Breakouts, Breadth, and Battle Lines: The S&P 500 Returns at 4,200

Jeff B. (00:00):

 

Hello everyone and welcome to another edition of LPL Market Signals. Jeff Buchbinder here with you today with my friend and colleague, Adam Turnquist. Adam, how are you today?

 

Adam T. (00:11):

 

Hey, happy Monday, Jeff. Good to be here. How are you doing?

 

Jeff B. (00:15):

 

I'm doing well, thank you. We're celebrating another tick above 4,200 on the S&P 500, certainly a key technical level. So since we got a lot of interesting things going on, technically, Adam, I am glad you are with me this week. So that's kind of the highlight of the market recap section, back to the battle line of 4,200. Here's the rest of the agenda that we have for you today. It is Monday, May 22, 2023, as we're recording this Monday afternoon. Next, we'll talk about some breadth indicators and some chart breakouts, followed by a technical take on bonds. And then a preview of the week ahead where we have the Fed minutes on Wednesday and we have the core PCE deflator, which is the Fed's preferred inflation measure. So, starting with the market recap, so Adam, we've talked about this a lot, you know, over the past month or so about the technical resistance. So, we've just touched 4,200. My first question for you is, how long do we have to be above 4,200 to call it a breakout?

 

Adam T. (01:27):

 

Yeah, good question. And I think you got to keep the champagne on ice here for the rest of the week, because I like the weekly close above a key resistance level, so that would be what we're looking here. Technically, we're just about there or right around that level today, going into the close here, but certainly a constructive technical backdrop when you look at where we're at. Just, you know, going back to those October lows, you know, we've been making a series of higher highs and higher lows. We're now above a rising 50- and 200-day moving average, momentum actually changed last week. We got a MACD buy signal that stands for moving average convergence divergence. Basically a momentum indicator that looks at two moving averages to determine kind of a buy or sell position. So that flipped into a buy signal last week.

 

Adam T. (02:18):

 

I give a buy signal and an uptrend a little bit more weight in terms of its probability of being right. So, we'll see if that plays out. And when you look at short positions in the S&P 500, they continue to pile on. So if you look at the bottom panel of the chart we brought today, that's the short futures positions for the S&P 500 E minis, and they're at the highest level since June of 2020. And the headlines back then, I was looking using Google search to, you know, read through the news and it was, this is just another bear market rally. Kind of the same tone that we're getting from a lot of the headlines today. So a lot of negativity in the market. I think if we can actually have a sustainable breakout above 4,200, we could see some short covering rally quickly move the index to those August highs that we've also talked about a little bit, right around 4,300. That's another big retracement level of last year's bear market. I think that one's going to be another problematic level to get through, but I think it could be a relatively quick trip to get there. Just given where the sentiment is right now in the market and where futures positions are, and then just this most recent change in momentum. So a pretty good setup as we retest that key level right now.

 

Jeff B. (03:38):

 

Yeah, maybe the debt ceiling will get us clearly through that 4,200 level and maybe more shorts capitulate and we're at 4,300 pretty quickly. So, thank you for that, Adam. Here's the intramarket performance from last week. You know, there you see another good week for the S&P 500 up 1.7%. We're actually up about 10% for the year now total return. So you know, for those who may have thought a double digit year was not attainable we're already there and we're not even at the halfway point. You know, we of course don't know if it's going to hold but we think there's certainly a decent chance that stocks can make up more ground in the in the coming months. Interestingly, Europe and Japan have done even better. They're better over the past six months, which you see in this table. The Euro Stoxx 600 and the Nikkei 225 they are also both better year to date in dollars. So, we have, in our tactical asset allocation for LPL Research moved away from the U.S. a little bit and toward international. In terms of sectors, Adam, it was a big growth week. I mean, we had right tech and consumer discretionary do well.

 

Adam T. (05:00):

 

Yeah, I think the big story too is how well tech did, despite the 10-year moving up 20 basis points, actually looked back at history to see how often has tech rallied 4% during a week where the 10-year was up 20 basis points. A pretty rare occurrence less, I think it's right around 1% of the time, but the last time we actually had the sector rally over 4% and the 10-year up 20 basis points was in July of 2011, if you remember that period, that was also a debt ceiling drama or debate or crisis, whatever you want to call it during that period. So, an interesting anecdote, at least from history there. So.

