trip to palm beach. In fact i will share a cautionary tale way shared for the audience, american voter. Touch listen to this, because it is so critical not just for the economy, but for the nation but i couldnt help the notice the seats are getting smaller even in business class. Here is a photo, last year, boeing actually shipped out 70 of their 777 planes, they had 10 seats abreast, right across. Used to be nine. It is just far too scenario. Im sure my next guest would agree. Wells Fargo Advisors Senior Vice President , mark smith. Before we get to the mark thats is way too narrow. Way too nair know. I need all of this. Charles they so make four or five seats out of this. The reason i bring it up, i was reading the note, you were talking about the stock market how narrow the rally is, youre saying narrow is not bad when it comes to the stock market. Narrow is not bad because you know where to go. Weve seen in the last year top 10 stocks contributed to 70 of the gains in the stock market. Only 24 . If you know where to go as an investor you make money. The tech play is ongoing. Still carrying through four 2024 you have to own tech. Charles value and core crushed it. Midcap which has been sort of a stealth rally across the board, both finally beating large cap across the board. Do you start, you were like when you first started coming on the show you were more of the balanced trade guy. Youre like tech, tech, tech. That, sr. With the money is. That is what ply clients ask for. We have to follow that. It is called momentum of. Were following momentum. I think you have to be in the large cap space, you get to play, if we do have a recession, when, if we have a recession this is the most defensive play you can be. Charles defacto safe haven. Not small cap value. Large cap growth will be your Defense System . I will is a core. It would be a great place to hang out if we have a recession. 30 of most companies revenues driving from overseas. Very well die diversified. Tons of money in the bank. Charles where is the debate, recession, no recession, where is your firm there . We wail have a slowdown, that could mean a lot to different people depending what your portfolio is. You have to only think dividend paying companies, companies that do well in a recession. Our last guest talked about amazon. There are a number of companies. I had Dominos Pizza at a Birthday Party it was amazing. I looked at the stock. Company like that using a. I. Does very well too. If you look where there is recession where you make money, if there is not you still charles youre a new yorker and you had dominoes . No, i went to connecticut for a Birthday Party. Im not going to dominos in new york. Good question, charles. Charles i had to pull the new york card. Golly. With this all in mind, it feels like right now it is just an amazing opportunity, right . The windows open and i feel like some folks on the street fret, this is the top, this feels toppy. Instead of taking advantage sounds like to you your clients got it right. Forget what may happen down the road at this very moment tons of money is being made and which want a part of that . Absolutely. You have to be invested in stocks with momentum. These tech stocks with a. I. Have momentum. It is not pets. Com. It is not 2000. These companies are making billions of dollars a quarter and showing growth god forbid. Actually growth. Were not making this up. This is not a dream. This is happening. When things slow down well clip some money and go into something a little safer. Charles pedal to the metal . I think so. Charles dominos, may being one of the best performing stocks out there. It is in the top 10. Pepperoni was good. Charles by the way a reminder for my next guest were . The roaring 20s, you want to take advantage of it. It only comes around 100 years. Well come back. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. Tourists tourists that turn into scientists. Tourist taking photos that are analyzed by ai. So researchers can help life underwater flourish. I got the cabin for three days. Its gonna be sweet what . Im 12 hours short. Have a fun weekend. Unnecessary action hero unnecessary. Was that necessary . No. Neither is a blown weekend. With paycom, employees do their own payroll so you can fix problems before they become problems. Hmm get paycom and make the unnecessary, unnecessary. See you down the line. Okay yall we got ten orders coming in. 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They provide the potential for regular income are federally taxfree and have historically low risk. Call today to request your free bond guide. 18002173217. Thats 18002173217. Charles my next guest told us that it was going to be the start of the roaring 2020s, he told us this the last year. He points to several reasons why this party is just getting started. Alltime highs in the stock market, home prices, equity on homes, consumer net worth. Joining me vertical Research Advisor kip herriage. Kip, there is always this narrative on wall street, we kind of touched on it on a brock, when we get to alltime highs, we know alltime highs in the market typically goes to stairstep fashion and collapses in the elevator fashion. We say beware it will go down faster than when it went up. What are you telling those in the market, what are you telling the skeptics. Thanks for having me back on charles, we hear that a lot. We had three bear market in five years beginning in 