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Fall Market Swoon, Followed By An End-Of-Year Boom? | Mark Newton @Fundstrat_Direct — Transcript

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0:00So, okay.
0:01>> My target it was lifted to 8,000 from
0:037,300. I do see that by end of year
0:07market should end the year on a positive
0:08note. I just don't think it's going to
0:10be an easy two or three months. I think
0:13we're entering a time when specifically
0:14in September we're likely going to get
0:16some volatility and we can speak about
0:19that in more detail.
0:27>> Welcome to Thoughtful Money. I'm
0:28Thoughtful Money founder and your host
0:30Adam Taggart uh and I'm very happy to be
0:32welcoming you here for an update
0:35discussion with Fundstrat's Mark Newton.
0:39Uh Mark is the head of um
0:41is it is it head of research or head of
0:43technical analysis there Mark?
0:44>> Head of technical strategy. Yep.
0:46>> Okay. Great. Um so uh Mark um you have
0:50been a very valuable addition here to
0:52the Thoughtful Money faculty roster
0:55um
0:56and I very much appreciate you coming
0:57back on here in midsummer to give us an
0:59update. Um I was looking back at our
1:01last conversation on the channel which
1:03we had back in April. And um
1:07uh I'm I'm I'm going to mention where
1:08you got things right and where you got
1:10things a little wrong and you were much
1:11more right than you were wrong. But we
1:13were talking in late April um when the
1:15markets were on a decline.
1:18And your your default expectation um was
1:23that
1:24we're probably going to have a an like a
1:26real swoon in May
1:28uh but then the market's going to power
1:29to um
1:30all-time highs in the summer, new highs
1:32in the summer. Um the the the May swoon
1:36didn't really materialize. Um May was
1:38actually a pretty good month and and and
1:40the markets have pretty much
1:42just gone up on a 45° angle since then.
1:45So you totally got the summer boom part
1:47of it correct here. Um so anyways,
1:50congratulations on that. At the end of
1:51the day you know, making it to your
1:54planned destination is what matters and
1:56and you certainly have so far. Um I I
1:59guess what I'd like to do with you here
2:01is just sort of pick up the conversation
2:03of okay, so that was then, what do you
2:06see coming ahead from here?
2:08>> I think it's actually a very good sign
2:10that we've seen such
2:13rampant breadth
2:15improvement really since the lows were
2:18made in the final week of March of this
2:20year. Uh I guess I guess in May
2:24I had some cycles and things that
2:26suggested the technology might have
2:28started to weaken, but I actually was
2:32quite encouraging to see that
2:35sectors like financials and health care
2:37and discretionary and industrials had
2:40all started to show very good
2:42outperformance and so that really helped
2:44to lift market breadth in a way that
2:47helped to cushion the market at a time
2:49when technology did undergo a very
2:52necessary
2:54period of consolidation, you know, but
2:56and I think that that happened across
2:58many different parts of tech and during
3:00different times. Thankfully, it was not
3:02all of tech all at once or there would
3:05have been a larger sell-off, but the
3:07markets honestly went sideways from May
3:10until you know, mid-July and now we've
3:13broken back out to new all-time highs.
3:15Um where we go next, I think is
3:19it's going to prove a little bit choppy
3:20between now and the midterms. It
3:23shouldn't be a straight shot continued
3:26push higher in the next few months and
3:29the reasons for that
3:31really have to do with the fact that
3:34tech still has some work to do before it
3:36can really can regain some of the former
3:38momentum it had. We'd had a big sell-off
3:40in technology, of course, and now that's
3:42rebounded, but parts of tech are
3:44still similar to software in the early
3:46part of the year, they're going to need
3:48to consolidate and and when I say
3:50consolidate, I guess I mean stabilize
3:53and before they can really start to push
3:55back to highs and and
3:57that is in regards to semiconductor
3:59really in many memory names.
4:02And [clears throat] so that is the first
4:04thing that I don't suspect that tech
4:06is going to be probably the best sector
4:09over the next couple months.
4:11Um the second is that crude oil
4:14to me looks like we're going to
4:18continue this little bounce that we
4:20started in the month of July up higher
4:22into probably mid-September, early
4:24October,
4:26which is going to be a source of
4:27probable discomfort for the markets.
4:30So you know, that was actually a very
4:32good sign when we
4:34inked out the possibility of this MOU
4:37and crude fell sharply and markets
4:40rallied and we thought, well, there's a
4:41chance that the war is going to be over
4:44quickly and and that's obviously gotten
4:46a bit sticky and and very difficult to
4:48sort of ink the final deal. So crude
4:51going higher is one possible negative.
4:54The other is that long-term interest
4:55rates, which have been going up around
4:57the globe, have started now to push
4:59higher
5:01uh in the US and and to the tune that
5:03the
5:04you know, the Treasury honestly saw
5:07you know, the need to to step in and and
5:09exercise their own sense of uh upping
5:12their bond buying, which I do think is
5:14helpful. The question is
5:16how rapidly can they do that to really
5:18stem the the decline in Treasuries. So I
5:22think that my biggest risks over the
5:24next few months are that yields on the
5:26long end still [clears throat] are
5:28likely going to rise and also that crude
5:31oil also can probably rise. And the
5:35combination of those, despite the fact
5:37that earnings have been stellar
5:39and the economy seems to be on pretty
5:40good footing and many respects,
5:43uh likely could serve to cause a little
5:45bit of a choppy environment for the for
5:47the US stock market.
5:49So
5:50>> Okay.
5:50>> my target it was lifted to 8,000 from
5:527,300. I do see that by end of year
5:56market should end the year on a positive
5:57note. I just don't think it's going to
5:59be an easy uh two or three months. I
6:02think we're entering a time when
6:03specifically in September we're likely
6:05going to get some volatility and uh we
6:07can speak about that in more detail.
6:10>> [clears throat]
6:10>> Okay, great. Well, you just answered
6:12many of the questions I was planning on
6:14asking. So, thank you for doing my work
6:16for me.
6:17Um so, sorry just to make sure I heard
6:19that last part right. Your end of year
6:21target is 8,000 for the S&P, but you
6:24don't see it being a straight rise from
6:26here to there. You see volatility in the
6:28mix.
6:29>> At least until the midterm elections. I
6:31think that honestly
6:34you know, even though I don't use
6:37politics as a way to forecast markets, I
6:39do get the sense that
6:41in most midterm election years any sort
6:44of weakness into October, November
6:45historically has been one of the best
6:47times of the entire four-year cycle to
6:48buy stocks. And I do get the picture I
6:52get the sense that
6:54we'll see a little bit of a lessening of
6:56the partisanship, you know, specifically
6:58with regards to things like the Clarity
6:59Act and and things that should have
7:02passed already, but that people are
7:05holding back based on things like ethics
7:07provisions and other reasons that that
7:10honestly after the the midterms will be
7:14easier for both parties to come to the
7:16table and push things through. So, I get
7:18the sense that you know, regardless of
7:20what happens in the election
7:22uh
7:23you know, the partisanship will go down.
7:25That's going to be a sense of relief for
7:26markets. And if anything, we'll probably
7:29enter a time when
7:31you know, all sectors can start to work
7:33together, not just
7:35tech work moving up and all sectors down
7:37or
7:38similar to today where you see, you
7:41know, crypto and many other asset
7:43classes moving up, but yet tech is down,
7:45therefore the markets are sort of
7:46churning and negative. I think we'll be
7:48on better footing after the election.
7:50So, it it's really how we get to between
7:53here, which is mid-August to
7:56you know, mid-November. And and my
7:59thinking it's it's not going to be a
8:01straight shot in either direction.
8:03>> [clears throat]
8:03>> Okay. Um
8:04I got a number of questions to ask you
8:06here. I'm going to ask you one that's
8:08uh
8:09I don't think very fair. Um
8:12but um
8:13I'm going to ask it anyways.