 

Jeff B. (05:44):

 

We're actually going to talk about 2011 again during this podcast. So that'll be a recurring theme. Stay tuned for that. So yeah, it's been a growth-led year. It's, you know, whether you're looking at a week, a month, three months, six months, you pretty much see growth outperforming primarily tech and consumer discretionary. You know, there's a little bit of AI enthusiasm going on here, right? Artificial intelligence, certainly playing into the mega cap tech strength. But you know, maybe just putting it more simply, when growth is scarce, you tend to see growth stocks do better than value. And so now as we, you know, maybe slow down coming off of a, you know, pretty solid GDP the last couple quarters and transition potentially to a mild recession around year end makes sense that growth would do a little bit better. So, a couple things going on there in terms of fixed income, you know, we had rates tick up, you just mentioned it, Adam, so that weight on bond returns, I mean, at 3.7 on the 10-year, you know, bonds can offer some pretty good returns. So, we continue to be neutral in our recommended tactical asset allocation. On the commodity side, you know, everybody's been watching gold. That's maybe another bullish indicator that gold's been struggling a little bit here over the last week or two.

 

Adam T. (07:10):

 

Yeah, certainly the kind of a relief rally in the dollar has certainly weighed on gold. Just more recently, you know, the dollar was pretty oversold, caught a bid off a key support level that we were watching, and we had this kind of relief rally back the other way. We have not reversed the downtrend, excuse me, on the dollar at this point. Looks like maybe a potential spot where you'd see that the dollar start to weaken as that momentum fades into that, the longer term down trend. But certainly weighing on gold, at least on a short term basis. You know, energy was finally up last week. That's a big contributor to the overall Bloomberg Commodity Index, which was flat on the year, so it kind of balanced out, but still looking for more technical evidence in terms of where WTI crude oil is, you know, it's managed to hold above its March lows, but really not enough evidence right now to make the case for a bottom in crude oil. I don't think so. Another commodity that we're watching closely though.

 

Jeff B. (08:15):

 

I would argue that the most important thing in commodities right now is deflationary, right? Following commodity prices or disinflationary, right? Helps cool inflation and it's certainly been doing that in recent months. So just kind of wrapping up the discussion of the S&P 500 here. I thought this was really interesting. You know, I kind of took a concept from Bespoke Investment Group and altered it a little bit and kind of made it my own study. If you look at all of the years where we've been up 8% or more through 96 trading days, so that's as of this past Friday, you actually see the rest of year is positive almost every time. And a lot of these years are strongly positive. The you know, 1987, clearly not, right? We had a strong start to the year, which is part of why we had the 87 crash.

 

Jeff B. (09:18):

 

So that is clearly a very unique situation. The only other decline rest of year. So, we're talking about the 150 trading days, roughly after the first 96. The only other time we were down was 1975, and that was marginally lower. You've been up an average of 9.5% and you've been up 90% of the time. So, you know, this is just one example of a study that suggests that, you know, maybe it's a little too early to get bearish, you know, for folks who feel like they have too much risk, maybe that 4,200 or 4,300 range makes sense on the S&P 500 as a place to consider trimming. But boy, it's hard to sell into a study like this, Adam.

 

Adam T. (10:00):

 

Yeah, I was surprised by the results of this. I mean, it also overlaps with some of the other seasonal studies that we've published on, you know, that's years following a down year are typically higher, trifecta years with that January barometer and Santa Claus rally you know, positive there by double digits and then just midterm election years. So it kind of just goes into that seasonal tailwinds, at least historically what we've seen. But yeah, certainly some pretty impressive numbers for the remainder of the year at least historically.

 

Jeff B. (10:32):

 

Yes. There's certainly a lot of reasons to be bearish. We talk about it or we hear from the media <laugh> about it every day. But, you know, you say it all the time, Adam, the weight of the evidence points, you know, maybe to higher being more likely than lower. So, let's continue the technical discussion and get into a look at breadth and then some breakouts. This is the fun section, right? So, you know, a lot of attention, Adam, on how the mega cap techs have been leading this market, and we haven't been getting a lot from the rest of the market, and that's true, that's just math, right? If you take out the mega cap techs of the top seven names, the market is basically flat year to date. So, you know, it's true that those big names are carrying us. But is there anything that you can tell you know, from looking at the breadth of the entire market that maybe suggests we shouldn't be too worried about that?

