Fed Pivot Sends Dow to Record Highs

Jeff Buchbinder (00:00):

Hello everyone and welcome to the latest LPL Market Signals. Jeff Buchbinder, your host for this week with my friend and colleague, Quincy Krosby. Quincy, thanks for joining. It is very windy and very rainy here in Boston. Hear it's similar down there where you are.

Quincy Krosby (00:20):

Windy and sunny. Cold.

Jeff Buchbinder (00:23):

Oh, well that's better. Not the cold part, but at least you got some sun. We have no sun. In fact, this is really strange. My kids, you know, I've heard about early release day. At school they had late release day. I've never heard of this before, where the principal kept the district in school for an extra hour to wait for the winds to die down. And for the commute to be safer. So, how about that one? That's new to me. Have you ever experienced that before?

Quincy Krosby (00:54):

Like it.

Jeff Buchbinder (00:56):

You like it?

Quincy Krosby (00:57):

I like it, yeah.

New Speaker (00:58):

Alright. Smart move. Smart move. Safety first. Alright, so here, we'll look at these lovely disclosures. Then we'll move into the agenda for this week. We've got, boy, we got a lot of stock market games to talk about. So new all-time high for the Dow, the S&P 500 as we're recording this on Monday, December 18, at about 2:00 p.m. Eastern. It is, the S&P is about 1% from an all-time high. So we're close, got about 40, 45 points or so to go. But the Dow got there already. Why did the Dow do that? Because of the Fed pivot, which we'll talk about. We're also going to look at commodities this week. So, you know, Quincy, you have a great global perspective. So you know, whenever I do this podcast with you, I want to talk about what's going on globally.

Jeff Buchbinder (01:45):

So certainly we can look at the commodity markets and get some understanding of what the markets are pricing in, in terms of global growth. And then the week ahead of course the Fed's preferred inflation measure. We talk about it every time that's on the docket. Inflation's become a little bit less important, <laugh> because we got the pivot. But nonetheless, I think that's the most important economic data point this week. And then the Bank of Japan is certainly the most important thing we're going to get from a central bank this week. So interested in hearing your thoughts on the BOJ Quincy. So let's start with our market recap. We didn't do this last week because we just went through the LPL Outlook for 2024. As a reminder for those who haven't seen it yet, the LPL market outlook for 2024 is out on lpl.com.

Jeff Buchbinder (02:39):

Actually, along with our new blog, we have a new blog site on lpl.com which was migrated over from LPL research.com, which is very exciting. It looks a lot better. So thanks to the folks who did that for us. So we're back to kind of our normal agenda. A normal routine. So this is the market performance recap. And you see here you know, the seventh straight week for the S&P 500, higher up, two and a half percent. The Russell 2000 has gone from a 52 week low to a 52 week high in a very short amount of time. Basically, I think it's around five weeks, five, six weeks, which is about as fast as that ever happens. So clearly this market is broadening out and you know, it's not just about the

Jeff Buchbinder (03:30):

Magnificent seven. Also worth noting the cyclical sectors did better than the defensives in general. That is signaling solid economic growth ahead. In fact, I saw a study over the weekend from Goldman Sachs that basically ties the correlation between cyclicals relative to defensives and GDP growth. And it's saying 3% right now, GDP growth, which of course is really strong. We probably won't do that in Q4, but certainly we wouldn't be surprised to see two. So very cyclical and sort of risk-loving type of intermarket performance here. And, you know, we had gains overseas. We had well, not totally across the board, but certainly in most of the key markets globally. The dollar starting to weaken. That makes sense when the Fed is presumed closer to a cut than a lot of these other markets outside the U.S. Bond returns really strong up over 2%, up 5% year to date on the Bloomberg Aggregate Bond Index, we were at negative returns for bonds not too long ago.

