0:14

One PM on the East Coast. Swistle

0:16

here. I was just eating some Goldie That's

0:19

G0LI, apple cider vinegar,

0:21

and gummies. And e y

0:24

asked what they

0:24

did, and I'm not really sure what they do. Etcetera.

0:27

So why do you eat them? So why do you eat them?

0:29

I mean, they must do something people buy them.

0:31

Right? I mean Apple cider apparently, it,

0:33

like, gets a met met Metaldism metabolism

0:36

zone that too. Nobody cares because

0:38

this is market call. It is, as I mentioned,

0:41

one o'clock on the East Coast, which

0:43

means the only time zone that matters for you

0:45

mountain people out there. I mean, don't even know what

0:47

you don't even know what time it is in the mountain

0:49

zone. That's why it's so screwed up. This

0:51

market called Dan brought to you by

0:54

FactSet, financial data and analytics

0:56

powered by tomorrow. They're also our data provider.

0:59

And, of course, so fi, get

1:01

your money right, Dan, all

1:03

in one app. And in just a few minutes,

1:05

e y from Sophie who's

1:08

got great new hair

1:11

By the way, I noticed that. And a new

1:13

blouse, if I may, be so bold.

1:15

How are you, Dan?

1:16

I'm doing well. I mean, you'd never notice anything

1:18

on me, but that's fine, guys.

1:20

I only false. I know they say all the time --

1:22

Yeah. -- in your in your Johnny Cash outfit,

1:24

which Today, I want I am in my I

1:26

am in I'm I'm wearing Garth

1:28

and the other day when you said I was Johnny Cash was

1:30

wearing dark blue. They're very different. Alright. Here's the deal.

1:33

I am black and blue a little bit

1:35

here guy from what's going

1:36

on.

1:36

I was, by the way, it's a great rolling stones

1:38

album, black and blue. Yeah. No doubt.

1:40

I mean, listen, I mean, it was just And we're we're gonna

1:42

talk to Liz about the Fed because

1:45

the wrote the note that she wrote that came

1:47

out yesterday on this SoFi investing

1:49

blog is all about the Fed's tight

1:51

wire, high wire, whatever wire act

1:54

that they are playing here. But it's interesting when

1:56

the stock market. I mean, the way I'm positioned

1:59

and I think the last thing we talked about on market

2:01

call yesterday before we left at, like, one thirty

2:03

five and the Fed was coming at it too. And Fed

2:05

pressure was at two thirty. I kinda detailed

2:07

how I was positioned. I was short of the QQQ,

2:10

short of the spy, short of the XLF. I'm

2:12

still that way. But I'll tell you this,

2:14

ma'am. The XLF guy is about to

2:16

go down on the day. Okay. Bank America is

2:18

down one percent of the day. Wells Fargo just

2:20

went down. Sitting room is about to go down.

2:22

If JP goes down, Schwab

2:25

is down two and a half percent. I don't know what's going

2:27

on there. If you look at all the regionals, we're gonna look

2:29

at some of those charts there in a second.

2:31

To me, this is the most important thing

2:34

going on for the markets, okay,

2:36

for the stock market. Now you could say, oh,

2:38

well, I'm gonna look at the other thing. I'm gonna look

2:40

at Google up two and a half I'm looking at Amazon,

2:42

up one a half percent. I'm gonna look meta, up three percent.

2:44

I'm looking at Apple, one and a half percent. I'm looking at the

2:47

SMH, up three percent. In a market

2:49

cap terms, That's just eclipsing

2:51

it. But let me just ask you this

2:53

guy who is more important a

2:55

bunch of dumb money that is piling

2:58

in to the mega cap tech

3:00

for this perception of safety.

3:02

It's only happening because what's going

3:05

on on the other side where there is the

3:07

potential Right? In my opinion,

3:09

okay, the potential for some

3:11

major market palpitations, some major

3:13

economic

3:14

palpitations, or maybe that's what's going

3:16

on there. So to me, what what do you think is

3:18

most important to focus on looking at the market?

3:20

I I missed law school that day, but if I were

3:23

the one of the counselors, I

3:25

would say, I object your honor, the

3:27

the the attorney, you're leading the witness,

3:29

as they say. That's rhetorical question.

3:31

And he would probably staying that objection.

3:34

But I'll answer your question, counselor. And

3:36

clearly, to me, I think banks are more

3:38

important. And we talked about it a few minutes ago

3:40

on our fast money call, and I said Listen, don't

3:43

look now. But Bank America is about

3:45

to make a new multi year low and lo

3:47

and behold, here we are to your point. So

3:49

what's going on in banks cannot be understated,

3:51

I don't think. I mean, people will say we

3:54

have effectively we've shored

3:56

up that side of the equation and

3:58

Everything is fine. Everything is not fine. And

4:00

I'm still pretty convinced that I set it on fast

4:02

money last night that you're going to see

4:04

over the next month or so would take under

4:06

in one of these banks, and that should probably lead

4:08

to some other things. There is a flight to perceive

4:11

safety in the form of these names. When

4:13

you have Microsoft up eight, nine, the last

4:15

I looked. Facebook continues to grind higher.

4:17

It's probably more of a Facebook specific thing.

4:20

What's going on with TikTok in stuff. But then

4:22

you look at Google, which by the way is going from

4:24

ninety one ish to a hundred

4:27

and six very quietly. Yeah.

