Celebrate Stock Market Milestones, but Don’t Forget About Bonds

Jeff Buchbinder:

Hello everyone, and welcome to the latest edition of LPL Market Signals. Jeff Buchbinder here, your host for this week with my friend and colleague Lawrence Gillum. You are getting a little bit of a happier version of me this week. Certainly, we like the S&P 500 over 5,000, and we'll talk about that. But me personally, I like the Kansas City Chiefs winning the Super Bowl last night, so hopefully everybody enjoyed the game. LG, I know you're a little under the weather, but hopefully you enjoyed the game last night, nonetheless.

Lawrence Gillum:

Yeah, for sure. It wasn't an interesting game. It was a good competitive game. You know, it's always fun to watch a game that's competitive and goes to the last minute. So it was a good game. I will say though, Jeff, that you and I are not one of the estimated 16 million people that called out today, so kudos to us for working after the big game.

Jeff Buchbinder:

Yeah, especially given it's the team I've rooted for my whole life. That won. I did stay up a little later than normal, but not late enough to not show up for work today. So, yeah, let's pat ourselves on the back. So yeah, we got a really good stock market to talk about. So, we'll hit that, the milestone 5,000 level. So Lawrence, of course, you're our bond guru here at LPL Research, so we're interested in hearing your thoughts on where you can find value in the bond market. The bond market's not getting a whole lot of attention now. It's really all about stocks and 5,000 and mega cap tech and all of that, but it looks like there's some sneaky value maybe in bonds, so, we'll do that next. And then after that, hey, here's more good news, <laugh>, right?

Jeff Buchbinder:

We raised our GDP forecast for 2024 in the U.S. A little bit in developed international as well, that's mainly Europe and Japan. But really the bigger move, the more meaningful move was in the U.S. as the odds of a soft landing continue to increase. And then finally a week ahead. It's a pretty, pretty busy economic calendar. So we'll hit that and close it out. It is Monday, February 12, as we are recording this about midday and stocks are up again today, adding to last week's gain. So let's start with 5,000 on the S&P, big number. And you know, certainly causes some people to think that maybe the market can't go higher from here. But that's certainly not what history suggests. We'll get to that in a minute. Looking at the intermarket performance from last week, it was a very growth oriented and cyclically led market again last week, which is really what we've been seeing all year and even you know, much of the back half of last year.

Jeff Buchbinder:

So you see the leaders, tech up over 3%. semis have been surging. Nvidia was up, I think 9% last week. So that's a big reason for tech strength. Arm Holdings has doubled in the last week, and it's actually a market cap of about 160 billion. So that is a meaningful amount of market cap added to tech enthusiasm that really started a, you know, a couple of months ago, I would say you know, with good results and good guidance from the likes of Taiwan Semiconductor you know, even at times you've heard some good things about from Intel you've heard some good things from ASML, big chip equipment maker overseas. So that's really been an area of strength that's powered tech to you know, essentially the best performance over the last three months. So you see here on the bottom left, growth has strongly outperformed value.

Jeff Buchbinder:

Actually, we think that'll continue for a while here. The earnings power is strong. It's still a pretty slow growth, slow economy. You know, with generally I would say low and stable rates. As long as we don't get too far above four, that tends to be a good environment for growth. And then you've got the U.S. continuing to lead. If mega cap tech does well, it's hard for the international markets to keep up. With the exception of Japan, Japan's keeping up. Up 10% year to date on the Nikkei. So really impressive performance there. That continues to be a market that we like. So turning to bonds and, well, anything you want to chime in on with commodities and currencies, Lawrence, I thought the high yield performance last week was interesting.

Lawrence Gillum:

Yeah, so it's been a slow start for the fixed income markets after the strong end to 2023 in terms of fixed income performance. It's not altogether surprising that bond market really hasn't done much this year. Over the past week in general, fixed income markets were down the Ag down about a percent in line with Treasuries and mortgages also down about a percent. We've seen rates higher, which we'll talk about in just a second, because of the unwinding of expected rate cuts that were priced into the market to end the year last year. We've been saying for a while now that we think that those rate cuts are overdone, and some of this backup in yields is warranted in our view. But that does mean that performance is negative for now.

