Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Carlyle Co-Founder David Rubenstein shares the details of his Peer-to-Peer interview with Fed Chair Jay Powell who said second-quarter economic data has provided policymakers greater confidence that inflation is heading down to the central bank’s 2% goal, possibly paving the way for near-term interest-rate cuts. David Konrad, Managing Director at KBW, breaks down bank earnings provides his outlook. Peter Atwater, President at Financial Insyghts, talks about connecting the economy to Wall Street and politics. LinkedIn COO Dan Shapero explains how AI is changing jobs and the labor market. And we Drive to the Close with Mary Ann Bartels, Chief Investment Strategist for Sanctuary Wealth.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
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Let's get to our key interview this hour with Carlisle's David Rubinstein, David, of course, host of Peer to Peer Conversations on Bloomberg Television and radio. You can catch David's interview with FED chair j Powell on The David Rubinstein Show Peer to Peer, airing July twenty fourth at nine pm Wall Street Time on Bloomberg TV. Let's go to the source. David patiently waiting for us in our Washington DC bureau. David, great to have you here. We've been counting down to your conversation with Ja Powell. We watched. How did this come about? Was it planned for a long time?
I'm just curious, Okay, Well, I am the chairman of the Economic Club of Washington, and in that capacity I often interview government leaders and business leaders and Jay Powell and had been somebody i'd interviewed before. He had worked at my firm a number of years ago, well before he was at the FED, and so we worked out a date that I would do this interview today, and we had about seven hundred people there and obviously a live TV audience.
David, we were chuckling the whole time. I mean, this was like a really a powel that you don't see at press conference, as a powel that you don't see every day. It's clear that you too are familiar with one another. What did you want to get out of the interview? Because we know that he's not going to give us any indication about a rate path. He established that at the top of the interview, What did you want to get out of it?
Well, I think it's always good to humanize well known people, and people can understand them better and the way they make decisions and the way they kind of handle their and I thought humanizing him would be always good. Clearly, when you're a chairman of the FED, you talk in what I've often called Fed speak, which is to say, it's very difficult for the average person to understand it. But Jay does a better job than some of his predecessors and speaking in common English because he's not a trained economist, and I just thought giving people an update on his perspectives on the economy would be a good thing. I mean, obviously, as you point out, he's not going to announce at an interview with me that he's lowering interest rates.
You can't expect that.
But I think he gave a pretty good description of how they decide to lower interest rates or increase interest rates, and I thought it was informative. And therefore I thought, you know, he accomplishes goal, which is the kind of you know, show people how he makes decisions, and I accomplish my goal, which is kind of humanize the chairman of the FED a little bit more than maybe he otherwise would be.
Well, David, help us understand your relationship. You mentioned that you guys do go back years. Of course, he was a partner at the Carlisle Group before he went into public service. I'm wondering if you're in touch with him regularly now, if you consider him a friend, just give us an idea of your relationship with him.
I wouldn't say I'm in touch with them regularly when you're a chairman of the FED, you know, I think it's somebody like me doesn't want to be calling them up all the time, and you know, I don't want to look like I'm trying to get information from him. And he worked at Karloff for years, but I wouldn't say I was his closest friend or vice versa. So I know him reasonably well. I've interviewed him, I think three times or four times at the Economic Club in Washington, and I have a good relationship with him, but I wouldn't say we're, you know, close as a friends. But I certainly like him and admire what he's done for the country and the job that he's had.
You know what's interesting too, and something we've talked a lot about David is, you know, the neutral rate and what he thinks about that two percent goal that the Federal Reserve has. He said, the neutral rate is probably hired today. Monetary policy is restrictive, but not severely restrictive. I am curious how you see things. Do you think the neutral rate doesn't make sense anymore, that it does need to be higher? And what is your expectation or what you think the Fed should be doing when it comes to interest rates right now?
