00:00The markets are optimistic.
00:01They're optimistic that there's some kind of resolution in the Middle East.
00:04Are they overlooking the worries about inflation?
00:07So, first of all, welcome, happy to be here.
00:09I think there's a little bit too much exuberance out there.
00:11It's not just the Middle East.
00:13It's Ukraine, Russia still there, America, China.
00:16There are a lot of these complex issues, which may or may not affect the market.
00:20But then there are issues like inflation, you know, that today's print wasn't so good.
00:23So, yeah, I think the market's kind of exuberant, and it may not be completely justified.
00:27So, why are they so exuberant?
00:28If they're exuberant, are you expecting a correction?
00:30And is it because they're looking at AI?
00:32I don't think it's AI.
00:33I think corporate profit is doing very well.
00:35AI will be a plus, though.
00:37This year it's just a lot more spending, which may be a little inflationary too.
00:41But it's more corporate profits.
00:43You know, we're doing a little bit more QE.
00:45Government's still spending a lot of money.
00:46The one big, beautiful bill is kicking in.
00:49Stimulus offsetting a lot of the gas.
00:51I think the gas increase, a dollar of gas is $100 million.
00:55The one big, beautiful bill is $100 billion that consumers pay.
01:00The one big, beautiful bill is $300 billion.
01:03Deregulation is real.
01:04There are these things which are causing a pretty good market right now.
01:07But when you talk about exuberance, it means that there's a market dislocation.
01:12Where do you see that?
01:13The stock market's in the top 10%, 15%.
01:16Credit spreads are very low.
01:17So, the general assumption that these things are all going to resolve.
01:21And I'm just, I'm kind of a skeptic.
01:22I don't know, I hope they do, but I don't know that they will.
01:25Okay.
01:25What do chief executives worry about in private that they tell you that they won't tell us?
01:31Not much.
01:32Maybe?
01:33Trade, you know, America, NATO, the wars, oil prices.
01:39I mean, the same stuff you hear about all the time.
01:40But CapEx, I know, you know, we had a great earnings season.
01:44Is the next one going to be less good?
01:47I don't know yet.
01:49It's very hard to tell.
01:50You know, I think the deficit spending drives a lot of corporate earnings, too.
01:56So, it drives a lot of CapEx.
01:58And, you know, will CapEx create productivity before it creates inflation?
02:02I don't know that.
02:03I think one of the risks is inflation.
02:05I've always thought that.
02:06Right.
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