 

Adam T. (11:29):

 

Yeah, I mean, certainly mathematically that makes sense. If you just take, you know, the extreme rallies in some of the mega cap names and their weighting, they're obviously huge contributors to this year's advance. So, we'll give you that one, but it's not as terrible as it sounds. You know, when you look at some of the breadth metrics that we look at, you know, you have around 30% of stocks outperforming the S&P 500 this year. That's a historically low number, but when you look at the actual composition of what stocks are outperforming, you have 59% of tech stocks that are beating the market. I think that's a pretty constructive sign, just given the weighting of tech within the S&P 500. You also have nearly or call it 47% of consumer discretionary stocks outperforming the S&P 500.

 

Adam T. (12:18):

 

So, if I were to pick a couple sectors that had the highest percentage, those would probably be the two just given their weighting. And then the read-throughs in terms of their more cyclical you know, their cyclicality in terms of the economic cycle. So, there's some positives that go along with it. I guess call them bright spots. We have seen a shift just really earlier this month with some of the more defensive names with healthcare starting to put up some better breadth. Same with staples, that one's hard to ignore. So, it's kind of a really, a mixed picture overall, I would consider it okay, at best, certainly would like to see financials participate a little bit more. I think that would be a key piece of the puzzle for a breakout above 4,200. I think we would need some of these breadth metrics to look a little more constructive, but overall, I would give it the okay at best for right now.

 

Jeff B. (13:17):

 

Yeah, we've been advocating for more balance between, you know, the cyclical sectors and the defensive sectors. But if you are looking for defensives, I mean, it's interesting that, you know, staples and healthcare are starting to look better. I think those would certainly be our choices over utilities at this point, and certainly over real estate which does have some defensive characteristics. So, let's look at some breakouts now, Adam, I think, I mean, you've already mentioned tech. This is just the chart of the S&P 500 tech sector. I mean, this looks like you know, a real favorable chart pattern here. I mean, we're talking about breakouts that, you know, that are clearing levels that we haven't seen in a while.

 

Adam T. (14:02):

 

Yeah, I would say this one's firing on all cylinders. When you start with the absolute price chart on top, you can see we've been climbing higher really since we made those December lows. We're now back above the August highs. That was a key level that we were watching, technically, took quite a few tries to get through it. And you can see last week we cleared the August high level, pretty decisively. And now the sector is trending higher above its rising moving averages. Looks like we're setting up for a retest of the March 2022 highs. So some more upside to go on the absolute. And then you're also getting a breakout on the relative chart. That's the bottom panel comparing the sector to the S&P 500, and that cleared the December 2021 highs, which is another level we are watching very closely. So, you're getting the breakout on the absolute and the relative basis, and which is crazy on that bottom chart, that's the highest level on that ratio chart since 2000. So maybe not the best analog, but directionally, you know, the trend is your friend here with the tech sector relative to the S&P 500.

 

Jeff B. (15:14):

 

Yeah, pullbacks will happen, hopefully not as big as what we saw for tech in 2000, but the point being, when you break out, what's the expression? The wider the base, the more room in space or something like that, <laugh>, right. You know, I'm not the technician, you can tell just from how I butchered that comment. But when you break out of, we're talking about it with Japan too, which is the next chart, right? Yeah. When you are breaking out into levels, whether it's a relative chart or an absolute chart that you haven't seen in decades, <laugh>, you know, it's really eye-opening. And I think, you know, when you can combine the breadth, you know, we have decent breadth in tech, we have good breadth in Japan with these breakouts, can set up for a nice run.

 

Adam T. (15:55):

 

Yeah, absolutely. This is looking at the MSCI Japan Index, and you had kind of this initial breakout from this multi-year or multi-month, we'll call it, consolidation range. That's the kind of the red and the green boxes. And it's continued higher just recently clearing those September 2021 highs. So now you're at the highest level since I think it's June or July of 1990. And this breakouts occurring on gaps higher, continuous gaps higher. So very good momentum in terms of the price action. You can see in the middle panel, that's the relative strength index, a momentum oscillator that we like to look at. You're extremely overbought right now. And I always like to say, you know, overbought does not mean over. This to me is more validation of the breakout. You want to be overbought. If you have a momentum indicator that's making a new low or not overbought, especially when you're making like a new major high that's what we would call more of a divergence.

 

Adam T. (16:57):

 

So, we're getting confirmation here with momentum and also on the relative basis. You can see in this bottom panel that's MSCI Japan versus the All Country World Index, and you're just getting back above those March highs. So, another less meaningful, but an important breakout on relative strength as well. And we're seeing that ratio chart move above its rising 50-and 200-day moving averages. So I think this one has some sustainability. Certainly, a little overbought, could see a little bit of a shorter term pullback, but directionally, I think this moves higher. I know valuations, I don't know if you're going to touch on that, look relatively cheap in Japan. Obviously they're kind of the last frontier in terms of that ultra-dovish policy with the Bank of Japan keeping things contained with their yield curve control program. And it doesn't sound like that's going to change, even though they did get a new Bank of Japan governor. So we'll see how that plays out. But right now it looks like we're seeing pretty good inflows into Japan.

