Market’s “Out-Hawking” the Fed

Jeff Buchbinder:

Hello everyone, and welcome to the latest LPL Market Signals podcast. Jeff Buchbinder here, your host for this week with my friend and colleague Lawrence Gillum. Lawrence, happy Solar Eclipse Day. How are you?

Lawrence Gillum:

I'm doing good. I'm excited about this solar eclipse. I guess it's going to happen in the next hour or so here. Unfortunately, we don't get the direct view, but it's still exciting, nonetheless.

Jeff Buchbinder:

Yeah, you know what else can block out the sun is those two big men playing in the NCAA championship tonight. Those are some, some big boys, so that'll be a fun game to watch, a fun matchup tonight. So it's not just Solar Eclipse Day, it's also National Championship Day for the men. Great game yesterday in the Women's league too. So we got a lot to talk about today. So the Weekly Market Commentary is on earnings, so that's going to be one of our topics here. I'm glad Lawrence, we have you with us so we can talk about the bond market because we've had, you know, pretty meaningful sell off here lately. And I mean, it hasn't been the entire reason why the market's been a little bit jittery. I think the Middle East is part of it too, but certainly, you know, rising rates and which is obviously related to what the Fed's going to do, been a very popular topic of late in the financial media.

Jeff Buchbinder:

So we'll spend most of the time on that. And then wrap up with a week ahead. The economic calendar has, you know, a fair amount on it, but I think inflation really stands out, the CPI and PPI. So get your thoughts on those two, Lawrence. It is Monday, April 8, 2024, as we are recording this. So let's get in the market recap first. We've titled this Rising Rates and Geopolitical Jitters because, you know, I really think those are the two biggest factors here, you know, driving this small bout of volatility, you can almost, you can hardly call it much volatility, right? Because, you know, markets are pretty close to all-time highs, but we did drop about 1% last week in the S&P, you know, hovering around that 20-day moving average. The next level of support we want to watch is the 50-day down around 5,082.

Jeff Buchbinder:

But, you know, generally speaking, the trend is up and, you know, we're just continuing to ride the trend. We aren't in LPL Research's tactical asset allocation, we continue to be neutral equities and are not, I mean, certainly we're always debating, you know, what to do with that allocation. But right now, no plans to take that equity allocation down. Still pretty good breadth. And the RSI, an indicator of overbought conditions, has come back down into more of a normal range which you would expect, certainly when you have a 1% drop. By the way, that drop could have been bigger last you know, Friday's jobs report was much stronger than expected. It did push yields up, Lawrence, but yet stocks went up anyway. So that tells me that the bond market, the stock market, maybe at least for that day, disconnected a little bit. Were you surprised, Lawrence, that, you know, the bond market sold off on that strong jobs report on Friday, and yet the stock market just, you know, rebounded sharply?

Lawrence Gillum:

Yeah, I don't know that I was surprised. I mean, certainly the reaction out of the bond market was warranted. Particularly when we start talking about kind of rate cut expectations. I mean, there's a, I think the argument for a positive equity market is that the economy continues to perform well. So even at these, so-called restricted levels of interest rates, the job market is humming along, and that's going to help keep consumer spending going. And, you know, that certainly translates into, you know, a better economy and potentially better stock prices. So there's a lot of good things going on in the economy right now, and that's translating into a higher equity market. But it's certainly weighing on the bond market, which we'll talk about in just a second. For sure.

Jeff Buchbinder:

Yeah, no doubt. I think you hit the nail right on the head there. Maybe good news is, is good news, right? Better economy certainly should translate into better earnings. So in terms of you know, intra-market performance, it was a pretty tough week for small caps, maybe showing some interest rate sensitivity there. We did recently upgrade small caps to neutral in terms of our tactical asset allocation views. You know, valuations are attractive and they are starting to perform a little bit better, not last week, but have seen some progress there. So that's I think worth noting. In terms of sectors, I mean, communication services and energy have been, you know, really strong all year and that continued last week. Those are the two sector leaders. I think energy is certainly benefiting from higher oil prices.