8:15So, you're not a political analyst.
8:18Um but um you know, right now
8:22bipartisanship, you know, seems to be a
8:25dirty word um
8:27on Capitol Hill.
8:28Um and
8:30there's a
8:32there's a division in the Republican
8:34Party right now
8:35of whether or not um to
8:39it basically
8:41do away with the filibuster.
8:43And uh
8:45the Republicans that don't want to do
8:46away with it say, "Well, look, it's a
8:49part of our, you know,
8:50political option set here. Um and it's a
8:53pretty nuclear option. And um you know,
8:57we we don't want to be the one to open
8:58that Pandora's Box."
9:00The other side of the Republicans are
9:02saying
9:03"Look, the Democrats are being super
9:05overt that
9:07you know, if they end up
9:10taking at least one of the houses of
9:12Congress, if not both, their main agenda
9:14is just going to be to impeach and to
9:17try to, you know,
9:18completely stall the current
9:20administration's agenda.
9:22So, um
9:24let's say that the administration or
9:26let's say that the the Democrats do have
9:29a lot of success in the midterms. Um
9:31now, those those people who are elected
9:34uh in November, they don't take office
9:37until the new year.
9:39Um
9:40do you think that if the Republicans do
9:43get beaten up at the ballot box this
9:45November, might they be more inclined to
9:49uh
9:49remove the filibuster knowing what's
9:51coming and also knowing that a lot of
9:53Democrats have said, "Yeah, once we're
9:55back in power, we're removing that
9:56filibuster." So, um
10:00you know, obviously removing it in the
10:01short term would let the Republicans
10:05uh if much better affect their agenda
10:06that they've been trying to get
10:08affected. Um but obviously it comes with
10:11with unknown political cost. I'm curious
10:13if you just have a
10:14a leaning anyway on that.
10:17>> Look, I think the bottom line is that
10:18markets tend to embrace
10:21um
10:22gridlock.
10:23Uh as much as we hate to say it, uh many
10:27have been
10:29you know, divided not only in the US,
10:30but all over the world. Uh and that's
10:32just a cycle we live in. It's not
10:34necessarily a US phenomenon.
10:35>> Mhm.
10:36>> I think that despite the fact that the
10:38GOP holds both
10:41House and Senate, that the margin of
10:44uh that they hold is so slim that
10:47honestly that's the time we've already
10:49been through in in recent in the last
10:51year has largely been gridlock. And so,
10:54even if
10:56the Dems were to win the House, winning
10:59the Senate would be less likely, but I
11:01think the House
11:03uh they would win it by such a small
11:04margin that I don't sense that much
11:06would change. I think that
11:08uh
11:09you know, with regards to Trump being a
11:10lame duck, I do sense that uh it'll make
11:13it difficult and I would agree with
11:16the fact I think people will start to uh
11:19you know, attempt to to have lawsuits
11:22and this
11:23uh against Trump. I just think it's
11:25going to be a
11:26a very difficult time in general. And I
11:29think that uh
11:30the markets tend to
11:33embrace the the extent to which there is
11:36gridlock and that not a lot can be
11:38passed and I think that's a should be a
11:41source of
11:43happiness to those that are bullish that
11:45that want the economy and the stock
11:46market to do well.
11:48Uh
11:49each of us has things that we want to
11:51see accomplished, but you know, I'm not
11:53a filibuster expert per se. I think that
11:57it's very difficult to have a read as to
11:59what uh
12:01you know, exactly is going to happen
12:03there.
12:04Honestly, but I just
12:06I I I don't sense that much is going to
12:07change after the election. I guess with
12:09regards to regardless of who's in charge
12:12of the house. I think it's still going
12:14to be very divided and I sense that uh
12:19I I I I just think that it probably will
12:21be a little bit easier though to come
12:22together on some issues specifically
12:24like the Clarity Act to try to get that
12:26over the finish line and uh
12:29but I I don't really have any any strong
12:32opinion that
12:34one party winning one way or the other
12:35is going to be a source of
12:39you know, success to to really for
12:42anything that's going to happen with
12:43regards to the US economy.
12:45>> Okay. Well, as I said, it wasn't a very
12:47fair question.
12:49Um
12:49but two things. One, um
12:52were the Republicans to get rid of the
12:53filibuster, there probably is a big
12:56bolus of legislation that would get
12:57passed in a scramble. So things would
12:59change in the short term. But but to
13:01your larger point, which I agree with,
13:03is what markets really like is
13:05certainty. And
13:08um
13:08gridlock usually is the best certainty
13:10they can get, which is just like, "Hey,
13:13the status quo is just going to
13:14continue. So let's just
13:16assume the status quo and make all our
13:17decisions based off of that." So that's
13:19probably going to be what happens here.
13:21Um okay.
13:22>> markets like certainty, but they also
13:24like uncertainty and tend to rally
13:27during times when people are skeptical
13:29around the sidelines
13:31unless that uncertainty turns to fear.
13:34And that can be problematic until
13:35bottoms are formed in the stock market,
13:37but generally a time of gridlock when
13:39there's a lot of uncertainty as we've
13:41seen since COVID has actually been a
13:43source of
13:44you know, that's when markets actually
13:47can do fairly well.
13:48>> Okay.
13:49>> One can read that both ways. It's a
13:51popular sign line that markets hate
13:55uncertainty, but I I've honestly seen uh
13:58both to be true, you know, when things
14:00get too certain in one direction, that's
14:02when you have to really
14:04watch out to some extent. When things
14:06are uncertain,
14:08there are people on both sides and and
14:10the narrative is not clear and markets
14:12tend to rally through those times.
14:14>> Okay. So, uncertain certainty isn't bad
14:16unless it gets into
14:18the point of overconfidence and hubris.
14:21>> And uncertainty isn't bad unless it gets
14:24to the point of fear.
14:25>> That's exactly right.
14:26>> Okay.
14:28All right, so just to pull on the fear
14:29thread for a second.
14:32You mentioned three factors that you
14:35think may weigh on markets over the next
14:37couple of months. Before the market then
14:40rallies to 8,000 by the end of the year.
14:43You talked about tech needing to
14:46stabilize. You talked about um
14:50you know, a
14:51prolonged increase in the price of crude
14:54oil.
14:55And you talked about a similar prolonged
14:58increase in long-term interest rates.
15:00Um
15:01which of those or feel free to add
15:03another one do you think is the biggest
15:06threat
15:09to
15:11a market downside? All right, so you
15:13know,
15:14you're talking about sort of volatility
15:16here. My question's more like what what
15:18would you what would you think would
15:20would the best candidate for things to
15:21be worse than you're currently
15:22imagining.
15:23>> I I think well
15:26technology being
15:2830% of the market, if tech were to start
15:30to nose dive, that is
15:32the absolute number one
15:35tangible
15:37point that one could point, you know,
15:39see as being something that would
15:40adversely affect the stock market if
15:42tech were to turn down dramatically. I I
15:43don't suspect that happens personally,
15:45but I just think the churning of of tech
15:48is in the the gradual stabilization of
15:50some of these
15:52uh sectors that have been hard hit
15:54within tech is is going to need to
15:56happen.