 

Jeff B. (18:01):

 

Yeah, certainly. Warren Buffet made a lot of headlines about his investments in Japan and you know, they've been struggling fighting deflation for decades. This inflationary environment is actually good for them. <Laugh>, you know, as odd as that is inflation in Japan is good, you know, and then with the rest of the world not growing all that fast, Japan, you know, they've been growing pretty slowly for a long time on a relative basis, that looks okay. So, you've got a really cheap market that compares better than it has in recent decades, on a macro level. It's just made for almost a perfect storm of positives here where you have fundamentals, valuations, technicals, all kind of aligning. And this is one of our favorite ideas right now, no doubt. So you know, in the interest of being balanced, Adam, you wanted to put in a more of a bearish chart, I guess.

 

Adam T. (19:00):

 

Yeah, this one definitely

 

Adam T. (19:03):

 

qualifies as bearish, we'll give you that. And this is looking at the S&P 500 utility sector, and it was in an uptrend for most of, you know, the last, call it last year or part of last year. And we started to see utilities roll over. Can see on this chart we've had lower highs going since September or really September of last year. Had a little bit of a relief rally more recently off support that ended right at that down trend, right around the 200-day moving average. That's the spot where I always say relief rallies go to die. And that's pretty much what happened here. We've seen price action subsequently roll over, now you're back below both your 200- and your 50-day moving average. Looks like we're going to go retest those March lows here for the utility sector.

 

Adam T. (19:49):

 

And then when you compare it on a relative basis versus the S&P 500, this is even more concerning because you're breaking below those March lows already. Clearly there's a downtrend in play right now for utilities. So, meaning that there's likely more underperformance ahead for the sector, you're at over a year low on that ratio chart. So, again, looks like some more potential downside or underperformance for utilities. Certainly, higher rates have weighed on, you know, the sector just recently, and some of those risk-on flows, you know, even last week, for example, utilities was an underperformer. So look for more of that, I think, ahead.

 

Jeff B. (20:30):

 

Great, thank you, Adam. Let's go to fixed income. We've touched on yields a little bit, but not much. So the 10-year has been inching higher. Should we be worried about, you know, a break above 375? Maybe we go back to four? What do you see for the 10-year?

 

Adam T. (20:50):

 

Yeah, so we've kind of been stuck in this really short term kind of consolidation range. We did get a divergence with momentum, that's the middle panel, that MACD indicator. So, we're seeing, you know, higher lows here with MACD that moved into a buy position. So that was, you know, pretty good signal that we could get a top side breakout from that range. And that's really what played out just recently. So, I think, you know, upside here is going to be relatively limited. Call it, you know, 3.88 to 4% I think would be kind of the cap in terms of where resistance sets up. You're still fighting against this downtrend that's been in place since last October. And keep in mind, you're also still fighting potentially the Fed, especially if they are in the pause camp, or we start talking more about rate cuts.

 

Adam T. (21:39):

 

I know you're going to talk a little bit about that on the upcoming slide here, but you look at the bottom panel, the short contracts for 10-year Treasury futures, meaning they're wagering on yields going higher, they are actually at record high. So there's a ton of money in the market right now pricing in higher yields. Keep in mind, a lot of times that record or extreme positioning in futures contracts is actually more of a contrarian sign. So, I don't put a ton of weight in that being a record high. A lot of times, like I said, that plays out in the opposite direction. But I think you could realistically maybe get back to kind of that close to 4% as a kind of a max upside here for 10-year yields.

 

Jeff B. (22:27):

 

Yeah, so maybe folks have put on their hedges already and there's nobody left to do more hedging, and that sets up a maybe. And we also you know, we know that, well, we think that this economy is, you know, potentially heading for a mild contraction, maybe the end of this year. Maybe it slips into early 2024, that should be, you know, negative for rates. And then Fed pauses tend to be negative for rates. We have that, not on this slide, but on the next slide. So, you know, we wouldn't be too worried about the risk of yields, you know, spiking through 4% and going much higher. We think the, you know, the downward pressure will offset some of the upside pressures, and there are upside pressures, right? Maybe this economy does a little bit better than people think. You know, the Fed's still considering hiking rates in June.