Jeff Buchbinder (04:41):

So we basically made our year in bonds off of just the last, you know, month or so with this huge rally as rates have come down in recognition that the Fed is done. There, you see the dollar weakness in the bottom right-hand corner here, down 1.5% on the week. That certainly helped not only international stocks post gains, but also commodities. Energy finally bounced. Industrial metals were quite strong. And precious metal solid as well, up between two and 5% across all the major commodities. So we'll talk more about that in a minute. So here's the S&P 500. So Quincy, you know, the I mean the index is overbought, right? I mean, frankly, most of its components are overbought. You see that in the bottom panel here. You know, 40% of the S&P in overbought territory, over 70% above a 20-day high. The RSI of the index is right around 70. That is overbought territory. So I think the question is are we going to drift higher consistent with seasonality, or do you think this market needs to pull back and maybe over the next month will end up lower?

Quincy Krosby (05:59):

Well, you know, I certainly think that markets typically need to consolidate gains, pause and then get ready for the, you know, the next rally. But markets that have a very strong underpinning, such as this market can defy the need to burn off some of that froth. You know, a strong market does defy in the same way an oversold market. We always say an oversold market is due for a bounce, but if that oversold market has reasons to be oversold, it'll continue. We're seeing this on the other side of the equation, and every time we thought the market was going to pause, it looked as if it was going to pause, typically the 10-year yield would inch lower and then the market will get another higher. But it will happen, the market does need to back and it will pull back. It's not if, it's when, but it will be just the pullback.

Jeff Buchbinder (07:00):

Yeah, the fundamentals of this market are still pretty good. So I would agree with that. If we pull back, we're not going to pull back dramatically. You have good breadth now, and you have the opportunity for the S&P 493 to do well, <laugh>, right? We've been just talking about those seven stocks all year. Well, here's the chance, and we saw it in small caps, right? Here's the chance for the rest of the market to start doing some work and maybe can, you know, lift the overall index, even if that magnificent seven doesn't do too much. So let's turn to the 10-year yield. And this of course, is the reason why stocks are rallying, right? Or at least it's tied to the reason why, the dovish Fed and falling inflation. We just lowered our 10-year yield target for year-end 2024.

Jeff Buchbinder (07:52):

It's 3.75 to 4.75. You can see on this chart we're a little under four. So yeah, there's certainly some downside in our view. I mean, the momentum to the downside has been quite strong, so we wouldn't be surprised if we go a little lower. But the returns from here for bonds are probably going to be a little bit more modest certainly than we've seen. You're going to see you know, probably see some resistance below 3.75, but if we do get down below 3.75, then maybe you could look at 3.3 as support. That would be quite a move from 5% not too long ago. So yeah, rates are nearing oversold levels and are probably going to find their footing here fairly soon. So let's turn to the Fed, speaking of rates. So, Quincy, we got what everybody called the, you know, a dovish pivot. And you know, the dot plots told us three cuts. I think most people see that I've seen forecast for are looking for four. The market is pricing and it looks like five next year maybe even six, right, to get us a little below 4%. You know, what do you think? Is that too aggressive here? Do you think three is the right expectation? And when do you think the cuts start?

Quincy Krosby (09:15):

Well, I think that if you have a, so-called soft landing, and it looks as if now the fourth quarter we're back above 2% in terms of the data up until this point. So we moved up from about 1.2% to go above 2%. It'll be hard to understand why the Fed would need to cut rates, say in March or April. I already saw the fed fund futures market pull back on its forecast for a rate cut in March, pulled it back, and the reason for that is there's been some pushback from the Federal Reserve speakers in an orchestrated attempt to get the market to understand that the Fed is not in the mood right now to discuss rate cuts that came from the head of the New York Fed, John Williams, who was backed up interestingly by Bostic, head of the Atlanta Fed, who tends to be much more dovish than the average dove on the Federal Open Market Committee and then Loretta Mester made a case, also spoke to the Financial Times, saying, I don't think so.