15:57Um
15:58the interest rate picture is
15:59interesting. I mean we can talk about
16:01this a little bit more in detail, but
16:02what the Treasury came out and said
16:04yesterday was was pretty groundbreaking
16:07and it it in no uncertain terms uh this
16:11sort of swapping of duration where
16:12they're going to be issuing short-term
16:14bills to really help to pay for
16:17long-term you know, hugely extending
16:20bond purchases. It it creates
16:22you know, a Treasury put where
16:25um you know, yields likely cannot get
16:29too far above 4.75 on the 10-year uh
16:33without causing a very noticeable
16:36trigger where you know, the Treasury
16:38will come in and start to buy massive
16:40amounts of uh different kinds of
16:42securities as well as the 30-year I
16:45guess being at 5.30. So, whether that's
16:47the line in the sand or not, at least
16:49the velocity of how rates have moved in
16:51the US
16:53uh
16:54to the upside in in in the last month is
16:57something that the Treasury has suddenly
17:00reversed their policy very quickly
17:03because just a few weeks ago they were
17:04saying exactly the opposite that they
17:06were going to be curbing that and now
17:07they're going to be now they've just
17:08said decided to more than double it. So,
17:11whether that's politically driven or
17:12not, we know that Scott Bessent's
17:15career within a hedge fund that he
17:17certainly has the tools to be able to
17:21do things in a way that might take the
17:22dollar far lower and if growth holds up
17:27and yields are capped then that actually
17:30can be a very good thing as a way to
17:32reduce the amount of debt. I mean we did
17:34the same thing during World War II 1946
17:38the debt to GDP was about 100
17:4110% maybe and they took that down to 40%
17:44and about three decades just buying
17:48you know exactly sort of the same things
17:51as what they're going to be doing now.
17:52So you know now that
17:55you know interest rates rising has made
17:56debt sort of this hot button that
17:58everybody wants to discuss as to being
18:00problematic because neither party wants
18:02to address it and interest rates are
18:03rising and it's a fiscal mess. You know
18:06there are tools that the Fed can use and
18:08and the Treasury can use and
18:10specifically I don't think the Fed's
18:11going to
18:13mention anything which could be a
18:15problem maybe for rates into Jackson
18:18Hole. I mean I think Warsh honestly
18:23you know this really gives him a green
18:24light to potentially be dovish but I
18:26still don't sense that they're going to
18:27want to talk about the economy much and
18:29and that that sort of lack of
18:32transparency and what causes long rates
18:34to start to creep up based on the term
18:36premium is something that uh
18:40probably will be communicated behind
18:41closed doors that they eventually uh you
18:45they'll need to fix that right? And I I
18:47I think that everybody is frustrated now
18:48in this new age of information we're in
18:51that they want to keep secret about how
18:53they look at markets and and I sense
18:55that that uh
18:56uh you know
18:58Scott Bessent has done his part and now
19:00you know that hat is
19:02you know this operation twist operation
19:04is now passed to the Fed and then we'll
19:05see what they do but it looks very much
19:08more like 1961 potentially than than
19:102011 12 uh the scope of the bond buying,
19:14you know, it obviously just a drop in
19:15the bucket. It's a band-aid.
19:17But, uh you don't know. They they said
19:19at a minimum it could be, you know,
19:21doubled. So, it a lot of it depends on
19:24how quickly rates start to rise from
19:26here, but I think it's comforting to
19:27many people that real rates likely will
19:29start to gradually uh pull back a little
19:32bit.
19:33>> Yeah.
19:33>> And so, we can there's a lot of
19:35implications to all this, but but to
19:37your initial question, uh technology is
19:40is you know, the biggest driver of
19:42markets. It has been and will continue
19:44to be with what's happening with AI. And
19:47uh that that is the number one.
19:49But, rates going up
19:51and and crude will all be things that
19:54the market will look at and say, "Oh,
19:56this is problematic." And I sense that
19:58that could cause uh market volatility.
20:00And those are mostly non-technical type
20:02things that I'm speaking about that I do
20:04think will have an impact.
20:07>> Okay. Um couple of things there. Um one
20:12So, right before I
20:14jumped on here with you, um Mark, I was
20:16um
20:17moderating a discussion uh involving
20:20Lacy Hunt. Um and Lacy was saying that,
20:25you know, his impression
20:27uh not that he has inside knowledge on
20:28this, but his impression is that
20:31Warsh is probably pretty pretty feeling
20:33pretty frustrated after yesterday after
20:36the Treasury's move because Warsh has
20:38basically said,
20:40"Look, the Fed has been intervening too
20:43much. And that distorts the signal that
20:46the market
20:48can send us. And we think the market
20:50signals are really important signals.
20:52So, that's why we want to sort of step
20:53back. That's why I don't want to
20:55tell you much about what we're thinking
20:57cuz that will influence the markets. We
20:59we we need a market that is telling us,
21:02you know, an unadulterated
21:05signal."
21:06Um
21:07and Besant, who put Warsh in the job in
21:10the seat
21:11and and probably was pretty
21:13understanding at the time that that's
21:15the the
21:16chart uh the path that Warsh was going
21:18to chart,
21:19you know, now here's Bullard basically
21:22doing the exact opposite, right? It's
21:24it's the Treasury putting its thumb on
21:25the market. So, I got to imagine that
21:27Warsh is feeling a little bit like,
21:29"Dude,
21:30come on.
21:31>> [laughter]
21:31>> I'm trying to get the world to to get
21:34comfortable with the Fed not moving
21:36markets here and here you go." Um so,
21:38I'm just curious. I'm sort of chuckling
21:39a little bit as I'm saying this. Do you
21:40Do you Do you have a similar opinion?
21:44>> I I think it takes 12 to 18 months
21:46before any sort of rate hike would work
21:47its way through the economy and and I I
21:50don't disagree that this is just a
21:51supply shock that caused crude to rise,
21:54not signs of
21:56demand
21:58um that are rapidly changing. Therefore,
22:00I I do view any sort of
22:04inability of inflation to get back to
22:06exactly the Fed's target as probably
22:08being temporary uh outside of the
22:11effects of of AI.
22:14But, I sense that uh
22:16if the break evens are correct, I mean,
22:18they've been nose diving for some time.
22:22Most of the data that's come out in the
22:23last month and a half has served to
22:26reinforce and if anything justify the
22:29Fed's inaction.
22:31>> Right. Cuz Cuz inflation expectations to
22:33your point.
22:33>> or PCE data or GDP or any of any of
22:37those uh CPI obviously, not GDP, CPI
22:40that that the fact that inflation thus
22:43far has not reared its ugly head to the
22:45extent that almost everybody who
22:49specifically if if you tend to be uh of
22:52one political persuasion, you might say,
22:54"Well, this absolutely inflationary and
22:56oh, it's a really big deal." And the
22:57markets are not saying that right now.
22:59Uh Uh, with regards to Lacy and and what
23:02you just said, I think that
23:04Warsh
23:05probably does not want many other Fed
23:08governors all out talking their own
23:11opinion many different times during
23:14between meetings. And and I think that
23:16makes a lot of sense. I think that it's
23:18but it On the flip side of that, it's
23:20also important to have some basic,
23:24you know, how you look at the economy,
23:25how you look at markets, what are you
23:26looking out for inflation. And I think
23:28that probably can be more clearly
23:30enunciated as to what they are
23:33looking at. So, I I tend to think that
23:35it is important for for Warsh to to to
23:38probably communicate a little bit more,
23:39but at the same time they don't need to
23:41be always talking markets 24/7 because
23:44that just creates a very confusing tone.
23:48Uh,
23:48it somewhere in the middle is probably
23:50where they should be. I think the lack
23:51of any communication causes such a risk
23:55for when they do act at the catches a
23:57market off sides all the time and that
23:59can be that can cause a lot of bond
24:00volatility and they don't want that
24:02either. So, uh, whether or not he
24:04realizes that that I think
24:08Scott Bessent will will basically make
24:10that message pretty clear at some point.
24:13So, I I don't know how long that Warsh
24:14can hold out and not, you know, give
24:16more information than they are, but I
24:18sense that he's going to be using
24:20Jackson Hole probably to go on a few
24:22nice hikes and uh, probably will not
24:24talk markets too much.