4:29

That has to make you sort of scratch your head

4:31

a little bit, and then you have the continued strength

4:33

in some of these semis. And I think here we have a

4:35

Google chart. We're back above that two hundred

4:37

moving average, but this move has been stealth,

4:39

nobody's been talking about it. But

4:41

there is it has to have

4:43

you scratching your head a little bit that

4:46

the markets looking past what's

4:48

going on in the banking sector,

4:50

which last I looked is still pretty important

4:52

component of our economy. And then flooding

4:55

into names

4:55

that, you know, now we're just gotten themselves flat

4:58

on expensive. Yeah. So let's

5:00

let's just kinda make this one point here. We're gonna

5:02

talk about the Fed with Liz in one

5:04

second here. But let's let's talk about with Janet

5:06

Yellen. So the treasury secretary had to say she was

5:08

in front of the senate yesterday. Interestingly, you

5:11

know, right as the Fed presser was going

5:13

on. So if Powell was talking over there,

5:15

and that was the very thing

5:17

that really caused some of these regional bank

5:19

stocks turn lower. And when you look at the two day

5:21

action, I think we have chart of the KRRE,

5:24

which is the regional regional bank ETF,

5:27

you know, that the Blowback

5:30

you know, the the regional bank ETF

5:32

here. Man, dude, look

5:34

at this thing. Guy, I mean, it's it's down one and

5:36

a half percent. I'm looking at FRC

5:39

down five point five percent making

5:41

new multiyear lows. This is

5:43

kind of a big level. So your point about a take

5:45

under. I mean, there's some regionals that their equity

5:47

is gonna be worth zero here. It's like, that's coming

5:49

to a theory near you. And for whatever reason,

5:52

I think that while, you know, anybody in their

5:54

mother who's out there, whether you're a large

5:56

money center bank or a major investment

5:58

bank, or you're like Schwab and, you

6:00

know, Schwab is interestingly down two and a half

6:02

percent right here. You know,

6:04

the the CEO Schwab was interviewed in Wall Street Journal

6:07

talking about the deposit base and and and, you know,

6:09

how they would be if they had a further run

6:11

on deposits. Something's going on. I

6:13

mean, like like, that's just kinda simple here

6:15

to me. So guess the the question is is, like,

6:17

when will we see greater correlation with the

6:19

broader market and we also talked yesterday

6:22

a little bit about, you know, some of the breadth that

6:24

had been, you know, really narrowing into some of these

6:26

mega cap techs. So, like, just give me a quick

6:28

comment. I'm just curious what you thought about

6:30

treasury second sec secretary yellen's comments

6:32

because I heard you unfast money last

6:34

night, and that's the thing that you won the most focus Yeah.

6:36

We led the show with, you know, with

6:38

the Fed. And I said, look, I mean, I thought

6:40

the Jerome Powell stuff was somewhat

6:42

benign and actually somewhat dovish. I

6:44

said, I think, would turn the market. And

6:46

if you go back and look, if we had a little

6:48

bit of a time capsule, market actually

6:51

rallied on the back of the Fed. I mean, at one point,

6:53

the Dow was up. I know a hundred and fifty point.

6:55

I know you're not a big Dow guy. My point

6:57

is, going from being up one fifty to

6:59

down five hundred in pretty short

7:01

order over that period of time from two thirty

7:03

to four o'clock. And I said it last night, I said, I don't

7:05

think it was your I think it was Janet Ellen's

7:07

comments, and now a lot of people are sort

7:09

of echoing that. I'm not suggesting they're mimicking

7:11

what I said, but think people came the realization

7:14

of Wait a second. It was the Janet Yellen comments

7:16

testifying in Capitol Hill. Now, I'll

7:18

say this about Jerome Powell. One

7:21

of the things that he said and and some of

7:23

the things that we've been saying, said the

7:25

banking sector, and I'm paraphrasing

7:28

to a point, But the banking sector

7:30

is gonna do our job for us in

7:32

the form of tightening, and he's right.

7:34

I mean, we've said this now for the last since Silicon

7:37

Valley happened, we said Watch and

7:39

see, credit conditions are gonna tighten,

7:41

and that's effectively doing the Federal Reserve's

7:43

job for them. But that is, if you think

7:45

that's bullish somehow, it's not because

7:48

credit is what this economy runs on. And

7:50

if credit conditions are gonna tighten just

7:52

a matter of time before it makes its way into the economy

7:54

and subsequently the stock market.

7:57

So guess to a degree, I understand

7:59

what's going on. You know, there's this perceived flight to

8:01

quality, and I'm reading some of the comments. Somebody said, how

8:03

do you think Google is expensive? I didn't say

8:05

that Google was expensive. I said some of these stocks.

8:07

I mean, Microsoft, the move we've had Blowback

8:10

to where we are. Microsoft's gotten itself

8:12

expensive. I don't care what you think about

8:14

Apple. In this environment, Apple is expensive.

8:17

Google has probably always been

8:20

the cheapest out of the bunch, but You know

8:22

what? It really hasn't performed until recently.

8:24

So there's a lot here for everybody, I guess,

8:26

is my point. If you're bullish, you can make a pretty

8:28

compelling argument. I'm bearish.

8:30

I think I've tried to make a compelling argument.

8:33

And here we are, you know, with the S and P where

8:35

we're trying, like, thirty nine eighty five or

8:37

thereabouts. I mean, We're effectively

8:39

thirty nine eighty. We're effectively, you know, right around

8:41

the two hundred day moving average. So all this

8:43

noise over the last few weeks

8:45

has got us nowhere mean, I

8:47

guess the Nasdaq has outperformed, but effectively

8:50

the broader market is where we started this whole thing

8:52

a few weeks

8:52

ago, Dan. Yeah. I'll just say this. If

8:54

you're bullish of equities right here given

8:57

what the Fed said, and just, you know, I saw very little

8:59

what Jay Powell said yesterday as dovish.

9:01

III really thought that the main, you know,

9:03

headline coming out of that was being

9:06

convicted to fighting inflation. So

9:08

to me and then we're seeing inflationary readings,

9:11

you know, kind of pick up a little bit something that we've been

9:13

tracking. And the last thing I'll just say is that

9:15

if you are buying stocks right here,

9:17

then you were making a bet that what's going

9:19

on in the regional banking sector will

9:21

not spill over to the broader sector,

9:24

you know, like the the money centers, the larger banks

9:26

here and what happened in Europe over

9:28

the weekend. That's ring fenced ring fenced

9:31

the issues over there. So to me, I I that's

9:33

not something I believe, and I'm not trying to be a doomer.

9:35

I'm not trying to, like, kinda be a fear monger

9:37

or whatever. Look at the price action in

9:39

these banks in the face of what's going on

9:41

in the rest of the

9:42

market. I can't believe that to be the case. Alright.

