Well, good morning, Yeah, we'll learn something. I think what we're going to learn is that there's still a lot of uncertainty. And I want to back up a second. You know, we did cut our numbers, but it wasn't just because of terriffs. I mean, and this is a theme or you know, a thesis we've had for a while. You know, we think there's a lot more going on than just terroriffs that have been weighing on you know, growth outlooks, this and this you know correction that we've been involved in has been is very well advanced. Would say one of the biggest headwinds that doesn't get a lot of airtime is the fact that AI cap X, you know, is under pressure and this idea that you know they're getting the return on AI is just not there, and that's been a huge driver of growth. The other other things that are going on, of course, is that you know, physcal spending is under pressure, and then just the stock market itself, when you know when it's correcting here is putting pressure on asset prices in that wealth effect. That's been a huge tailwind for the last several years. So you know, the overall economy itself has not been that healthy in the United States for quite a while, and the earnings picture has not really supported the asset price inflation that we've been seeing, and of course the Fed not cutting rates anymore. So there's a lot going on besides just tariffs. To me, tariffs are almost the last piece of the earnings and that's why we decided to do it now, is like that's the cherry on top almost to this slowdown that's going on. And the question is is that tip us over into session? Right? So does a two fifty seven look something worse. And that's what we're trying to figure out during earning season is our company is now going to take action meeting, you know, layoff employees and we have a labor cycle finally, and I don't know if we're going to get clarity on that, but that's what I want to be looking for.

Well, good morning, Yeah, we'll learn something. I think what we're going to learn is that there's still a lot of uncertainty. And I want to back up a second. You know, we did cut our numbers, but it wasn't just because of terriffs. I mean, and this is a theme or you know, a thesis we've had for a while. You know, we think there's a lot more going on than just terroriffs that have been weighing on you know, growth outlooks, this and this you know correction that we've been involved in has been is very well advanced. Would say one of the biggest headwinds that doesn't get a lot of airtime is the fact that AI cap X, you know, is under pressure and this idea that you know they're getting the return on AI is just not there, and that's been a huge driver of growth. The other other things that are going on, of course, is that you know, physcal spending is under pressure, and then just the stock market itself, when you know when it's correcting here is putting pressure on asset prices in that wealth effect. That's been a huge tailwind for the last several years. So you know, the overall economy itself has not been that healthy in the United States for quite a while, and the earnings picture has not really supported the asset price inflation that we've been seeing, and of course the Fed not cutting rates anymore. So there's a lot going on besides just tariffs. To me, tariffs are almost the last piece of the earnings and that's why we decided to do it now, is like that's the cherry on top almost to this slowdown that's going on. And the question is is that tip us over into session? Right? So does a two fifty seven look something worse. And that's what we're trying to figure out during earning season is our company is now going to take action meeting, you know, layoff employees and we have a labor cycle finally, and I don't know if we're going to get clarity on that, but that's what I want to be looking for.

And also on the policy front, tax cuts, because it sounds like in Washington as these negotiations take place, looking for pay for is I'm not so sure this is a certainty that we're going to see corporate tax cuts.

And also on the policy front, tax cuts, because it sounds like in Washington as these negotiations take place, looking for pay for is I'm not so sure this is a certainty that we're going to see corporate tax cuts.

Well, that's right. I mean, I think what they're trying to negotiate with with Congress now is really just an extension of the tax cuts that were put in place, you know, I guess seven years ago now. So I'm not anticipating additional tax cuts, but boy, if we don't get an extension on those tax cuts, that's you know, that's going to really hammer earnings for next year. In twenty twenty six.

Well, that's right. I mean, I think what they're trying to negotiate with with Congress now is really just an extension of the tax cuts that were put in place, you know, I guess seven years ago now. So I'm not anticipating additional tax cuts, but boy, if we don't get an extension on those tax cuts, that's you know, that's going to really hammer earnings for next year. In twenty twenty six.

We heard the news this morning China ordering its airlines not to take any further deliveries of Boeing. I got to wonder what goes through your mind as you see this across the tape and the daily flow of evolving trade policy. Does it provide any clarity or does it add to the swirl of uncertainty? It all seems very ad hoc.

We heard the news this morning China ordering its airlines not to take any further deliveries of Boeing. I got to wonder what goes through your mind as you see this across the tape and the daily flow of evolving trade policy. Does it provide any clarity or does it add to the swirl of uncertainty? It all seems very ad hoc.

Well, that's right, I mean, and you know this is going to be messy. I mean, China clearly is not, you know, bowing down in terms of you know, agreeing to everything the United States wants. And that was always going to be the case. Is that. I think the you know, the tariffs on on China that you know that those never came off, you know, even during the Biden administration. So that's that's a That's just the one that's going to be the most contentious for sure. I mean, we're going to have negotiations with various countries over the next ninety days, and I don't think anybody expects China to come running to the table to negotiate. I mean, that was always going to be the most contentious one, and this is just more evidence of that.

