The Market’s Narrow Leadership: The Generals Need More Soldiers

Jeff (00:00):

Hello everyone. Welcome to another addition of the LPL Market Signals podcast. Jeff Buchbinder here with my friend and colleague Quincy Krosby. How are you today, Quincy? How was your holiday weekend?

Quincy (00:13):

It was lovely. Thank, thank you. It was a good weekend and an important weekend, isn't it?

Jeff (00:20):

Oh, it was an important weekend. Certainly, you had to follow your news alerts to see what was going on in Washington, no doubt. So, we'll talk about that. It is Tuesday morning, May 30, 2023, as we're recording this. The you know, the debt limit deal is certainly the biggest headline today. It's driving futures higher, at least before the open. But there was, you know, certainly a few other things to note from last week that we'll talk about. So, let's get right to it. Here's the agenda. You know, last week, the earnings blowout from NVIDIA was certainly a big story. And so that report, as well as its big move in the market certainly showed up, more on that in a bit. Of course, we got a deal on the debt limit. It has to pass Congress and be signed by the president, but it looks really likely that that'll happen.

Jeff (01:17):

So, we'll share some of the details, at least the details that we have. The main topic, though, I'd say for today is this concept of narrow market leadership, right? The generals need more soldiers, the generals being the mega cap tech names that continue to lead this market higher. And the question being is that unhealthy? Is it just a matter of time before you know, this broad market rolls over as a small number of stocks shoulder that burden? And then we'll preview the week, of course the ISM and the jobs report, the big data points for the week. So, let's start with a market recap. So, Quincy was, I mean, it was kind of a ho hum week. If you just look at, or at least this is a five day look back, right? The S&P only up 0.3%, but we had a furious comeback at the end of last week to get to that, you know, green number, with a big rally on Friday. You know, I would say that certainly the strong numbers from NVIDIA and earnings optimism was a piece of that. Also, optimism that we would get a debt limit deal, another piece. Do you think there was something else going on here other than just you know, tech and debt limit?

Quincy (02:38):

Well, it was nice to see that Best Buy got a a bid you know, a Main Street icon juxtaposed to the new NVIDIA artificial intelligence theme that is underpinning much of this rally. So, that was nice because what it indicated is that while consumers are being more deliberate, they mentioned that they were able to, you know, offer a surprise, a positive surprise with the market. And I think that's important, because you mentioned it. Can we have anything else helping the generals, and this is what we need to see more of that, and perhaps the debt ceiling deal will help, you know, underpin a rally of sort of the rest of the market.

Jeff (03:31):

Yeah, certainly the strength in mega caps and the artificial intelligence enthusiasm is showing up in the Nasdaq, you know.

Quincy (03:38):

Yeah, yeah.

Jeff (03:39):

Up last week, but up you know, 14% plus in the last three months. Yeah. This is this is an "N" led global market, right? Because it's NASDAQ and Nikkei, right? Yes. And you look down the bottom here, you see the Nikkei up almost 15% last three months mm-hmm. <Affirmative> up a little bit last week. So, those are two of the best charts that you can find right now. Mm-Hmm. <Affirmative> I know you also want to make some comments on Germany that made some headlines last week, right? On a technical recession, two straight quarters of negative GDP yet, you know, that market's doing okay, it's kind of hanging in. Europe in general is certainly hanging in there. Do you think there's more weakness to come in Europe as a result of this Quincy? Or was that kind of already priced in and maybe anticipated?

Quincy (04:32):

Well, you know, once we saw the trade numbers, and, you know, we've been following that, right? You talk about South Korea, for example. The trade numbers out of Germany were not good at all. You juxtapose that with China. And Germany has a very strong trade relationship with China. And once we started to have the weaker numbers coming out of China, one of the things we saw was not just, you know, Germany, but we also saw those luxury good names coming down. They were their own cohort. They were kind of Europe's version of our big tech, right? They were all going up, up, up as the Chinese consumer was buying luxury goods. And suddenly as that data began to filter out of China, indicating weakness, that pulled back and pulled back and pulled back. And then Germany again, the trade data, much of it also had to do with exports of their vehicles, you know, their big export market.

