Rates Up, Stocks Down, Now What?

Jeff Buchbinder (00:00):

Hello everyone, and welcome to the latest LPL Market Signals. Jeff Buchbinder here with Lawrence Gillum, our Chief Fixed Income Strategist. How are you today, Lawrence?

Lawrence Gillum (00:12):

I'm good, Jeff. How are you doing?

Jeff Buchbinder (00:14):

I'm doing fine. Doing fine. We are putting equities and bonds together again on the podcast for you this week. So thanks, Lawrence, for joining. Looking forward to a good mix of topics. Certainly, the equity markets and the bond markets are giving us some interesting things to talk about. So, let's get right into it. We'll show you these lovely disclosures and then show you the agenda for this week. It is Monday, August 21, 2023, as we are recording this. We're going to start by just recapping last week's market action quickly. Of course, the big story being the rising interest rates and what that has done to stocks, certainly the primary driver of the pullback.

Jeff Buchbinder (00:58):

So related to that, we'll talk about where this pullback, pullback might go next. That's the topic of our Weekly Market Commentary on lpl.com for this week. And then you know, what are we watching in the rate market? What does the move in rates mean? Where might that go? Right? So you could argue that really the whole call is just about rising rates and, and the implications because, you know, when we preview the week ahead, we're going to talk about Jackson Hole, the Fed meeting coming up. I guess it starts Thursday, and then Friday morning we'll hear from Fed Chair Powell. So that's the agenda. Let's start with a quick recap of last week. Lawrence, you know, I'll do stocks, and then we'll jump to the next page and bonds, and you can weigh in. Market down for the third straight week S&P down a little over 2%.

Jeff Buchbinder (01:50):

NASDAQ did a little worse. Russell 2000 small cap index, even a little bit worse than that, down about three and a half percent. So, it's market shooter around rising rates primarily. Certainly, the negative news out of China has not helped the property crisis and just frankly, a series of weak economic data. So that's added to concerns. But really, we think this is a rising rate story. And that ties to the Fed, certainly ties to stock valuations. You know, beyond that, I mean, as you've had this dollar rally lately that has weighed on international equities. So, you didn't get really any diversification benefit, we'll call it, by going outside the U.S. we really think you need some dollar tailwind for the international markets to really make some headway against the domestic markets.

Jeff Buchbinder (02:49):

We have gotten one piece of what you need for international to outperform, and that's weakness in U.S. tech. We didn't get that last week, but, you know, during this pullback, which is now about 4.6% in August, certainly tech has led the way down. So, you see in the table to the right, while tech was a strong performer last week, thanks in large part to NVIDIA, the chip maker riding the AI boom, is reporting earnings this week on Wednesday, and was real strong last week in anticipation of that report. And that fueled tech gain. So tech was the best sector last week, but as you see in the one-month column it's actually led the way down, down 9% over the last 30 days or so. So, I think that's really all I want to say there. Well, let's go to the bond side and I'll hand it over to you, Lawrence. So, you know, of course, rising rates pushes bond prices down. What else do you want to share about last week's bond market action?

Lawrence Gillum (03:56):

Yep. So it was another week of higher rates. I don't know if the Treasury needs to change its name and have AI in the name to help offset some of these increases in yields. But we don't get that benefit. So, it's been five weeks in a row of increasing Treasury yields, and frankly, last week, no place to hide. Now, generally speaking, over the past couple months anyway, credit has been a good spot to hide in. We've talked about credit, how it's really bucking the trend in terms of what happens historically when you get these sort of macro headwinds. But it sold off last week as well. So frankly, just no real good place to hide in the fixed income markets. Cash was probably your best performer last week. It's we continue to see flows into the, the cash market over 5.5 trillion in cash assets. Now cash is a legitimate asset class again. We've warned about putting too much money into cash, but it is an asset class that has done well with this recent rise in Treasury yields though.