Well, I think the country will do much better off listening to Jay Pal's vieues on where the interest rate should go than probably my views on interest rates. But I think it's a general sense that the market is believing that there will be a cut, and I think Jay made it clear that he doesn't listen to the political situation. So I have said in speeches that I thought it would be unlikely that the FED would want to cut during a presidential election period of time, but I think he's made it clear that that's not his view or the view of the FOMC, that if they think the data warrants a cut, they will have a cut. And therefore, the FED could do something at the end of July when they meet, or they could do something again when they meet in September. And my guess is that sometime before the FED meets after the election, they will do something. That'd be my current thinking. The economy could change, and obviously data is everything, but right now the markets are anticipating, and I think the FED is not shutting down the idea that something could happen before the election.
Before the election, okay, do you think that the election in any way sways? I mean, we're all human, right, and we can say we're very objective, but we're human and impacted by lots of things that are going on in this world. Do you think that j Powell and policymakers at the FED might be swayed a little bit of small influence when it comes to the November election presidential election?
I think the Fed, everything Jay says, is that they don't really pay attention to the election dates, and I think right now, since so many people pay attention to the markets and the interest rates where they are that I think that the FED will do what the data suggests is appropriate. And when the data gets to the point where they see inflation more or less getting the two percent and the economy softening a bit, I suspect they will not wait until after the election because they don't want to be seen as political. And therefore, while they might be criticized by some for lowering interest rates before the end of the before the election's over, I just think the FED has given enough signals, including today, that they're not going to worry about the election. They'll do what the data suggests is appropriate.
I do wonder, David, as you said, you've talked with Jay Powell several times certainly in this format. So you monetary policy obviously in the economy first and foremost, and there are certain things that Jay Powell will go you guys laugh about some of the things he will obviously not reveal. But having said that, at the end of the conversation, when it comes to the things the Bloomberg audience cares so much about in terms of monetary policy and the economy, what was your key takeaway from j Powell?
My key takeaway from the interview and with my discussion with him is that he's a man who's very much on top of the data. He enjoys the job, not worn out by it. Doesn't say well is to me, I have got all this pressure on my shoulders. I think he can deal with it quite well. He's used to it. He's been in the chair for quite some time. I think he's reasonably happy now with where the economy is. Remember, we didn't go into the hard landing that everybody was predicting. People thought there would be a recession that last year or this year. That didn't happen. So whoever gets credit for it, The Fed deserves some share of that credit because they manage the economy. Me into a really nice soft landing, so called, and so right now, while unemployment is going up, I don't think it's going up by such on a level that's scaring people. And I think the markets are in pretty good shape and the economy is in pretty good shape.
He didn't want to comment on the market, the idea of the so called Trump trade returning after this weekend's horrific Yes, he was clear about that up on top, and I'm at the top of the interview. But I'm curious about your view and what you think is being priced into markets right now, David, the Fed chair not weighing in, but politically, what is being priced in right now?
Well, clearly, the events of the weekend, no doubt scared a lot of people about the violence that is still prevalent in this country in many areas. Unfortunately, and so fortunately, we did not have an assassination, though one person did die tragically and another person still in the hospital for the wounds that that person suffered as well. Sad situation. Obviously, the investigation we'll figure out what the Secret Service could have done differently or better. I'm not an expert in that area, so I just can't say what they will find, but clearly we have an eliminated violence from our political situation.
Unfortunately, David, you've served in the federal government. You were chief counsel to the US Senate Judiciaries Committee sub Committee back in the seventies, Deputy Assistant to the President for Domestic Policy during the Carter administration. The democracy has faced other heavy periods before. It feels rather heavy today. Is there something different this time around?
You are, I.
Feel like it's safe to say a student of history. You respect past leaders and what they've done. How do you make sense of this particular political and historical period.
Well, it's difficult to really put it in context right now because you can't really tell what the historical impact it is till many years afterwards. But right now the country seems to be fairly bitterly divided between the Democrats and Republicans. And it wasn't the case fifty years ago or so. When John Kenny ran for president against Richard Nixon teen sixty, they campaigned in most of the states because they didn't know how the states would go. Now the country's fairly divided, so we know how almost all the states are going to go. They're only five or six, maybe seven states where it's a kind of a swing state. So it's much different than it used to be. The tensions between both sides seem to be much greater than they used to be. Bipartisanship is something that is not as common as it used to be in Washington, d C. So I don't know whether the events of this weekend will scare people into saying we should try to, you know, be less i'd say violent in our rhetoric and less condemning of other sides. But clearly President Trump has suggested that he would make them more unifying speech than otherwise was going to make. And I think President Biden's speech last night was designed to also have a unifying impact. Whether you can unify our country in a way like this, I think we should, I don't know, but it will probably have some beneficial impact, though obviously the events were tragic.