Quincy (05:36):

So, I think it is probably just quote unquote just a technical recession. And you remember we went into a technical recession and there was that debate regarding what is a technical recession? Is it not a real recession? So, again, if we see global growth holding up overall, if we see China beginning to turn the corner, and perhaps with more fiscal stimulus complimenting the monetary stimulus that they have been enjoying as the People's Bank of China has lowered a number of the rate, maybe we'll start to see a pickup in Germany. And remember, they're a big exporter within the Eurozone. Italy has done well, I looked at those numbers. So, in any event maybe it is just that, a technical recession, and I often wonder Jeff, whether they're having their own debate within Germany, well, a technical recession is a recession just as we did here in the U.S. But there too, you need to see consumer spending down. You need to see it for a good portion of months, right? You need to see the labor market hurting. We haven't seen that in Germany. And the hope is we don't see that, and that this is just that a technical recession, but that growth leads them out of it.

Jeff (07:03):

Yeah. Maybe we'll get you know, a playbook for the U.S. where a mild recession, you know, doesn't necessarily cause meaningful declines in equities, you know, you, you could get a mild recession that everybody expects later this year. Mm-Hmm. <Affirmative> perhaps markets hold up in spite, certainly. So you know, let's move on really quickly to fixed income and commodities here. So I think this is interesting. Markets have been pricing in a much higher probability of a June rate hike, right? I think it's now something like 60% Yes. Likely. And you've seen some close Fed watchers move over to that camp. The two-year yield is up 11 days in a row. You know, who knows if it'll make it 12? But that has been a big run, certainly. I think yields are actually down a smidge today, you know, digesting the debt limit deal and the treasury issuance that's going to come from that.

Jeff (07:59):

It's a liquidity drain. As market moves into those short term treasuries to effectively fund the increase in spending. Maybe a little bit too in the weeds there, but this is something a lot of strategists are paying attention to right now. So, we've had a little bit of fixed income weakness recently. You see that in the left hand side of this table you know, down across the board last week. It's still not, you know, a credit downdraft necessarily, but it's you know, we've had a little bit of a rate move. And then on the commodity side I mean, grains made a big move. We don't talk a lot about, about grains mm-hmm. <Affirmative>, but within energy, actually oil up, nat gas down so that, you know, down 1.1% in the energy mm-hmm. <Affirmative>, yeah. Column last week is a little misleading because oil did make a move higher mm-hmm.

Jeff (08:51):

<Affirmative> while natural gas was falling, we're still in a pretty good seasonal period for, for crude oil, Quincy, as you know. So, you know, maybe you know, prices at the pump inch higher here in the near term as we you know, well, we already hit the roads this past weekend, certainly. And thanks again to all of our veterans out there listening for all you've done for our country and for those who made the ultimate sacrifice as well. The you know, I think oil could make a little bit of a move higher here in the near term. What do you think, Quincy?

Quincy (09:28):

Well, yeah, I mean, a couple of things that some stockpiles down. It looks as if the replenishment program in the U.S., to replenish the stockpiles in the strategic petroleum reserve finally are getting back on schedule or new schedule. So, 3 million barrels of oil, hoping to go back into the strategic petroleum reserve, that takes oil out of the market. It's not a done deal. They go through kind of a bidding where the oil companies come in and give a price. But that also helps. There's another element here, which is OPEC+'s meeting. You know, that the oil minister out of Saudi Arabia, the DeFacto head of OPEC, coming out with the ouch comment, like, okay, you short sellers beware. We could come in and do what we did to you last April, which is when they announced the quote unquote surprise cut in production.