Quincy Krosby (10:30):

So, you know, this is orchestrated. It is the Fed saying basically we want some quote unquote optionality, as they like to say. If they have to raise rates they don't want to, they probably think they don't have to, but it's a just in case. And Chairman Powell also said at the press conference early on, actually, I think it was the second questioner at that press conference, said, look, I just want to say we're not declaring victory, we're not declaring victory, we've done very well. It's moving in the right direction, but we have to make sure that it continues to move in that direction. They don't want any surprises and they also don't want to repeat what happened in the seventies. And also you have to argue for Volcker, he raised rates, cut rates. And then later on he was forced to raise rates again. I think they want to go slow.

Quincy Krosby (11:25):

And I think also they're prepared at this point, Jeff, to say, look, we're not going to be rushing towards 2%. We don't want to damage the economy in order to get to 2% quickly, as long as it is moving in the right direction and that the last mile is moving closer in that direction. In other words, the untangling of the super core. We'll find out this Friday, we'll get the Personal Consumptions Expenditure Index. So the market, but by the way, in this market today is saying, oh, really? We're not really sure we believe you anyway. You'll wind up having to cut rates and, you know, if something breaks they are going to provide liquidity. They are going to come in quickly and provide liquidity by cutting rates, there's no doubt about it. But the question is, what else would get them to cut rates? And that may be that at some point inflation comes down to a level that happens not be commensurate where the rates are and then they will cut as well, but that's not going to be in March unless something goes wrong.

Jeff Buchbinder (12:33):

Yeah, the odds of something breaking have certainly come down with this move lower on the 10-year yield and intermediate rates along with it. So, they might pull off what many thought was impossible, frankly. You know, normally the playbook is buy the pause and sell the cuts. In this case, it's possible that, you know, we don't get a cut until the second half of the year. And, you know, by that time the market kind of heats up a little bit again. We get through a little economic soft patch, maybe. Yeah. Yeah. And then they are, you know, looking at maybe hiking again next year. You know, that wouldn't be our base case, certainly, but you know, look it up in the 90s, right? You had a soft landing and then you overheated later. We'll see. But right now let's just focus on the fact that the pause is here.

Jeff Buchbinder (13:25):

The market really likes that. And I, you know, frankly, I wouldn't get too caught up on whether we get a cut in, you know, May or June or maybe in a little bit after that. So and March seems too soon, I agree. So, let's turn to commodities. So, Quincy the Outlook, we had a commodity chart where we compared this commodity cycle, to the 2001 to 2008 cycle that was driven more by China. You know, this time China's working against the cycle, not for the cycle <laugh>, right? So you know, this is just a broad Bloomberg Commodity Index, so it includes a lot more than oil but it has come down and it's now behind its pace from that prior decade. And frankly, you know, given the growth outlook in China, which I know you'll comment on in a bit here, maybe it goes much slower.

Jeff Buchbinder (14:23):

So you know, commodities outlook is not unequivocally positive here. A quick look at oil, I know you've got some thoughts here, Quincy, we have a little bit of a bounce, you know, I titled this chart, "starting to get its footing". The 65 to 67 kind of range has a lot of support technically, and we just bounced above this, you know, sort of upward sloping trend line to get, you know, back into the low 70s. I'll say this, it, you know, our bias is oil goes higher. And certainly the geopolitics are pointing in that direction. Seasonality is pointing in that direction as well. It's turning more positive. But there's a lot of headwinds here, right? I mean, you have U.S. oil production at a record, Quincy, and you have a lot of technical resistance, right? Having essentially chopped our way down from, you know, 93 to 70, right? It's not going to be a straight line up, I think. In fact, maybe it takes, you know, they say that a lot of these commodities take the elevator down and the escalator up. I think we're in an escalator up situation here with oil. What do you think?

Quincy Krosby (15:44):

Well, you know, we saw this playbook some months ago when oil prices came down quite dramatically on the back of recession fears, when that was very prominent in the headlines, and it didn't matter about cuts in production back then, and the oil prices continued to edge lower. Suddenly you have that changing. But as you pointed out, the U.S. frackers are coming in and we've got record production in the U.S. And, but a couple of technicals help put kind of an underpinning last week on prices. And that was the stockpiles, crude stockpiles, in the U.S. were lower than expectations, which is when you want the price to go up, that was a good catalyst for the price to go up. The other thing is I have to add something about whether or not the market thinks that oil prices are going to go up. Take a look at the Saudi market today.