9:44

Let's do it. Let's see if Liz can drop

9:46

a little clarial knowledge on us

9:48

about what's happened in the last twenty four hours. Stop and acknowledge.

9:51

By the way, that's a that's a new I

9:54

don't know. My sense is that's a blouse. Look

9:56

at that dude walking behind you. Tell that tell

9:58

that guy to put some night nice clothes on.

10:00

I mean, it looks like he's going to the

10:01

gym. Sorry. Back to you. We

10:03

prioritize comfort here at

10:05

SoFi, so he can wear whatever he wants.

10:08

This trend is not new. Clearly. Perhaps

10:11

the first time I've worn it on market call.

10:13

Okay. But my highlights are

10:15

new, so you were bang on

10:17

with that.

10:17

Sam's great, I was. By the way,

10:20

EYI

10:20

can see you. Great. Yeah.

10:22

It's Thursday. It's my favorite day.

10:25

Mean, if it's true, then you get to hang with

10:27

the two of us and it is fun. Before

10:29

we get to your note, I mean, you've heard us wax poetic

10:31

and there this Listen, I'm with

10:33

Dan on this one. You know, this reversal in the banks

10:36

today and has poorly I mean,

10:38

I don't wanna pick on Bank of America. But I

10:40

will for a second if we could pull up a Bank America

10:42

chart. I mean, it's not making a fifty two week low

10:44

today. It's making a multi year low. This

10:46

is Bank of America, by the way, folks. This is

10:48

not some product bank. I mean, that has

10:50

to be somewhat of a warning sign. And if

10:52

other these big money center banks, the

10:55

the systemically important banks

10:57

that they call them, the g SIPs, If

10:59

they start to roll over, I'm hard pressed to

11:01

believe the broader market's not gonna

11:03

catch wind of

11:04

that. Howard Bauchner: So

11:06

here's the thing. I actually

11:09

feel like And this might be an odd prediction,

11:11

and it could be completely wrong. But I actually

11:14

feel like the The contagion

11:16

might end up in the stock prices, which is what

11:18

we're seeing right now. I think Yellen's comments

11:20

yesterday didn't help. You know, we're not gonna blanket

11:23

guarantee all deposits yada

11:25

yada yada. I understand why financials

11:27

would sell off on that statement. I

11:30

don't think that this particular

11:32

issue issue is going to be the thing

11:35

that takes it all down. So

11:37

and I wanna be really clear about this. I don't think

11:39

it was necessarily unique. I don't think

11:41

it was oh, know, SVB is the

11:43

only one that was affected by that, and they were affected

11:45

by it because they had bad risk management, all the things

11:47

that we've heard over and over again. But

11:49

I do still think there's going to be another set

11:52

of headlines. They just may not be this

11:54

exact same theme. So it may not be

11:56

that there's deposit flight. I'm guessing

11:58

and I said this in my note today, I'm guessing

12:00

it'll be something along the lines of a credit

12:02

event. So I've said this

12:04

a couple times The issues

12:07

we've seen so far are unique to those particular

12:09

companies, but the liquidity issue is

12:11

universal. And it will

12:13

all come back together at the end of this and

12:15

we'll say, oh, well, it all is kind of caused by

12:17

the same catalyst. Right? It was all

12:20

caused by rates going up. It was all caused by

12:22

sucking liquidity out of the system that quickly.

12:24

It was all caused by investors

12:26

having this muscle memory and believing that the same

12:28

thing that got them to this point was the same stuff that

12:30

would get them to the next point. But

12:32

I think the next set of headlines is going

12:34

to be a different theme than what we've seen so

12:36

far. Howard Bauchner:

12:37

Yeah, well, I mean, to me, what think Bank

12:39

America and Wells Fargo are telling

12:41

you right here is that mark

12:44

to market, those held to maturity,

12:46

okay, treasuries, that they might

12:48

also have a situation with it's

12:51

that there's going to be losses in these other

12:53

banks. Now I get it. The denominator is

12:55

different, right, on their capital basis and

12:58

the concentration and all that sort of stuff. But

13:00

again, this brings me back as to two

13:02

thousand and eight when I know you

13:03

were, like, in seventh grade and

13:05

you're a

13:05

cheerleader on the sideline of

13:08

the JVs. Twenty six. Yeah.

13:10

Working? I've screwed up. But by doing

13:13

supervising three departments. But,

13:15

like, it's just

13:15

Well, that's a twenty year. Do that. I mean,

13:17

you'll so bad for these CEOs

13:20

that they have to go on and they have

13:22

to say whether it's on TV or to

13:24

print media or to their team or to their counterparties

13:27

or to whoever and say, This is contained.

13:29

This is isolated over here. We've

13:31

ring fences. We've done that. You

13:33

know, every time that they speak, I don't know

13:35

about you guy. I just have the

13:37

muscle memory of saying to myself

13:40

as a traitor, I wanna fade that. Right?

13:42

And so, like, this morning, again, the Schwab

13:44

CEO was interviewed

13:46

in the Wall Street Journal, you know, talking

13:48

about this though, and look at the stock. It's

13:50

one of the worst acting stocks. You know what I mean?

13:53

In the financial sector today. So to me

13:55

when I see that sort of price action, I just it's

13:57

very hard for me to say

13:59

that it's

14:00

contained. Like it like somebody knows something.

14:02

Guy talked about that. Hold on. Hold on. Let me

14:04

just real quick. So I wanna be clear. I'm not

14:06

saying that I wouldn't fade some of

14:08

this stuff. I'm not saying that I wouldn't in

14:10

on the rally days, right, if I

14:12

have a broad financials position, which I did,

14:15

I have faded it three times now, on

14:17

days, on up days. It's

14:19

not that I think financials won't get hit

14:21

again or hit harder. think

14:23

it's the next catalyst or

14:25

the next the details of of whatever happens

14:28

next are not gonna be exactly the same as what we've

14:30

just seen. I think they've plugged those

14:32

holes sufficiently, and the

14:34

next thing is going to be just something that took

14:36

a little bit longer to work itself out of

14:38

the system. So like I said, maybe it's

14:40

a credit event, but I still do think that financials

14:43

largely because they're a cyclical bunch -- Mhmm.

