Weak manufacturing data paves the way for September rate cut, says Nationwide's Kathy Bostjancic

So Kathy, pick up on that. That paves the way for a September cut. Yeah, we, we see signs. And the ISM report was just further evidence of that, of economic growth moderating and inflation as well. And that overall slowing in growth, that's that's welcomed to a degree, like as long as it's just taking the froth out of activity. And if we're correct that inflation continues to trend lower. And I think particularly on the service side of inflation, it's been sticky. We know the good side is, has been overall economic activity softer and, and inflation is actually in deflationary territory. But if we could see some of the heat come out of the service side on inflation, I think it leaves the door open for the Fed to start cutting rates in September and you know, get 50 basis points of rate cuts in by the end of the year. Jim, do you agree with that? Yeah. Listen, I mean, I think, you know, Kathy's, you know, nailing it, you know, right on. I mean, look, I mean lower inflation, if we do get it, it it opens the door for Fed rate cuts. And when I think about the markets, it's a question of is, is good news good news or is bad news bad news? And right now it seems like bad news is good news, meaning that if we are having a slowing in the economy and if that does lead to lower inflation, well, that's good because it opens the door for Fed rate cuts. But at some point, this rise, potential rise in unemployment or potential slowing of the economy that weakens employment, you know, that effectively could, could bite into consumption. And right now, companies have been companies have had the wind at their back that they've been able to raise prices to maintain margins. But if the unemployment rate starts to rise and if the economy starts to slow fast enough, then companies are not going to be able to do that. And that could actually start to put some pressure downward pressure on the on the broader parts of the markets. And we're already seeing that mean the broader segments of the markets are, you know, are, you know, are slightly higher, but not anything great. We know it's 10 stocks that are driving, you know, the majority in the market. You know, so for them it might be OK, but but I get a little bit concerned that bad news may become bad news at some point in the second-half of the year. Are you the strategist that just raised your price target to 5700? So I didn't think you were a price target kind of guy. No, I'm not a price target kind of guy, you know, you know, no, you know, no targets for me. You know what I'm thinking is that, you know when I looked at 2025 earnings, So I just like let's take 2024 out of the equation. If we're looking at earnings around 200 and $75277 which Rep which represents a really good growth rate in earnings growth and you multiply that times about a 19.7 or 20 PE, you're going to get levels in the equity markets about where they are today. So I think we are this is about where we're supposed to be in a relatively optimistic scenario. If we start to get a set back unemployment rate rises, you get a pension, consumption margins start to fall. There is some downside scope to this. I don't think it's, you know, I'm still optimistic, I'm still over, you know, I'm still bullish, you know, on on the market. But you know, caution is is warranted. Steve, do you think they're going to start paving the way for a September cut here? I think the data has been in line with it. I mean, I'm trying to think of, you know, when you hear the the train schedule, they tell you that the trains are running on or close to schedule. I think that the decline in inflation is running on or close, even a little bit ahead of schedule. Remember, the feds got 28. That's the median forecast. So not everybody's on board with that, but as 28 as the median forecast for the committee for the end of the year, we're running at 26. And I just want to pick up on what Jim was talking about. I've not done yet my deep dive on the jobs report for Friday. I'm going to wait for ADP. I'll probably read Kathy's piece as well, but one thing that's came out over the weekend which I read is from UKG, which is a a private sector software human resource company. They say we see the labor market cool as the summer heated up with workforce activity completely flat in June. No particular points of weakness, but also no particular points of strength.