00:00I think that the market had some expectations of him, especially after the earlier speeches that
00:04were, that didn't, let's just say they didn't hit the way that I think that they were intended to.
00:08And I think that he did a good job of redefining, here's my job, here's what I want to do,
00:13here's what I think is wrong, here's the parameters that I'm looking at. But I don't
00:18think that you're going to get the same kind of consistent talk and handholding that we've had
00:22since arguably the financial crisis. Yeah, he made a big point of saying,
00:26you don't call this forward guidance, but he did give a trail map, so to speak, which sounded a
00:32lot like forward guidance. And it feels like the markets all reacted as if it were forward guidance.
00:37Do you think he's like weaning us off of it? You know, it's one of those things where markets
00:41are always going to look for information. They're always trying to parse out what's going to happen,
00:44right? Remember, there was a briefcase indicator, there was a sandwich indicator, there were a lot
00:48of things. He wore a great tie. Back in the day, there were a lot of other things that people
00:52relied
00:52on besides speeches. And I think that, you know, there is there was some concern post the first
00:58two that there was not an attack on inflation. And I think that he is trying very hard to make
01:03that case. Adding a couple more variables makes it possible, I think, to say, you know, let's see
01:09what happens with the data that's coming right now. August has been traditionally kind of up and down.
01:14And in fact, I think the last time there was a big Fed panic move was because of data that
01:18came in
01:18in August. And then it sort of later wasn't so bad as we got through September and October.
01:22So we'll see what happens. I think that if you don't see a huge change in the data or if
01:27it's
01:27mildly benign, it gives them room to wait a little bit longer. But we'll see. I don't know if they
01:31want
01:31to wait. I know that there are a couple who don't, but there's still nine that do. So let's see.
01:35Let's see how that goes. Earnings have been better than good, better than excellent, quite frankly,
01:41particularly on the second quarter here. Is that enough to support this market,
01:44do you think, here? Because it feels like, man, the multiples, the market doesn't feel that
01:49expensive. Well, it certainly has been, right? So absent the earnings growth and absent the fact
01:55that that's been fantastic, I think you would have much more trouble digesting all of the other
01:59things that are going on, including what's going on right now with oil prices. But I think that what
02:03came out last week and I think what came out of NVIDIA was we see a strong environment going forward
02:10and we don't see that backing down the way that people have been concerned. They're like,
02:13we're already worrying about 2027, right? Because it's September, about to be. And that's where we
02:18start to shift into what are next year's earnings. So I think that that was a good forward look. And
02:23I think that if you see things continuing and you're seeing good earnings on not just the technology
02:27front, but on other fronts as well. And you're seeing pretty strong cash flow for the technology
02:31companies. They're spending it for a lot of other companies. They're using it in different ways.
02:34So I think that that looks pretty benign at the moment. And it has to be given where valuations are,
02:40I think. You mentioned oil prices. And obviously, this morning, we were saying I just saw them
02:44today. I know. I mean, it's shocking. And they've been going up for a while. I'm wondering how you
02:51mentioned that. But how are you factoring that in and escalating tensions in as well?
02:55So because the tensions have escalated and deescalated a number of times, you've had very
03:00much of a roller coaster for oil prices. It hasn't been a straight line higher. It's been higher and then
03:05lower and then higher. I think that this is a consequence, obviously, of what happened over the
03:09weekend and the concern that we are now going to be back in a hostility situation. I don't know that
03:13this was I don't know that that's going to happen. I don't think anybody knows yet. We're not going to
03:18get we're not going to hear what the plan is. We're just going to see what happens. And the fact
03:21that
03:21there was kinetic action makes people much more concerned. And that's where you're seeing the
03:24rise in oil prices this morning. If that doesn't repeat or if we get a week where things calm down,
03:29I think you see oil prices calm down again. There was also some discussion over the weekend of how
03:33much oil got through, how much Saudi Arabian crew got through. You know, it's hard for us to see that
03:37from
03:37the outside because a lot of this is going on in the dark without transponders. And so we're working
03:43on how that goes. That took the oil price down last time. Let's see what happens going forward.
03:47Yeah, boy, just looking at I hadn't even really paid attention to this morning. But boy, WTI crude
03:51oil is up 3.8 percent, $3.17 a barrel now at $86.57 a barrel for WTI. Brent $91
04:00.18. So higher oil there.
04:03So that kind of goes back to Sarah, what do you think the underlying inflation is? And how does
04:07it impact just corporate earnings in general, do you think? So right now, the biggest problem for
04:11inflation is probably more for consumers than it is for corporations, depending on what you do and
04:16what sector you're in, right? Because if transportation costs are a large part of what
04:19your cost basis is, if you're an airline, this is a problem. If you are in other sectors,
04:26it's less of a problem. The transportation issue is going to, it has been up and down. I think
04:31it's been problematic for consumers because it's mostly food and energy that are taking the brunt
04:37of this. Now, that's probably going to continue. We've got some issues that are going on with the
04:41growing season because of weather. We've got some issues that are going on because of fertilizer.
04:45So higher commodity prices are something that is concerning. The problem is that raising rates
04:50doesn't necessarily attack that except by lowering demand. And then that hurts your employment picture.
Comments