2018. Unprecedented never happened before. Average stock lost 40 of the value. People are shellshocked. It will last several years. This is structural bull market, based on the strength of the economy, based on consumer t has a long way to go. By the dip will continue to be smart money strategies. Charles your strategy of excitement is the innovation revolution. We heard something similar though during the pandemic. Remember when these tech stocks were rallying, they said everything was pulled five years ahead t was a wonderful rally, except in 2022 all these stocks got hammered. What is distinctly different about now than back then . I draw a parallel from 95 to 2000. We were not ready for that. We didnt know what was hitting us. It started going parabolic. I think that prepared us for now. These companies have grown up, tech has grown up. The inovation revolution, take a look what is happening around us. Cryptocurrency, the blockchain, fractional ownership, tokenization, all of these things are new topics to people but it is going to be a incredible we think what will happen in the years to come. Space exploration. Innovation throughout the economy, the big economy. So we think that earnings are going to continue of course a. I. Which everybody is talking about. Charles sure. We think earnings are the key story here. That is what is going to drive things. That is what we think makes this a different setup than in years past. Charles so i know that youre still bullish. You started off the segment say buy the dip. You said wrong people are still bulls. Sounds elitist. Who are the wrong people getting in making you a little nervous . It is the permabears who i am talking about. It is retail. The fear and greed index is extreme greed. This is particularly when we use discipline. This is what were telling people f youre long and strong, stay long and strong f youre putting new money into this market this is time to use some caution. Keep buying the dips. Remind the folks in the 95 to 2000 meltup, this is similar market, we had four corrections of more than 10 to 20 and a bear market of 32 right towards the end of that, right, then the final big surge. Use the dips to add to positions but dont chase it. Charles what year is it if the parallel youre using . Is it 95, 96, what year are you using right now . 96. 96. Charles youre also a bitcoin bull, you point to the recent runup, it goes back to what you just talked about, the excitement over bitcoin is nowhere it was in 2021, 2022, those other prior rallies, despite the fact it has really impressive. You like that, you like that, there is not a whole lot of folks jumping in on the bandwagon right now . Exactly. The greed in the stock market does not exist in bitcoin. It is incredible. I do twitter polls, 70 of the people that follow me, they know ive been a bitcoin bull since 2017. They know weve been right about this move. We recommended it in 2000. They hate it. Dont trust it. That is bullish from a sentiment point of view. They did a poll, only 40 owned it. We think that is a big buy signal. Charles i have a only 30 seconds but i cant let you go without you saying a good play to pay the small caps, three times russell 2000 etf. The symbol, tna. It goes up three times the rate of the russell but also go down. You have to really be, youre going for a grand slam here, my man. Were trend followers and were market timers. That is what we do, when we find the hot trend, we went aggressively long small caps last october. We continue to ride it. We think this group will be 40 . I think i said that last time i was on the show, thick or thin, by pullbacks. Charles kip, thank you very much, appreciate it. Folks coming up it is a never ending battle or wall street, the pain, economists were singing from the same hymn sheet. No more. Some are extremely optimistic. Some are extremely pessimistic. Well talk about it next. Personalized Financial Advice from ameriprise can do more than help you reach your goals. I can make this work. It can help you reach them with confidence. No wonder more than 9 out of 10 of our clients are likely to recommend us. Ameriprise financial. Advice worth talking about. psst psst ahhh with flonase, allergies dont have to be scary. Spraying flonase daily gives you long lasting nondrowsy relief. Flonase all good. Also, try our allergy headache and nighttime pills. Everywhere but the seat. The seat is leather. Alan, we get it. You love your bike. We do, too. Thats why were americas numberone motorcycle insurer. But do you have to wedge it into everything . What . I dont do that. This reminds me of my bike. The wolf was about the size of my new motorcycle. Have you seen it, by the way . Happy birthday, grandma really . Look how the brushstrokes follow the line of the gas tank. Hey hey brought my plusone. Jamie . Charles all right, so it wasnt that long ago, seemed like everybody in the economist world, the economic world were sort of on the same page, right . They were saying slower growth, maybe a recession in the cards for 2024. All of sudden there has been a major divide among the smartest economists on wall street. Kelly ogrady is here to break down that divide. Reporter thats right, charles. We have gloom and doom and unbridled optimism. It is hard to believe theyre all watching the same economy. Begin with the bear case. Bca Research Points to a spike in Interest Rates you see that right there as well as limited being access toe loans on