24:25>> Talk much, yeah. But I was going to say
24:27you you may need to prep yourself for
24:29disappointment at least in the short
24:30term because at least the way that Warsh
24:31is talking is not only do I want, you
24:34know, the other Fed officials out there
24:36in the media um, like they've been, but
24:39he's like,
24:40I don't know if we need to have as many
24:42um,
24:43>> That's right.
24:43>> updates. And he's gotten rid of forward
24:45guidance. So, even when he's talking,
24:47he's not going to be as generous about
24:50where the Fed thinks the puck is headed
24:51as his predecessors.
24:53>> Yeah, look, the most important thing
24:54anybody can do when you take on that
24:56role is to establish your own sense of
24:59independence not only from the president
25:02but also just to other members and say
25:05this is the way I'm doing things and
25:06that's why
25:08the first term of a new Fed governor is
25:10often very rocky and volatile and I
25:12think it takes time for the markets to
25:14understand what the policies are.
25:16Uh, he would not all of a sudden take
25:18this role and then immediately go and
25:20switch and go about-face and start to
25:22openly communicate. I doubt highly that
25:24would happen but
25:26uh
25:27you know, I'm
25:29I'm just a technical analyst. I'm not an
25:31expert.
25:32>> [laughter]
25:33>> All right. Um,
25:35I I want to challenge one thing you said
25:36earlier if I heard it correctly. Um, you
25:39you made a comparison to the tools that
25:42the Fed and the Treasury have available
25:43to get rates down and and you know,
25:46you cited the era after World War II.
25:50I don't know, Mark. I see a lot of
25:52differences. I mean, first off, what
25:54really I think made the biggest
25:56difference there was the fact that we
25:57became the world's manufacturing hub,
25:59right? So, we had a massive boom in in
26:02business um
26:04while our competitors were pretty
26:06decimated and you know, they needed to
26:08pay us to rebuild. Secondly, we did not
26:11have the debt and deficits uh challenge
26:14um post-World War II that we do now. I
26:16know we had deficits
26:18uh during during the war years
26:20themselves but right after that those
26:22went away pretty quickly.
26:24Um, so we we you know, that that's new
26:26this time. We certainly have a lot more
26:28of that. So, I I guess my question to
26:30you is is
26:31um
26:33you know,
26:35is this kind of an apples to orange
26:36comparison and um regardless of your
26:40answer to that
26:42does the Treasury really have enough
26:44tools here um assuming for a second that
26:47the Fed sits on the sidelines, does the
26:49Fed really does the Treasury really have
26:52enough tools
26:53to win out here or is this just
26:56little micro movements where the macro
26:59trend is going to overpower what the
27:01treasury can do?
27:03>> My my thinking is the dollars move this
27:04week is probably one of the more
27:06important moves of the last month and
27:09and for me it signals that the next year
27:11is going to
27:13the dollar move has kicked off a pretty
27:15meaningful decline that
27:18even if we bounce after the yen gets to
27:21say 151 and I don't sense it'll get much
27:24higher
27:25versus the dollar so I I do sense that
27:27dollar yen's move will prove short-lived
27:29for their own reasons of say gradualism.
27:32>> Okay.
27:33>> The dollar should be headed
27:35to the downside over the next year and
27:38if we can keep growth and we can keep
27:40interest rates from going up too high
27:42then that absolutely will be beneficial
27:44I think to earnings.
27:46US of course holds a lot of its assets
27:49overseas in foreign currencies and and
27:51so its liabilities are in dollars so
27:54having the dollar slide would certainly
27:55be a good
27:56good sign there and we know that 40% of
27:59most companies revenues come from
28:01overseas having the dollar go lower
28:02would would certainly benefit that. I I
28:04think there's a lot of benefits that
28:06it's nice to talk strong dollar but in
28:08reality if growth is high enough and we
28:11can engineer a slide in the dollar uh
28:15you know there's there's a lot of
28:16benefits to the US for for that to
28:17happen at least in the near term and I'm
28:19not saying it's going to happen forever
28:20it it is apples to oranges of course
28:22with the World War period sure. But
28:25um I I don't know you know I I that's
28:28probably a little bit
28:30above my skis to to know exactly all the
28:32tools that the Fed has to be able to
28:34engineer this but I I sense that
28:36what they announced yesterday was
28:38definitely a game changer and and they
28:40they intend to be pretty vigilant on on
28:44being able to buy and not necessarily
28:47across the curve but but more for
28:49liquidity purposes and we saw that with
28:51Bitcoin. We saw that with gold. We saw
28:53that with many things that, you know, in
28:55terms of causing this reflationary type
28:57move where they're very prepared to let
29:00the economy run hot for a couple years
29:03and uh
29:05no party is willing to address
29:07the key reasons why we need to cut
29:10spending and and yeah, eventually
29:14through a point you've made many times
29:15before. I mean, that that could
29:17certainly cause a a bigger deal down in
29:19the long run. Uh if we can't get
29:22uh if we can't get you know, the deficit
29:25to GDP according to Scott's initial 333
29:28program, you know, to GDP
29:31uh debt to GDP of uh 3% of GDP deficit
29:35uh
29:37what do you say? 3 million barrels of
29:38oil a day and
29:40uh
29:42I I forget the I forget the third part
29:44of the platform, but he hasn't talked
29:45about it in a while. The the bottom line
29:47is that that you know, the Fed he he has
29:49he's still very much is sort of
29:52orchestrating a mini hedge fund here and
29:55uh he very well can pull out a lot of
29:58his
29:59bag of tricks to be able to help the
30:01economy in ways that maybe most of us
30:03aren't seeing.
30:05So,
30:06given that none of what's happened is
30:07really helped to has caused the economy
30:09to
30:10turn down sharply. The economy based on
30:13everything that everybody looks at every
30:14day is still operating in in pretty good
30:17shape. The earnings are
30:19literally the highest we've seen in
30:20about 30 years with regards to profit
30:22growth. That is probably the biggest
30:24thing that outweighs a lot of the
30:25negatives that we're talking about that
30:28just seeing such robust profits is uh is
30:31generally a very good sign for the stock
30:34market and for the economy in ways that
30:37many of these other reasons of debt
30:39being high or absolutely a problem, but
30:42they're not going to crush the economy
30:44right away. If we can keep long-term
30:46interest rates down, and if we can't,
30:49then that the the home the house, you
30:51know, housing market would give us
30:54that first signal, I think, that uh
30:57that there's going to be a problem, and
30:58we don't see that right now with regards
31:00to high yield markets or really uh many
31:04different parts of the economy seem to
31:06be clicking despite
31:08all the issues that we can talk about
31:10about all the things that are
31:13unfair for those that don't own homes
31:15and 401(k)s and and the parts of the
31:17economy that are certainly adversely
31:19affected and and are not participating,
31:20and there's no doubt that that happens,
31:22and and there's no easy fix for that,
31:24but um you know, I I think that the uh
31:29you know, I tend to subscribe and and a
31:31sort of the glass full uh half full
31:32approach and and think that uh there's a
31:35lot of good that's happening right now,
31:36but but certainly we need to
31:38figure out a way to reroute some of the
31:41oil in in pipelines through the Red Sea
31:43and the Gulf of Oman and and not
31:46necessarily depend on the Strait of
31:48Hormuz to the extent that we are, and I
31:50think those steps are also taken right
31:52now, and I think that in general
31:54uh there is a a light at the end of the
31:56tunnel.
31:58>> All right, and I'm with you on that last
31:59point where I I've been pretty vocal in
32:01predicting that
32:03once this war is over,
32:06um
32:07the world is going to buy a lot less oil
32:10uh through the Gulf than it was before.
32:13>> Yeah.
32:13>> Um they're they're just going to be, you
32:15know, once burned, twice shy, right?
32:17Like, hey, that that place is more
32:19politically unstable than we realized.
32:22And as you said,
32:23a lot of that redirection of pipelines,
32:25etc., that that that's
32:27happening at warp speed right now with
32:29the other GCC countries just saying,
32:31"Hey, look, we can't be
32:33>> Right.
