00:00Okay give us the bad news. We've seen some volatility potholes as Amy Silverman calls them. I guess though overall the pullback hasn't been that severe. Are you saying it's going to be more severe. I think it's more that we should expect to see continued volatility. If you think of what a difference a week makes right. Last week there was a lot of concern that the Fed actually won't cut rates in December. And now this week as we started to see more consumer survey reports come out we started to see Mary Daly the San Francisco Fed governor speak to her concerns around employment and potential job losses and weakening and then
00:29employment market. All of a sudden that expectation for December rate cut is back on and we see markets have really recovered so much this week. So if it's good volatility that's good for markets right. That's good for traders. I mean the fact that the December 8 that came back online meant that you know the pothole was okay. Well I think that's really what we are expecting is that we'll continue to see volatility both downside volatility and upside volatility because there continues to be this level of uncertainty in terms of we are flying blind. We don't exactly know what October
00:59job employment unemployment unemployment numbers will look like what inflation numbers will look like. And so as we continue to have this gap in data where the October reports are not going to be released which the Trump administration has already said they won't be releasing quite a few numbers. We're going to be flying in this market where we're not sure. And so I think that lack of data that lack of certainty of where we're going to go from here is going to generate continued volatility as folks perhaps overreact to any bit of information that comes out. So we're seeing a VIX
01:29below 17 and a half right now. It went up to almost 25 I think in the last couple of days. Are you saying that we'll see more 25 and even beyond maybe because at that point it begins to become a little troublesome. I don't know that we'll necessarily see above 25 but I do expect that we could continue to see the market bounce up and down before the end of the year. And I think it's this consideration that for investors staying mindful not to be whipsawed as we continue to see one week. It's weeks
01:59expect the S&P to you know finish 2026 up another 20 percent another week. Folks are you know the bears will come out and say that we're expecting to see a less you know. Are investors protected from this volatility more and more as the year sort of comes to a close or are they still a little bit open. Again just to quote Amy Silverman she was a little bit worried that perhaps they weren't you know fully protected to the downside. I think that's probably the case.
02:26I think many investors continue to be exposed. We obviously know that there's a bit of concentration in U.S. equity markets and we think that we continue to see investors quite over allocated to public equity markets which is understandable given the run that we have seen in public equity markets.
02:41And so there's both a exposure and concentration in a specific number of companies but also concentration to U.S. equity markets in general. And so we do think that as we expect more volatility in public markets that investors are likely exposed to that and should be mindful of that as well.
02:57Well given that there's a number of catalysts between now and the end of the year and you cited some of them already you also put in your notes obviously the tariff announcement from SCOTUS could make a difference.
03:05And there are plenty of other things that could really change the picture. I mean economic data to say the least. Would it be advisable just to maybe get out of some of those names that have had a nice run or is there a way to protect yourself in case they do drop.
03:19Yes. Yes. Yes. And what you reference is exactly some of the things that we're thinking about which is there's outstanding uncertainty around tariffs. Now is there a likelihood a potential that SCOTUS rules against the Trump administration on the legality of the tariffs.
03:33There's certainly I think a possibility for that. That said we don't necessarily think that tariffs are going to go away. Right. There's certainly some contingency planning happening with the Trump administration in terms of how can those tariffs be implemented in other ways.
03:46It just creates this level of uncertainty. Right. Where what does that mean. Ultimately I think for investors for companies for consumers there should be a continued expectation that the tariffs are here to stay that but any amount of uncertainty around that certainly will contribute to volatility in equity markets as well.
04:05But you don't have to run to treasuries and put all your money there either. Exactly. Because there could be upside volatility as well. Right. As we talked about it really bounces around. So it's important to stay balanced.
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