Lawrence Gillum:

We don't think, obviously, that it's going to be a negative year for fixed income. We do think yields are going to fall from current levels, but it's just going to take some time until the Fed starts cutting rates. But we do expect at least four rate cuts this year by the Fed. And until we get either some softer economic data or, you know, the continued trend in inflationary pressures or disinflationary pressures, we're likely going to be in this trading range. But in the meantime, we're likely going to see these negatives in front of some of these indexes over the near term. We do like the core bond space, which we'll talk more about in just a second. But to your point, Jeff, the high yield bonds outperformed last week. They were positive on the week.

Lawrence Gillum:

And frankly, high yield bonds are not overly cheap at this point. In fact, you could argue that they're pretty expensive. But there is a carry component with high yield bonds that is attractive for a lot of investors. We'll talk about that in just a second too. But in the meantime, like I said, core bonds negative on the week, negative on the year. But we do think that the fixed income complex overall over the course of 2024 is going to outperform cash and generate some kind of, call it mid to high single digit returns in 2024.

Jeff Buchbinder:

Yeah, we're still recommending a slight overweight to fixed income funded from cash in the asset allocation recommendations from LPL Research. And that allows you to still be neutral equities. So, you know, again, we've had this pretty big rally. Certainly, we get that but for now we're riding it. The momentum is quite strong. A little more on the S&P. Well, first here, you see this run to 5,000 has been tremendous, of course, and this is a really strong chart, but, you know, we're a little overbought and we probably need a little digestion, I think. Most technicians would tell you that, certainly. But if you, I didn't go back further on this chart, but if you go back a little further to the prior highs at the start of 2022, we're only about 5% above that level, right?

Jeff Buchbinder:

So a 5% gain from January 3, 2022, to now certainly doesn't make it seem like we're too stretched. Also, you know, this bull market is up about 40 from October 2022. We did about 21 and then another 14 year one, year two. So this is a pretty typical year two bull market. But the difference is year one was pretty tepid, right? The average year one of a bull is up 40, and we were only up a little over 20. So, sure, are we stretched? Yes. But, you know, when you look at how strong this bull market has been and compare it to history, it's really not that strong, right? And again, look at January 2022, to now, we haven't really made a lot of progress, so feels like we're way up in the clouds. We're really not. Now I get it, the valuations are a little high.

Jeff Buchbinder:

But that's not a great timing tool. It doesn't tell you, you know, when we're going to correct, we need a catalyst. We're watching very closely for that, of course. But right now, based on the strength of fundamentals, and I'll show you an earnings chart in a minute, we think this rally is justified here. So this chart just shows how strong the S&P has been over the last 15 weeks, right? This is the first this is remarkable, the first time since 1972 that you've seen the S&P 500 up 14 out of 15 weeks. That is, that is tremendous consistency, right? Now, you could certainly draw the conclusion that we need to sell off from this, but history actually doesn't suggest that that's the right move. In fact, I got these numbers from Bespoke, Bespoke Investment Group, or BIG as we call them.

Jeff Buchbinder:

They do a great job with these stats. This is slightly different, but the same concept. There have been 15 other streaks. There've been 15 streaks where we went 70 days without a 2% dip, okay? After those dips, after those periods with no dips, the S&P was up an average of 13% for the subsequent 12 months. And up 87% of the time. Just really, really strong performance. And this is, it syncs up with the stats we've been sharing in recent weeks, right? When you hit a new high, stocks go up double digits on average the next year, especially if there's been a long wait for that new high, right? And then when you hit the 5,000 milestone, it's the same thing. This is from Adam Turnquist, our chief technical strategist. After the S&P 500 hits a major milestone, what happens? Double digits for the next 12 months on average.

Jeff Buchbinder:

I know it's a small sample size, but still makes the point that strong momentum tends to continue and a break to a new high is not a reason to sell. In fact, you know, you could argue it's a reason to buy. At the very least you get average returns. I thought the six month was interesting, here. You only need six months from these highs to go to get up 9% on average with, again, almost up nine out of 10 times. So great message I think for folks to, you know, get more comfortable owning stocks here. Despite how far we've gone. We've also had a great earnings season. It started out really messy. I'd say two weeks ago, it looked sort of typical. After last week, it looks quite good. You know, I won't go into all of these details.