14:45

-- that hit in that environment And then,

14:47

you know, we're gonna hear narratives like, well, if

14:50

if yields continue to go down and bonds

14:52

rally, that helps the unrealized losses thing

14:54

and that's not that big of deal anymore, that's

14:56

why I think that won't be the next

14:58

issue. Howard Bauchner: Let's take a look at bonds

15:00

and we might as well we have the chart and

15:02

we're right we seemingly found

15:05

level in terms of ten year yields at

15:07

least that the market seems to

15:09

have at least held for the period of time and

15:11

that level comes in to form of the two hundred

15:13

day moving average. Yeah, I know we sort of breached it,

15:15

but you see what I'm talking about here.

15:17

I mean, it's effectively your uptrend line.

15:19

And the question, I guess, I'll ask to

15:21

Liz first, but Dan, I'm sure you can opine.

15:24

If rates aren't going back up here, is

15:26

that a good thing or I I gotta be

15:28

honest with you. I really don't know the answer think if

15:30

tenured yields start trending back towards four

15:32

percent. I mean, I'm sure there'll be people to

15:34

say that's bullish. I'm sure other people can make

15:36

a coaching argument that it's

15:37

bearish. don't know the answer, but here we

15:39

are at a level that something's gonna happen, Dan.

15:42

Yeah, I I you've been saying

15:44

this for months now. Okay?

15:47

That, you know, like, lower yields is

15:49

saying something about the economy. Higher

15:52

yields is saying something about what's

15:54

gone on with the Fed positioning, right,

15:56

and the inflation battle, that sort of thing.

15:59

But the volatility is the

16:01

thing that should be freaking investors

16:03

out. Right? In the last and just even if

16:05

we pull up the two year and what

16:07

we saw last week, right, like

16:09

in in response to what

16:11

the market was doing relative

16:13

to what they thought should be done for

16:16

the regional banking sector and the banking sector

16:18

as a whole and what the Fed might do.

16:20

And, you know, we we track the CME

16:22

Fed the FedWatch tool. And

16:24

just the volatility in that

16:27

over that period is pretty fascinating.

16:29

So Yeah. I'm with you, Guy.

16:31

I I mean, this is one of the reasons why we've talked

16:33

about stagflation. It feels like Danny started

16:35

talking about it on tape in the summer. Of

16:37

twenty twenty one and summer of

16:39

twenty twenty one and it feels like

16:41

that's what we are in for and now

16:43

all of a sudden we're seeing some fragility in

16:46

our financial system because

16:48

of all of that sort of, like,

16:50

you know, like all the crosscurrents as it relates

16:52

to why rates have been moving the

16:54

way they have and what the Fed has been doing with

16:56

their balance sheet and the like. So I don't know. It

16:58

it you know, Liz and that's one of the things that, you

17:01

know, I was joking about. Where you were in

17:03

o eight, but this is really confusing.

17:05

And I guess the point is going back to the stock

17:07

market for a second, I mean, I'm looking at the S

17:09

and P that's up three point five percent in the year.

17:11

And then NASDAQ, the NASDAQ one

17:13

hundred is up nearly eighteen percent

17:15

on the year. I mean, like, think about that. Right?

17:18

And so you know, broke out,

17:20

you know, above that that downtrend it held

17:22

its two hundred day moving average and that little uptrend

17:24

it's been in. Something's something's

17:26

really wrong here. I mean, like, to me, like, something's

17:29

either wrong, either I couldn't be more wrong

17:31

in the history of my career about what's going

17:33

on in tech here. Or this thing

17:35

is is about ready to come back crashing

17:37

down to earth because up eighteen percent of the year doesn't

17:39

make any

17:40

sense. Well, if you tie the two things that

17:42

you just talked about together. So if the ten year

17:44

yield is rising, first of all, it could be

17:46

because we got a summary of economic projections

17:48

yesterday and the Fed projected that

17:50

inflation would be higher by the end of this year than

17:52

they originally thought, which I don't think is a surprise

17:55

to anyone on this show. Right? So

17:58

let's say the ten year continues to rise because

18:00

inflation proves itself to be a problem.

18:03

Okay. That also means that cost

18:05

of capital remains higher

18:07

for longer, which we both

18:09

we all know, pressures tech. These

18:12

tech companies have already made a bunch of

18:14

cuts Right? They've cut employees. They've cut costs.

18:16

They've gotten rid of whatever the excess

18:18

frothy stuff was on the outside.

18:21

So think about them coming back out of this. And

18:23

this is what I would challenge the investors

18:25

who are driving the NASDAQ up at this

18:28

point. I would challenge your thought process

18:30

with this. If the cost of capital

18:32

remains permanently higher --

18:34

Mhmm. -- or at least higher for long period of

18:36

time. That means that the discount rate remains

18:39

higher. Tech companies can't finance

18:41

their growth with that high of a cost of capital

18:43

at the same rate that they used to. Okay?

18:45

So already the valuation itself is expensive.

18:48

Secondly, they've they've cut resources.

18:51

Right? They've cut resources across the company,

18:53

not just sales and marketing and the

18:55

regular stuff. They've cut a lot of things.

18:58

So they come out of maybe a

19:00

little downturn, and it's

19:02

harder to get money to finance

19:04

their growth. And they don't have as many

19:06

people to actually create the growth. They've

19:09

lost resources. So the

19:11

upside here, I don't think there is a cogent

19:13

upside story in this. Now it's

19:15

possible that if we have a downturn, that

19:17

tech doesn't get hit as hard as

19:20

some of the cyclicals because they've already seen their

19:22

pretty big bear market in twenty twenty

19:23

two. But I don't think they continue to go up

19:26

from here. Howard Bauchner: We got a couple of questions

19:28

I wanna hit before we get to Liz's notes.

19:30

PKLarkin, guide

19:33

Dan, think FRC may fail twelve

19:35

dollars now is unreal. We address that. I,

19:37

you know, I don't wanna pick on that, but as

19:39

I said last night on the show, fast

19:41

money. There's gonna be a buy there's gonna be a take

19:43

under at some point in one of these banks. And

19:46

if it's First Republic, I mean, so be it.