Quincy Krosby (16:47):

That's all oil. That's all oil all the time. It's up, at least was up earlier on their cycle. The other thing that is happening and this is important, and that happens to Iranian surrogate, they've got a number of surrogates, they deny it, but nonetheless, the Yemen based Houthis are out there in the Red Sea targeting the tankers. Why this is different now this week, the question is where are the tankers going to go? And therefore, it makes oil more expensive because they're going to have to go around and that takes longer. It's more expensive, the burn more oil doing that. And then there's another question as far as that's concerned. What is the U.S. going to do? This is important because the U.S. clearly doesn't want to be brought into anything that pushes this conflict away from the contained, so called contained, conflict with Israel and Hamas, it would push the U.S. closer into a really, into a quagmire with Iran, which Iran may want, actually. But the point is, you see oil prices going up as soon as this became yet another story.

Quincy Krosby (18:12):

The big integrated names are having their ships go around or not, or not going again, anytime you disrupt the pattern or the supply of oil, doesn't matter what it is, a hurricane, strike, people striking or something like this, prices climb higher. So that's what we say. But the bigger question is, how much more does the U.S. take? Remember U.S. troops have been targeted. A couple of our ships were targeted. At some point, the U.S. may just decide they're going to answer back, and if they do, they're going to win. Because if you start sending in U.S. support, they're not going in there to just be a cruise line. They're going to go in there to make sure they send a message. The question is, does the U.S. do that? And if they do, when, how much more does the U.S. take from these surrogates for Iran?

Quincy Krosby (19:09):

Of course, I just want to point this out, Iran denies it. But the history dictates that they are these surrogates for Iran. I just want to point out too, they have gone after Saudi targets as well, and that has placed the Saudis in the line of conflict with them, the Houthis, and also therefore Iran. So it gets to be quite complicated, but oil prices climbing higher. And I just want to point out the U.S. again at 13.24 billion barrels, billion barrels of a day. And the expectations are we're going to come out with another 550,00 barrels of oil a day next year in 2024. There's no stopping. I want to add here to something that I think may be interesting. Folks may remember this before it was OPEC Plus, it was just called OPEC. We were producing so much oil. It was almost a change in our culture in the U.S. where we were becoming energy independent, completely energy independent.

Quincy Krosby (20:20):

The Saudis did not appreciate this. And what they did was they flooded the market with oil. They just flooded it with oil, thinking that what would happen is the U.S. shale producers would just back out, just back out as the price point was just not enough for them to make any money. Well, what it did was it caused chaos in the entire energy industry and the energy complex and prices for a long time. I only mention this because there are many who believe that the Saudis could pull something like that again. Our view is that they probably won't because of the chaos that would ensue. But that said, they want to come out and have a unified view from OPEC Plus saying we are going to cut production. It's not going to voluntary, it is going to be solid. And that is what they've been lobbying for, they are working on it and we'll see if they can actually forge such an agreement.

Jeff Buchbinder (21:23):

Yeah, we've been saying all along that well, not all along, but certainly since October 7, that the key to oil prices is whether the conflict between Israel and Hamas gets wider. And if you potentially disrupt oil production coming out of Iran then you have a formula for higher oil. So that's what we'll have to continue to watch. This chart looks a little better. This is copper. You know, we talk about Dr. Copper because it's a global barometer of economic growth. So, you know, maybe you could read this to me the economic growth outlook in China is bottoming, right? Maybe expectations have bottomed. I mean, the economy's not accelerating, but maybe the expectations are troughing, what do you think Quincy?