Jeff Buchbinder:

You can see them here on the screen, but I'll just say to get almost three points of earnings growth in a week, which is what we did, is really tremendous, right? So we went from, you know, tracking to maybe one, to tracking to close to four on S&P 500 earnings growth for the year over year Q4 2023 to Q4 2022. So this has gone to a really solid place. And if you look at where the earnings product is coming from, it's coming from comm services, which is where Alphabet and Meta are. It's coming from consumer discretionary, which is where Amazon and Tesla are. And although Tesla didn't help the earnings growth last quarter. And then from technology of course, again, where that strength in semis is. That alone was 10 points of S&P 500 earnings growth.

Jeff Buchbinder:

So, the only reason we're only up four is because we've had some big drags, financials, energy, and healthcare. Last point here, guidance has been quite good. Last week, the forward estimates, that's 2024, actually went up slightly, which is very rare for this stage of earnings season. And we're only down about a half a point in the year to date period, 2024 estimate consensus S&P 500 earnings is holding up very, very well. So that tells you that those numbers are believable. So really good earnings supporting the S&P 500's advance. So Lawrence, let's go back to you and talk about bonds again, and then we'll wrap up with the GDP change and the week ahead. So, you know, you'd mentioned a couple of you know, areas of the bond market that, you know, you think are attractive. So we'll get to that in a minute. But first, we're looking, going to look at yields and you say they're range bound. I look at this chart and sure, looks, looks pretty range bound to me. What does that tell us?

Lawrence Gillum:

Yeah, for sure. Real quick just one comment on the earnings quality that you mentioned earlier. It's one of the reasons why the high yield market has performed as well as it has this year relative to the other markets. A lot of these higher yielding companies, these non-investment grade rated companies have outperformed their earnings expectations. And we've seen a bump in a lot of these smaller cap companies as well. So, it's not just an equity story. It is also a credit story. And the credit markets, while not cheap at all, are still looking good from a fundamental perspective, and that's translating it into positive returns for the high yield sector in particular. So, wanted to call that out real quick. But as it relates to rates, we do think we're in this trading range for the foreseeable future.

Lawrence Gillum:

Well, the near term anyway. That big decline in yields that we saw to end the year last year was because of an aggressive rate cut campaign expectations by the market. Markets were pricing in upwards of seven rate cuts in 2024. We thought that was too many. We've been talking about perhaps four rate cuts in 2024. So that the slight backup in yields that we've seen over the course of this year, there's been about a 0.3% increase in 10-year Treasury yields this year from the 3.88 that we started the year. We're around 4.18 now currently. So it has been an upward trajectory in yields. We think that we're in this 3.75 to 4.25 range as long as the data comes in better than expected.

Lawrence Gillum:

If we continue to see this disinflationary story play out, if we continue to see good economic growth, it looks like the Fed's not going to be in any hurry to start to cut interest rates. So you know, until that happens, we think we're going to be in this kind of 3.75, 4.25 range. So it's important to remember though, that, you know, if you buy a fixed income instrument, a Treasury security that's yielding 4.18, kind of, that's your expected return over the life of that instrument, regardless of what interest rates do. So when interest rates back up like they have recently, it's a good reason to start to look at fixed income again, because your yields and your expected return over the life of that instrument is higher now than it was to start the year. So the fact that we haven't seen yields fall, you know, tremendously from current levels, is a good thing for fixed income investors. It makes fixed income more enduring over time. So like I said, just because we haven't seen yields fall doesn't mean there's something wrong with the fixed income market. It actually just makes it a more compelling story over time.

Jeff Buchbinder:

Yeah. And we're getting falling inflation. We're getting, we think, a little bit of a slower growth economy in 2024. You know, if the Fed follows through with these cuts as we expect you know, you would think that would put some downward pressure on rates.

Lawrence Gillum:

Yeah. The challenge thus far has been the amount of supply expected to come to market this year. We've talked about just the amount of Treasury issuance, a lot of Treasury issuance expected to come to market this year, which would generally mean that yields won't fall as much as they otherwise would have absent the increase in supply. The Fed policy, is still the primary driver of interest rates. So as the Fed starts to cut rates, we will likely see yields fall from current levels. But we're not, we may not see as a big a decline in Treasury yields because of the supply challenges. Although last week was the first big challenge or first big hurdle for the Treasury market in terms of increased supply. There was a 3- year auction, a 10-year auction, and a 30-year auction last week.

Lawrence Gillum:

All of them outperformed expectations, and there was a lot of demands and kind of quieted perhaps some of those folks out there that think that we're going to see, you know, five, six, 7% type yields on these Treasury securities because of the increase in supply. We don't think that's going to happen. So, a lot more supply coming to market. So, it's obviously still too early or too soon to say that the supply demand picture is in complete balance, but it was encouraging to see the amount of demand last week to take down these larger auction sizes.

