00:00Well, lots to chew over there. Let's talk to Matt Maley, Chief Market Strategist at Miller Tabak & Co.
00:04Matt, welcome back. Your reaction to Powell's words?
00:11Well, yeah, he definitely, you know, there's a shift in focus here.
00:15You know, he's moved from concerns about the inflation issue to that of the employment issue.
00:23So that obviously shifts everybody to thinking that there will be a rate cut.
00:28Even some people thinking it might even be as much as 50 basis points, although I doubt that will take place unless we see a really weak employment number coming up.
00:37But this, you know, change. And of course, we're seeing that what's going on in the marketplace today.
00:42And not only the big rally, but what's rallying. We're seeing, although the tech stocks are bouncing back very strongly,
00:48we're also seeing the financial names bouncing, whether it be the bank stocks and other financial names bouncing very, very strongly.
00:55This might well be Powell's last Jackson Hole keynote speech. I mean, who knows? But it looks likely.
01:02What do you think he wants his legacy to be?
01:05Well, I mean, you know, a couple of things now that we're so focused with what's going on with, you know, President Trump and, you know,
01:14whether how aggressively they should they should cut interest rates.
01:16But longer term, I think, you know, what he's done to guide us through, whether it be the pandemic.
01:23And then, of course, he was able to cut rates without putting us into a recession.
01:28So I think that this is is still has a very strong legacy.
01:33And but looking forward, I still think that inflation is an important thing for him.
01:37He doesn't want to be the one that reignites inflation.
01:40So I think people need to be careful about him thinking that he will automatically get a lot more aggressive in terms of cutting rates.
01:47I mean, beyond Powell's speech, what indicators should investors and policymakers be watching for now in the coming months?
01:57Well, I mean, you know, first of all, we're going to see what's going on in the technology sector.
02:02Next week, we get the NVIDIA's earnings report.
02:05And it's funny that we've even had situations where NVIDIA has reported good earnings and good guidance.
02:10And yet the stock has gone down because of a cell news reaction.
02:13But, you know, it is so essential that these groups do well.
02:18I mean, MIT came out with this report in the past week saying that the the end users of all these AI chips are not really making any money from it.
02:26And, you know, that's raising some concerns.
02:28So that's going to be key to look at.
02:30Then, of course, the other two things are going to be what happens with the economy.
02:34Do we see a further slowdown or a backup in terms of employment?
02:39And what does that mean for earnings growth?
02:42Because the market is very expensive right now.
02:44Inflation has moderated somewhat.
02:46But the labor market is showing some rather mixed signals, isn't it?
02:50I mean, I wonder how do tariffs and trade policy feed into the inflation outlook here?
02:57Yeah, that's that's that's that's a big question, Mark, because, you know, everybody's been talking about, well, geez, you know,
03:02the the tariffs really haven't had much of an impact on on the economy, haven't had much of an impact on inflation yet.
03:10But nobody was really looking for it to have much of an impact until about now.
03:13I mean, the second half of the summer and into the fall.
03:17And as we move into the fall months, we'll start to get the numbers on how that's really having what kind of a real impact it's having.
03:24So, you know, we're heading into that time frame in the marketplace that tends to be a little bit volatile.
03:29So hold on to your bootstraps. It could be even after today's big rally, we could still see a lot more volatility in the weeks ahead.
03:37Matt, good to see you. Thank you for that. Matt Maley, chief market strategist at Miller Tabak & Co.
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