Quincy (10:27):

Now, the point is also that Russia's exports are still out there, even the ones that are not allowed, and granted, it's the spot market. It's difficult to police, but the Saudis now are getting concerned about that because they obviously want to push up the price of oil. They want to put a floor under the price of oil, and that is probably, you know, 90 bucks a barrel, 95 bucks a barrel. So they're a long way from that. So, the question is, what do they do and how do they, how do they give an ouch to the short sellers who've probably covered their shorts already? It's going to be an interesting meeting for OPEC+, certainly.

Jeff (11:12):

Yeah. I mean, recession timetables are being pushed out a bit. Yeah,

Quincy (11:16):

Exactly. Yeah. Would

Jeff (11:18):

Would be supportive of crude oil. And you mentioned the supply tightening supply picture, obviously mm-hmm. <Affirmative>, we have a China reopening so, you know, we'll see where it goes, but yeah.

Quincy (11:29):

Mm-Hmm. <affirmative>,

Jeff (11:30):

It's not too hard to make a case for oil to go a little bit higher. A couple quick charts kind of to set the stage for, you know, where we are in the markets today this is, I mean, this picture hasn't really changed, right? We've been talking about higher highs and higher lows Yeah. Since October, right? Mm-Hmm. <Affirmative>, and we've been above these moving averages 50-day and the 200-day here for a while, so, that's constant. But yep. What's changed here now is, you know, over 4,200, we actually broke through to new 2023 highs, and we're now making a run at August 2022. Right. yeah, our Technical Strategist, Adam Turnquist, made the point that you might see a short covering move that pushes us to 4,300 pretty quickly, now. Getting much higher than that, probably going to be tough.

Jeff (12:27):

But certainly, we could see now that we're over 4,200, we could see a move to 4,300 pretty quickly. This study we did last week in a blog on LPLResearch.com mm-hmm. <Affirmative> kind of plays into that. We're actually going to also have this study in the Weekly Market Commentary for today on LPL.com, where we talk about breadth, bad breadth, <laugh> and the fact that these mega cap techs are leading more on that in just a moment. But this is a really simple study, but it's a powerful message. Yeah. And it says that if you're up through 100 trading days, more than 7% year to date, then the rest of the year has historically been really strong. You've had gains of an average of over 9%. Yeah. Yeah. Rest of year. Right? So that means you're talking about, you know, near 20% gains for the full year mm-hmm.

Jeff (13:20):

<Affirmative>. Now, history doesn't always repeat, we know that. But this sure sets us up for some potential gains here the rest of the year. I also want to point out, you know, two of these losses, you know, you're up 88% of the time. Yeah, yeah. Two of them are marginal. So really, you've only been down meaningfully one time, and that was, you know, the 1987 crash. Yeah. So, you know, this tells us you know, don't be too bearish. Right? Don't get two offsides in your positioning here. We still think a small overweigh to equities makes sense, but certainly you know, with this move we've seen, we're up 10% year to date. It's starting to get a little less comfortable, I'll say it that way. But we still think, you know, the odds are pretty good that we ended the year higher than we are now.

Jeff (14:10):

We also are pretty much done with earning season, Quincy, and estimates are moving higher. I don't think anybody saw this coming. We came in earnings season looking for 220 in S&P 500 earnings for the year. And now consensus is 222 up a couple of boxes. That doesn't sound like much, but the number usually goes down. Okay. Yeah. Right. So that's actually better than it sounds. So really strong earnings season that I wanted to highlight really quickly before we get to the next section. So, Quincy, let's talk debt limit deal. I'll let you walk through this one. It wasn't unexpected, right? And we generally got what we thought we would get. But do you see any surprises in the framework of a deal that we, you know, that we got information on over the weekend?