Jeff Buchbinder (05:02):

Yeah, it's a period where you got to play a little bit of defense, I guess you could say on the equity side and the, in the fixed income side, but, which generally we're doing, we, you know, our recommended asset allocation for LPL Research, we did take down risk you know, early in the summer, late spring, and are still comfortable with that, you know, kind of neutral equities with a little bit of additional core bonds to help mitigate risk. But certainly in the last you know, few weeks as this rate rise has taken place, bonds have not been able to offer you the diversification benefit. We still think they will, but we'll get into this a little bit more here in a bit. But you know, in the very near term, Lawrence, I know you know, think there's a little bit more risk that you know, the 10-year yield stays a little bit higher for longer than maybe we had previously anticipated.

Jeff Buchbinder (05:55):

So, let's with that teaser, let's get into the stock market pullback. Again, this is our Weekly Market Commentary for this week. You know, a question I'm sure many of you are asking for those of you who follow the markets closely, is where might this pullback go, right? We're bouncing on Monday, but we had almost a 5% pullback. We're actually right at the fair value target that we've set for the S&P at around 4,400 now. So you know, you could argue that maybe we don't have a lot of conviction either direction at that point, but from a technical analysis perspective, just looking at the charts. These were put together by our chief market technician, Adam Turnquist. We have 4,200 to 4,300 as a logical place to land. Now, 4,200 to 4,300 doesn't hold, you know, based on the previous support levels and previous resistance levels, right, after you break through upside resistance, that then becomes support.

Jeff Buchbinder (06:57):

So once, if we break below that range, then you're talking about the 200-day moving average. Now, one of the reasons we pulled back in addition to higher interest rates was that the market was overbought in July, right? You can see that in the bottom panel here, the 200-day moving average was 13% above or the market was trading at a 13% premium to the 200-day moving average, right? So that could be another landing spot for this pullback, and that's not that far down. But it would end up with a 10% correction if we get down to, let's say, 4,130 or so, where that where that moving average is. So those are some levels to think about. In the Weekly Market Commentary, again, on lpl.com, we also highlight the seasonal pattern here. Now, you've heard us talking about how the S&P 500 does not do as well in August, September, and early October.

Jeff Buchbinder (07:52):

Well, if you look at the VIX, the measure of implied volatility based on the options market, it follows the same pattern, right? A higher VIX is negative for stock prices and vice versa, generally. So, you know, we've highlighted where we are here at about week 32, I think in the calendar year. This is the start of what you typically see is a rising VIX period, peaking maybe week 41, 42, that's, you know, getting us, you know, a couple months out. And then we tend to see it fall back half of October through the end of the year. So, if we follow this seasonal period, the point here is that we're in for a little bit more volatility. Now, what does that look like in terms of stock market performance? That's what you see here in this table.

Jeff Buchbinder (08:42):

So, what we did is we took, you know, all the years back to 1950 from January to August, actually January to July 31, so, and broke those returns down into quintiles. So, the first eight months of the year, if they're up 15%, you're in quintile one. That's over 15, actually, 15.4% to be precise. When you're in that quintile, you on average see additional gains of 5.2% with an average max drawdown of 8.6%. So based on history, we could see stocks end the year 5% higher than where they ended July, but still have a 9%, roughly, correction in that period. So, I think we would take that right. Now, the average, maybe we would argue the average August to December market pattern is more likely. So, there you see an average gain of 3.4% in the last four months of the year. That would put us a little bit shy of the record high on the S&P 500, somewhere in the 4,700 range.

Jeff Buchbinder (09:52):

And then the average drawdown is about 10%. So, we could see that, but that would be totally normal. So for those of you who are, you know, maybe going to get a little bit more nervous if we drop another few points this historical study can maybe make you feel a little bit more comfortable. So, more volatility to come, you know, we probably have to get through September, maybe into early October before we, you know, convincingly bottom here in the midst of this pullback. And then maybe we can stage a late year rally. Certainly, the economic data, excuse me, the economic data has been supportive of stocks going higher. Certainly, the earnings season has been supportive of stocks going higher, but valuations and rates are not right now supportive. We don't think of stocks going higher. So let's turn to rates, Lawrence, and this is going to be your section.