main street as the main reason for impending slowdown. Personal loans, credit cards, look at that one, this is up 20, 2025 . It is not just high prices it is the interest you have to pay on top of that. The reality, getting access to capital to finance it all is not as easy as it used to be. On top of that excess savings are gone for most folks. We have blown through the pandemic savings. Only the top 20 have real deposits and money markets. You look at the huge discrepancy sy, these guys are in the negative here. They dipped little bit, not as much as folks down here. Double click on that 20 . This is really interesting too. Apollo points out there responsible to close to 40 of consumption right now. So essentially they are the group that is saving and buying the most right now. So those last two data points really underscore how tough things are for the rest of main street. But then, apollo goes, they post 10 reasons why the economy is too strong foreany rate cuts. So the bull case, right . For starters, consensus u. S. Gdp continues to be revised higher since the feds december pivot, right . Now that change has provided a strong tailwind to growth since december. You know it started to drift here a little bit but you can really see this big jump in growth expectations. So the takeaway here is the economy is not slowing down. It is actually reaccelerating. Another reason to cut rates, inflation is moving higher. You see that right here. These all show different metrics of core cpi. Services cpi, sticky fed cpi, median mean, each are calculated differently but the story is the same. The trend trend we were starting to go down but now were ticking back up. Finally, that puts a pause on rate cuts, many signals there is strength marbled into the economy. Finally this one, anecdotal signs as well, strong rebound in cardboard boxes. They are a great barometer for the broader economy. Everything we buy is in a car board box or online orders or food making its way to the grocery stores. You see in 2008, a huge drop in demand. We saw a sharp drop the last couple years but this up swing has been just as sharp. Charles, it is good to see debate on wall street although stock investors have fund a way to make the bull bear case work for them. Charles fed in, fed out, stock market higher. Kelly, thank you very much. We have lombard chief economist, stephen blitz and fhn economies chris low. This peak inflation rather than peak funds rate, what does that mean . The fed came out basically in the last minutes and said as a group they all believe 5 1 2 is the peak rate, right . At some point or another they are going to be cutting although they seem to skip over the fact they cut already. They cut back in october when the fiveyear went from 5 to 4 . So that ease is already in the economy. Charles defacto, same impact as a rate cut . Yeah. If you go back to when they were hiking rates in 2022 and they were under a lot of criticism how slow they were hiking, if you remember they said well, but our communication, it was already tightening because the market was already priced to the hikes. Well the market is priced to the eases, about 100 basis points in the next 12 months. Charles heres the thing though, chris, with that, a lot of this is, a lot of the ability to jawbone markets comes down to credibility. They lost a big fraction of their credibility with the transitory inflation part and you wonder, you know, how much more they can afford to lose if they get this wrong. In other words, i feel like maybe perhaps the powell victory lap, even though he wont call it a victory lap, the powell pivot was a little premature . Well i think, it is a combination of things, right . They stopped tightening. They never really talked about a pause. They immediately went not just to talking about easing but telegraphing seven cuts in two years. Market of course priced all of that in for year one. Charles right. If youre going to go youre going to do it all and now the fed just having finished talking everybody back to that december consensus were just a couple of weeks away from the march meeting, when according to the guidance were getting just the last few days, some of them will want to pull back from that promise of seven. Charles so, stephen, youve got some really brilliant folks out there in totally different cam camps. Are we right now . What are we modeling with respect to rate cuts this year. I was modeling several cuts. There is a leg liquidity overhang and there is growth that suggests and demand for capital, the fed modeling, the 50 basis points as the real funds rate as being neutral, right . Therefore where they are now they consider tight. But if you think about it a funds rate of 150 basis points over the core inflation rate pre2008 that was easy money. When you look how the economy is reacting, when you look how the equity market is reacting, you have to walk away maybe from the presumption, maybe not 2 . The old benchmark is where it is but it is higher than 50, theyre probably not as tight as we think they are. Charles with the conversation with the federalist reserve, that should automatically make the hairs on the back of their neck stand up. Is that the antithesis what they wanted to happen when they embarked on this ratehiking venture . Exactly. What i would say about the current environment as long as inflation was coming down real Interest Rates were going up. When they saw those january Inflation