00:00The S&P 500 and Nasdaq reached new record closing highs on Monday,
00:05capping their best quarter in over a year as hopes for trade deals and possible rate cuts is investor uncertainty.
00:11Both indexes ended the quarter with double-digit gains.
00:18Trade deals with China and the UK have fueled optimism that an all-out global trade war can be minimized
00:24with hopes for more deals to be reached before President Donald Trump's July 9 trade deadline.
00:30Clearly, the Middle East situation, kind of having died down, especially last week,
00:35is lending a little bit of credence to the relief rally construct.
00:38I expect that to kind of be a very fluid situation.
00:41Should that dynamic change in the Middle East, we could see a little bit of a scare, spark things again.
00:47But in general, I'm expecting anything that's positive and constructive to be fed through into the stock market as well as bonds.
00:55With regard to the Fed cutting rates, one of my thoughts is that a lot of the noise,
01:00has started to come out with regard to sooner cuts rather than later.
01:03I'm a little skeptical of that personally because I think the inflationary environment could ramp up again.
01:08As we saw on Friday with the PCE data moving slightly higher, 2.7% away from the 2.5, 2.6% area we had been in of late.
01:18I'm expecting a little bit of a challenge for inflation going forward.
01:22And I expect that to kind of come more to fruition as we move forward into the year.
01:26Therefore, I don't expect, I'm not as forward thinking with regard to the Fed being on their front foot with cutting rates more aggressively rather than less.
01:35A lot of people are suggesting a September cut is in the mix.
01:38It certainly could be, but at this point, I don't see that happening.
01:41I'm only expecting one cut at most this year.
01:43The end of the quarter was also influenced by managers operating stocks to make their financial statements or portfolios look more attractive at the end of a reporting period.
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