Jeff Buchbinder (10:48):

You know, I mean, the first obvious question is how much higher do we go, right? 433 on the 10-year is the last I saw, which I think is the intraday high from last year. So we are, you'll see this on a chart in a second. We are really close to breaking out to what, like 14-year highs, something like that. 15-year highs. You know, I don't know if that's going to happen or not, but, you know, what's the risk to the upside for yields, I guess is the first question. Where might they go? And then I think the next question is, what are rates telling us?

Lawrence Gillum (11:27):

Yeah, so we are approaching these 15-year, 15-16-year highs in rates. This is another chart from Adam suggesting that after the breakout, if we do get past this 433 level, that next area to watch out for is 4.5%. Beyond that, it's 4.7%. So, there is potentially more upside potential in yields. You know, we set out a 325, 375 year-end target. A lot of that was predicated on an economic slowdown, perhaps a contraction. We'll see on the next chart. The bond market is really starting to price that out even further now. So you know, as paradoxical perhaps as it seems, as long as we get continued strong economic data, we could see potentially more upside potential on yields, right? So if you want to go to the next slide, the bond market has been pricing in this potential recession for quite some time now.

Lawrence Gillum (12:30):

We talk about inverted yield curves as precursors to recessions. We're starting to see that disinvert a little bit. And what we call this, we call this trade is a bear steepener, you know, in the fixed income world, we have our own language, we all have our own little decoder rings, et cetera. So what we're seeing now is a bear steepener, not to be confused with a bull steepener. And all that means is that within a bear steepener, the long end of the, the Treasury yield curve is moving higher than the short end of the yield curve, meaning that the yield curve is starting to disinvert.

Lawrence Gillum (13:07):

So, a lot of that is predicated, again, on just the strong economic data that we've seen recently. We continue to see economic surprises to the upside. So the bond market for a couple other reasons as well. But the bond market, frankly, is starting to price out the prospects of a near term recession. Now we just saw on the 10-year, you know, maybe there's additional 20 basis points, perhaps 30 basis points of upside in terms of potential yields. That would take us back to kind of like a negative 30 basis points, a negative 0.3 percent inversion. So I think that's probably the extent of any sort of steepener that we could see, at least in the near term. Now, we've talked about other reasons why we're seeing the yield curve disinvert.

Lawrence Gillum (13:55):

It's, you know, we've seen a lot of supply come to the market in terms of Treasury, Treasury issuance. The Treasury came out a couple weeks ago and said that they need to borrow a lot more than what markets we're expecting. That put upward pressure on yields. And then of course, the actions out of other central banks tend to push yields higher as well. So it's been kind of a perfect storm, if you will, in terms of reasons why we're starting to see intermediate and longer term yields move higher. The front end of the yield curve is frankly anchored to Fed rate hike expectations. They've stayed pretty static over the course of the past, call it, you know, few months. But it's really the back end of the yield curve, these longer maturities these, you know, 10 years and out seeing the most volatility right now. And that's of course that's going to have impacts to the real economy, that has impacts to the stock market, and of course, the bond market as well.

Jeff Buchbinder (14:51):

Yeah, it's hard enough to predict the next few months, but we spend so much time talking about longer term economic forecasts, right? I think, you know, I like to think about upside downside. We obviously, we don't have a crystal ball. We say it all the time. If you know, if we go to 45 or 46 on the 10-year before we make a peak, that's, you know, 20, 30 basis points of upside. But if you look at what downside we could have, if the economy slows down to, or stalls in the, you know, latter part of the year or early 2024, which is our house view, you know, how much further down could yields go? Well, you know, you just said it, Lawrence, I think maybe we could see 375 or lower, right? That's 50, 60 basis points. So as, I mean, this is my equity mind thinking about this, right? Seems like we have more downside to rates than upside. And if we do go up a little bit more, you know, maybe duration looks even better. Maybe people want to extend maturities. Maybe folks who haven't had an overweight to fixed income to date want to think about maybe moving in that direction. What do you think?