Quincy (15:04):

Well, you know, it's, what's interesting about it, I became hopefully actually sent out a note on this. I was hopeful when McCarthy, Kevin McCarthy, speaker of the house, came out and said, they're going to be unhappy. They're going to be a lot of unhappy people with this. That was good news for me, because it meant that the horse trading had begun, and that's how you get a deal. So I look at it, and, you know, how do I say this? The Democrats, the ultra-left wing of the Democratic party, is very unhappy with it. And the ultra-right wing of the Republican party is very unhappy with it. That's absolutely. But what we have, yeah, it's the way it should be. But here's the thing, for McCarthy, remember, he came in on the 15th ballot, and in order to get that vote to get into the speakership role, he had to promise this, and he had to promise that.

Quincy (15:59):

And right now that cohort is saying, you double crossed us, and they're very unhappy with this. Now the question is, can they get the overall vote? It looks like they can, it looks like they have the votes, and I think it's going to vote, I think tomorrow. But the point I want to make is, it's amazing how they were able to come together on some of the stickiest issues, which is the work aspect underpinning benefits, that surprised me that they were able to get through that. That really surprised me because that one has held dear, to not just the ultra-left wing of the Democratic party, but I would have to say the left wing of the Democratic Party. And on the other side, most middle, even middle of the road, Republicans are against benefits without, you know, having a work stipulation.

Quincy (16:55):

That surprised me. Also what surprised me, one that I follow very closely is the president's budget for defense spending, that stayed intact, larger defense budget. But nonetheless, it came in and the president's defense budget is still higher than it was last year. So, it's 3% higher, and that remained intact. I thought that was going to be a battleground. And then one other that really surprised me, speaking of energy, Jeff, we were just talking about it, was the agreement on the energy complex and pipelines, a positive on that. And that's something which is fascinating because the administration has actually gone out with, you know, auctions, come on, please come in and join the auction. And you you know, the oil community, the crude energy, oil community's been skeptical.

Quincy (17:58):

Like what we're, we're not going to go in and do anything. It's not exactly hospitable for us, but nonetheless, that got through. And that one is also one where the left wing of the Democratic party was fighting tooth and nail for the president to just back down and say, no, this is not going to happen. And yet they weren't paying attention to what was going on in the White House for months now, trying to get more energy production just being easier with the companies and the bids. So that surprised me that, that got through. And you saw Senator Manchin coming in with his pipeline, so that that was also part of this give and take, and I call it horse trading. Old-Fashioned horse trading got this. And I hope they get the vote on Wednesday.

Jeff (18:51):

Yeah. Don't we all, we all want to put this in the rear view mirror. Yeah,

Quincy (18:54):

Yeah, yeah. Absolutely. Yeah. This,

Jeff (18:56):

The Manchin horse trading's been going on for over a year, <laugh>, so, you know, looks like he finally got what he wanted, or at least most of what he wanted. Yeah. So yeah, the main headline is we just don't have to pay attention to this anymore, which is great. Assuming we get the vote tomorrow.

Quincy (19:12):

Yeah.

Jeff (19:13):

I think I mean, just add a little color. The food aid programs, the work requirement, I think was raised four years from 50 to 54. So, you know, you have to meet that work requirement longer, right. Until you are a few years older. Yeah. So, you know, it sounds very reasonable. I mean, certainly we're all living and working longer these days than we used to. So, that seems like something that, you know, both sides can live with. So, I really don't see where this falls apart. I think, I think we can move on, which is great, and talk about other things. We can't quite move on from the topic of narrow leadership. Can't move on and talk, stop talking about the Fed, either <laugh>, but let's talk about narrow leadership.

Jeff (20:05):

Quincy, again, this is in our Weekly Market Commentary for today. We actually wrote two Weekly Market Commentaries for today, <laugh>. We had a debt ceiling goes bad commentary that we thankfully were able to scrap and then another weekly commentary on breadth. You have to write these things a little bit in advance so you can't just throw something together last minute <laugh>. So thankfully we had this backup plan because the other piece we wrote is certainly outdated. So, here's a picture of just how narrow the leadership has been. Just these six names, right? Apple, Microsoft, NVIDIA, Alphabet, Amazon Meta, yeah. Yeah. Are all of the year-to-date gain. Okay? Now, I ran this you know, middle of last week. We produced this chart on Thursday, so stocks gone a little higher since then.