Jeff Buchbinder:

Yeah, that's great. So yeah, if we can hold in this sort of low fours range till we digest more of those Treasuries that can be helpful for the outlook, no doubt. Although for me, my goal is just to not say Fed rate hike anymore and say cut, because <laugh> too many times people slip up. We're looking for Fed cuts, looking for cuts. So far so good during the last you know, 10 minutes or so. So turning to credit, this is, you know, small caps have shown a little bit of life. I think despite the fact that we've had a troubled, you know, regional bank struggle with commercial real estate here, that's got a lot of headlines over the last couple of weeks, the credit markets overall continue to hold up well. I think that's probably what's encouraged the market to start buying small caps lately. You know, we haven't seen much sustained outperformance from small, but I think they're up they've outperformed, I believe, five out of the last seven weeks. So seeing a little bit of life out of small caps that probably aligns somewhat with this calm credit market, I would say. What do you think, Lawrence?

Lawrence Gillum:

Yeah, for sure. As we talked about earlier, the fundamental story for corporate credit for the corporate credit markets is still a fairly positive one. Certainly, there'll be pockets of angst or pockets of areas where there could be an increase in defaults. But when the Fed pivoted, when Chairman Powell pivoted from this higher for longer narrative a couple months ago, really potentially took the worst-case scenario off the table for a lot of these high yield corporate credit borrowers. There's still going to be a refinancing wave. A lot of these issuers still have debt that's very, very cheap, very low interest rates. They are going to have to roll that and refinance that eventually at these higher yields. But you know, it's not going to be as painful and dramatic as it was call it six months ago.

Lawrence Gillum:

So, and because of that, we've seen the corporate credit markets rally and really price in this soft-landing narrative that markets have really, frankly, fully embraced. If what we're looking, we're showing here on the screen is the option adjustment spread or the additional compensation for owning risky credits. So if you look at the high yield corporate credit market right now, you're only getting about 3% over comparable Treasury securities. So, in our view, that's not a lot of compensation or additional compensation for owning some of these riskier debts or riskier credits. Now, we don't think that spreads are going to widen significantly from current levels because of the economic backdrop has improved, and because the fundamental story still looks fairly positive, we just don't think spreads are going to tighten very much from current levels either.

Lawrence Gillum:

So you're kind of just sitting here collecting coupon, which is fine. You're, I mean, these bonds are still yielding six, 7%. But there is not a lot of, in our view, upside outside of just clipping coupons for the corporate credit markets. If you look at just in as where these spreads are relative to history, the high yield corporate credit market at 3.15% over Treasuries, is in the 10th percentile, meaning 90% of the time spreads have been higher. And then for the high-grade index, similar story at 0.95% over comparable Treasuries, it's in that 19th percentile. So nearly 81% of the time spreads have been higher. In general, you would get compensated more for owning these types of fixed income sectors. Right now, you know, the markets are really pricing in this soft landing. If we get anything other than that soft landing scenario we could see spreads widen from current levels, though. So we're not overly optimistic or constructive on corporate credit. But there is an argument for longer term investors that can handle some of that volatility to take advantage of some of these higher yields that you're getting in these markets right now.

Jeff Buchbinder:

So Lawrence does that mean, you think investors should focus more on the defensive characteristics of fixed income and obviously the yield and not think so much about, you know, tightening of credit spreads to potentially generate returns. How should people think about building portfolios?

Lawrence Gillum:

Yeah, for these markets in particular, like I said, we're unlikely to get spreads tighter than they currently are. It doesn't mean, again, it doesn't mean that we're going to see spreads wider than they are currently given the economic backdrop. But our view is that if you're a 60/40 type investor, you can take your risk on the equity side where you can have some, you know, decent price appreciation. Whereas on the high yield sector, for example, I mean, you're probably only going to generate a five to 6% type return, but with the potential for a, you know, a bigger loss there if things don't go the way markets are pricing in. So you know, the great thing about fixed income, and there's a lot of great things about fixed income, is that you don't really have to take on a lot of risk unless you're getting compensated for it.