Numbers which backed up a little bit, went the wrong way charles everyone is saying, it is january, it gets cold, it does this. That did what i is what i sa . Charles you adjust the factors, do this, do that. Whether that is true or not it really underscores the fact that you cant start easing until you have more certainty and of course that has been the other message from the fed. Theyre not ready to go yet. Charles so the conflicts continue. Last week almost, from what i can remember almost everything that was out was negative, came in either, you know, Consumer Sentiment went down a lot more than they thought it would. Friday alone they released data points. Construction spending was negative. Ism was really, you know, ism employment down. Ism down, prices paid up, the worst combination. On that part you have got that stuff, stephen. On the other hand you have periodically things that come in much better than expected. The job you two guys have is really tough right now. It is but it always is, right . In any set of data you always have leads, lags, you do have weather. You have the most number of people who work because of weather in january since january of 2011. So the seasonal certainly didnt pick that up. I think we had this at the end of 22. We had a real dip in december and had a big jump in january or february. I think you need another month or two charles stock investors long this market right now, and you know, again the rally began own the notion of six or seven rate cuts. Right. Charles know it is to accepting three rate cuts. But there is growth on the other side of this, right . So charles growth equation is justification for the market being higher . Yeah. It is always is. The market is saying Interest Rates are lie relative to our recent experience but note necessarily high enough to kill growth. Growth is what drives the equity markets. Fourth quarter profits from an economist standpoint, not necessarily what they did. Charles right. Well good. Charles chris, the last 30 seconds to you, on that notion higher for longer at these same et cetera levels drove the summer swoon last year. Now higher for longer is okay because the economy is doing better than we thought . I think so, yeah. Bear in mind we have january data mostly in hand. Were beginning to to see the earliest january numbers. You plug them into a weaker number, two, 2 1 2 . After 4 growth in the second half of last year. This is a healthy economy and i think, what it says about earnings Going Forward is terrific. Charles all right. Earnings estimates are going up. It feels like almost every day they inch much a little bit higher. Stephen, chris, thank you very much appreciate it. Thank you. Charles my next guest says this market seems very familiar to a time when some believed a total collapse was coming. Is it 1999 . If so, should you be afraid or should you make some money . Well be right back with gary k. Everyone say, space pod. cheese. [door creaks open] [ominous music] [ding] meanwhile, at a vrbo. 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But, if youre looking for the potential for consistent income thats federally taxfree. Now is an excellent time to consider Municipal Bonds from hennion walsh. If you have at least 10,000 to invest, call and talk with one of our bond specialists at 18002173217. Well send you our exclusive bond guide, free with details about how bonds can be an important part of your portfolio. Hennion walsh has specialized in fixed income and Growth Solutions for 30 years, and offers highquality Municipal Bonds from across the country. They provide the potential for regular income are federally taxfree and have historically low risk. Call today to request your free bond guide. 18002173217. Thats 18002173217. I dont want you to move. 18002173217. Im gonna miss you so much. You realize well have internet waiting for us at the new place, right . Oh, we know. We just like making a scene. Transferring your services has never been easier. Get connected on the day of your move with the xfinity app. Can i sleep over at your new place . Can katie sleep over tonight . Sure, honey this generation is so dramatic move with the xfinity 10g network. Snow. Out of time so tonight im going to party like its 1999 charles all right, folks you we probably should play that at the beginning of every show. You see that market . It was negative when we started. It is called the cp effect. My next guest says see as lot of people compare to what is happening now to 1999. He is saying it is not even close but if it is lets take it. Kaltbaum capital management, fox news contributor, gary k. Gary, let me share with the audience. This is 1999. The nasdaq 100 up 79 . You say if this is where were at, lets take advantage of it . Bring it on, why complain . I dont think the market as a whole is there yet. There is bunch of things like the crypto and a. I. Starting to really feel like it. When i am buying stocks, big caps, go up 10 in three days, nvidia is up 80 since we jumped on it january 8th. There is something going on. Well keep riding out until it keeps going. The one worry, which is what we watch closely, this is for your viewers, if you see the charts like the eiffel tower up on the left side and right down the right side, party will be over. Eiffel towers can go up a lot, and down a lot. But right now still going and another big day today. Charles on that note though, i love that you, cautionary notes for