Jeff (21:02):

But you know, yeah, the point still holds, certainly. If you add up the contribution with those six names, you get the entire gain, right? Actually, you get more than the entire gain, right? Because the rest of the S&P 500, the other 494 names, give or take, in aggregate are down 0.3% year to date. So, I actually saw an analysis this morning from our friends at Strategas that look at this kind of narrow leadership. And they use the top 10. So the top 10 names, and what percent of gains have those top 10 names driven in positive market years. And they went back to 1993. And this is by far the biggest concentration from top 10 names for overall market gains. I mean, it's, frankly, it's double the contribution of a lot of these other years that we've seen, or more.

Jeff (22:04):

Yeah. That was a really interesting study. So, you know, what does that mean, right? Well, it means that the foundation for the markets maybe isn't as strong as we would like it to be. But if you break this out into sectors you do see some areas that have pretty healthy breadth. One of them is technology. We've warmed up to the tech sector here recently. 62% of the tech sector is trading above its 200-day moving average. So some people think, oh, it's just, you know, Apple, Microsoft, and NVIDIA. No, it's actually pretty broad within tech. And then you can see the same thing over to the left, comm services where you have Meta and Google. You have 54% of the stocks in that sector outperforming. So, it's not just a couple of names. Consumer discretionary, same thing.

Jeff (22:57):

It's not just Amazon trading above its 200-day, it's, you know, more than half. That's the dark blue line here. That's where the good breadth is from that measure. The challenge though well, there's two challenges. One is for the broad market only 43% of the S&P 500 stocks are above their 200-day moving average. So, momentum is kind of, you know, mediocre. Yeah. Or breadth and momentum. The other piece of this is, you know, we show what percentage of stocks are underperform or outperforming the S&P 500, and it's only 25%. So, three out of four stocks this year are underperforming. And that's a tough environment for active managers. And just another way to highlight the narrow leadership that we've had. So, we have one more slide on this, and then I'll let you weigh in, Quincy.

Jeff (23:54):

So, this is a study that shows how stocks have done after these narrow breadth readings, the narrow leadership. We break the S&P 500 into breadth quintiles. So, the strongest breadth on the left, the weakest breadth on the right, if you have really strong breadth, you see on the left, this is top quintile. You see, on average we're up 21% 12 months later, you know, solid gains, three, six months later as well. If you go all the way to the right here, not all the way to the right, second to the right, and see the lowest quintile on average, you see losses, right? This is the only quintile where the market tends to go down after these breadth readings. Now, we could show you studies that show that the market's likely to go up in 12 months. There are a lot of them <laugh>, right? But this is one, probably one of the most bearish studies that I've seen, frankly. On average over the next 12 months, stocks have fallen 7%, 6.8% after these bad breadth quintile readings. So, what do you think, Quincy? Is this something to be worried about, or would you provide a counterargument to this?

Quincy (25:21):

Well, you could provide a counterargument to this is that these companies make money. They have rock solid balance sheets. And so when you're worried about the future, because it was the debt ceiling, true, but you also had concerns over the Fed, you had concerns over the bank crisis stress in the credit markets, the lending, impending recession. You could go on and on with that wall of worry. This is that tug of war between price action and the wall of worry. But it isn't, I've seen comments that, oh, this is exactly like 1999, 2000. No, it isn't. I mean, then the companies didn't make any money, and yet, if it had .com and we all remember that it took two years to unwind them. These companies make money. Now, there's the other argument that they are what we call long duration names.

