00:00Chris Verona Strategas of Baird Company writing, we think we still defer to the uptrend in equities.
00:04Keep an open mind and stay committed to price first, narrative second approach.
00:08Chris joins us now for more. Chris, good morning.
00:11Price first, narrative second. What is price saying right now?
00:14Yeah, well, listen, I think when you look at the broader picture here, most global equity markets are still in
00:19uptrends.
00:20At the same time, I'm not convinced we've really seen a deep flush here yet.
00:24And you kind of look to not necessarily levels, but what are the internal characteristics of this market look like?
00:30You know, we're sitting here with about 40 percent of the S&P above the 50 day.
00:34We really haven't seen the big surge in new lows yet.
00:36The put call ratio remains pretty benign here.
00:39So things I would want to see to really mark some capitulative flush, I don't think have necessarily been checked
00:45yet.
00:45Now, that can change quickly. That can happen very quickly.
00:47I want to be open to that happening over the next week or two.
00:50But we haven't checked those boxes yet.
00:52We've repriced energy. We've repriced rates.
00:54Where have we started to reprice growth?
00:57Well, I think that's the big question from here forward.
00:59And particularly when you put it in context of the Fed, it's crazy to me that you see all these
01:04narratives being written that central banks are going to tighten into this.
01:09I think central banks have learned along the way you don't tighten into energy shocks.
01:13I think, if anything, you know, if this gets worse than people anticipate, we should be talking about more cuts,
01:19not less cuts down the line.
01:21And kind of our barometer to really economic growth or how the market perceives growth is what is consumer discretionary
01:28doing relative to consumer staples.
01:29Now, we've seen a modest correction in that pair over the last, you know, five, six weeks.
01:34As you might expect, it's really essential to us.
01:37Things like that or banks or industrials can respond out of this.
01:40I think if there's a bigger problem developing, we probably still rally first.
01:45We learn about it in the summer as the real cyclical stuff starts to roll back over.
01:48That's the timeline for, I think, how this plays out.
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