the audience but i feel the flipside of that is so many experts, so many professionals they dont want to touch the market. You yourself youre hearing a lot of talk about this being 1999 because of what happened next. I feel like that is a huge mistake. The window of opportunity is open. Arent we in this market to make money . Thats why i say, watch the market. Pay less attention to Everything Else. Thats what we do. As i tell you a thousand times, charles, we scan 1500 to 2000 stocks. Every country, every commodity the, every sector every day. Were looking for launching pads uptrends off the launching pads, not worried about what everybody thinks. I can tell you factually, before nvidia lifted off from the 6 month trading range i read 20 different stories, 20 different, by the way smart people said their accounting was bad or theyre aggressive with the accounting and the stock should be worth 100. You have to be careful about the too expensive, overpriced because markets and price will go much farther than anybody would ever think to the upside until it ends. Charles you know, speaking of rocket ships youve always said watch the semis. I have the smh chart here. Oh, yeah. Charles going back the last five years. This most recent run is like, this is the quintessential parabolic move. You said in your notes you own some of the best names in here. Is there any place in in complex, the semiconductor complex, where someone is not exposed to right now could buy at this moment . It is a tough call because the horse has left the passenger and the train has left the station and you never know when you will get a five or 10 pullback you get caught. I can tell just tell you, charles, on thursday i brought the bakeout on amd. It is up 10 in 2 1 2 days. I on friday i bought taiwan semiconductor. It is up 5 in one day. The good news it is still going. Were looking for new merchandise every day. Were very overweight on the semis and a. I. Again the most important thing, until it stops im doing everything i can to ride it out. I got to tell you it is not easy. The tough part of this is to stay in them as key keep going vertical. Charles i dont want to tell you the names i took profit the on too early. Youre not alone. Youre not alone. Charles dont lament on it. A big profit is a big profit. You make 60 in a matter of weeks, it keeps going up, dont kick yourself. You will end up hurting yourself in the future. Youve been spot on, fantastic, gary, my friend. Thanks, charles. Charles so no rate cuts this year, none, none whatsoever. Were hearing more and more people say that as a possibility including my next guest, cameron dawson. Joins me in studio. Is bad debt holding you back . The only limit is the sky its our time you dont want to miss it just a little bit louder its our time you dont want to miss it its your moment in the spotlight all your ambitions. All in one app. Low fixed rates. Borrow up to 100k. No fees required. Sofi. Get your money right®. I have type 2 diabetes, but i manage it well jardiance its a little pill with a big story to tell i take oncedaily jardiance at each days start as time went on it was easy to see im lowering my a1c jardiance works twentyfour seven in your body to flush out some sugar. 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Earnings are starting to move i dont know if the market is leading the earnings, though. But at least theyre starting to move in the right direction the estimates. Thats such a good point because market does lead earnings earnings are usually last no. The problem or the challenges always does the earnings materialize because a rally based on not earnings is not nearly a sustainable. The good news is we are seeing signs that the 11 are so growth thats marked down for 2024 looks to be supported by the economic fundamentals. Then the question is can we get another 11 in 2025 what the street marked down as well. Charles what are you feeling right now . We think were seeing a cyclical recovery and pmi turn higher. We know we have the ism and a little bit softer but theres enough science that some of the cyclical signs are Getting Better thats supportive of Earnings Growth. Charles what about the come i dont know why it is not working but one thing to note thats interesting 86 trading days into day without a 2 pullback that will make anybody complacent. It is that we all kind of fall asleep at the wheel momentum is a great thing in the shortterm you certainly see this market being driven by momentum. But what we have to watch for is that positioning. We have to watch for sentiments were watching the Options Market really closely things like the put call ratio, telling us how much people are willing to pay for Downside Protection versus upside optionality. Isnt that were that is now feels like sort of got to be worrisome even where it is now. It is not as extreme as it was in 2018 or early 2022 times before where the market really struggled after we got to those momentum or sentiment extremes so were not at the kennedy loggens but we have to watch it carefully. Charles we have talked about the fed and seems it was inconsequential and seven rate cuts that got into the year rally and spilled into this year and now no one seems to care. It is absolutely incredible how much this market can sh rud off lack of rate cuts that are priced in just a couple of months ago market fought with a 90 chance that we would get a rate cut next week at the meeting this