Jeff Buchbinder:

And then communication services, it was really the mega caps. You know, Meta and Alphabet were very strong last week. And that, you know, certainly drove sector performance. You know, we always watch the relative performance between the cyclical sectors and the defensives. And last week was pretty good in that regard, right? You know, cyclicals do better. It's a better signal for the economy and corporate profits and eventually for the market. So we had you know, those two sectors are pretty economically sensitive. And then if you look at the defensives, you had you know, real estate has a defensive component, that was down almost 3%. You have consumer staples down almost 3%, certainly a very defensive sector. Utilities were down as well. So I think that's the kind of mix that you want. Although it is, the mix is starting to tilt a little bit more toward value over the last month or so.

Jeff Buchbinder:

In terms of regions, nothing really stood out. I mean, Japan is struggling with this monetary policy transition, right? And the threat of more yen intervention by the Bank of Japan. You know, the market's still up 17%. I think it really is just following the U.S. got a little ahead of itself and is you know, pulling back a little bit as some folks take profits. But the fundamentals in Japan, we think still look pretty good here. The you know, in terms of the bond market, you know, Lawrence, you alluded to it, right? When you have rates up, you're going to have, and you price out Fed cuts you're going to see some losses in the bond market.

Lawrence Gillum:

Yeah, for sure. So we did see yields move higher last week in the two, in the neighborhood of 15 to 20 basis points across the U.S. Treasury yield curve. So really no place to hide out except for, you know, potentially cash. But the price action out of the bond market was wholly, I would argue, based upon the reduction of expected Fed rate cuts which we'll talk more about in just a second. So there's been an interesting dynamic in the bond market. The bond market had been trying to front run Fed expectations. Now they're, it's really pulling back and trying to be I guess less aggressive than even the Fed. So it's been a pretty interesting dynamic, but that also translates into losses across most of these fixed income sectors. The aggregate bond index down over 1% last week, down close to 2% this year, not the start that a lot of investors were hoping for, for 2024 for fixed income. I heard a lot of people calling 2024, the year for bonds part two, hasn't happened yet.

Lawrence Gillum:

And so we'll see if that does come to fruition or not. But really even the plus sectors that have been you know, generally positive this year, experienced losses last week, high yield bonds down half a percent. The preferred sector, which is our preferred expression within the plus sector, was down about 20 basis points, still up about 4% for the year. So that's been a good area to hide out in for our tactical models. But other than that, it's really been a tough start to the year for a lot of these fixed income sectors.

Jeff Buchbinder:

Yeah, I guess as you know, see these, this backup and rates, Lawrence, bonds actually provide potentially more protection, you know, if you do get an equity market sell off, right? I mean, they, would you expect correlations at this point in general to be you know, in favor of diversification to help investors if we get a sell off maybe in the next, you know, couple of months given how far stock prices have gone?

Lawrence Gillum:

Yeah, I mean, I think if it's just an ordinary equity drawdown, it may not provide the same protection that it has historically. But I think if there is the geopolitical risks or concerns out there that you generally mentioned, I think that would be a good environment for treasury securities and AAA-rated agency mortgage-backed securities, the safer parts of the fixed income markets. So, it's going to depend on what the reason is for that equity drawdown, but with yields moving up to the levels they are currently, it does provide more of a cushion for sure if there is a negative market event.

Jeff Buchbinder:

Yeah, well, let's, let's hope strong growth is the reason not geopolitics. So turning to commodities, you know, I mentioned that oil was up and that helped the energy sector. So there you see it, up four-point half percent on concerns about a potential, you know, retaliatory strike by Iran against Israel. So you know, oil's kind of calmed down a little bit today. You know, we're recording this early Monday afternoon and there are headlines about progress towards the ceasefire. We've seen that before, so maybe we have to be a little bit skeptical, but you know, it is helping oil calm down a little bit. We're seeing strength across the commodity complex though recently, you know, you see you know, last week solid gains in gold, really strong in silver, copper, actually aluminum I know is broken out to a new high.