19:48

But something out there is happening Jim

19:50

Aspire, you still bullish on GDX. Absolutely.

19:52

Gold continues to perform the underperformance

19:55

in the gold miners, given the prices, like,

19:57

in a thirty five percent historic discount.

20:00

I think the gold miners are saying we don't believe

20:02

the move. It's just a matter of time before they do.

20:05

And let's go to your note. People are asking about

20:07

HYG, this plays into it, but I don't

20:09

know if we can pull up a real time KYG. I

20:11

will tell you over the course of the last fifteen

20:13

minutes or so, there's been a pretty precipitous

20:16

drop in HYG. It's gone from about seventy

20:18

four thirty below seventy four,

20:21

which doesn't sound like a big deal. And this

20:23

trust me folks when I tell you, it actually is

20:25

a pretty significant move. So something's going

20:27

on there. Maybe it's on the back of the bank move,

20:29

but people are talking about it. So something

20:32

to keep in mind, Let's roll out

20:34

EY's note. When I was a kid, by the

20:36

way, there was this cat named Philippe

20:38

Petit. If you don't know

20:40

who he is Google him. Go to your Google

20:43

machine. That dude, in the nineteen

20:45

seventies, he I don't know how he did

20:47

it, but he must have gone up to the World Trade Center

20:49

with a big backpack and shit. He shot

20:51

a line across one trade center to the

20:53

other, and he walked across the

20:56

world trade centers on a tight

20:57

rope. And that dude like, sitting down and

20:59

doing shit. Gotcha. It was great. Yeah.

21:01

You

21:01

gotta see there's a documentary that came

21:03

out maybe ten or fifteen years ago.

21:05

It was called Man on

21:07

Man on Wire. It's like an REM

21:09

song. No. It is so good. It

21:11

is basically the story of that.

21:13

So it's a documentary. And then there was also that

21:16

that something Jordan Lovett. You know, that guy,

21:18

Liz, the the actor. He

21:20

also played him in in a movie, but the

21:22

man on wire is is a great

21:24

documentary. So definitely Sorry

21:27

to kill you. No. I mean, I'll go to

21:29

my blockbuster this week and it's supposed to rain

21:31

on Saturday, and I got nothing else to do.

21:33

But high wire act. I mean, that

21:35

dude was a high wire. The will end us by

21:37

the way were as well. And I will mention,

21:39

those dudes didn't use a

21:41

net. So if you think you got

21:43

a net now, think again, back to you, Liz.

21:45

Okay. I I'm not really sure where to start

21:48

after all that. The cats are are freaky

21:51

acrobatics. So I'm not surprised that a

21:53

cat pulled that off. But anyway,

21:57

yesterday was perhaps

21:59

the biggest Fed meeting we'd all been waiting

22:01

for. And the High Wire Act

22:03

was going into it, my

22:05

feelings were I don't know how

22:07

he actually succeeds today.

22:10

I don't know what statement the market

22:12

would even enjoy out of his mouth.

22:14

And I expected that it would be bad no

22:17

matter what happened. And I

22:19

will say this. I was on halftime report

22:21

yesterday. We do final trades on that show just

22:23

like I know you guys do on fast money. My

22:25

final trade was to not trade

22:28

because it's so different. It's

22:30

so difficult between two and two thirty first

22:32

of all. But then even from two thirty to four

22:34

o'clock, everything changes. And

22:37

that is exactly what happened yesterday.

22:39

And throughout that period,

22:41

the market was kind of benign to it right

22:43

away. And then as guy pointed out. We had a little rally.

22:45

Obviously, ended down pretty sharply

22:47

on the day. Here are the things

22:49

that stood out to me in the statement yesterday.

22:53

The statement around the fact

22:55

that recent events are going to cause

22:57

credit tightening in households and businesses.

23:00

They're gonna monitor that. And then the one

23:02

sentence where Jerome Powell said

23:05

that if price stability isn't there,

23:07

the economy doesn't work for anyone. That

23:09

is exactly what I have

23:11

been saying for such a long time that

23:13

they had to keep fighting inflation

23:16

because if we didn't, we're going into

23:18

recession anyway. I've been asked many times

23:20

in media what's worse. Rate hikes are

23:22

inflation. Hands down, inflation

23:24

is worse. So although

23:27

I think they probably could have gotten away with a

23:29

pause yesterday, twenty five basis points

23:31

is consistent with what they've been telling

23:33

us the entire time that they're gonna continue fighting

23:35

this. I actually think that there

23:37

is a pretty good chance that's it. I

23:40

don't know that we're going to see another hike.

23:42

I also think that the Fed is wrong about

23:44

not being not showing any

23:46

cuts before the end of the year. So

23:49

I don't know that they'll have to cut three times like the

23:51

market might expect, but I I would expect

23:53

at least one cut before the end of the year and not for

23:55

good reasons, either because something else broke

23:57

or because the economic data actually started

23:59

to turn notably

24:01

down. Yeah. Well, it's funny. You know, so

24:03

as we're looking at the market here today and,

24:05

you know, on my main access screen, as I said,

24:07

yes, today. You know, I have hundreds of stocks.

24:09

I have them organized by sector. I have a bunch

24:12

of ETFs. think of it as little bit of a

24:14

heat map. And just as we've been sitting in

24:16

front of our screens, I mean, we talked about what just

24:18

has gone on with the bank stocks. You know,

24:20

Guy, are you looking at your oil stocks here.

24:22

What like, they're all read now across

24:24

the board, you know, OAH is down one percent,

24:26

actually is now down half a percent,

24:29

you know, crude oil at seventy bucks can't

24:31

really seem to get out of its own way. We've drawn

24:33

some lines on that crude, that resistance level

24:36

at seventy, and that might be speaking

24:38

a little bit to what Liz is talking about

24:40

as it relates to growth. And I think

24:43

you guys both made this point that Fed

24:45

Chair Powell made, and that was the thing that I

24:47

thought was bearish for equities,

24:49

was that the contraction in

24:51

lending in the banking sector, right, and all

24:53

this sort of, will be a drag on

24:55

the economy. Right. So and and I get

24:58

it. Listen. I get it. If you say, okay.

