Earnings Growth to Trump Fed Policy, Curtin Says

How worried are you about the tail risk, though? 'cause the markets increasingly feel like they're ignoring. Don't see those tail risks as being germane anymore. The the the risk that actually inflation stays sticky. And the Fed and other central banks maybe can't do as much in terms of cutting rates as maybe we had anticipated. We're pricing two now. Does that go to zero? And what about the risk on the other side, which is that actually you got some warning signals out there flashing a little bit, maybe not red, but certainly amber. Walmart yesterday talking about the fact that even kind of high middle income shoppers are trading down. You got deer yesterday talking about the fact that they're not seeing the demand that they once had as agricultural prices come down a little bit as well affecting the industrials. There's some warning signals on both ends, sure, but you got to navigate through that. And let's begin with inflation. First of all, I think that was a collective sigh of relief. What happened on Wednesday? In other words, we saw signs of a little bit of disinflation. But it's been our view that the Fed could remain cautious here. May not raise, I'm sorry, may not cut rates at all this year. But so far, economic growth and earnings growth we think will trump what's going on in terms of the Fed policy. Remember, liquidity is pretty generous. Look at corporate issuance, liquid corporate spreads, we've reduced QT, we've got bond yields coming down. These are all kind of positive signals as well. You talked about the consumer in the sense of there is some slow down, some evidence in in some of the retail side. But think about services, in the first quarter consumer spending on services rose over 4% that's like the highest in two decades. So what are we doing? We're switching from goods maybe to services. I do think some of the lower end consumers in the United States also experiencing maybe a bit of a pullback. Inflation does impact them, maybe a bit of AK style economy. But it looks to us like growth is still pretty solid in the K style economy. And to be absolutely clear, you see a Fed that could stay on hold this year. But nonetheless the stock story continues to be constructive because all of those factors you pointed to. What about the liquidity impulse then the, the cash that's on the sidelines and what is the next catalyst in the short term? Is it NVIDIA next week? Well, I think NVIDIA is going to be important next week as we're going to get more information on that Blackwell, which is about 21 times the performance of the A-100. So and look this week we continue to see lots of interesting news on Gen. AI, right, Project Astra, have you tried ChatGPT 40, right. So some of the power of these applications is still to come and I think that will encourage investors on NVIDIA TSMCS already things were pretty good. I think that's a nice Beltway. So that AI catalyst continues to run. I I think it does because I think people are continuing to see the advancements. We haven't stood still in Gen. AI. We have multimodal, you know, tax video programming, language translation tutors, let me find my glasses somewhere in the room. You know, I think lots of things are happening there. So people can extrapolate about the productivity improvements ahead and that helps, right?