It’s all about inflation. It looks like it is all about inflation and I would also say earnings. So let’s just look at the price action that we’ve seen to start the second quarter. You have geopolitics. You also have earning season kicking off. You have some also some some seasonal elements to what we see in April this week. You tend to see a lot of tax payments selling both within the bond market, in the municipal bond market as well as within the equity market. So when you combine all of this and put into perspective that just yesterday we were at all time highs in the NASDAQ and we’re coming off two quarters of double digit gains. I think we may be putting too much weight on some of the volatility that we’re seeing that are pretty garden variety pull backs within the market. We spent a lot of time worrying with the labor market and focusing on those jobs numbers we get every month. Are they really a factor at this point. So I think if you’re going to say what matters more is that the labor market or is inflation in terms of the Feds dual mandate and what they’re going to pay attention to. The data that we have out of the labor market is very robust. The job creation that we’ve seen if we look at it year over year, you could start to see some cracks in that. So for example, you can look at JOLTS and you can see the millions of jobs that we’ve actually come down in terms of openings. You could also look at the quits rate that’s stabilized a bit. So we’ve seen some softening, but I think the large picture a pretty robust labor market. That being said, when you look at inflation, that’s where the feds attention is and I think what we’re seeing right now and what Larry Summers just mentioned is the fact that the Fed needs to see a trajectory of disinflation. And So what we have for this first quarter, we don’t have that data. We have more of a stalling and a pause. And so to credibly be able to cut and know that inflation is on a path to actually what we believe is going to be 2 1/2% by this year’s end, you need to see some of those trends actually take place. So Kristen, you said it’s not just the inflation data, it’s also earnings. What are we looking for for earnings? It is. So within earnings, I think it is something about actually beating and then raising guidance and and expectations because the expectations right now I think are relatively reasonable. I think what are are we going to see, we raised our expectations for the full year. So we came into this year relatively conservative thinking that we would see slower growth data. I think that when you look across the US equity market, it’s been really resilient. So you have about 5 sectors out of the 11 that are anticipated to deliver earnings growth. You also have some sectors that have been surprises. So when we look at the price of oil and what’s that, what that is going to do for energy, even if we look at utilities, the anticipated earnings growth is in the 20s. So from a percentage standpoint, which is oddly actually a beneficiary of AI. So expect more AI language, but in sectors that you wouldn’t expect. What about Main Street versus Wall Street because Russell 2000 has not had an easy time of it, it is not. And if you look at like small business confidence measures, they’re also not where they where we would want them to be. So I think this is another thing when people are talking about whether or not the Fed’s going to cut and some of the the measures that we’re looking at. I think you have to say why do we see such strong consumer spending, why do we see the resiliency and and really it is a delineation between, if you’re looking within the market, the corporations that have their balance sheets in order that took advantage of historically low interest rates. Even at the beginning of this year, we saw a huge amount of investment grade issuance come to market. It’s actually the highest quarter since what we saw back in 2020. So there are a lot of companies that have their balance sheet in in order that’s very different than the Russell 2000. The same is true within the consumer spending dynamic. If you are a homeowner and you locked in those low mortgage rates, that’s a very different reality as to how you feel inflation versus the rest of the population at the very end here. Any investment advice, How do you invest in this in climate? So a couple of things. I would say stay diversified. So when you look at the price action today, there is value to having both fixed income within your portfolio as well as equities. The broadening out to make sure that again you’re not going to unprofitable parts of the market are highly levered, but you’re finding opportunities to take advantage of some of these themes, but at a reasonable valuation. The other thing that I will say is if you’re worried about geopolitics, there are hedging opportunities that exist. So don’t trade your portfolio based on geopolitics or elections, but take advantage of some of those hedges to stay invested. Yeah, unfortunately, I mean, need some of those hedges on geopolitics, I’m afraid.
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