Jeff Buchbinder:

So, you're talking about technical strength, strong momentum, really across most commodities, and it hasn't mattered that you know, the dollar has been firm. It's really been more about global demand and a little bit about geopolitics there. So just wanted to hit that on commodities really quickly. And you know, the strong dollar ties into earnings, which we'll get to in a minute, right? Because it clips international earnings for U.S. based multinationals, dollar index up almost 3%. The trade weighted version of the dollar, which is probably better to use as a proxy for earnings impact is up closer to two. So there will be a little bit of a drag on earnings from the dollar but maybe not quite as significant as this table suggests. And then of course, we're going to watch the ECB meets this week, watch the euro, that right now it looks like the market expects the euro or the ECB to cut before the Fed. We'll see. So I don't know, that's not maybe an elegant segue Lawrence to the main, you know, bond market presentation here that you put together for today. But you know, clearly the tone last week from not just the Fed, but from the economic data, has been quite hawkish. Yeah. So what does that tell us about where the 10-year has gone?

Lawrence Gillum:

Yeah, for sure. So it has been good news bad result for the bond market and the opposite of what's going on in the equity market. So we did see yields move higher over the past week up about 20 basis points on the 10-year Treasury yield. It's above kind of our year-end target. Those are those red dashed lines there. We think the 10-year Treasury yield ends the year between 3.75 to 4.25. Given the economic strength and the already reduced rate cut expectations. I think we're kind of getting closer to maybe an upper bound at least in the near term. There's been a lot of rate cuts priced out, which we'll talk about in just a second. But there's been a big move in the bond market. And to your point, it does provide additional income opportunities in the fixed income markets.

Lawrence Gillum:

It provides potential diversification benefits. So it's been not the, maybe not the start that a lot of fixed income investors had hoped for, but you know, currently the setup is still pretty attractive for those investors that can own fixed income and stomach some near term volatility. But really the big story, and you can move to the next slide, please, Jeff. The big story in the fixed income markets has been just the amount of rate cuts that are getting priced out of the market, which is in contrast, as I mentioned, to what the bond market was really trying to attempt to do to end the year last year. Right? If you think about what happened last year, the bond market maybe got ahead of itself and started pricing in a lot of rate cuts.

Lawrence Gillum:

And that's what we're showing here. If you look at the chart here, this is showing the number of rate cuts that are expected by the bond market per the individual Fed meeting date. The most glaring one is that yellow line there, back to start the year. The markets, the bond market was expecting at least five rate cuts by September. Now, markets are expecting you know, one, maybe two rate cuts by the September meeting. So there's been a big adjustment in the amount of rate cuts that have been priced in. And what's particularly interesting is that the Fed communication that came out recently, they hinted at potentially three rate cuts this year. Markets are around two and a half by December. So even the markets are less aggressive than perhaps the Fed has suggested in its recent communications to us in the amount or in the number of rate cuts expected this year.

Lawrence Gillum:

So it's been a pretty interesting reversal of sorts on the bond markets behavior because like I said, we were talking about how some of these rate cut prices were pretty outlandish. We never really thought we would get five, six, seven rate cuts in 2024, but that was what the bond market was pricing in. So I think at current pricing it does look a little bit more realistic, perhaps maybe a bit too far on the number of rate cuts that are getting priced out, but certainly a lot more realistic than the five, six, seven that were priced in to start the year.

Jeff Buchbinder:

Yeah, that would have really required a recession to get that many rate cuts. And we don't, obviously we don't want that. So this is really more of a soft landing profile, right? I think.