David, are you optimistic given the heated political environment right now?
I'm optimistic that the country is in reasonable shape economically, politically, we can do more than than we have been doing to kind of bring the country together, and that part the jury is still out, but I'm hopeful that while the events were tragic over the weekend that there will have some beneficial impact in getting both sides, Democrats and Republicans to try to work together more cooperatively.
Jay Powell said to you, predictions are very difficult, especially about the future. When you think about the future for the United States politically, economically, what's top of mind and curious if you have any plans to maybe want to be at the Federal Reserve. You guys talked about if it's a good job.
Well, I think it's really hard to kind of say that all of a sudden, we're going to eliminate all the schisms that we've had in the last couple of years. Clearly there are a lot of tensions between the two side political sides. Jay Powell has been appointed by a Republican president and reappointed by Democratic president, and he's done a really good job of kind of walking a fine line of not trying to be seen as political or democratic or Republican. I think he deserves a lot of credit for that. I think he's an excellent job as Chairman of the FED.
All right, I'm not going to ask you that about Chairman of the.
Fed any thoughts, but you can answer if you want well.
I think he's done a good job. I remember, this is not a job that anybody really thinks it is an easy job. Many people who have emerged from the job, you know, are generally applauded after they've served, but when they're serving, very often they get criticized by both sides. And it's hard to be chairman of the Fed. And in fact, as one chairman of the FED once said, William mc chesney Martin, my job is to take away the punch bowl at the party, which is to say, take away all the fun that you would you would want to get. And so that's the job of the chairman of the Fed, is to take away the punch bowl.
And people don't like that absolutely.
David Rubinstein, thank you so much. Busy day for you and so appreciate checking in with you. Bloomberg host and Carlile co founder and co chair David Rubinstein. You can catch his show and come Station with j Powell July twenty fourth at nine pm Wall Street Time on Bloomberg TV.
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Let's not forget we are in the midst of the beginning of earning.
It's just getting started, you know that, because the big banks are reporting. This is just the beginning, Carol.
The official, unofficial start. Yeah, they did continue this morning Goldman Sachs reporting results. Stock is off its highs of its set of the session, but we did see some move to the upside. Goldman. Among the headlines the trading unit powering a surgeon earnings in the second quarter. It also plans to cut down on stock repurchases. After the fed's annual stress tests required to set aside more capital, the bank again pushing back against those results.
For more, we turned to David Conrad, managing director over at KBW right here in New York City. David, I'm first up politics front center after what happened over the weekend, and certainly the economy always front and center. We just talked with David Rubinstein, you interviewed FED SHO J. Powell at the Economic Club of Washington. Let's start with politics. I'm just curious how it might impact the sector that you cover and follow so closely banking.
Yeah, first of all, thanks for having me on. You know, it's a big question mark for investors. Certainly, we saw, you know, when Trump was elected president the first time, a big bump of financials. Part of that was because they paid the highest tax rates and so the big tax cut really led that. But there was also a hope for deregulation and consolidation in the industry, and I think that latter point would probably hold true if he were to be re elected. I think there's a lot of pinned up demand for consolidation, which I think would open the doors for that. I think there's also another school thought of what may happen to inflation and the long end of the curve as well under that scene area, which which may put a little bit of pressure on financials. But I think overall, I think the conclusion would be if Trump were to win, it would be you know, less regulations and maybe opening the door for more inm andang.
So maybe good for some of the big banks and some of the financial companies, maybe not necessarily for consumers.