Quincy Krosby (22:12):

Manufacturing industrial production, surprise to the upside. I mean, that is the official data that came out and that whenever you see that, you'll see some of the industrial metals also move higher. But the big expectation is, and again, hope springs eternal, and that is that the authorities at their so called Third Plenum, that is their big meeting, that is the one the world watches. It's where they come out with their five year plan, all of their goals. What's happened is they haven't had it, it is supposed by happen in 2024. They typically have it in October, November or December, so far, no one knows when it's going to be, which is big change. However, the expectations are that when they do have it there will be more help coming from the fiscal side of the equation as opposed to the monetary side, which has been seen as tinkering trying to help the beleaguered, almost illiquid, property developers. This is one of the things that's holding them back.

Quincy Krosby (23:20):

The debt that is mired in the property developers, which happens to be a large portion of the Chinese economy. The hope is also that perhaps they introduce, get this, a western, a western style way to alleviate the pain, the way that we've done in the U.S. The way that other countries have also gotten rid of bad debt. You create the bad bank, or we call it the sick bank. And then you move all of that debt and you push it over. So that you clean out that entity, and then you monetize what's in that bad bank. The goal, and this is, you know, I should point this out. No one is saying it's going to happen, but let me put it this way. The Chinese authorities know that this is a viable path towards cleaning this up and they have to clean it up. That said, the hope is that they will come out with a significant fiscal package. By the way, that most likely it'll be infrastructure spending of some sort, perhaps water treatment throughout the country that would require building.

Quincy Krosby (24:34):

And of course that is good for the industrial metals. Remember too that they leaders in EV, electric vehicles, and copper is used in that. And you know, they're going to push that production. One thing I just want to add about what the expectations for China, and when you mention the early part of the century, where commodity prices just went through the roof, most likely this stage for China is where they want to move up the scale, up the value added scale, which is very normal for countries that are emerging from the emerging market status, where it's double digit growth. They want a high technology, they want manufacturing that is much, much more suited for a, you know, technological infrastructure high end. And that kind of growth is not double digit. That's usually even below 5%. Most people expect that is what we should see from China. But in terms of commodities, you know, they probably will have an announcement that could push commodity prices higher. They're not deviating from their goal to be the world leader. And EV.U.S.

Jeff Buchbinder (25:46):

Yeah, EV sales been cooling good in the U.S. so it's really more China I think that's driving this copper move.

Quincy Krosby (25:57):

Oh yeah, for sure.

Jeff Buchbinder (25:58):

Yeah. So you know, the LPR Research house view is, you know, neutral on industrial metals, neutral precious metals, and

Quincy Krosby (26:06):

Well, look at gold.

Jeff Buchbinder (26:07):

And overweight. Yeah. gold's had a nice run. We sold in a strength, I guess you could say. And then right now energy is our preferred commodity, so, we'll see what happens, but I think oil has nice upside here, at least in the, in the short term. So, let's conclude here with some geopolitical topics, Quincy, you certainly are well versed on all of these. So what should investors be thinking about, you know, as 2024 outlooks come out and most forecast are between, I don't know, 4,800 and 5,100 on the S&P? That's what I've seen anyway. We're kind of right in the middle of that. You know, we all know inflation's a risk and rising rates are a risk that we can't totally dismiss. But how about the geopolitical risks? What do you think could you know, potentially derail us next year?

Quincy Krosby (27:04):

Well, I mean, you know, you're going to probably have an issue with Taiwan. Let me put it this way. You know, President Xi is going to have Taiwan join Beijing. I mean, it's one China and they aren't going to deviate from that. The question is how do they, how do they deliver that? And if they can't deliver it by having pro-Beijing officials in place to make it easier, they're going to go in and they're going to do whatever they need to do to get them to recapitulate. The question has always been, not if, but when would they do it? And some of the analysts in the U.S. have said later, latter part of 2025 or even 2027. By the way, most have now pushed it closer and the view is this, if you wanted to do something like that, you've got an economy that is slowing, that's sluggish. Consumer spending is down, consumer confidence is down in China. What about your adversary, your main adversary, the U.S.? Well, why did you ask that question? The U.S. is focused on the Middle East, focused on, you know, Putin and Ukraine.