Lawrence Gillum:

Yeah, yeah, for sure. Yeah. So I mean, the argument for, to your point is it's exactly right, in order to get six, seven rate cuts you would need to see a hard landing type scenario where the economy really needed a jumpstart in terms of lower rates, where the Fed would take the fed funds rate down close to call it, you know, four, three and a half, 4%. And, you know, we just didn't think that was realistic for this year. Maybe they get there over time, but it seems like it's a stretch to get there in any sort of one year, absent a financial crisis or a recession.

Jeff Buchbinder:

Sounds good. So we'll continue to geek out on the bond market and the Fed. What is this telling us?

Lawrence Gillum:

Yeah, so this is interesting as well.

Jeff Buchbinder:

The dot plot , right.

Lawrence Gillum:

For bond geeks. So this is interesting in that the we talked about the number of rate cuts that are getting priced in in 2024. What's also interesting is that the kind of longer term, call it neutral rates is a lot different from what the Fed is expecting. So the Fed thinks that the neutral rate and the neutral rate is the rate that is considered neither accommodative nor restrictive. It's just kind of a rate that an interest rate that allows the economy to function properly without any sort of stimulative or a restrictive basis in terms of interest rates. So the neutral rate the Fed thinks is closer to 2.5%. Markets are pricing that in around 4%. So markets are expecting fewer rate cuts this year, and fewer rate cuts overall during this new rate cutting cycle.

Lawrence Gillum:

So I call it interesting because you could argue that a lot of the bad news in terms of rate cuts has been priced into the bond market, right? So if the Fed is able to cut rates back to three, three, or, you know, two and a half, 3% and over time, then that should provide a tailwind to fixed income investors because like I said, a lot of the bad news, the shallow rate cutting cycle, the fewer cuts in 2024 and 25, a lot of that's already priced in now. And that's why I think they were probably close to the top in terms of yields, at least in the near term.

Jeff Buchbinder:

Yeah, I mean, it shouldn't take too much to get that first cut. And, you know, and it's, I mean, I've learned this from you mainly Lawrence <laugh>, right? When the Fed is cutting, even if it's just kind of one cut, pause, wait, then another cut, it's tough to see a meaningful sell off in the bond market, right? So, this keeps you anchored, right? That, you know, I mean, maybe we'll go to four or five, maybe technicals momentum, the machines trade us up to, I don't know, 4.75, who knows? Hard, obviously hard to predict, but the fundamentals are really telling us that we're going to get back down into that range, right? Because of the connection between fed funds and the bond market.

Lawrence Gillum:

Yeah, I think the real risk to markets, or at least the real risk to fixed income markets, particularly the longer end maturities, Treasury securities, is that if the Fed is too aggressive with rate cuts and there becomes a re-acceleration of inflation. So that kind of fits in with this next chart that I put together. So if you think about Treasury yields, you can really break them out into two components. There's a growth expectation component, and there's an inflation expectation component. If the Fed starts to cut rates, you know, potentially too soon, too aggressively, you could see inflation expectations move higher, which would push nominal yields higher. But right now, inflation expectations remain contained. That's the blue part of this the, of these vertical bars, the orange part is the growth expectation.

Lawrence Gillum:

So you can see the really the increase in Treasury yields this, this year has been because of that stronger economic growth story that we've been talking about, and not because of higher inflation expectations. Now, inflation expectations have picked up a little bit, but certainly not to the point where they are the predominant driver of yields. There is that risk, as I mentioned though, that if the Fed starts to cut too aggressively too soon we could see the back end of the yield curve sell off. But right now, things look pretty contained.

Jeff Buchbinder:

Boy, they're going to be real careful <laugh>, they clearly missed on the front end by you know, calling inflation transitory and not being as aggressive as they should have been as early as they should have been this time. I mean, they can miss it again, but they've done a heck of a job. Clearly, they're being very careful and very patient. So I'd be surprised, frankly, if they were overly aggressive in yeah, in their cuts.