Well, I think maybe longer term, if if that one scenario were to be the case, where it turned out to be inflationaring a long end backed up, that would be the case. But I think you know that that's just one school of thought. But certainly, you know, we would we would expect, you know a little bit for the bigger banks and the and the broader m and a perspective, but also for you know, the regional banks for further consolidation would be you know, also an attractive place to be, all right.
Having said that, we also as to mention David Rubinstein obviously of Carlisle but also hosts the show here at Bloomberg did interview fed jo J Palm. They talked about the economic environment. What color have you gotten from the big banks? Obviously Goldman this morning, but we had JP Morgan City Wells Fargo last week. What are you getting from those banks and their results and what it says to you about first of all, the security and health of our financial banking system and then also what it's telling us about the environment.
Well, there's there's really two. It's really kind of split with what we've seen. First of all, capital markets we be waiting for this for a long time. Investment banking is up, you know, well over twenty percent fifty percent for JP Morgan year over year. So we saw a lot of underwriting and trading as well, and so we did see a pretty strong environment for capital markets. The flip side of it is those we didn't see really any loan demand outside of credit card borrowings, and so the loan demand is continues to be weak. And as we're at this peak and rates before maybe the FED starts to drop rates, we're getting the tailwind of deposit costs still, so consumers are still kind of adding higher rates on their deposits and that that's hurting the net. Interesting come, what's any other aspect too, is we're still seeing higher charge offs and credit cards. So I think that's right now more of the normalization state, but we are seeing higher charge offs there.
How much higher do those charge offs go?
Yeah, I think I think we're about at the normalized state. But the borrowing has increased materially, you know, over the past years, So I think for the most part, we're probably going to go up, you know, probably another fifty basis points. But you know, we've come from a one and a half percent rate to now pushing three and a half four percent, So I think we're near the top four the prime bowers in terms of the marginal increasing credit card boss.
Hey, let's go through some of the banks. Obviously, Goldman reporting in today's session. I'm looking at Goldman shares. They're just off their highs. They're up about two percent. Go back to Friday. JP Morgan was down more than one percent on their results. You had City down almost two percent on its result, and if I pull up Wells Fargo, it was also we saw really taking a hit in the Friday trade. It was down about six percent. So walk us through those in particular, which names you might be a little bit more worried about, which ones you like?
Yeah, I would say, first of all, JP Morgan was down on Friday, really more for positioning and its valuation. It's pe is near the high watermark for its historical range, you know, pushing twelve and a half thirteen times twenty twenty five numbers. So it's an over owned name. It's a very popular name. I think fundamentally was very strong. But that's just technicals on ownership on why you kind of pulled back. They didn't change their guidance materially, and so that was maybe modestly disappointing, but I think that's more on valuation Goldman, you know, I think it's really the place you want to be right now. You want to be a market sensitive revenues. You want to kind of be in the place where investment banking still probably operating twenty percent below normalized levels, so there's a lot of momentum with revenues there. I also think what's interesting about Goldman is their restructure and the balance sheet both you know, limiting consumer exposure, but also you know, unwinding some heavy capital components of their their on balance sheet equity investments, and so that's going to free up a lot of capital. I think buybacks may be a little bit lower from this current quarter, as you mentioned earlier, but still very strong. You know, City is a long term turnaround story, you know. I think actually the quarter though itself was a little bit disappointing. They had you know, they had a headline beat, but in reality they missed on revenues. They had strong wealth of performance, which was which was needed there that that has been struggling had a really strong performance there, but they had declining service services revenue and they didn't perform as well on trading as Goldman or JP Morgan did. And then lastly, you know, Wells got beat up a little bit. That's also a long turnaround story. They disappointed on their NII guide as well as their expense guide, and so that was a bit of a setback in the long term story there.
Hey, David, help us move this forward to tomorrow when we hear from Morgan Stanley and we hear from Bank of America. Starting with Bank of America, such a great read on the consumer. What should we be looking for? What should our investing audience be looking for?