Quincy Krosby (28:24):

And you have a political season coming up, that happens to be a very good time to do what you want to do. The question is, will they? The other question about it, I want to this angle to it, and that is that there has been a tremendous amount of purges in China, particularly in the military, the foreign affairs community in China. In the economic sphere in China purges across the board and it suggests that President Xi Jinping is becoming more and more paranoid. Very often mistakes are made. And that's the worry about, perhaps it happens sooner rather later. That's the case that's being made. Because once a leader becomes paranoid, if in fact that's what he is, they tend to go deeper and deeper, try to show the world they're not paranoid and make mistakes. So I'm just throwing that out there. That is a concern about Taiwan. And the other aspect to it, by the way, is there is an expectation that our allies are not going to join the U.S. in any material way regarding Taiwan.

Quincy Krosby (29:44):

In other words, if it's a military conflict, the expectations are, they do not want to destroy their relationship with China. Sanctions work, but only up to a point, China is much more independent if you will for their economy to function. They have, you know, commodities, they've got minerals, and they have a very big, a very large workforce. So that is a concern. The other concern is the Middle East, this is a concern, and the Middle East is not going away. And you can see this constant pushing, pushing, pushing on the United States. The question again is, does the U.S. turn this into a larger conflict? Obviously they don't want to, obviously Biden does not want to, but it may reach the point where by not doing anything, they actually invite more trouble, more conflict.

Quincy Krosby (30:41):

Then the last one has to do with Israel and Hamas. The Biden administration is being pushed in both directions for the election. You know, Michigan is extremely important. Many have said, well, he's lost Michigan. The other issue is, you know, how far Israel is going to go. The president has been pushing to have Israel basically wind things up. There's an old saying in the military is that when you are going after your adversary, which you don't want, is a, you don't want a soft surgeon. You don't want a surgeon who is going to go easy on you. And that is the other side of this equation as to whether or not the Israelis just give up now, or do they go the extra miles almost literally to reach their goals?

Jeff Buchbinder (31:32):

Yeah, they're saying that they've entered a new phase, or I think that's their words as well as Biden's words, a new phase that's maybe going to be more surgical. But they're certainly not going to you know, respond to calls for a ceasefire until they're ready. And even when they're ready, it's not going to be a ceasefire. It's going to be more of a targeted search for terrorists and that's going to take them outside of Gaza, certainly. So, yeah, and I agree, you can't totally dismiss the Middle East. I mean, history tells you, and we showed this before on this podcast, that the stock market tends to look past these types of events. Of course, yeah. You know, as long as you're not in recession, right? As long as it's not a major financial crisis. And right now we're not experiencing either of those things.

Jeff Buchbinder (32:29):

Then the stock market should withstand a lot of turmoil in the Middle East. So when you take oil prices higher, when you when you have the U.S. and Iran potentially we hope not, but engaged, right, with one another, then that's a whole different story because then you could potentially see $100 oil, which obviously has economic impact and involve the U.S. military, that's a, you know, we're a long way from that and we hope we never get there. But that's certainly more of an economic event. So economy's in good shape, the fundamentals of corporate America are in good shape because of this soft patch, malaise, whatever you want to call what happened in 2021 is largely gone, right? We don't really have a major inflation problem, unfortunately, we're at higher prices. Sure, you're growing modestly off of, you know, compared to the price increases of the last couple of years.

Jeff Buchbinder (33:27):

But we still are at higher price levels, <laugh>. So inflation, you know, is maybe from the Fed's perspective, the bottle is largely won but we're still paying more for goods, a lot more frankly, than we were paying a few years ago. And so that the threat of putting higher oil prices on top of that, although they've been going the other direction lately, prices at the pump or, you know, $2 and change in a lot of places. But there's still that risk out there that we have to monitor. So we'll just keep monitoring all of this. Russia, Ukraine we have to monitor too. Again, it's the same situation in the sense that if it remains contained, it's unlikely to affect the U.S. economy, right? And that's, or corporate profits. And in that event, event, if it's contained, you're probably going to see stocks continue to go higher and rates stay where they are.