Lawrence Gillum:

So yeah, I think, you know, that if they do get one cut or even two cuts this year, I think that would be consistent with market expectations, wouldn't cause a stir in the fixed income markets per se. But if they do, I think that if the Fed starts to cut, you know, three, four, even five times while inflation is still above its target, I think that could be problematic for the bond market despite getting interest rate cuts. So it is a balancing act. And to your point, I think they are going to be pretty careful as well. And you know, there's that rich history of the late seventies, early eighties of Fed officials that were, you know, not as diligent on the inflationary front as they, as maybe they should have. So there is history that this Fed has learned from. So, I too think that they're going to be careful over the next, you know, several quarters.

Jeff Buchbinder:

Very good. All right, thanks for that, Lawrence. Let's, we can talk more about inflation and how it relates to the bond market when we get to the week ahead preview, but let's talk about earnings. So earnings season starts this week. That's the topic of our Weekly Market Commentary for today, which you can find on lpl.com. The I guess it really gets rolling on Friday when we have JPMorgan. We have Wells Fargo, Citigroup, I think BlackRock. So a few big financial names kick us off, and then it'll start to broaden out into some other sectors in the following weeks. So, you know, high level, in terms of the numbers right now, consensus is up 3%. So we think we can do up six. The average upside is about four points. So this is, you know, probably a fairly conservative projection given that the economic environment is pretty good.

Jeff Buchbinder:

And by the way, we got more good economic data last week in the ISM manufacturing, the asset manufacturing index broke above 50 for I think the first time in something like 15 months. So and there's correlation between the ISM manufacturing index and earnings. So, it's pretty good economic environment should support earnings. We should be able to get a few points of upside and come in around six. That's actually pretty similar to what we got last quarter, right around five. But I think the key really in terms of the numbers isn't so much whether it's five, six or seven, it's what happens with estimates. And right now the market is essentially pricing in an earnings ramp. We know valuations are high, you know, the S&P's trading at about 21 times. When you have high valuations, you really need to ring support.

Jeff Buchbinder:

So we want to watch this, these estimates. If they hold or even drop just a little bit, remember they usually fall. They just hold or drop a little bit. I think the market will respond to that positively. I think the biggest drag is probably going to be the dollar, which I mentioned before because you know, multinationals earning profits overseas are going to have to translate those earnings back into higher and into a stronger dollar. And that will clip earnings a little bit. Not a ton, but a little bit. You know, otherwise I think this is a pretty good environment. We're going to continue to get the Mag Seven contribution. In fact, that's really where all the earnings growth is going to come from. You don't even need seven, you can just use five. The five Mag Seven names that are expected to grow earnings are worth five points of S&P 500 earnings by themselves based on current estimates.

Jeff Buchbinder:

So, you know, that's basically the whole story, right? <Laugh>, we don't really need, we don't expect much contribution from the 493. So that's what this chart says. But I think it's really important to keep in mind that starting next quarter, I mean hopefully this quarter, but probably not, starting next quarter, we're going to get earnings growth from the 493. They're going to start contributing to S&P 500 earnings. And that's, I think, when you can really see some broadening out of this market. We've seen a little bit recently, you know, with value names starting to do a little bit better. You know, I mentioned small caps at times have done a little bit better, right? That's sort of broadening. I think the smaller and mid-cap names across non-tech sectors certainly can be better for this market. You know, a healthier bull market is one that is driven by a broader set of names.

Jeff Buchbinder:

So that's something to look for. Margins, it's kind of the same as I mentioned with earnings. If we can preserve the margin expectations that are in estimates right now, it's for a strong ramp starting in June, then I think the market can, you know, will respond possibly to results. Now, the I guess the, you know, right now the CPI and PPI have a pretty big gap between them. And that's good for margins, right? Producer margin, producers buy the PPI and they sell it to the CPI, generally speaking. That's probably going to come down. That margin's probably going to come down. So this margin balance is going to have to come from the sectors that have really been challenged lately, and that's healthcare and natural resources. So we'll be watching those areas closely. Those are the areas that are seeing earnings declines right now.

