00:00I want to start with your market view, because this is a market that has run really far, really fast, actually, up more than 20% off the lows, despite all of this trade uncertainty that still lingers.
00:14Is the rally justified?
00:16You know, look, I think we've had a tale of two data sets here.
00:19We've, of course, had the consumer sentiment data, which had been weaker than expected.
00:24And in a lot of ways, that was driven by the uncertainty around tariffs and trade.
00:27But we also had the hard data set, and that has actually exceeded expectations.
00:32We're looking at things like Q1 earnings growth, 13% year over year, pretty strong, given the uncertainty.
00:39We're looking at Q2 GDP now, on track for over 3.5%, according to GDP now.
00:45And, of course, we're looking at things like labor market, inflation data, all pretty benign or at least resilient thus far.
00:52And so what I'd say broadly is this rally was based on actual fundamentals, perhaps some of that trade and tariff uncertainty being walked back.
01:01So perhaps the worst is behind us there.
01:03Now, as we get into the summer months, there are some pretty big catalysts we'll have to get through.
01:07We could see bouts of volatility ahead.
01:09But generally, I think we're set up, as we head into the back half of the year, for better market returns.
01:14So talk to us about what could shape the market direction as we think about the second half of the year and what could trigger some of that volatility that you mentioned.
01:22Yeah, absolutely.
01:23So, for example, on the trade front, we will certainly be watching the end of the 90-day pauses, both for the broader trading partners, I think July 9th, for China, closer to mid-August.
01:34That will be a potential catalyst, unless we start hearing deals being done ahead of that, or at least perhaps even an extension of some of those dates as we get closer.
01:44The second one, of course, we're watching is the tax bill, the big, beautiful bill on track potentially for a mid-July date heading through the Senate.
01:52And then, of course, more broadly, we are looking at what happens in terms of the impact of tariffs on both economic growth, inflation.
02:02But keep in mind, as we head towards the back half of the year, we're also watching a Fed that potentially is cutting rates, more certainty out of trade and CEOs getting a little bit more clarity, and then potentially fiscal stimulus coming into play into 2026.
02:16Here's the thing, though, the S&P 500 is very close to all-time highs with only, what, one trade deal announced.
02:23Is there a chance this is a buy the rumor, sell the news type of thing?
02:26Could it already be priced in, or is this a market that is poised to continue to move higher?
02:31Yeah, you know, look, you made a great point up front, 20%.
02:34We move pretty far pretty fast.
02:36We know markets don't move in a straight line indefinitely.
02:40Any given year, two to three corrections are the norm, and especially a year where there is elevated uncertainty.
02:45So we would expect another bout of indigestion as we maybe are working through, whether it's trade, whether it's the tax bill, whether it's just economic data that is showing signs of cooling, perhaps.
02:58But those are probably opportunities for investors to position potentially ahead of some of those better catalysts as we head into 2026.