32:33>> bottlenecked by the strait going
32:35forward. We got to find another way to
32:36do this. Um
32:38And just to be super clear though, quick
32:39correction, uh you said you don't want
32:41us to be as dependent on the Strait.
32:43US actually isn't dependent on the
32:45Strait as well.
32:45>> No, not the US. But the rest of the
32:47world is and of course that is a
32:48knock-on effect. What I mean is I guess
32:49I don't want that to be a source of uh
32:52of friction that sort of holds the world
32:54hostage and and to your point, I don't
32:56think it will be. Yeah, I mean the US
32:58has played this card perfectly in ways
33:00that probably the majority of the public
33:02does not completely understand given
33:04that we're leading the world in oil
33:08uh
33:09you know, capacity and and and and AI
33:11infrastructure and and there's a lot of
33:14things that are actually going well with
33:15regards to uh the US having being sort
33:18of the winner in this global game of
33:19risk uh in the way we're positioned with
33:21our own energy infrastructure.
33:23>> Right. Um I would agree with that. Um I
33:26I think that US net exports are going to
33:29be materially higher going forward as a
33:32result of the loss of the Strait. Um the
33:35one thing I'll I'll just clarify there
33:38cuz you said energy infrastructure, I
33:40think where we are actually a fair
33:42amount behind is in just the capacity of
33:46our electrical grid um which needs to be
33:48dramatically rebuilt. That's not a
33:50secret to anybody. Um and we're going to
33:52we're going to need that to power all
33:53the data centers that we're building
33:55which is an advantage, right? I think
33:56we've got
33:57uh
33:59you know, China does a much better job
34:01of producing electricity than we do. Um
34:05but uh
34:07we're we're doing a much better job at
34:09building compute
34:10uh than they do, right? Uh and and
34:12obviously if we can upgrade our grid,
34:14then we win on both counts. So, but
34:16that's going to take a while.
34:17Um
34:18okay, so I want to get to asking you
34:22about the implications of the outlook
34:25that you have here, right? Um weaker
34:27dollar, um good growth, you know, all
34:30that type of stuff. Um real quick
34:32though, I just want to try to get to
34:34clarity on something and I I
34:36wrestle with these questions.
34:39So, we have
34:43We've had tremendous earnings growth in
34:45the AI space, which as you said is is a
34:47big chunk of the market right now,
34:49right? I think you said 30%. I've seen
34:51stats that say and I guess it all
34:53depends on how you classify AI and AI
34:55adjacent, but I've heard that AI and AI
34:58AI adjacent companies make up more like
35:0045% of the S&P's total market cap and
35:03like over 70% of the Nasdaq 100's.
35:06So, they're massive percentage.
35:10So, those companies have had great
35:12economic a great earnings growth up to
35:14now and their earnings estimates going
35:16forward continue to get ratcheted up,
35:19right? So, it's growth growth growth
35:20growth growth and I agree with you.
35:23Rising growth solves a lot of problems.
35:27But, let me just let me just ask you
35:29this. So,
35:31when I look at the GDP growth for the
35:34US, let me just rattle off some stats
35:36here for you. So, a year ago Q2 of 2025
35:42grew at 3.8%.
35:44It grew even higher in Q3 of 2025, 4.4%.
35:48Q4
35:49dropped to 0.5%
35:52and you know, there was
35:53stuff going on there,
35:56tariffs, all all sorts of things that
35:57you know, made that one real low. Q1 of
36:012026, 2.1%.
36:03Q2 of 2026, 1.5%.
36:07So, you know, if I were to chart that,
36:08that would be a declining line of of GDP
36:12growth over the past year plus.
36:16So,
36:19when it comes to the growth of our
36:21economy overall,
36:23are you more optimistic or are you
36:24worried about this declining trend.
36:29>> I think I'm optimistic to a point over
36:31the next couple years. I I think that
36:34eventually, probably come the third
36:36quarter of 2028, we'll reach sort of a
36:38tipping point where uh
36:40you know, some of the cycles I look at
36:42start to turn down into like 2030. And I
36:44think that that probably is a time when
36:47we need to be worried. Uh I I don't
36:49sense that the the the problem is in
36:512026 nor next year.
36:54And so uh
36:57you know, I I just I don't know. I I
36:59don't
37:00I don't do a lot of work on GDP, and so
37:03I can't speak to all the factors that
37:05are involved or how it's measured. I
37:07just know that uh
37:10you know, of all the different ways of
37:11looking at the economy, there's many
37:13people would would rightly say that uh
37:16you know, we're we're still in in pretty
37:17good shape, and it's more of a
37:18Goldilocks
37:20time for what's happening, honestly. And
37:22with the
37:23the earnings
37:24uh as good as they've been in a long
37:26time. I think that uh
37:29you know, that should carry us that
37:30should carry us higher in the markets in
37:32general over the next couple years, even
37:34if it's a if it's a choppy time in 2026.
37:37>> Okay. I I get worried um
37:40about
37:41something you said there, which you
37:43said, you know, this is kind of a
37:44Goldilocks era. This is a great time,
37:46right? Um and yet,
37:48you know, our debt keeps growing. We
37:50just hit 40 trillion this month, which
37:52is a mind-bogglingly large number. Um
37:55the deficit is over 2 trillion. Um and
37:59so I know you're not calling for a
38:00recession anytime soon, but it just
38:02suggests that, oh my god, you know, if
38:04we're if we're
38:06if we're wrestling with those challenges
38:08in the good times, what's it going to be
38:10like in the bad times? You know, what
38:11what's the deficit going to blow out to
38:13as a percentage of GDP?
38:15Um
38:17>> Yeah, those those are not those are not
38:182026 issues. I mean, th- those are those
38:21are certainly very important.
38:23You know, I I have I think that
38:25privatizing social security makes a lot
38:27of sense and putting that money to work
38:29in the market is a way of trying to grow
38:32that.
38:33Uh
38:34You know, you have to cut spending a
38:37little bit in all different areas.
38:38Nobody wants to be the one to
38:41>> Which nobody wants to do. Yeah.
38:42>> No, nobody if you're trying to get
38:44reelected, certainly trying to argue
38:46that
38:48spending
38:49on any of these key issues uh
38:52Medicare, Medicaid,
38:54you know, certain things
38:56Look, I think I think after COVID a
38:58number of things went up dramatically
38:59and and I would argue that that it's
39:01right to pull the plug and and reduce
39:03all that, but uh
39:06Yeah, it's very tricky to know the right
39:07answer as to what the proper mix is.
39:11>> Yeah, okay. I mean, one thing I applaud,
39:13I don't necessarily hold my breath that
39:15it's going to make a
39:16big difference,
39:17but is
39:19the current administration's
39:21um
39:24prioritization of
39:26identifying and removing fraud and waste
39:29and abuse.
39:29>> Yeah.
39:30>> Um
39:31and
39:32again, like I said, I'm not going to
39:33hold my breath. Um
39:36political
39:37initiatives like this tend to not
39:40tend to more often than not kind of
39:41fizzle out. But I I and I don't have
39:44exact numbers for this, but my kind of
39:46gut tells me
39:48if we could remove all the waste, fraud,
39:50and abuse, just magically,
39:52I think we probably wouldn't have a
39:53deficit.
39:54Like I think it's it's it's a it's a big
39:56number, right? And so, you know, that
39:58that that So, any success that that
40:01movement has will kind of like rise and
40:03growth. It'll just help our problems
40:05here.