I think with Bank of America it's two components which are really the same. I think originally, you know, initially on the print you want to look at the deposit costs and see was Wells Fargo's higher deposit costs a read through for b of A or was it isolated to Wells Fargos. So we want to see if the quarter of a quarter increase in deposit cost is low double digits or is it more like JP Morgan that was up five dips quarter on quarter. The second thing that's important is they're earning guidance that will come up on the call. We anticipate really positive guidance for NII for Bank of America, and that's partly because the reason why we like to start because it's under earning in several areas. For instance, they have some interest rates swabs that are over its commercial loan book, which is really brought down the yield. They're actually only yielding Fed funds levels for their for their commercial loan book. As those roll over, we think it's gonna be a material pickup in those yields. And so we think you know that because of that, because of credit cards, we think it will have higher NII towards the end of the year.
David, really quickly fifteen seconds, she got new money to commit. What name do you put it in among those big banks you just talked about, and very quickly please.
Yeah, I think it's Goldman Sachs. I think the other name we haven't mentioned is Bank in New York that is actually the best supporter we saw for Friday and it was five and a half percent.
All right, David, thank you so much. David Conrady's managing director over at KBW. The KBW bank and index, by the way, is up about fifteen percent year to date.
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Donald Trump Indeed Confirmation has depict the junior Senator from the state of Ohio, JD. Evans, as his running mate, having said that let's get to our next guest, because someone who really is just so great at as I said, tying together Wall Street, the economy, and obviously throwing in politics, and someone we turn to a lot to make sense of our tumultuous times. And we're talking about Peter at Order. He is economist, he did work on Wall Street. He writes a newsletter called Financial Insights. He's an adjunct professor of economics at William and May. He's also the author of the book The Confidence Map, Charting a Path from Chaos to Clarify, which came out last year.
Hey, Peter joins us from Pennsylvania. Peter, good to have you back with us. Look, we got to ask you about the breaking news here. The former president who has not officially been nominated yet has tapped Rising Republic and Star JD Vance as is running mate. I know you're here to talk about economics, but certainly the economy is tied to politics. How are you interpreting this news.
I'm not at all surprised him. Jd. Vance is situated perfectly in the center of the country. He is a figure who has played extraordinarily well at both ends of the economic spectrum. And I think that for Trump, he is an ardent supporter. He will be loyal and as he's demonstrated throughout this campaign, he is a fighter for the Trump presidency.
And forgive me your book, of course, the Confidence Map, charting a path from chaos to clarity. There's a lot going on here, So Peter, forgive my mistake there Having said that, do you feel like we have more chaos in this market in an economic environment or more clarity?
So I think that the market has really taken the boost in former President Trump's popularity as an indicator of inevitability. If I've read one word in the last seventy two hours, it's landslide. And I think that with that, investors now feel free to look at all things Trump presidency related You've mentioned in prison stocks and firearm makers. But I think that this is a clear sense that investors believe in the inevitability of the outcome, and that is something that we tend to see with geopolitical events, that they don't matter until the crowd sees them as inevitable, and then everybody plays catch up.
But is it inevitable? I mean, there's still three months to the election, more than three months, Peter.
Yeah, there are words that I don't like as a sentiant expert. I hate the words unstoppable, inevitable, and saleable. You know, go back to the twenty sixteen presidential campaign and there's a Time magazine cover that says, you know, can anyone stop Hillary Clinton? Then you look at the polls over that campaign, and that marked the high water mark. And so the risk for the Trump campaign is that this represents this sense of inevitability, represents a major peak in confidence, and that we see some sort of retreat. Is it enough for, you know, to make a difference in November. We'll see. But I'd also say at the same time, Tim, there is a sense of defeatedness among Democrats that's equally comparable and so you have both extremes in mood on broad display today.
So hm, So I'm thinking about investors who are listening and trying to kind of connect all the you know, and at the same time you talk about this kind of feeling of inevitability in terms of the outcome of the November election, posters will say, you don't really know until two weeks before, although we'll watch the momentum and a lot can happen in the next few months. Having said that, how do you think about then what this all means, Peter, for what conclusions should investors be thinking about when they've got to just invest in this environment? Do they hold off? Can they make decisions?
So?