Well, that's right, I mean, and you know this is going to be messy. I mean, China clearly is not, you know, bowing down in terms of you know, agreeing to everything the United States wants. And that was always going to be the case. Is that. I think the you know, the tariffs on on China that you know that those never came off, you know, even during the Biden administration. So that's that's a That's just the one that's going to be the most contentious for sure. I mean, we're going to have negotiations with various countries over the next ninety days, and I don't think anybody expects China to come running to the table to negotiate. I mean, that was always going to be the most contentious one, and this is just more evidence of that.

Well, what's the message from foreign exchange in the body market? Can we infer anything with respect to foreign capital inflows into the US?

Well, what's the message from foreign exchange in the body market? Can we infer anything with respect to foreign capital inflows into the US?

Well? Number one, I think it confirms what we knew at the end of last year, which is that foreigners probably have way too many assets in the United States to begin with. You know, I think and that we're not the only ones talking about this. But you know, when you look at the S and P five hundred making up seventy percent of the MSCI global you know, people talking about US exceptionalism that if it was you know, preordained, you know, I mean, that was going to happen inevitably. And I think this development is only accelerating that. Our work and you know, talking to dealers and everything else, you know, suggests that we're not seeing outright selling of treasuries from foreign governments. But let's be clear, foreign governments have not been net buyers of treasuries for quite a long time. I think the I think the movement in currencies is probably more function of stocks than it is treasuries. We we have seen flows move from the United States to these other regions, particularly Europe and back to China to some degree. Those have been the two biggest beneficiary of maybe US asset prices coming down, and this idea of too much capital concentration in the United States. The question now is have we adjusted enough, you know, has that happened? Have we seen it and I would just point out again and this process started really three four or five months ago, and you know, we're probably a good way down that road. We are still somewhat barished on the US dollar because US dollar is overvalued, and it's not just a function of flows, but that will accelerate the adjustment process.

Well? Number one, I think it confirms what we knew at the end of last year, which is that foreigners probably have way too many assets in the United States to begin with. You know, I think and that we're not the only ones talking about this. But you know, when you look at the S and P five hundred making up seventy percent of the MSCI global you know, people talking about US exceptionalism that if it was you know, preordained, you know, I mean, that was going to happen inevitably. And I think this development is only accelerating that. Our work and you know, talking to dealers and everything else, you know, suggests that we're not seeing outright selling of treasuries from foreign governments. But let's be clear, foreign governments have not been net buyers of treasuries for quite a long time. I think the I think the movement in currencies is probably more function of stocks than it is treasuries. We we have seen flows move from the United States to these other regions, particularly Europe and back to China to some degree. Those have been the two biggest beneficiary of maybe US asset prices coming down, and this idea of too much capital concentration in the United States. The question now is have we adjusted enough, you know, has that happened? Have we seen it and I would just point out again and this process started really three four or five months ago, and you know, we're probably a good way down that road. We are still somewhat barished on the US dollar because US dollar is overvalued, and it's not just a function of flows, but that will accelerate the adjustment process.

What's the signal for equities for bottom.

What's the signal for equities for bottom.

Well for US And we spent a lot of time on this, you know, like I said, we think this correction is well advanced in terms of time and price, and so what we're looking for is a retest probably of those lows we saw last week. It doesn't mean you have to go all the way back down there, but like Monday to me was a classic capitulation day. We see it in all the data, massive volume. It was almost a panic, and that means that's probably going to be the momentum low for this correction, which is now officially sort of a bear market anyway you slice it. And so usually when you have a bear market, you know, capitulation like that, it takes time to heal. And so what we're looking for is sort of backing and filling, you know, chopping market for the next month or two at least maybe it goes further than that, and then on a retest, we want to see lower momentum and we want to see, you know, certain things start to outperform at the bottom, and we're just not there yet. So we're prepared for another thirty sixty days minimum of high volatility and a lot of price a lot of price movement. But I'm not in the camp that we still can't see something positive by the end of the year, where like we've had all the growth negative impacts now and then the growth post the things that they're going to be doing to start to show up at the end of the year, and the markets will the markets will figure that out right

Well for US And we spent a lot of time on this, you know, like I said, we think this correction is well advanced in terms of time and price, and so what we're looking for is a retest probably of those lows we saw last week. It doesn't mean you have to go all the way back down there, but like Monday to me was a classic capitulation day. We see it in all the data, massive volume. It was almost a panic, and that means that's probably going to be the momentum low for this correction, which is now officially sort of a bear market anyway you slice it. And so usually when you have a bear market, you know, capitulation like that, it takes time to heal. And so what we're looking for is sort of backing and filling, you know, chopping market for the next month or two at least maybe it goes further than that, and then on a retest, we want to see lower momentum and we want to see, you know, certain things start to outperform at the bottom, and we're just not there yet. So we're prepared for another thirty sixty days minimum of high volatility and a lot of price a lot of price movement. But I'm not in the camp that we still can't see something positive by the end of the year, where like we've had all the growth negative impacts now and then the growth post the things that they're going to be doing to start to show up at the end of the year, and the markets will the markets will figure that out right