00:00Russ, we've got this odd tug-of-war, this short-term reaction to the progress we're making in trade talks, real progress between the U.S. and China, and then long-term, just realizing the tariffs are higher now than they were at the start of the year, and that could be disruptive for growth in the future. How do you wait one versus the other?
00:16Well, good morning, Jonathan. You know, it's funny. Whatever you write two, three days ago probably is stale, given the pace at which headlines are coming out. But I think you're right. I think we are in a tug-of-war. Obviously, this morning, we got some very good news. It reduces the risk that we're going to see a serious economic contraction. It reduces some of the uncertainty. It reduces some of that left tail. Having said that, we still have to contend with a few things, one of which is there's still uncertainty,
00:44the second of which is how much did the previous disruption hurt economic activity, whether it was at the consumer level or at the corporate level. And third, and again, valuations are not the best short-term timing tool, dealing with the fact that even with the pullback we had earlier in the year, S&P is back to trading at 21 times future earnings. That's a big number, given all the other things going on. So I do think it's a tug-of-war. I think we're still in a range, although that range is probably higher on the upside
01:14and lower on the downside than it was on Friday. Did we learn anything, Russ, that makes you materially change your allocation, given some of the uncertainty that remains out there?
01:24I don't think we would change our allocation. A lot of the themes we were thinking about on Friday are still in place. One of the things that we were looking at
01:32that I do think is going to probably work in the back half of the year. You know, we had that big rotation earlier in 2025. Everyone piled into defensive parts of the market,
01:44whether it was staples, utilities. I don't think that was right. And that really made sense only if you expected a recession.
01:51The extent the odds of that are lower, we're probably going to muddle along with the economy.
01:55I do think some of the large mega cap tech names that struggled earlier in the year can actually do well in an environment in which growth is
02:03okay, rates are contained. And many of these big themes that we were all talking about back in 2024, they're still very much in place.
02:11So that's one area of the market I do think is a place to be in the back half of the year.
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