I think investors have to plan for what they can imagine, but also be well prepared for what they can't. This is a time where, you know, if I look at the FED and AI and now the Trump, what we've seen in terms of the Trump momentum, there is a sense of inevitability and omnipotence that is multi dimensional. And so I find that a fascinating contrast to the backdrop of geopolitical uncertainty and social unrest that we see. And so I think investors need to be positioned for the potential event that we see something come out of the blue that up ends confidence in a way that they're not prepared for.
Is it anything, I'm just thinking this political environment keeps reminding us that something can just come out of the blue at this point.
Yeah, I mean it is so striking. That parallels to the late nineteen sixties. I mean there too, we had markets at record highs and yet significant social political unrest below the scenes that inevitably took its toll on the markets.
Not to mention a DNC that also happened in Chicago. I'm wondering, Peter about what those events could be. I mean, we didn't a lot of people didn't see a pandemic coming. That was a surprise to a lot of folks. What should be on our investor audience radar?
I think investors should be paying attention to what's happening in Ukraine. If we've seen anything, it is that low natural gas prices tend to create energy in the Kremlin, So I'm focused there. I think that we need to appreciate geopolitically, broadly speaking, that it's not left or right that matters. It's all about the incumbent versus the opposition, and so this is an environment where we will vote out incumbents no matter their political identity and alignment. And so investors need to be thinking about what does a G seven world, what does a G thirty world look like without incumbents in place?
Do you think right now something that you look at, Peter, just one last question. We've got about a minute or so left here that you do talk think about the gap between mood and financial markets. Is there a wide gap at this point in your view?
Is a gap that I don't believe has ever been wider. I mean, I look at the mood of those at the very bottom and it bears no resemblance to the record highst that we're seeing in the financial markets, and that to me is deeply troubling.
We have one minute left, is the what are possible implications of that?
Well, those at the very bottom mood wise, it's all about me here now, and see that they don't care about the concerns of others. They don't plan for the future. There's an impulsivity and a high emotion that goes along with behaviors that tends to run counter to the interests of investors.
All right, kind of leave it on that note, Peter, thank you as always so appreciated. Peter at order of course, joining us there. As we mentioned economist, he's worked on Wall Street. His newsletter of Financial Insights, something that we get regularly and read it. He's an adjunct professor of economics over at Will and Mary in Virginia. And his book, of course, The Confidence Map, something that we've talked about. You can check out our past podcast to hear that conversation, The Confidence Map, charting a path from chaos to clarity. Peter Course, joining us there from Pennsylvania. I'm brother Marco, a journal How about you let me drive?
No, no, no, no, ple's gone to drive, honey, please, how do the riding gravel?
Let's mate, I want to try it.
It's a good question.
This is the drive to the Clothes dot com.
I think we'll buy a run.
Yelling on on Bluebird Radio.
All right, TikTok. Everybody got about eighteen nineteen minutes left in today's trading session. Bouncing around on the equity side of things. But we are up across the borders. You just heard from Charlie. But call it a little changed at this hour. We're definitely off our peaks of the session, but we, you know, have been thinking could we get another record on the S and P five hundred today.
Bill Maleney just reminded us to look at Bitcoin up six percent today.
Well, this plays into what folks have said, the Trump trade is on.
Yeah, so okay, yeah, we'll see what our.
Guest has to say. Marion Bartel's is with us. She's chief investment strategist for sanct Sanctuary Wealth and she joins us once again in New York City. Marianne, good to have you back with us. I'm not quite sure where to start, but we have asked a lot of folks over the last couple of hours about this Trump trade. You've watched a lot of market cycles, political or other. How are you thinking about today's market environment and what really matters to the investment trade.
That's a great question, Carol.
Obviously, what we have been seeing since the presidential debate between Trump and Biden and the events over the weekend with the attempts on Trump's life are totally unprecedented. But we started making the argument that once we saw how Biden before during the debate, we started to see the markets start pricing in a Trump win, and I'm sure you've had other guests talk about all the betting sites. The betting sites are heavily now leaning towards a Trump win after the events this weekend, and we really started to see the markets also pivot after the CPI report. The CPI report came in better than expected, and we've really started to see a shift out of technology, particularly semmies, into cyclicals. And we think that has a lot to do with the direction of interest rates, with the market pricing in the FED cutting rates in September and really starting to price in a soft landing.