40:08>> I think the rapid rise of some of these
40:09NGOs certainly can be attributed as a
40:13reason why some of this fraud has gotten
40:15out of control and and I applauded Elon
40:18Musk's initial work in Washington. I
40:20know it got very political and it was
40:23uh
40:24attacked by many, but I I think that uh
40:27they at least uh uncovered a lot of
40:29things that were absolutely correct
40:31about some of the fraud that was
40:33happening and
40:34now nobody wants to touch it with a
40:3510-ft pole, so we have to trust some of
40:37the grassroots move- movements of some
40:40of these younger reporters that are
40:41going out and trying to uncover it, but
40:44it I think uh
40:45yeah, it it's a very real issue and and
40:47I think that that is uh something that
40:49that really is important. I don't know
40:52uh under the current administration if
40:54it'll ever really truly gain any
40:55traction. I think that people have dug
40:57in their heels and and until we have
40:59somebody until it becomes a sort of a
41:02bipartisan area of agreement uh
41:05you know, then I think it's probably not
41:07not much will happen in between now and
41:102028, but hopefully it will in the
41:12future.
41:13>> Well, just to opine personally, this is
41:15one of the things that frustrates me
41:17most about government where I'm just
41:18like
41:21why isn't this a slam- dunk bipartisan
41:23issue? Like it like who who can really
41:25be on the side of like, "No, I don't
41:27really want to investigate fraud."
41:28Right? But clearly that's a lot of
41:30special interest there.
41:32>> That that 100%, yep.
41:34>> Yeah.
41:34Okay. [snorts] Um one last question
41:36before we get to kind of the rubber
41:38meets the road, you know, given your
41:40outlook, what asset classes do you think
41:42will perform well or poorly?
41:44Um
41:47I think a big if
41:48uh in
41:51I mean, not just your forecast, but
41:52anybody's forecast um
41:54is
41:57the net return on AI.
42:00Right? So, we are clearly spending a
42:02ton. That's very stimulative. That CapEx
42:04is very stimulative to the economy.
42:07Um
42:08it is unclear
42:09uh uh, at this moment what kind of
42:12return we're going to get on that
42:13spending.
42:14Um, and I've had some people in the
42:16program recently who were massive AI
42:18bears who one of which was
42:21his foundational starting point is just
42:24this technology doesn't work. And so
42:26this is all malinvestment that we're
42:28doing right now. I don't necessarily
42:30think that's the case. But I have heard
42:32way more stories of
42:35hey, my compute costs are going up way
42:38higher than my productivity gains.
42:40Um, then I have heard companies say, "Oh
42:42my god, AI has been super transformative
42:45for us and we're getting a phenomenal
42:46return on that investment." Um, so I do
42:49worry if at some point here, um, if if
42:52if we don't see really observable
42:55material gains pretty soon in corporate
42:58earnings from AI, that those earnings
43:01estimates that are driving everybody's
43:03optimism here are going to have to come
43:05down.
43:08>> We shall see.
43:10>> Yeah, I I don't have the the expert
43:11opinion on that in terms of, uh, that I
43:14don't think they're artificially
43:15inflated, but I I do,
43:18uh,
43:19sympathize, you know, with with your
43:21concern. I think, uh,
43:25you know, these memory companies,
43:27you know, that have had to raise prices
43:29so dramatically, at what point will the
43:31government step in and claim that this
43:32is a monopoly and this is unfair and
43:35and, uh,
43:36you know, it's it's you go out to buy a
43:38new iPhone or many different things that
43:39are impacted by just the the pure cost
43:42of,
43:43you know, in general. I I think
43:46there's no easy slam dunk message that's
43:49absolutely right. It's probably
43:50somewhere in the middle. You have to
43:52celebrate the, uh, the innovation and
43:55sort of this renaissance period of,
43:57um,
43:59you know, what what's going on with
44:01artificial intelligence at the same
44:02time, uh,
44:04you know, there's always going to be
44:04risks. Uh, how you use those,
44:08how you think about that is really
44:11what we're all trying to do, right? And
44:12then in terms of uh
44:15being thoughtful about money is being
44:18adhering to trends and and honestly not
44:20letting our worries uh throw us off
44:23course until the time is right. And
44:26seeing that something might be in a
44:28bubble is very different than having
44:30that actual evidence that things are
44:32where we can take action to prevent
44:35losses. And uh
44:38yeah, I tend to be
44:39uh
44:40pretty optimistic about AI, I guess. I I
44:43think that uh
44:47being uh
44:49a Newton and we've always taught that
44:50inertia things go in one trend and you
44:53have to
44:54>> [laughter]
44:54>> equivalent or more to change that trend
44:57and and until I I see that happen and I
45:00have to honestly stick with that trend
45:02and and not be a skeptic, you know. We
45:05recognize that there certainly need to
45:07be improvements.
45:08Big wars about open source and frontier
45:11models and what's going to win out and
45:13and uh sort of the the nervousness of uh
45:17Dario and and I don't know what the I
45:20just look, I sense that the the on
45:23bond buying couple with massive IPOs and
45:27um
45:28deals I I I I I sense that that
45:31generally is a good sign. And there's
45:33going to be warnings in advance when
45:34that starts to slow. That's not where
45:36you flip the switch off overnight.
45:38>> Yeah.
45:38>> So
45:39uh
45:40I I just think that in general it's
45:42right to trust the trend and and and
45:45look to make changes versus
45:48uh be too skeptical without proof that
45:51things are absolutely in a bubble and I
45:53just don't really see that right now.
45:55>> Okay.
45:56Um but two things. One, I'm not making a
45:58prediction here on how it's it's going
46:00to end up. I'm just saying that this is
46:02a big if. It's a big variable in the
46:04calculation and and it's one that nobody
46:07has
46:08super clear line of sight on. So, um
46:11however that variable ends up, it's
46:13going to have a real material impact on
46:14things. That said,
46:16um as you have told me many times in the
46:19past, you you are a trend guy. And um as
46:22are a number of other people that I
46:23interview on this channel and and I
46:25think one of the
46:27kind of truisms that come out of
46:29interviewing a lot of people like you is
46:32respect the trend, right? Like basically
46:34don't fight the trend. Um but the key
46:37thing also is to know when the trend
46:40shifts and then react early when it
46:43does, right? You don't want to you don't
46:44want to stay on a trend too long um when
46:46it's no longer
46:49working well in the markets, right? Um
46:51>> Really, that's that's correct. I mean,
46:52it certainly helps to strip the emotion
46:55out of the equation. One uses it as a
46:57source of risk management, but also just
46:59uh have a guideline as to
47:02a way of visually uh being able to study
47:04that which you're
47:06trying to discuss. And and specifically
47:09the odd is many ways to do that now. You
47:11we can see those trends in action. So,
47:12when they start to slow or reverse, then
47:14you
47:15have a little bit more
47:17uh all of us have more credibility when
47:19we try to say that things might be
47:21coming to an end and why.
47:23>> Mhm. Okay. Um well, great. And you know,
47:25one of the great things about having you
47:27on this channel, Mark, is
47:29um you keep everybody grounded as to
47:32sort of where the the data and the
47:34trends are telling us things are headed.
47:36Uh but I also just want to make sure
47:38that you know that if you see an
47:40important trend change happening,
47:42um you call me up and come on this
47:44program anytime, [laughter] okay?
47:46Um all right. So, now to the meat of the
47:49sandwich.
47:50Um
47:52all right. You see the you see the next
47:54couple of months ahead with um
47:58you know, some more volatility generally
48:01more weakness uh than what we're seeing
48:03right now. Um you do expect them at some
48:05point probably post midterms things to
48:08to write and and have the market end
48:10around 8,000 for the S&P. Um
48:14in that type of arc for the next 5
48:16months or so, um what does that mean
48:19from an investing standpoint to you? Um
48:22does it mean things like uh
48:25you know,
48:26uh uh own gold and and commodities and
48:29hard assets for some of the reasons you
48:31mentioned about um you know, real rates
48:33coming down. Um
48:36you know, is this all is is this mean
48:38maybe lighten up on tech until tech is
48:40consolidated? I'm just curious what you
48:41take away from your outlook.
