00:00Do all of these forces, the forces I'm talking about, Lisa's talking about, do they put the year-end rally in jeopardy?
00:05Is that year-end melt-up now at risk?
00:07Well, we're going to go through many mini-cycles before we get towards the typical year-end seasonal type rally,
00:14which typically kicks off closer to Thanksgiving into the end of the year.
00:18I think it comes down to the data.
00:20And we're going to, at least now, finally, with the government reopening, we're going to get the data.
00:23Some data.
00:23Some data.
00:24Not all of it.
00:25Not all of it, but I do think the burden will be there, the burden of proof is there, that you have to have really strong jobs data to turn off the Fed.
00:33Even though they're talking tough, I think they're still going to cut it, is our view.
00:38Can we just get into the data and why we're not getting the household survey?
00:41What is it about that particular survey that makes it difficult to produce?
00:44Well, I think it's the actual collection process.
00:47And let's also take a step back and realize that the BLS has had staffing issues all throughout the year.
00:56You know, getting people back in place, collecting the surveys, doing the household.
01:00It's much easier to do the establishment NFP.
01:02What's your sense that this data would come in stronger than expected or weaker than expected based on some of the peripheral information that we have been getting?
01:09Yeah, I think that the alternative data that we've gotten throughout the last six weeks still points to a weaker labor market.
01:15So I think that once that's clear and you see it, it's going to be hard for the Fed to back down.
01:20So if the Fed does cut rates, where is the outperformance going to actually come from if it really is in response to a real problem, right?
01:26It's sort of this idea that be careful what you wish for when the Fed actually does cut rates because they could be responding to a real issue.
01:31True.
01:32I think if it lingers into Q1.
01:34So if the Fed cuts rates because we've been kind of in this lull of no data, vol's been very low, there's uncertainty about what the outlook is.
01:41If they're cutting because the persistent weakness is one thing.
01:44If it's an accelerated weakness, I think that probably shows up more in Q1 than at the end of the year.
01:49Oh, you don't buy the pickup in Q1 next year because that's what this market's priced for.
01:54That's what Fed President Muslim is talking about, a reacceleration in Q1 26.
01:58Why don't you buy it?
01:58Well, I mean, as both you in your opening intro, I mean, yes, small businesses should be leading the charge.
02:05But if you look at the NFIB surveys, you're not seeing that pickup yet.
02:08And they're the most rate sensitive.
02:09So you need to get rates much lower to get them to actually start to hire and not just, you know, be reacting to the fiscal policy that's been put in place.
02:17And look, let's not ignore the layoffs have been huge and they keep coming through, even heading into the holiday season.
02:22And the seasonal sort of like hiring plans aren't there.
02:25So the jobs market, in our view, still gets worse before it gets better.
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