Lawrence Gillum:

That's what your equity allocation is for. So our view is, you know, stay up in quality. If you are interested in owning high grade corporate bonds, our preference has been in the short to intermediate part of the corporate credit universe. You're not taking on as much duration risk or interest rate risk, and you're not taking on as much credit risk in that part of the corporate credit curve. But you're getting similar type yields. So, it does it is helpful to be a little bit more nuanced in your corporate credit allocation than just owning the index. We think that there's a better way to do that and that's how we've allocated within our discretionary asset allocation models to make sure that we're not taking on too much risk without getting the appropriate compensation for that risk.

Jeff Buchbinder:

Yeah, if you're not getting compensated for either interest rate risk, or credit risk, don't take much. And we don't know when this market's going to turn lower. Maybe the fixed income market will give us a clue as to when that might happen. But until then yeah, I agree. Take your risk on the equity side and have that fixed income cushion when you need it. You know, at some point you'll need it this year. I suspect this market will not go straight up between now and December 31. <Laugh>. So that's really nice to smooth out the ride with some fixed income and you can get good yields, which you couldn't get a couple years ago. So you got one more slide on bonds. I know Lawrence, which is about valuations of the different bond sectors. A lot of these dots and diamonds are up at the top of the bars. So what does that mean?

Lawrence Gillum:

That means that valuations are still relatively attractive versus history. Our look back window here, is the I believe it's 2007. So the yields that we're seeing in a lot of these fixed income markets are still amongst the highest they've been in over a decade, close to two decades here. So, we still think there's a lot of value in some of these higher quality fixed income sectors. We talked about corporates, although you know, they're yielding that 5.3% at the index level. The short to intermediate part of the corporate credit universe is yielding around 5.1%. So you're not giving up a lot of yield to invest in these short to intermediate parts of the corporate credit universe. Our preference, though, is again, to stay up in quality. AAA rated mortgage-backed securities are yielding around 5%.

Lawrence Gillum:

Treasuries are yielding around 4.5%. And those are going to be your ballast if things don't go well. Right now, if interest rates don't change at all, if yields don't change at all, and the Fed only cuts rates four times this year, like our expectation, and say the 10-year Treasury yield doesn't move a lot from current levels. Your expected return for these fixed income markets is your starting yield. So you could get a five-ish percent type return by owning AAA rated mortgage-backed securities. But if things don't go so well, and the economy falters, or there's a bigger perhaps geopolitical event, we could see yields fall from current levels. And that's when you start to generate these high single digit, low double-digit type returns for owning this high-quality fixed income sector. So, our preference is to invest in these mortgages, the Ag, Treasuries, even munis, high quality munis, clip the coupons, collect the income and if things don't go well in the economy or in the geopolitical realms you have that buffer. You have that ballast to your riskier segments of the riskier segments of your portfolio.

Jeff Buchbinder:

Yeah, I think that's excellent advice. This is what diversification's supposed to look like, right? You're, it's a little bit of an insurance policy. And by the way, with, you know, how far stocks have come, we're going to have to review our fair value target on the S&P 500 because we've just raised our GDP forecast as I'll get to in a minute. And of course, stocks are just tolerating higher valuations at this point than we thought they would this early in the year. So you know, the upside in equities is getting a little bit more modest, the upside potential, right? We don't think we're going to go full blown late 90s. So in that environment, the risk reward for fixed income might even look a little bit better than equities here because of the lower risks.

Jeff Buchbinder:

So thought that's worth highlighting. So let's quickly go through the GDP change. This is the subject of our Weekly Market Commentary. Jeffrey Roach, our chief economist, did a really nice job spelling out why we've gone up. We're basically consensus now. We went from one to 1.4% on U.S. GDP, and we took the advanced economies GDP forecast up 0.1. So there's a little bit of spillover. If the U.S. does better, you know, that's stronger exports for the rest of the world. We left the Eurozone and emerging markets alone. So this is really just a U.S. call. So why do we do it? Number one job market stronger than we thought, stronger than first reported too, by the way. And so the December upward revision in payrolls was huge. And we got some upward revisions in payrolls in October November, too. So when we started writing the Outlook in, you know, last fall, and we published those forecasts they were based on an assumption that the job market was a little bit weaker than it actually was.