So there's a lot of moving parts to the market, right, But yes.
Is that more significant, Marianne? Like I said, you understand the markets seen a lot of cycles. Is it really what matters? And I would agree with you since those inflation prints that there's been a very different narrative and rate story, if you will, We've really seen rates all along the US curve moved down. Is it much more about that story versus an outcome for the presidential election or tell me it's both.
At the end of the day, Carol, what is most important about the direction of equities over time is earnings, and we're in the early stages of getting.
Second quarter earnings.
So it's been our view earnings are going to be better than expected, and that the market probably is also starting to price in where they're seeing earnings next year, and at least from the analysts bottom up, there's still forecasting double digit growth in earnings. So I think earnings are the main driver, but the topics of today are also going to have an additional factor on top of how stocks Behave.
You have a target range of fifty six hundred to fifty eight hundred for the S and P five hundred, we're right now at fifty six twenty five, Marianne, Are you going to raise that range before the end of the year.
So we didn't technically raise our range, but I did about a month ago, or maybe a little bit more than a month ago. Try to take a longer term view on what is the true track that the market is on, and I think the true track is a range of six thousand to seven thousand. The question is do we get a good correction in the fall? Can we get a good ten percent correction, because I think that sustains prices of the market over time, or do we continue to rally and get so extended that we have a deeper correction going into next year. But either way, what I've argued is that the secular trend for the market is a bull market, and I see this market powering higher into.
Twenty twenty nine, twenty thirty.
Probably we'll have a bear market before then, but don't be frightened away from it, because I still think we're going to power higher.
So that's six thousand to seven thousand. What's the timeframe on that for the S and P five hundred.
You know, Carol, that's a great question.
You know, sometimes it's hard to put a timeframe. I've thought that that's kind of a fools game to really do a long term target. I'm comfortable over the next two years reaching that target for the market.
Over the next two years. Okay, go ahead, Carol.
Well, and so as you said, well, you know, at some point we'll get a bear market recession in there somewhere as well. I mean, one of the things that we've seen, certainly in the conversation coming out of Jay Powell. We just talked to David Rubinstein of Carlisle Group, who interviewed Jay Powell Earlier today at the Economic Club in Washington, Jay Powell talking a lot more about the dual mandate and more specifically, not just the inflation side of the equation, but what's going on in softness in the labor market. Is a recession kind of a given thing at some point as well?
In your view?
Historically, Carol, we used to have recessions every four you, I know, so if you're going to use history as a barometer, at some point between now and twenty twenty nine to twenty thirty, we probably should have a recession, but it would be a recession that would take stocks down but give investors an opportunity to buy. I don't think it would be a major bear market that flits us into.
What I call a secular bear market.
So I think with the AI coming into play, will get increased productivity over time. I think the market behavior is very similar to nineteen ninety five to two thousand, and I think we're around nineteen ninety five, so I think we still have a very long runway for equities to go up.
Do you think though, that they'll end with a crash like we saw at the end of the dot com bubble?
I've actually agree with ed Yard Danny that it's the Roaring twenties. And I went back and compared the Nasdaq one hundred to the Dow because that's the one that we have back into the twenties, and the technical patterns between today and that period are frighteningly very close. So when I think we're in the early stages of a bubble, and if we're correct about that, it.
Will not end in a positive way.
Yeah.
So yeah, it sarves to remind everybody. After the Roaring Twenties came the Great Depression, which started in nineteen twenty nine. So are you saying that you're looking at a situation like that.
I'm not calling for a depression, but you could have markets collapse fifty sixty percent.
And that's painful. That's painful to watch your portfolio to be cut in half.
Yeah, that's a major hair imagining it right now.
I don't want to imagine it. But yep, markets go up, markets go down. Mariann So good to check in with you once again. Marian Bartel's chief investments Jack just for Sanctuary Wealth joining us in New York City.
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