Jeff Buchbinder:

If we can get to, you know, to the point where the market sees earnings growth in those sectors you know, that's when you're going to start to see a big margin bounce. So last chart on earnings is estimates. And here we have a positive bias I'll say. Estimates have been very resilient and that's helped the stock market, right? Normally these estimates fall, we talk about this every earning season, right? Estimates fall on average about 8% in a given year. So if you look at both of these lines, this is 2024 in blue and 2025 in orange, they've really not fallen at all. <Laugh> in the last, you know, how long do I have on this chart? Nine months. That's really impressive and very rare and just points to the underlying earnings power of corporate America. And it points to just how wrong analysts have been about the economic environment. If you go back to June 2023, when this chart starts, you had a lot of people certainly worried about a recession. We, at LPL Research, were more worried about recession back then as well. You know, that kept our estimates from getting too high and you know, allowed for this eventual stability over this nine month period. So it's a good story. We're going to wait and see what numbers look like this quarter before we raise estimates, but that's probably coming. Thoughts on earnings, Lawrence?

Lawrence Gillum:

Yeah, no, it also translates into the corporate credit markets as well, and with the economy continuing to perform well, that likely means that corporate credit spreads are going to stay at, you know, pretty tight levels as well. So it's a good story for the equity market. It's a good story for the credit markets.

Jeff Buchbinder:

Good point, yeah. For those of you who are, you know, nervous because of how far we've come, just watch the credit spreads. They are not sending any signal. They're usually early, right? Because as Lawrence knows, bond investors are much smarter than equity investors, right? <Laugh>. So the bond market's always going to sniff it out sooner, and they're, you know, you're not seeing it, right? So it doesn't mean we won't have a slowdown. It doesn't mean we won't have a recession in, I don't know, nine, 12 months, which certainly wouldn't shock me, but it's telling you right now that the odds of recession are quite low. So good stuff. I like Lawrence, the way you tied in the stock market and the bond market together. We're getting along swimmingly despite our <laugh> divergent career paths. That's what diversification's all about. So let's preview the week. It's all about inflation, Lawrence and you know, you, we all care about inflation, but probably matters more for the bond market than the stock market. You know, thoughts on what we might, what we might get from the CPI and PPI and what that might mean for bonds?

Lawrence Gillum:

Yeah, I mean, it is certainly about the inflationary prints this week, CPI on Wednesday, PPI on Thursday. It looks like there's going to be a slight, you know, decline in month over month readings which would be good to see. I think if you know, look at the rounding, you know, maybe we get a touch less than that 0.3% number on a month over month basis for both core and headlines. So if that is the case I've seen some surveys out there that suggest maybe it comes in a little softer than what analysts are expecting. That would be a good thing for fixed income markets, perhaps a, you know, I wouldn't expect a dramatic repricing in terms of rate cut expectations, but I think it would take some of the pressure off the fixed income markets if we do see a print that's less than what analysts are expecting. Same thing for the PPI data on Thursday.

Jeff Buchbinder:

Yeah, I've seen the same. I mean, I guess I got the jobs report, right? I called the over there, so maybe I'll call the under here and see if I can get two in a row. It's hard. But yeah, based on all the components of the CPI, it looks like there's a chance that we do maybe a little bit better. What worries me and I talked to you know, our economist Jeff Roach about this this morning is that energy prices, you know, having risen, could seep into some of the inflation data in coming months. So that is certainly something we'll have to watch that might not affect this one, this reading all that much, you know, there's obviously a little bit of a lag to this data. I mean, we look at core, core matters more.