 

Jeff B. (23:21):

 

We don't think they will, but it's certainly possible. The job market is still tight. You know, rental inflation, you know, real estate inflation is still a little bit of an issue. So you know, there could be a little bit of a move higher in rates from here. On a fundamental basis, the Fed is obviously you know, not only are they potentially going to raise rates again but they're also doing QT, you know, reducing the size of their balance sheet by selling bonds, which is rate positive. So, you know, we're not just sort of discounting the risk of higher rates, but we just think the negatives for rates offset the positive. So, this chart Adam is interesting. I don't think we've shown this chart before on this call, just stocks versus bonds. So, what is this? What looks like a pennant pattern? Yeah,

 

Adam T. (24:16):

 

You've been doing your studying on technicals I see. So, you can call that a pennant or symmetrical triangle. Yeah.

 

Jeff B. (24:23):

 

Fundamental guys are coming, look out.

 

Adam T. (24:26):

 

Exactly. <laugh>. So yeah, this is the ratio chart, just a simple one of the S&P 500 versus the 10-year treasury price. So, we're stacking them up, you know, in this stocks versus bonds scenario. Higher meaning, you know, stocks are favorable. If it's moving lower, that would be bonds would be more favorable. And sticking with this breakout or breakdown theme for today, we're starting to see a breakout here on this stocks versus bonds ratio chart, kind of consolidating for really the last year, little over a year, at least on the ratio chart. And now we witnessed a breakout just last week on this chart. So more, you know, more evidence of potential a, you know, money moving into equities. I think, you know, if you're in a bull market or at least an uptrend, it's, you certainly want to see stocks outperforming bonds. So we're getting some evidence of that here. And I don't necessarily mean, or I don't think it necessarily means that we're, you know with the yields right now that it's really directional. I think it's more of a story of yields consolidating, which allowed equity markets to start advancing. So I think that's, that's how I'm looking at it as more of a takeaway versus any directional call on at least the 10-year right now.

 

Jeff B. (25:41):

 

Yeah. And our asset allocation we're neutral fixed income, and we're shifting a little bit of cash into equities to fund a small equity overweight. So, that's consistent with the picture that you see here. Here's by the way, these are charts from our Weekly Market Commentary, at least a couple of them for this week, available on lpl.com, where we talk about the outlook for fixed income for the rest of the year. We showed this chart last week, but it's just important and really fits in with the story here. This is just the path of the 10-year yield after the Fed has completed its rate hiking cycles since 2000. And you see here they're all lower, particularly in 1995, which Adam was a soft landing, as you've pointed out to me recently. But you know, even 2006 where you were clearly heading for a bad economy, for a number of reasons, rates you know, I mean, they were down, they weren't down sharply. I mean, this tells you that maybe 375 holds on the upper end and, you know, inflation keeps coming down. Maybe we're at 3.5 in a year. What do you think?

 

Adam T. (26:57):

 

Yeah, I think that's a fair assumption. And I think the macro forces alone, if you just take out the technical picture would certainly point to that as well. So, I think, you know, the certainly where policy, at least how we see it now that would make sense.

 

Jeff B. (27:14):

 

Yeah. So, we're comfortable with a full allocation to bonds, you know, consistent with your target, even though we've had this massive move higher in rates over the last couple of years, we think it's just about done. So, Adam, let's preview the week. Good technical discussion. A lot of interesting ideas for folks to consider. The highlights of the week are the Fed Minutes on Wednesday. And I say this every time the Fed minutes show up here. They shouldn't be market moving because it's just telling us what we should already know, right? You know, the Fed, you know, they have Powell press conference, they, you know, go out on the speaker circuit. And we've heard from I think 14 different Fed speakers in the last week, something like that. <Laugh>. I mean, it's just dizzying, frankly, how many Fed presidents and governors are talking now.

 

Jeff B. (28:10):

 

And so that transparency reduces the chances that we get a surprise in the minutes. So we're not going to, you know, necessarily say that that's going to be market moving, but the odds of a rate hike in June are now around 30%. Hopefully that comes down a little bit. We don't think they should hike again, and we don't think they will. And then turning to the right. So, Adam, we got personal income and spending with the PCE Deflator. You know, inflation is so key to where this market goes from here, the debt ceiling, there's the 2011 comparison again, right? We don't think we're going to have another 2011 with the debt ceiling where we get an, you know, an S&P downgrade and default fears intensify or anything like that. So, once we get past that, I think the markets, and we're done with earnings pretty much, I got an earning slide next. It's really going to be inflation while we kind of wait to see if we're going to get a recession or not, or how bad it might be. Inflation's the key driver for this market.