48:44>> Yeah, I think a lot of it depends on
48:46one's time frame and risk tolerance. Uh
48:49for those that are intermediate-term
48:50investors, many of these technology
48:53stocks are still quite cheap uh if in
48:56fact their forward earnings are to be
48:59believed and uh if that's the case, then
49:01you'd want to
49:03own technology for the next couple of
49:05years and think that it's still going to
49:06be uh you know, a wonderful source of
49:08returns. And so, I I agree with that. Uh
49:11to put on my short-term tactical hat,
49:14I would invest in uh healthcare. I I
49:17respect the momentum of what's going on
49:19with the
49:20GLP-1 drugs and and some of the what's
49:24happening in bio- technology and and
49:26honestly, uh it's a very exciting thing
49:29that's happening right now. For the
49:30first time in years, uh healthcare has
49:32been under relentless pressure for
49:34literally since 2023, and that now seems
49:38to be changing and has turned a corner.
49:40So, I would own healthcare. I would own
49:44energy and materials. To your point, uh
49:47precious metals, base metals uh should
49:49work much better as real rates start to
49:52retreat. We've already seen a fairly
49:54sizable move off the lows in gold and
49:57silver since July. The cycles the
49:59monthly cycles turned in the summertime
50:01and so we've seen now really the first
50:04move off those lows.
50:06Ideally that will need to be
50:07consolidated along with this move in
50:09cryptocurrencies. And so I think that
50:11happens probably from late
50:14August into September and then
50:17uh
50:18thereafter I think it's probably wise to
50:22look to buy any and all dips in crypto
50:24as well as metals.
50:26And uh
50:29you know, technology should be
50:32ready to to buy in even tactically
50:35probably by the midterm election, but I
50:37I the parts of tech that
50:39you know, I own now that I think are
50:40great and I'll stick with them. I think
50:42it's just you know, you have to have a
50:44long-term approach on some of this and
50:46say these some of these stocks are down
50:4720 30% but the longer-term trends are
50:50fine. It makes sense and
50:53you know, it just depends on one's time
50:54frame honestly. Um
50:57But yeah, I the Fed having
51:00come out and publicly said that they're
51:02going to be uh
51:04you know,
51:06giving sort of a treasury put and then
51:07helping the back end of the curve uh
51:09should be helpful for the metals in
51:12general. Uh I just worry really about
51:14the next
51:15probably four to six weeks in that
51:17regard cuz we've we've had really good
51:18movement off the the lows and I sense
51:20that that if rates spike in September
51:23like I think then that probably is going
51:25to be
51:26a time when when most of this stuff
51:28starts to correct.
51:30Uh
51:31But that should be a dip buying
51:32opportunity. So I I I
51:34Go ahead.
51:35>> I just want to clarify that point.
51:37You said rates to go higher. I think you
51:39meant yields to go higher. You're not
51:40necessarily predicting an interest rate
51:42hike by the Fed. Correct?
51:43>> Oh no, I'm not talking about Fed fund I
51:45know. Yeah, absolutely right. Long
51:46long-term interest rates and or I just
51:48call them rates like
51:49>> Yeah.
51:49>> 10-year 30-year treasury yields I think
51:52will probably start to push back higher
51:56similar to what's happening across the
51:58globe. Uh so yeah.
52:00The US has been you know, the best house
52:02in the bad neighborhood for some time
52:04and and now we're seeing our own
52:05treasury market start to uh
52:07to wither ever so slowly and uh
52:11these technical moves when you break out
52:13of three-year triangle patterns
52:14technically
52:15it's tough.
52:17You know, what what the treasury
52:19announced yesterday won't be sufficient
52:20to think that that's going to reverse
52:21that and yields all of a sudden are
52:23going to drop. So that that's generally
52:24going to be something that probably is a
52:26source of worry
52:28eventually with regards to the housing
52:29market and and causing supply issues
52:32that might cause uh
52:33you know, that's normally the first shoe
52:35to drop and so we'll have to wait and
52:37see.
52:39>> Okay. So yeah, so um obviously bonds you
52:42think are going to get beaten up a
52:43little bit here in the near term as
52:46but yields go higher.
52:47Um
52:49knock-on effects on real estate are are
52:51not going to be um
52:53very sanguine either as a result um
52:56presumably higher mortgage rates.
52:58Um
52:59Mark, I'm going to give you a little
53:00inside baseball. Um
53:02I can pretty much near guarantee that
53:05the real estate market is going to
53:07really take its lumps going forward from
53:09here
53:10um and potentially crater over the next
53:12year or two and I say that with
53:14confidence because I just bought my
53:16first house ever and so
53:20with my luck uh I have top ticked the
53:23the real estate market.
53:24>> Well, I think that we all own homes for
53:27different reasons and uh I it's nice to
53:30have uh as long as you're not massively
53:33speculating across the board and buying
53:35lots of different properties. I think
53:36that's
53:37it's great to have a home and when you
53:39get the chance to refinance you do that
53:41and you don't treat it as a
53:43as a short-term speculative type, you
53:45know,
53:46thing, but you just own it for for
53:48long-term for for different reasons than
53:50than really monetary gains out of real
53:52estate. So.
53:53>> Yeah, well, that's exactly my situation
53:56here, and I bought it
53:57not hoping, but but I bought it saying,
54:01"If the market does crater for the next
54:03couple years, I'm going to be okay with
54:05it, cuz it's a long-term uh
54:07asset."
54:08>> Perfect.
54:09>> Great.
54:10All right. Um well, look, that was super
54:12useful. Let me just summarize again for
54:14the viewers. Um
54:16uh
54:17you know, in the near term, with your
54:18outlook being now through the end of the
54:20year, or at least through the midterms,
54:23um you like healthcare and biotech, you
54:25like energy and materials, you like
54:27precious metals and base metals, you
54:28like crypto.
54:30Uh tech is a little bit more of a
54:31question mark. I kind of noted like you
54:33think it's going to have a
54:34consolidation, but you like it still, so
54:38maybe buy on the dips. Um bonds you
54:40think are are going to have a tougher
54:42time, same with real estate.
54:45>> Difficult to really opine short-term on
54:48real estate. It all depends on one's uh
54:50location, and obviously the liquidity
54:54drives all that data. Very very tricky,
54:57depending on where you are. The
54:58northeast, where I live, has been pretty
55:00well insulated from any
55:03massive boom or bust in the last couple
55:05decades, so it's a very different market
55:07than obviously out west or in the south.
55:09But uh yeah, parts of Florida are
55:11already you know, have been pulling back
55:12very sharply in in recent months, and uh
55:15>> Right.
55:16Let me put it this way. So, you're
55:16right, real estate is totally local, and
55:18that's that's kind of my situation here,
55:20where there are pockets of
55:23the metropolitan area of Reno, which is
55:24where I live,
55:25that are projected to have some price
55:28declines in the next year. The pocket
55:31where I'm looking at is not. It's
55:32projected to price increases, um and
55:35it's just all local. Um
55:38Uh but I do not hear you saying
55:41man, I think real estate is going to do
55:42real well in the next, you know, 6 plus
55:44months.
55:46>> That's tricky for me to say that. The
55:47long-term 18 It's like an 18 and 1/2
55:50year cycle,
55:51uh you know, should be peaking and
55:53should bottom, honestly, like 2029. So
55:57>> Mhm.
55:58>> many parts of the country it's already
55:59been happening. I think it with rates
56:01mortgage rates are up to what, 6.7%?
56:04>> Yep.
56:04>> I had a mortgage at
56:06right around 3% and I sold my home and
56:10very happy to just be on the sidelines
56:12there and sort of waiting for the crash,
56:14so to speak, and investing my money in
56:16AI stocks.