25:00

That's fine. Then in Liz, you just said

25:02

there's a great point that lot of these tech companies have been

25:04

cutting jobs. They've been cutting costs. Fairly

25:06

aggressively. So maybe that's why the Nasdaq

25:08

is this huge beneficiary. But

25:11

your point about your final trade of not

25:13

trading it doesn't mean you have

25:15

to buy stocks here either as an investment.

25:17

You know what I mean? Especially with where they

25:19

are. And I'm not you know, I trade. Right? But

25:21

I also look to kinda dollar cost

25:23

average things, you know what I mean, on a

25:25

long term basis, but not when the

25:27

Nasdaq is up eighteen percent in the

25:29

face of what I think is gonna be a recession

25:31

in the back half of the year. So, God, I'm just curious

25:33

what you think of that as you're looking at I'm

25:35

looking at parts of the market weaken

25:38

on the tail or the back end of

25:40

what's going on with the bank stocks. And let me tell

25:42

you something people watch out because,

25:44

you know, Apple was up more than two percent. So,

25:46

yep, one and a quarter percent. Tesla was up

25:48

four percent. It's only up one percent right now.

25:50

If you lose some of those names, and

25:53

here's the one. This is

25:55

the big Kahuna here, people. And Guy, I know

25:57

this is, you know, NVIDIA. If you

25:59

lose NVIDIA after the day or

26:01

the week that it's had, right, with its AI

26:03

day and the upgrades at Morgan Stanley and this

26:05

are, watch out below. It's interesting.

26:08

When you were saying it that way, it made me think, obviously,

26:10

of the godfather and Robert Duval

26:12

said to Sunny, if the old man dies, you

26:14

make the deal. And that's what I'm thinking here.

26:16

Like, you know, if couple of these things come

26:18

to fruition, you gotta come to realization

26:21

that this market is built on

26:23

a little bit of sand here. You know, I get

26:25

what's again, I'm not trying to be doom and

26:27

gloom, but I see what's going on. But if you start

26:29

losing these banks one by one,

26:31

and if there's weakness in that sector. And

26:33

again, if credit conditions to Liz's earlier

26:36

point, continue to get tighter. It's

26:38

just not it's not bullish, and

26:40

you shouldn't be paying an historic

26:42

valuation for the market under

26:44

these set of circumstances. And, yeah, the Fed

26:46

might be they probably should be done quite frankly.

26:48

But the lag effect, I don't think anybody

26:51

fully comprehends. By the

26:53

way, let's go to your next slide because I'd sort

26:55

of dig it. Firm is the word. Not

26:57

greases the word, which, you know, I loved

26:59

I tell you what, as much as people loved the

27:01

Libby and Newton John, which she was great,

27:03

I thought Stock Card Channing was a badass

27:06

and Greece, but that's neither here nor

27:07

there. You would have been a great rizo,

27:10

though, if you portray

27:11

Oh, what have you been a great rizo?

27:13

In your high school production, but

27:15

anyway I would count myself as Rizzo,

27:17

actually. Yes. Absolutely. This

27:19

this just shows our generational difference though,

27:21

Guy, because I was thinking more of the lyric

27:23

bird is the word, which is in a hip

27:25

hop song -- Yeah. -- from yesterday year.

27:28

Anyway Right. Yeah. Firm is

27:30

the word. Yeah. Okay. I I mean, I I

27:32

legitimately L0L about this

27:34

when he started talking about now

27:36

it's gonna be appropriate to do some firming.

27:39

Like, what the hell does that mean? It

27:41

got so much more convoluted, and now

27:43

we've just replaced the word tightening with firming

27:46

somebody put I actually posed the question to

27:48

Twitter and somebody answered it, I think, very, very

27:50

eloquently, something along the lines

27:52

of. That means it's done cooking So now

27:54

we put it in the fridge and the custard

27:57

firms up. And I think maybe that's it.

27:59

So that's why I really do think that it's possible

28:01

this was the last one. Now the

28:03

chart that I'm showing here, credit spreads, as

28:05

we've alluded to a couple times, yes, they

28:07

came back down in the last couple days,

28:10

but look at that slow grind higher

28:12

and then obviously you see the big pop

28:14

higher that was on some of the bank news. This

28:16

is high yield spreads and investment grade credit

28:18

spreads. For the entire part of the

28:21

year before this, nothing had really happened. In

28:23

fact, they had gotten tighter, and it

28:25

didn't make any sense. And that's what a lot of the bulls

28:27

would point to that there's no weakness in the credit fit

28:29

market. Everything's still fine. Well,

28:31

if we're going to look at the equity market as

28:33

a signal for what's to come, you have to look at

28:35

the credit market for a signal of what's to come

28:37

as well. And somebody is selling

28:39

credit. So do not ignore this.

28:42

I think this is something that's really important.

28:44

It could end up being a warning sign

28:46

and a part of the it that hasn't really shown

28:48

warning yet. This might be the beginning of

28:50

it showing a real warning. Now I

28:52

acknowledge we are nowhere near the

28:54

spreads that we normally would be in stressful environments.

28:56

There's still a lot more to go, but that's also

28:59

a warning to say, it's not as if

29:01

these are suddenly attractively

29:02

priced. This could be just the beginning of

29:04

a really steep rise in spreads. Matter

29:08

of fact, I mean, Guy, you bring up the HyG.

