Lack of trust in the bond market is supporting the stock market, says Morgan Stanley's Lacamp

Jim, the camp able to join us now from Morgan Stanley. Jim, it's great to see you again. Long time no speak what what's your take on not so much this decision itself, but the extent to which the election is taking up a lot of your headspace in terms of how bullish or bearish you are in the market? So neither one of these guys are geniuses when it comes to economics, right? I mean, when you look at the current administration, they're spending money like no administration has spent before, and that's saying a lot because they all do. Then you have an administration that that could be coming in that wants to raise tariffs and both want to cure inflation. And it makes me wonder who taught these guys economics. I mean, the, the two things you wouldn't want to do if you're going to try to bring inflation down is have runaway government spending and, and, and employee deploy tariffs around the world, which implies that you're going to get the countermeasures, which would be tariffs over here. And that's prices higher. So I, I, I don't think the treasury market particularly likes either outcome. And actually, oddly enough, Wilfred, and it is great to see you, by the way, oddly enough, that's one of the things I think that's helping the stock market is that people don't trust the bond market. They're looking at a treasury rate of 5%, inflation rate of 3.3%. You have taxes on top of that. We have all these Treasuries that we have to issue because our deficits are running so high. And then you have the Japanese bank going bankrupt selling 63 billion of U.S. Treasuries and a lot of foreign governments and, and central banks around the world offloading Treasuries. It makes the, the outlook for bonds just a little uncertain. And I think that's one of the things that has helped the stock market oddly enough. But, but, but, but I guess that that might be a kind of positive asset allocation factor in, in the short term. But, but some of the themes you're talking about there in the more medium to long term. And maybe therefore they're not factors for the second-half of this year for the stock market, But they're pretty worrying if, if we're talking about the US Treasury market falling out of bed and yields rising pretty sharply. That's bearish for, for all asset classes. It is and it, it's a, it's a big concern, Wilfred. When you look at the last trillion and a half dollars that we spent in government spending and, and by the way, government spending is one of the components of GDP. So we have AGDP print that was 1.4% in the first quarter. That includes a lot of government spending that's not very good. And that one and a half trillion dollars that we spent gave us a trillion dollars in growth. So it had a negative multiplier. And when you move that forward, that's not that's not a good outlook for the economy and it's not a good outlook for the dollar. It's not a good outlook for stocks in the long run. In the short run, we might be OK. The trends are OK. We haven't broken any trends. Historically. When you have a good first half, you have an even better second-half. First two weeks of July historically are are pretty strong. So we may be OK in the very short run, but in the long run, I think there's a lot of concerns and this is no way to run And it, it's kind of like running a diabetic economy. We, we, we're relying more and more on these sugar injections and it's not, not a good path in the long run at all. But in the short run, I, I still think the market looks OK as long as you stay focused on companies that are growing. Problem is what's good right now isn't cheap. In other words, those growth companies are not cheap. And what's cheap right now, whether it's value or small cap or international, it's not good, It's not participating, You don't have the earnings growth. So you have to be very narrow in your thinking.