Jeff Buchbinder (34:23):

So still a pretty good backdrop but some risks we have to watch. So not the most upbeat way to end, Quincy. So let's talk about the week ahead real quick, and then we'll end <laugh>, right? Which is, this is a more positive message. We'll get more good inflation data, the core PCE, you know, the people that track the individual components of this and take the CPI and convert it into PCE are saying it's going to be up like you know, 0.13 month over month on the core or something like that, right? So I think there's a little bit of downside to consensus expectations and the PCE data, the Fed's preferred inflation measure will continue to support the Fed pivot. I also highlighted sentiment, you mentioned Quincy a couple times, you know, consumer confidence you know, I guess with regard to China, but consumer confidence really does matter. It's important for consumer spending, especially during the holidays. So I just flagged that. And then the University of Michigan consumer inflation expectations survey I think is really interesting. That's gone, moved all over the place, but the last tick was down a lot, so, right. We went basically from four to three in one reading, and now hopefully, we'll stay where we are or go lower. So I think that'll be important to watch. And then housing data too. Anything Quincy that you, anything else you'd highlight here before we end.

Quincy Krosby (35:55):

I might mention that we're going to have the Philadelphia Manufacturing report coming out and only mention this because it has a very strong positive correlation with the manufacturing heartland in the U.S. and the reason I mention it is that the consensus estimates logged down in negative territory, bottoming and bottoming markedly. Remember one thing about the market and investors they like to see less bad news. So if it's less bad news, that's very good news. That may not sound scientific, but folks watch to see if bad news sort of eases up and that's what we're looking for in that Philadelphia Fed survey that comes out this week, that would be important. Maybe it has to do with the United Auto Workers strike over and orders coming in, but it'll be important. Manufacturing is what, what is it? About 10, 11% of our economy. But it's important and we want to see it start to make that turn. We'll be looking for new orders, we'll be looking for hiring expectations and prices paid.

Jeff Buchbinder (36:58):

Absolutely. And then the BOJ this week there's been a lot of speculation that they're going to, you know, at least hint at tightening, probably not tighten. So we'll have to watch that, they come out with their announcement tomorrow, Tuesday. So you'll know what they said by the time you you listen to this. So probably not going to be any surprises because the market's been anticipating this for quite some time. But the BOJ officials have essentially telegraph that they're not going to make the move at this meeting. That fair Quincy?

Quincy Krosby (37:31):

Well, <laugh>, they're a little bit vague, you know, they try, they really do try to they go after the hedge funds. I mean, they are constantly being attacked, the yen, for example, constantly under attack, not by the Houthis, but by the hedge funds. And they try very hard to circumvent that, and that's why they don't want to give it away. The one thing I do want to say about when they make the decision, maybe it'll be that they move yield curve control a little bit more, like lift it a little bit more and not pull the band aid off, but they want to do it when global markets are fairly sound. And I think, you know, at least the biggest market, the United States, it's in good shape.

Jeff Buchbinder (38:21):

No doubt. That might be that might mean it's a good time, but I mean, some people talk about how the BOJ surprises, but I think raising rates tomorrow would be too much of a surprise. So.

Quincy Krosby (38:32):

Oh, not raising rates, just the yield curve.

Jeff Buchbinder (38:34):

Right? Just the yield curve control range. But even that, they already, they already basically bit guided to a higher range. So I don't think that range is going up either. We'll see. But the yen is rallying in anticipation. So yeah. Yes, that'll be important to watch this week. Because higher rates in Japan do translate into higher rates in the U.S. So we'll end on that note. So thanks Quincy for joining. Thanks everybody for joining, as well, for another LPL Market Signals. We're going to be off next week for Christmas holiday, but we'll be back with you. I guess this our last, this is our last one of the year, right? We'll be back with you after New Year's. I want to wish everybody a joyous holiday season, a safe, happy, healthy holiday and we'll see. Year. Take care everybody.

Quincy Krosby (39:24):

Thank you so much, thank you.