 

Adam T. (29:16):

 

Yeah, absolutely. And we'll get a little glimpse of that on Friday with obviously with the PCE and then the University of Michigan survey data that comes out as well. So should be an interesting, or I think a welcome distraction from some of the deal or no deal debt ceiling drama that we're continuously listening to.

 

Jeff B. (29:37):

 

Yeah, when people listen to this podcast, they'll probably know whether the Monday discussions between McCarthy and Biden were productive. Well, maybe we'll see more theater, which is what we've seen the last few days where, you know, somebody storms out and says, you're being ridiculous <laugh>, right? Could be either side, frankly. But the fact remains that everything's pointing to this taking more time right up to the deadline. Which my, I guess the last I saw, maybe June 8th, they could get to you know, Goldman Sachs highlighted that date. But Yellen and others have been pointing to June 1 because we've had soft tax receipts, right? The government has soft tax receipts and they run out of money sooner. So, you know, we're running out of time <laugh>, so we're getting close to that 11th hour that everybody's been talking about.

 

Jeff B. (30:34):

 

So everybody's going to focus on the debt limit talks, of course. But inflation, I think is going to be probably the biggest driver of the week. As long as nothing crazy happens either with the debt limit or with geopolitics. I guess this University of Michigan survey of long-term inflation expectations will also be interesting because that ticked up last month. We certainly want that to come down a little bit consistent with the path of inflation that we've seen over the past year. So, wrapping up with earnings, we also get another 25 or so earnings reports over the next couple weeks. So, I wanted to squeeze in a quick summary of this. We're getting in Nvidia this week, which is a big name, but mostly it's just going to be smaller names, some retailers, which typically kind of bring up the back end.

 

Jeff B. (31:34):

 

So, you know, with that small of a number of companies left, we're not going to see these numbers change. And they're very good. You can see here on the screen the beat rates 79% on earnings, 75% on revenue, those are very, very good, you know, especially in a challenging environment. Two numbers I think on here that are really good. The down 1.8% for earnings year over year, we were looking at down seven when reporting season started. That is really nice upside, better upside than we've seen in the last few quarters. And I think a surprise to many, the, probably the biggest reason for that surprise is margins. Margins actually went up quarter over quarter. I don't know of anyone who saw that coming. I think that's a shock. I think that was shocker to everybody, frankly. And I follow a lot of shops and read a lot about earnings, you know, previews and whatnot.

 

Jeff B. (32:32):

 

And that was not on the radar, <laugh> not even for me. And I consider myself kind of a perennial earnings bull. The other thing here that's really positive, Adam, is the resilience of estimates, right? Typically they fall close to 3% during earnings season. I think the average is two and a half, but somewhere in that two and a half to 3% range. And this earning season, they only fell 1%, you know, which doesn't sound great, but it's better than we normally get. And remember, there are a lot of folks out there, really smart folks doing a lot of rigorous analysis that are pointing to, you know, five to 10% more downside to estimates this year. So, I mean, clearly you know, market participants are underestimating the earnings power of corporate America.

 

Adam T. (33:25):

 

Yeah, and I think been quite a surprise this year for earnings. And I mean just the overall consumer strength, especially some of the commentary you'll hear in some of the retail calls, at least, I was reading through some of those. It was definitely not pointing to a full-blown recession anytime soon by some of the retailers. So some constructive comments around the overall consumer, which has certainly helped, I think, prop up some of these numbers.

 

Jeff B. (33:54):

 

Factset counts number of words that are interesting in these transcripts. And they've actually seen among the lowest numbers of mentions of recession in the past five quarters, and the lowest number of references to the word inflation over the last four or five quarters. So you'd have to say those are positive developments too. Frankly, corporate America is doing just fine. They've been preparing for a downturn for a while. And again, markets just underestimated the earnings power. And this has been bullish, of course, for stocks. And one of the reasons why we, you know, what are we now like 17% off the October lows now I think, so you know, again, 10% year to date, roughly as we're recording this. Earnings have been one of the factors that have helped drive stocks higher and we think they could continue to surprise, frankly, to the upside with expectations as low as they are. So with that, we'll go ahead and wrap. Thanks Adam for walking through those charts. Really, really interesting stuff. Couple of investment ideas there for folks listening. As always, thanks for joining and we'll be back with you next week for another LPL Market Signals. Take care, everybody.