Jeff Buchbinder:

And of course, that's, you know, more jobs is more pay for consumers and more money to spend. The other big reason that we raised our forecast is we're seeing, you know, banks ease lending standards, and we've seen loan demand pick up a little bit. This is from the Federal Reserve Senior Loan Officer Survey that they conduct with banks. And so the top line, it's broken down into large banks, small banks. But the sort of grayish blue lines at the top that is the percentage of banks tightening, it's coming down. The orange and blue lines at the bottom, percentage of banks seeing more loans, more demand for loans, that's ticked nicely higher. I'm just talking about in the last, you know, few quarters. So this is a, it syncs up, Lawrence with what you were saying.

Jeff Buchbinder:

The credit markets are doing pretty well, look pretty healthy. And you know, that's certainly reflected in the risk that banks are willing to take. Now, here's a little bit of the other side of this. You know, the good news on the economy, this is dividing consumer spending into services and goods. So if you see services, which is the blue line at the top, it's gotten back to its trend. Remember, services economy was shut down during COVID. Now obviously the economy is fully open, so you're seeing back to trend services spending, right? But if you look at goods, goods got way ahead of themselves, way above trend. We were buying a lot of stuff during COVID that, you know, got delivered onto our porches. That has come way down but, you know, closer to trend, but it's still got more to come.

Jeff Buchbinder:

So that is really the main reason, you know, why you're going to see slower economic growth this year. It's still, you know, one and a half will be fine, but it's certainly slower than the closer to, you know, 2.4 that we saw last year. So, that's that, that's our Weekly Market Commentary, which you can find on lpl.com on raising our GDP forecast. By the way, we also have a section in there on fiscal spending potential. So there's even upside to those GDP forecasts. If we get a tax bill, they're working on it in Congress now, there's upside to defense spending expectations. We know about the defense bills, you know, aid to Ukraine and Israel, Taiwan. We don't know if that's all going to come through, but if it does you've got some nice upside to the economy in 2024. So let's preview the week, Lawrence. I know you look at the calendar closely. I mean, I'm eyeing the CPI. If we get a two handle on the headline CPI year over year, I think that would be a pretty cool message for the markets. What are you going to be watching this week?

Lawrence Gillum:

Yeah, it's all about the inflationary picture as well as retail sales. So, we'll see if we continue to get this disinflationary story, which is a positive one for sure. I believe that we recently changed our inflation outlook as well, right? So, we think that the Fed is going to get back to target, back to 2% sometime this year. So the inflationary story could be a 2023 story and not necessarily a 2024 story, which should allow the Fed to start to cut rates. And then retail sales. We know the consumer's been stronger than expectations. And look, you know, if we go by the survey data, it looks like the, you know, retail sales should be another positive growth story. A couple things just that aren't on here. There is Fed speak this week. There's, I think nine or 10 different Fed speaking engagements that tends to bring volatility to markets. So we'll have to see how those play out. But importantly, on the fixed income markets, we talked about the amount of supply coming to market, no auctions this week, so we don't have to worry about figuring out if there's solid demand or not. So should be hopefully a quiet one on the fixed income side.

Jeff Buchbinder:

Yeah, the, you know, the markets had some time to adjust to fewer rate cuts. And you know, I think most of that process is probably behind us. There could be a little bit of a, I mean, tantrums too strong of a word, but maybe some jitters if we, you know, get to the point where the markets pricing in three instead of four, four instead of four and a half. But I mean, the move from seven to four and a half I think was really the big one. So hopefully the market adjusts comfortably to you know, fewer cuts from here. We'll have to see. Obviously, that'll be in the back of the market's, mind, investors' minds as we get this inflation data this week. So yeah, it's pretty much all about inflation. I think the retail sales, maybe there's a little bit of risk to the downside because of the weather.

Jeff Buchbinder:

It was really cold in some parts of the Midwest and to some extent the Northeast and that freeze could end up translating over into soft retail sales. But the expectations from economists aren't really that robust anyway. You know, up 0.1%, ex autos, month over month or down 0.2% month over month all in. So that'll get some attention. But don't expect too much in the way of spending in January. You also have <laugh> people who spent a lot during the holidays and took a break. So we'll go ahead and stop there. Thanks everybody for listening. Certainly Lawrence, greatly appreciate your thoughts on the bond market. Lord knows, as a chief equity strategist, I don't know a lot about bonds <laugh>. So glad you were here to paint the picture there of some areas in the bond market that look interesting. So we'll go ahead and wrap there. Everybody, have a wonderful week. As always, thanks for listening to LPL Market Signals. We'll see you next time.