Jeff Buchbinder:

The Fed pays more attention to core, which takes out food and energy, but you know, you can still have some spillover, right? Because if somebody's making widgets and they, it's cost them more to make the widget and cost them more to get that widget to the customer, they're going to raise prices, right? Now that takes time to play out, obviously. But it is something to watch. So probably points more to, you know, if the market is a little bit unsure about two cuts or three cuts, that probably points more to two if energy prices stay high, even though it's all about core. And I guess this University of Michigan survey of inflation expectations is also going to get some attention as it has been, you know, really since COVID. We're in a two handle, which is great, and you know, hopefully it stays that way, but that number, that survey has kind of bounced around almost unpredictably at times.

Jeff Buchbinder:

So I'm not going to make a prediction on that. I won't make a prediction on the basketball game either tonight, but I will not make a prediction on that. But just say, you know, anything around three or lower, you know, hopefully markets will be comfortable with that. I guess the other thing this week is the ECB which meets on Thursday. And you know, what do you think, Lawrence? I mean, could the ECB, does the market think the ECB is going to cut first or is it still kind of in line and does that jive with where you think we'll be?

Lawrence Gillum:

Yeah, the market does expect the ECB to cut rates as early as June. So rate cut expectations for the Fed have been pushed out more likely a July or even potential September type rate cut, but markets have remained pretty steadfast in the expectation of a June rate cut for the ECB. Not unprecedented for the ECB to move first, but it doesn't happen often. So it would be something that is worth watching particularly in the currency markets, generally speaking, when the central banks start cutting rates that puts pressure on their currency. So we'll have to see how that plays out. But it, yeah, this is the crazy cycle that we're in now, that the ECB could be the first mover in terms of rate cuts.

Jeff Buchbinder:

Well, I think everything economic has been unusual for the past four years.

Lawrence Gillum:

Indeed.

Jeff Buchbinder:

So, <Laugh>, we'll just, we'll just continue that path and have something else unusual happen there, maybe with the ECB. So, yeah, that means a strong dollar. It means be a little bit careful with how you invest outside the U.S. because those returns could be trimmed. And, you know, the emerging markets we remain underweight. Not an area we like, particularly like, although we think China's an interesting trade right now. Emerging markets have historically had trouble with a strong dollar and, you know, may again, but I think that they've become a little bit less sort of currency sensitive maybe than EM was, you know, 10, 20 years ago. It'll also be interesting to watch the yen and the Bank of Japan here, if this you know, adjustment and rate cut expectations both in the U.S. and in Europe puts further downward pressure on the yen, because then you could be talking about an intervention and some volatility in that market. There are other reasons to like investing in Japan now, which, you know, we're certainly acknowledging by still liking that market. But the risk is, I'd say is rising of a currency intervention and, you know, a little more volatility in the near term. So something else to watch. And I think you know, other than that it's just earnings starting on Friday. So we'll be watching that very closely. So, Lawrence, anything else you want to throw out there before we wrap?

Lawrence Gillum:

No, it's a busy week. And if anyone, you know, obviously needs to get a hold of us, let us know. And don't look directly into the sun later today.

Jeff Buchbinder:

Yes, my local library I just saw ran out of glasses, so I'll have to use that, you know, paper trick or just be really careful. So yeah, for those of you who are right on the line, get some pictures, share them with us, share them on social media. I think there's going to be some pretty cool stuff coming out of that. And then, you know, for basketball fans, enjoy the game tonight. So thanks Lawrence for jumping on. Good discussion. The, you know, it's hard for an equity guy to admit the bond market is interesting, but it actually really is <laugh> right now. And so you know, we'll continue to watch how the bond market responds to the inflation data this week. So

Lawrence Gillum:

As a bond, as a fixed income person, though, we like boring. So once we get past the interesting part, I'll be happy again.

Jeff Buchbinder:

Good point. We'll try to bring you more boring. I like that <laugh>. So hopefully all of you have an exciting week, not boring, but exciting in an equity way, a good way. So have a great week. We'll talk to you next week. Thanks for listening to LPL Market Signals. Take care, everybody.