29:10

You just did. That's the high yield ETF

29:12

that tracks the sector. It really has

29:15

looks like it's been tracking the S and P five

29:17

hundred. If you were to kinda overload those

29:19

sorts of things, we've been asking this question

29:21

because for the last couple of weeks as we've had

29:23

a lot of mar people join us on our

29:25

market calls and on the table, Liz, you would

29:27

obviously be one of those people we've

29:29

talked about. The fact, yes, what's different this

29:31

time when any comparison

29:34

you wanna make about the last banking crisis

29:36

that we're at, this was a interest rate

29:38

situation. This was a duration mismatch

29:40

but you guys have been bringing this up. On the

29:42

other side of that, what happens here? We've

29:44

been talking about credit and some very smart

29:47

credit folks. And, you know, I think it was

29:49

Schlock, who's the strategist over

29:51

at Apollo. Those guys are pretty good on

29:53

credit. And he was saying, I think earlier

29:56

this week, that he thinks that defaults

29:58

are gonna start ticking up. There's been a lot of focus

30:00

on commercial real estate. So where

30:02

where are some of these regional banks

30:04

very exposed to commercial real estate

30:06

Right? And so I don't know, guys.

30:09

Just, you know, drop in here is is kinda

30:11

what I'm saying because I think the illusion of

30:13

what's going on in the Nasdaq is kind of

30:15

like a, you know, look here, don't look there,

30:17

at least for some of the people that have

30:20

this kind of universal bullish outlook. We

30:22

are not them. And

30:24

let's go to our main man.

30:26

You know

30:27

them. Can I say it? Yep. Yep. Go ahead.

30:29

Just do it. There's no time it is folks.

30:31

I want everybody collectively to say it.

30:33

I don't care if you might be in your office. I don't

30:35

give a shit on 3123.

30:39

Butters. There

30:41

it is. John

30:42

Butters, he is the senior earnings

30:44

insight analyst over there at

30:47

FactSet. He gives us a preview

30:49

of his blog that drops every Friday morning.

30:51

Also, check out FactSet on

30:54

the Twitter because because they tweet out

30:56

a lot of great information about S

30:58

and P valuation, trailing forward, and they're

31:00

updating a whole host of of the

31:02

datasets that they put out. But John's

31:04

Block's gonna drop tomorrow morning. We have

31:07

a little bit of a preview here. Today,

31:09

he is focused on the bottom up

31:11

target for the S and P five hundred. Right

31:13

now, forty six thirty one based on this

31:16

target, industry analysts believe the index

31:18

will see a sixteen percent price increase

31:20

guy in twelve months versus yesterday's close

31:22

of four thousand, energy up twenty

31:24

six percent, financials up twenty three percent

31:26

that seems optimistic. Real estate up twenty

31:28

one percent are expected to see the largest

31:31

price increases the information technology sector

31:33

only up nine percent, which is kinda

31:35

interesting given the performance here. And so

31:38

just thoughts on some of that here

31:40

because, again, it makes some sense

31:42

to me, but I think we are all in the camp

31:45

that current consensus of S and P

31:47

earnings for this year up high single

31:49

digits, maybe some up more than ten percent

31:52

is a little too optimistic. And if that doesn't

31:54

come in, then these targets are not particularly

31:56

attainable in my opinion. Yeah. Look, forty six

31:58

hundred, this is just through my lens,

32:01

is really wishful thinking.

32:03

And if it's gonna be contingent on

32:05

financials up, you know, twenty

32:07

three percent or even half of

32:09

that. I mean, I don't know where that's coming

32:11

from because it feels as though and

32:14

this is not casting a spurs, and Sean's doing the

32:16

work. I mean, that's what market has sharpened, but

32:18

it feels as though that might be negative number

32:20

by the time we get through with all this stuff. Energy

32:23

obviously is under pressure. You've highlighted

32:25

that number of times in real

32:27

estate I mean, I will tell you home builders,

32:30

I mean, we've talked about this on market call and

32:32

fast money. I think people would be shocked to

32:34

see how well the home builder stocks have been doing.

32:36

And I've attributed that to supply demand.

32:39

But I think real estate in the

32:41

collective is a much different

32:42

story. So, listen, forty

32:44

six thirty one as you say Dan, have

32:46

added people. Well, real quickly, Liz, before you get

32:49

in here, we have an XHB chart that's ETF

32:51

attracts, the homebuilders, there's some other stuff other

32:53

than just kind of pure play homebuilders. I mean,

32:55

pretty constructive chart there if you think

32:57

about it. And and I think I think what you're talking

32:59

about as far as automotive real estate is the IYR,

33:02

and and that is a bit of a disaster. I think

33:04

earlier in the week, we hit some of those REITs.

33:06

Right? Those commercial office REITs and stuff,

33:08

and that's So there's two different things going

33:10

on. Right? Some of the dynamics as it relates to

33:13

residential real estate

33:15

versus that in commercial. Liz,

33:17

thoughts on forty six hundred. If you go back

33:20

to the start of, you know, twenty

33:22

twenty two, the S and P was sticking forty

33:24

eight hundred. Right? Isn't that crazy to think in the

33:26

first week of twenty twenty two. That's

33:28

where it is. We got down to, what, thirty

33:30

five hundred or so at

33:32

the lows back in you

33:35

know, in October here, but four

33:37

thousand six hundred seems optimistic.

33:38

Howard Bauchner: four thousand six hundred seems very

33:41

optimistic. I'm sure we'll see it again in our lifetimes.

33:43

But I don't think it's happening anytime

33:46

soon or if it does, will fall. The the thing that

33:48

makes me nervous is when the market goes up day after

33:50

day, once we string about two or three of those

33:52

days together, just feels like we're right to

33:54

give it all back. So look, on

33:56

the earnings front, I want to

33:59

make comment there just so everybody

34:01

knows, there's there's a difference between forward earnings

34:03

and trailing earnings. And when you look at

34:05

what happens in a traditional recessionary

34:08

environment, you usually have a decline

34:10

in earnings of twenty to thirty percent.

34:13

And so that's twenty to thirty percent from

34:15

the peak in trailing earnings. The peak and trailing

34:17

earnings really only happened a couple of

34:19

quarters ago. So if that's

34:22

the case, we've had only our first quarter

34:24

of negative earnings growth The second quarter

34:26

of negative earnings growth may be just starting

34:29

to be heard about in April. And

34:31

that would confirm an earnings recession. I

34:34

would assume or venture

34:36

a guest that we'll see some analysts bring

34:38

their down if we have confirmed an earnings

34:40

recession and economic data starts

34:42

to soften. So What could

34:44

happen here? What also might happen with the homebuilders?