market doesnt seem to kaish the fed which then brings us back to earnings opght mism and positioning. So with that in mind earnings are down the road this market can rally it is hard to fight this you dont find a rally like this do you push back on this or do you participate . Were letting our winners ride and respecting momentum where our position so the growth positioning saying were not yet at the point were ready to trim, however, when were adding new capital to the market instead of chasing the things that have been up the most which could experience the most downside if you see a hiccup were instead looking for areas in value and international very selective, that are more early in their recovery. Charles so right now Communication Services wouldnt be adding to tech and Communication Services. Shk intriguing to me because lily it is like one of the situations you have lily nouveau then you have the rest. So theres still opportunity there in the Health Care Space to add new money. Theres sell areas that are trading discounted evaluations starting to see ions of life in biotech as well which has been in a downturn for two years. We do think that you have to see those earnings materialize one thing thats a bit disappointing about health care is youve seen earnings estimates get cut a little bit over the past couple of weeks so we want to see that inflection in earnings and support evaluations where they are today. Charles you mentioned your greatest fear the timeline for this. Did you kind of ride and let the market tell you what the timeline is . Thats the treky part and one of the conversations we had was in 2022 that was the beginning of the bare market in 2022 gave you a strong indication that trouble was brewing because you have big volatility down days and selling no reason. That typically is a sign that a c change is comes so you can respect the momentum in the short run but then be very aware this market could change because trees dont grow to the sky. Or at least didnt before. A. I. They can go forever and ever. Make it grow. Thank you so much. Appreciate it. Charles all right folks so as President Biden brags about u. S. Economy doing better than european economy keep in mind he doesnt want this economy. Thats what makes it interesting about that that he doesnt believe in the economy that hes bragging about. He wants us to be europe and we have to remind people yes, we are doing better than our european counterparts because of who we are. Because of the foundation President Biden loves this and taking advantage of it and everyone has to sate system is in place. You know theyve brought me on the Coaching Staff of the Kansas City Chiefs next year they said charles we want you to be the head coach i can get them to the playoffs but to the playoffs so i have honor of speaking to the club for growth that was saturday and the emphasis was on how great our Economic Foundation is. And that any president would benefit from it. Just like i was suggesting there if i was the coach of Kansas City Chiefs next year i would get them to the playoffs system already in place i couldnt mess it up that bad but thats why folks look at germany this is my case stead im talking about this a lot this year because future of america begins in november and ive got to tell you whats happening in germany looms large because this country is on a path of economic selfdestruction. It is a path that we want to avoid. Ice ironically it comes to path of two germans karl marx and bismarck with the capitalist movement the chancellor when there was a big spread of socialism when it started to rise sweeping through europe so he came up with a idea to present old age payment system. First nation in the world with a Social Security plan. And ironically conservatives at the time they hated and said man are you nuts but he was brel i cant plan kicked in at age 70 and Life Expectancy was 45 listen were a caring nation we take pride in helping each other but social schism not helping but selfdestruction and thats the one thing that we have to all keep in mind because on one hand, the shadow of karl marx looms large it really, really does weve lived through monetary theory we saw checks go out and it really felt great to a whole lot of people until, of course, it triggered one thing that they know even the architects know one thing that it does spark inflation. So the argument this year will be hey, let us keep writing you checks we know it is like a sink that we fill up with water and what water spills over that is inflation but welfare a solution. If you let us if you put us in power and keep us in power well keep the checks coming but give us the power to go after those greedy sob and then we get some of the water out the sink. Doesnt spill over. We dont get inflation, you get your checks and it sounds good on paper folks but in real life it means no Business Investments and it means that we go down the path that germany is on. Germany is on a path to selfdestruction i hate to see it. But it is happening in real life and we should Pay Attention because it is again, between the Socialism Movement between the climate movement, theres smart ways to go anything that you want to do but what theyve done is not smart and hurt them badly lets avoid that in the meantime last hour of trading always exciting. Especially today liz im buckled up. Good because the expression chips are down charles so we have to flep that to the chips are up