Quincy (26:18):

So why are they leading us higher, given that interest rates are climbing higher? We have to go back and look at whether or not that holds for these mature companies, because most of them are quite mature companies. They're not the new entrepreneurial companies of 10 years ago. So, that I think may explain it. But they are seen as defensive. And by the way, we saw this during COVID, did we not? They marched higher and higher and higher. And we talked about breadth not being strong enough, not being wide enough. And the answer was, well, rates are so low. They are seen as defensive names. Now that said, what would be helpful is to see the small cap come back to life because we know that that would be a reflection of lack or what should I say, the diminished concern over the bank scenario, that would help dramatically in terms of this argument that it is only the mega caps leading the market higher.

Quincy (27:27):

And we've seen some movement in the small cap space. The Russell 2000 has actually showed signs of life, again. We need to see continuation there because I think that would help assuage fears that the generals are the only ones leading the market higher. Certainly, if the Russell 2000 were to gain momentum, it would suggest a healthier economy, by the way, economic backdrop, given that there would be more interest coming in from buyers in the banks, which of course are reflective of credit stress and so on. So, I think that's what we need, but you can't deny price action. There's this argument. You hear it over and over again. Well, it doesn't count. Well, of course it counts. And there's another aspect too, Jeff, that is to say the market does its own due diligence, right? The market in and of itself takes in the headwinds and also the tailwinds and comes up with a valuation.

Quincy (28:30):

Now, you could argue, and you have made this comment before, the market is trading at what, almost 19 times forward earnings, without those names the S&P 500 would be trading at 14 times forward earnings. That's quite a difference. So, again, it would be much better to have a broader representation. And the hope is by the way, that as we now check off, we hope Wednesday afternoon, Wednesday night, we check off the debt ceiling concern, and then we move ahead, that we will have a broader representation in the market. But it's not unusual to see these names more and more as a defense mechanism for providers. Now granted, fear of missing out is now coming into play. Short covering is coming into play, but we have to go back and remember the initial reasons we saw money going into those names.

Jeff (29:31):

The AI hype machine is certainly going strong.

Quincy (29:35):

Yeah. Well, yeah.

Jeff (29:36):

One of the best starts to the Nasdaq ever. Yes. Big divergence between large caps and small caps. We still like large caps better, but I agree a hundred percent if we can see small caps mm-hmm. <Affirmative> sustain better performance, that'll be helpful. Very. And if we just see breadth broaden out, which, you know, we may see. Certainly, earnings did their part mm-hmm. <Affirmative> and you know, maybe we can get past the Fed rate hike cycle, and you know, markets can take some comfort in that. And you know, certainly, we'll get to the week ahead here, now. We've got some key data here that could, you know, help maybe give us a little bit more market breadth in the ISM and the jobs report.

Jeff (30:23):

And I actually, I mean, I've said this before, I like the ISM quite a bit because it does Oh, provide a signal for earnings. Yes. Right? And you also have a playbook of, you kind of know where recession starts based on the ISM, right? I mean, typically if you're going to get a recession, you're going to have an ISM below 45, right? Yeah. Usually sort of in the 42- 43 range or lower the ISM manufacturing index ticked up last month. So, if we get another uptick or maybe even stability, right in that 47 range, that could set up a muddle through, I mean, if you, if you made a, you know, scenario for a muddle through you would probably say, yeah, we'll probably, you know, go to 47 and then, you know, start to rebound, you know, what we sometimes call a mid-cycle pause. This could be a mid-cycle pause rather than, you know, an outright recession. So, I'll be watching the ISM closely also, the prices paid has come down. Yeah,

Quincy (31:28):

Exactly. I mean,

Jeff (31:29):

The PCE data last week was a touch hot which certainly caused some folks again, to move over to the rate hike camp for June. I think June 14 is decision day. So that'll get some attention too. But you know, it's, right now the the ISM is saying muddle through and then payrolls, I mean, we've softened a bit, you know, in recent months, but not much. So, you know, Quincy, is there something to worry about here with, with payrolls? Could that number or those numbers push us over and maybe make a rate hike in a couple of weeks a foregone conclusion?