34:47

Yes. We've seen some dips. Right? We saw

34:49

pretty big dips in twenty twenty two, we saw earnings

34:52

start getting revised down. The peak in

34:54

earnings estimates was really in, I think, it was

34:56

early summer of twenty twenty two, and

34:58

then they've come down from there. Homebuilders,

35:01

yes, they saw their pain and now they're back up.

35:03

But if we go into a downturn,

35:07

all of that stuff makes

35:09

some kind of low, if not new lows.

35:11

And homebuilders are gonna trade with the cyclicals,

35:14

not with the kind of lagging home

35:17

prices, lagging real estate defaults,

35:19

all this all the other stuff. So real estate

35:21

is a tricky piece because it trades in in

35:23

two different pieces. You're gonna look at the cyclical

35:26

leading stuff, which is homebuilders, and then

35:28

you're gonna look at the things that happen

35:30

when actual real estate loans

35:31

default. So it's it happens in in two different

35:34

ways. Course, day after day, Dan,

35:36

is a song by the great band, bad finger.

35:38

I won't demonstrate what the

35:40

bad finger is, but I'm sure

35:43

you folks are smart enough figure that out.

35:45

There was a great album cover, by the way,

35:47

I digress. Yesterday, Dan, we

35:49

pulled up a square chart as fate

35:51

may have

35:52

it. And this was somewhat fortuitous.

35:55

I don't

35:55

know how to spell that word. Well, so we

35:57

should this is something we're trying to do a little

35:59

bit more on on market call. We get

36:01

a lot of requests for kinda how we go about doing

36:04

things. What are some of the inputs we use? And, you know,

36:06

that was one where to me,

36:08

I've fundamentally been kind

36:10

of not AAAA fan of this company,

36:12

the valuation, especially relative to maybe

36:14

some other fintechs that are publicly traded.

36:16

But just kinda looking at the charts and we've just highlighted

36:19

the technical setup. We kinda hit on some of

36:21

those points. You and I were both kind of in agreement.

36:23

And one of the things I just say and and one of

36:25

the reasons why Carter has been such a a great

36:27

partner of ours over, you know, since

36:30

we launched market call and this is meant to

36:32

be obviously a very visual sort of medium here.

36:34

It is streaming video, you

36:36

know, oftentimes, and he says it all

36:38

the time that the technicals lead some

36:40

fundamental news, you know, whether you believe

36:43

that or not. And and, you know,

36:45

I know a lot of really smart investors,

36:47

traders who don't look at charts, but

36:49

most of the ones that came up the way Guy

36:51

and I did really do. And what does it do?

36:54

And it kinda helps inform some levels.

36:56

We talk about levels all the time. It shows

36:58

relative strength. You know, sometimes

37:00

in a raging bull market. Like, we've been

37:02

in as far as the Nasdaq, which we mentioned now

37:05

five times this show. Why is this stock

37:07

like this come in so hard over the last

37:09

month. Right? Is there something in the technicals?

37:11

Is there something about the sentiment? Is there something

37:13

about the level. So that that to me,

37:15

we obviously had no knowledge one way or another

37:17

that was coming

37:18

out, but oftentimes the technicals will

37:20

precede some fundamental

37:24

It was an interesting the timing

37:26

was interesting. So, I mean, that's

37:28

what we try to do here. Right. Wrong and

37:30

different. We come to play It's like baseball,

37:32

man. You get your ass handed to you on a Tuesday.

37:35

You're coming back on Wednesday. I mean, that's just

37:37

the nature of the beast. You know what I'm saying, Dan?

37:40

You know what I'm saying? E y?

37:42

Sure. Somebody somebody called out my Wisconsin

37:44

accent on the word legging. Yeah. It's their

37:46

legging. Oh, I forget that. I've heard that.

37:49

That's a that's a routine that's

37:51

a routine callout that we get about

37:53

you. But if you

37:53

can't do anything about it, the a's and the o's,

37:55

they're just gonna be that way. And by the way, I do not

37:57

call soda pop. I call it

37:59

soda. Minnesota calls it pop.

38:01

Yeah. Wisconsin calls it soda. Wisconsin.

38:05

Yeah. Noted. My cat I mean,

38:07

it's tough out from our I really thought they'd quit

38:09

themselves better. As it turns out,

38:11

looks like Krayton is gonna carry the big

38:13

East flag for a while, but nobody really

38:15

care. Oh, you can't still life too, Dan. Nathan.

38:17

I know your orange from Syracuse

38:20

did not make the tournament nor did my hoys of

38:22

Georgetown for that matter, but nobody

38:24

really cares about this. By the way, They

38:26

say you can judge a person by the friends he

38:28

or she keeps. We met one of EY's

38:31

friends at a range game, total badass

38:33

that brought. I mean, really, right or wrong.

38:35

Oh, rather. Little thing, but, you know, twice

38:37

the exact Yeah. Small enough. I don't know. I mean,

38:40

I don't understand where that came from. But that's it,

38:42

Dan. And EYI

38:44

wanna thank FactSet, financial

38:46

data and analytics powered by tomorrow.

38:49

They're also our data provider. Wanna thank

38:51

so fight. Dan gets your money right all in

38:53

one app. Butter's always a stud.

38:55

He brings it. His work speaks for

38:57

itself. E y, always bringing

39:00

it on a Thursday. The audience is always

39:02

here. By the way, smash

39:04

the like button and subscribe on

39:06

the YouTube YouTube channel. If you're not

39:08

YouTubeing. I mean, I YouTube that shit

39:10

all day long, man. I'd love the YouTube. I

39:12

think it's gonna catch

39:13

on. Wrong with you. That's you

39:15

so much. This is so much. Alright.

39:17

Listen, people. Thanks for being here with us.

39:19

Liz Young, thanks for the heavy

39:21

lifting you do on a

39:22

Thursday. We got need to pick us up. You

39:24

put us on your shoulders and you

39:26

just do it all. So thanks so much. Anytime.

39:29

I might see it.