56:17>> [laughter]
56:18>> Participating in the bubble. No, so in
56:21all seriousness, I think uh
56:23it could be a tricky period for for real
56:25estate, but uh it depends on where you
56:27where you live.
56:28>> Sure.
56:29All right. Uh well, fantastic. Well, in
56:31wrapping up here, Mark, um first off, is
56:34there anything that else that's burning
56:35brightly on your radar that I just
56:37wasn't smart enough to ask you about?
56:43>> I mean, we didn't really talk a lot
56:44about sentiment.
56:46You know, that that's that's really been
56:48a mixed picture, so I it probably
56:49doesn't deserve a lot of uh attention,
56:52but uh
56:54you know, to our earlier discussion
56:56about
56:57certainty and uncertainty, as long as
56:59they're not at extremes, and I I don't
57:01think we're in extreme in one direction
57:03or the other, and so uh
57:05you know, people that I know are right
57:07rightly concerned about many things, and
57:10and that
57:11that concern probably keeps people a bit
57:14under invested at a time when sentiment
57:15is still a little iffy, but um
57:18you know, we all need to embrace, I
57:20think, what's going on in
57:23with earnings and and just the technical
57:25picture of the market is is still pretty
57:27bright, you know, there are a few
57:30yellow warning signs, but that's not
57:32going to materialize at least for
57:34another probably another month. And I
57:36think initially, you know, markets
57:38should attempt to bottom and push higher
57:40and and then we probably get a little
57:42choppy period. Uh but
57:45yeah, we covered FX, we covered uh
57:47treasuries and uh metals,
57:49>> [snorts]
57:49>> um commodities and
57:52we solved the the US's uh debt problem,
57:55so that's good.
57:56>> [laughter]
57:56>> So, outside of that, I I don't uh you
57:58know, honestly
58:01you know, I think I think probably we'll
58:03have a little bit more to talk about in
58:04uh September, October than now.
58:07>> Okay. Well, if you are open to coming
58:09back on then, I would love to Well,
58:10actually, your um
58:13I think probably your next appearance on
58:14this channel uh is going to be at the
58:17Thoughtful Money Fall Online Conference.
58:19You're going to be one of our featured
58:20speakers for it. So, folks, if you if
58:23you're excited to get Mark's
58:25update when things are {quote} and
58:26{unquote} likely to get more
58:27interesting, buy your ticket to the
58:29conference. Um all right. Well, Mark, um
58:32as always, just a great discussion. Um
58:35you're such a
58:36kind of just-the-facts kind of guy,
58:38no-nonsense kind of guy. It it it really
58:40is a pleasure to to talk with you about
58:42all this. Um and your track record so
58:45far has been really quite good. Um
58:48uh when I talk about that May swoon not
58:50really appearing um in my mind, you
58:53know, that's about as minor of an error
58:55as you can have and uh and you got the
58:57really big part right.
58:58Um
58:59for folks that would like to follow you
59:01and your work in between now and the
59:03conference, where should they go?
59:06>> So, we have two different websites. One
59:07is for institutional investors and those
59:09that know of Tom Lee and and the firm
59:12would go to fundstrat.com.
59:15Uh we do have a retail arm as well that
59:18is fundstratdirect.com
59:20where we offer uh retail investors the
59:23chance to look at our research and of
59:25course all the videos that we do and the
59:27webinars. Uh we have a new AI product
59:31that's been very successful where people
59:33can use that to sort of white list
59:35things that they give to clients if
59:37they're an RAA. And
59:39I will be out in Huntington Beach next
59:41month for Future Proof. And so that if
59:43you're find yourself in that area and
59:45want to come down and say hello,
59:47Funstrat will have our own tent there.
59:49Uh I myself
59:52uh am on X every now and then as Mark
59:54Newton M C M T
59:57and uh
59:58you can certainly
1:00:00the best place to to to find us is
1:00:02really the website or our YouTube
1:00:05channel. And so what I would encourage
1:00:06you to look uh for that as well.
1:00:09>> All right, fantastic. And as usual when
1:00:11I edit this, Mark, I'll put up all the
1:00:13links and URLs there on the screen so
1:00:15folks know where to go. Folks, the links
1:00:16will be in the description below this
1:00:18video as well.
1:00:19You know, Mark, [clears throat]
1:00:21I've been thinking about going to Future
1:00:22Proof at some point. Had enough people
1:00:24recommend it to me and I was kind of
1:00:25hoping to go this year. Um but uh
1:00:29as most folks know, um not only did I
1:00:32buy a house, but it's being built, so
1:00:33it's not going to be moving ready until
1:00:35like next summer. Um
1:00:37>> Right.
1:00:38>> And the house I'm currently renting
1:00:40it got sold out from under us. So we got
1:00:42to move in about 2 and 1/2 weeks. So
1:00:45there's just there's just too much going
1:00:46on with that and the conference and
1:00:48everything that I'll have to get your
1:00:50crib notes uh from this year, but it
1:00:51would be fun to meet you in person at
1:00:53one of the future
1:00:54>> Absolutely. We'll have to new storage
1:00:55units are definitely helpful in that
1:00:56regard. Take that from my wife and
1:00:58myself. So that's
1:00:59>> thank you.
1:01:00>> That's the way you solve that problem
1:01:01near term. So
1:01:02>> Yeah, yeah. Fortunately, we we have
1:01:05when we moved here,
1:01:07whatever it was last year, um we got a
1:01:09big storage unit and a lot of stuff is
1:01:11already there. Um so we don't have a ton
1:01:13here where it's where we live. So this
1:01:15move should actually be relatively light
1:01:18compared to past ones. Um all right,
1:01:19fantastic. Um
1:01:21so folks, please do me a favor. Please
1:01:24express your gratitude to Mark for
1:01:26coming on and being so generous with all
1:01:28of his forecasts and insights. Please do
1:01:30that by hitting the like button, then
1:01:32clicking on the subscribe button below,
1:01:34as well as that little bell icon right
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1:01:40insight that Mark has shared today,
1:01:42highly recommend most people do that
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1:01:54if you don't, or you'd like a second
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1:02:29would say this, I'm just thinking in my
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1:02:33this? It's it's free. It's customized
1:02:36information and then you can choose what
1:02:38to do with it uh
1:02:40what to do with it, yeah, based on
1:02:41whatever you want. Um, lastly, just a
1:02:44reminder, if you want to see Mark and
1:02:46our other great lineup of faculty at the
1:02:48Thoughtful Money Fall online conference,
1:02:51it's going to be Saturday, October 17th.
1:02:54Don't worry if you can't watch live cuz
1:02:56everybody who registers is going to get
1:02:58replay videos of the entire event, and
1:03:00you're going to get those the same night
1:03:01as the event. A lot of lot of
1:03:03conferences take weeks usually to get
1:03:05you those replays. We get them to you in
1:03:07hours.
1:03:08Um,
1:03:09and so to sign up for that conference,
1:03:11just go to
1:03:11thoughtfulmoney.com/conference.
1:03:14And I highly recommend you go do that
1:03:15now because we are offering tickets at
1:03:17the lowest early bird price that we're
1:03:19going to offer. And I want to make sure
1:03:21that everybody gets that lowest price if
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1:03:35All right, Mark. Thanks for being
1:03:36patient through all that.
1:03:38Um
1:03:39I hope you have a great end to your
1:03:40summer.
1:03:41Um I very much look forward to you
1:03:43continuing doing what you're doing with
1:03:45all your unex. Um so, you know, looking
1:03:47forward to keep track of how your
1:03:49thinking evolves from here. But really
1:03:51excited for your participation in the
1:03:52conference. Thanks again for doing that.
1:03:54>> Thank you, Adam. Take care.
1:03:55>> All right, you too, buddy. Everybody
1:03:57else, thanks so much [snorts] for
1:03:58watching.

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