Quincy (32:11):

If wages climb higher, you know, because wage wages climbing higher typically translates into higher prices as companies try to pass along the higher wages. So, and they've been successful because consumers have just basically said, well, we live in a world that's you know, higher prices. And that by the way looks as if we are becoming entrenched into a higher price psychology, which is something the Fed does not want to see. So that said, there's also not a theory, but an acceptance that the Fed, if they want to raise rates, would like to do it during a period where they have the luxury, quote unquote, of a strong labor market. Because it is the labor market that typically leads us into a recession. And that typically actually comes from margin compression, right? Where companies say, we've got to make our bottom line, we've got to, you know, shareholder value, we've got to cut costs.

Quincy (33:14):

We haven't heard that much during this past earnings season. So, the Fed, right? Yeah. So, the Fed may you know, see, but again, the prices paid is crucial. We get the consumer ISM report next week, and there it's been above 50, barely above 50, but in expansion territory, nonetheless. And we'll see whether the prices paid there has inched higher or lower, and I think on Friday it will be about wages. They want to see wages come down. And this is a very difficult discussion because it has political ramifications because there's a camp that says, wait a minute, these are lower wage orders. Many of them are working in the service sector, they're earning more than they ever had. Why would you want to see their wages come down? And you could hear the give and take on this from the Federal Reserve that look, we understand that, but you still need price stability. And they're paying higher interest rates on their credit cards. They, yes, they're getting higher wages, but at the end of the day, they're losing money as long as inflation keeps crawling higher. So it's an interesting debate, but I think if wages are higher materially, which I don't think it's going to be the case, but if it is I think you're going to see that 60% probability climb higher right after the release of the of the report.

Jeff (34:49):

Yeah, absolutely. I mean, you highlighted it's all about wages. Well, if we're somewhere around 200,000 jobs, you know, that's fine. Even 150 mm-hmm. <Affirmative> that's probably not you know, the key here, it's probably the the wage numbers. And then you've got, you know, the JOLTS report, right? Job openings, you've got ADP claims, claims is more timely. It's a big labor market week, right? And a shortened week. So we're going to cram a lot of data into four days. So anything else you're watching, Quincy, for the week? I mean, we'll obviously be watching the debt limit vote. Anything else to highlight before we wrap?

Quincy (35:32):

No, just something you mentioned before, which I think comes into play for the Fed, is the liquidity drain that we're going to see in the economy. And that's something that the Fed is going to watch, and that may be the reason that they skip. You notice they're now talking about skipping a meeting in terms of a rate decision, not having a rate decision, just skipping it until July. So that's an interesting move. We're going to have more Fed speak this week before they go into the blackout period. But I think it's going to be very interesting to see what, what they ultimately decide. One thing that the Fed wants to do is not surprise the market. They have what shall I say, highlighted this underscored this, that we don't want to surprise the market in terms of rate hikes because companies, it matters for companies, it matters for individuals. They don't mind surprising when they cut because they get more bang for their buck, by the way, when they surprise the market with a rate cut, but with a rate hike, this administration with Powell has been very clear. We want to guide the market as much as we can. So, they only have a few more meetings for that because they go into the blackout period.

Jeff (36:54):

Fed watchers, don't worry, you've still got plenty to watch. <Laugh>

Quincy (36:58):

Always, always can't. 24/7.

Jeff (37:01):

Yes. Can't quite put the Fed watching to bed.

Quincy (37:05):

Fed up. Fed up. We're all fed up.

Jeff (37:07):

Well said. So, thanks Quincy for that. We will go ahead and wrap there. Thanks everybody, as always for joining us on the Market Signals podcast. We really appreciate it. Thank you Quincy for joining this week. We will be back with you next week for another edition of LPL Market Signals. Take care everybody. Thank you. Thank you so much.

Quincy (37:28):

Thanks so much.