00:00Well, Matt Maley is Chief Market Strategist at Miller Tabak and Founder of the Maley Report.
00:05Always good to have you on the program.
00:07Look, America votes next week in the midterms.
00:12What are the markets most nervous about?
00:16Well, it's interesting because usually when you have a situation where there is a difference between
00:24who's in the other party in the White House and the party in Congress,
00:27that actually tends to be positive for the stock market when you have a split government.
00:32However, this time around, people are a little bit more worried about it
00:36because, of course, the situation with the technology and the AI industry is so important to the stock market right
00:45now.
00:45And if the Democrats do take over, especially if they get both houses,
00:51they worry that, number one, the issue of data centers will become a bigger issue
00:57and thus they'll slow down.
00:59And also the worries about safety issues and humanity and things like that
01:04could slow the process down as well.
01:07So this is something that could actually create some more problems for the stock market
01:13rather than ease them off like they usually do when you have a split government.
01:16You talk about the stock market, but we were just talking to our correspondent about the price of oil
01:21up around $116 a barrel.
01:24Higher fuel prices and tariffs are squeezing American households.
01:28What can the White House realistically do about it before polling day?
01:35There really isn't a lot that can be done about it at all because we're only a few days away.
01:39I mean, we're less than a week away now.
01:41And even if oil prices come down, we know that the prices at the gas pump, there's always a lag,
01:49a big lag.
01:49So he's hoping to get it back below $4 a gallon, and that's just not going to happen.
01:54So the impact it's having on what outcome will take place next Tuesday is already baked in, I think.
02:02Now, of course, the midterms aren't going to change who's in the White House,
02:05but they could change how much the president can get done.
02:10What would the results signal about the direction of America's trade with the rest of the world, including China?
02:18Well, I mean, again, this is a situation where it will raise some further concerns.
02:26I mean, he's going to have a lot tougher time getting things done.
02:28There's also concerns that he'll have to spend a lot more time defending himself
02:32if there's another round of impeachments and such.
02:36And when you have this at a time where, again, this issue on the technology area,
02:41where a lot of different companies right now are telling us that there is going to be a further delay
02:47in rolling out their AI capabilities because of whether it be safety reasons or financing reasons,
02:56I mean, that's just another way of saying it's going to take us longer to get the return on investment,
03:03this massive investment we've made.
03:04And that's not something that bodes well for the markets as we move into 2027.
03:08So it is a little concerning to me.
03:12Yeah, I mean, so you're talking about U.S. stocks there, which have climbed this year despite conflicts,
03:17despite higher interest rates.
03:19And, of course, we're looking ahead to the Fed decision later.
03:24Could these elections be what finally knocks the markets off course?
03:30I think they could be.
03:31You know, as you mentioned, it's funny how when we see these big rise in long-term interest rates
03:36or interest rates like we have this year and when we see the rise in oil prices,
03:41significant rise in oil prices like we have this year, the market, for some reason,
03:46always seems to be able to ignore it for a while, for several months, actually in some cases many months.
03:52And that's been the case now.
03:53But I worry that the catalyst, the election could be the catalyst that does finally open people's eyes
03:59to what's going on, again, especially when you have the situation with the tech stocks running into problems.
04:07And I guess the thing is, it's not just the higher interest rates either.
04:11It's also the widening of credit spreads, the decline in the private credit market,
04:17the decline in the high-yield market, et cetera.
04:19So it's not just – this problem is broadening out, and I think we're at a point where it's coming
04:27to a head.
04:29McMayley, always a pleasure talking to you.
04:30Thank you so much.
04:31I look forward to having a debrief with you after those midterms.