Lawrence Gillum (16:04):

Yeah, no, and that's been our mindset too. The risk reward for fixed income is fairly asymmetric at these levels, meaning that there's potentially more upside return, downside yields, downside prices. So, we have been slightly overweight fixed income. Again, the house view is maybe we do get that economic contraction, even if we don't get an economic contraction, starting yields are still at very attractive levels. We just talked about the 10-year Treasury yield being the highest level it's been since I think, 2007. So, you know, taking advantage of these higher yields. And, you know, the great thing about fixed income is that you can buy and hold, you can buy a bond and hold it to maturity and all that rate volatility in between, it's not going to impact anything in terms of getting paid back at par. So, the starting yield environment for a lot of fixed income markets is the best it's been in quite some time. So, if you're a client or an advisor that has a time horizon measured in years, not quarters or months, measured in, you know, three- or five-year time horizons, you know, fixed income is a really attractive opportunity right now, especially for those investors that need income.

Jeff Buchbinder (17:20):

Yeah. And if rates do move lower and you get that extra appreciation on your fixed income, you probably also get some equity upside as well, because valuations are of course, tied to yields. You know, we've taken about a point and a half or so off of /PE ratios in the S&P with this pullback because earnings have held up so well. It's, you know, the decline in stock prices has come directly out of valuations. And frankly, you know, now 18 and a half times looks pretty reasonable. So, I mean, that's consistent with our fair value assessment, that the S&P 500 right here is worth 4,400. So maybe that all makes sense. But you know, lower rates can be good for bonds and good for stocks here. So thanks for that, Lawrence. We got Jackson Hole coming up, and of course that is putting everybody's focus squarely on the Fed. So we just pulled the latest expectations for fed funds. It really isn't showing a high probability of a rate hike over the next couple of meetings, right? I think at last check, maybe 30% chance that after this September and November meetings that we have a hike, right? That's, you know, basically saying that most people don't expect the Fed to hike at all. So, is the market wrong here? Are we going to get one more hike?

Lawrence Gillum (18:44):

Yeah, I mean, it certainly depends on the data, right? But if you look at the chart here, these orange bars represents the number of hikes or cuts that are priced into the market. It's really hard to see with this dual axis here. But on the right hand side, you're looking at the number of hikes priced in, and right now markets are saying, you know, less than one. So markets do think that the Fed is done. Maybe we get one more kind of insurance hike just to be on the safe side. We've heard some Fed officials talk about the need to do maybe one more to get the fed funds rate into really, really restrictive territory to help bring down some of those inflationary pressures. We've seen a lot of movement in inflation. I think that the goal or the kind of the next hurdle is getting from that 3% inflation rate down to 2%. So maybe that one more insurance hike is necessary. But frankly, I mean, we think, we're of the view that the Fed is likely going to be done after November, if in fact they do raise rates in November. But it's been a pretty aggressive rate hiking campaign relative to history. And you know, the good news is we think that it's almost over.

Jeff Buchbinder (19:58):

Yeah. And then historically, you tend to see rates fall after the Fed finishes, right, Lawrence? So, that's another reason why we think rates might move lower. I mean, you know, maybe it's not next week, maybe it's not next month, <laugh>, but the risk of further huge moves in rates higher, we think is fairly low. Although there've been some pretty big names out there, you know, Larry Summers is one that have been saying that rates could maybe go as high as five, maybe, you know, the 10-year or maybe even six. You know, I like to look at the nominal GDP growth outlook, right? To kind of anchor my 10-year yield expectations. So that's pretty hard to see if we're going to have a slowing economy and falling inflation. You know, would you put odds on that Lawrence, that, I mean, what are, what is Summer seeing maybe that would suggest you know, we could just blow through four and a half and blow through five.

Lawrence Gillum (20:59):

Yep. So, his view is that we get back to those pre-COVID levels. We get back to a fed funds rate that's more in the, you know, two and a half, three-ish percent levels. And then you have a term premium or, you know, a risk, an additional risk priced into owning bonds. But you know, 4.7 was the average 10-year Treasury yield from say, 2000 to 2008 before the global financial crisis. So it's not outside the realm of possibility that we see something like that. Six may be hard to get to, only because if you think about the impact that Treasury yields have on the real economy, so the 10-year Treasury yield is directly part of the equation for mortgage rates. So that would mean mortgage rates are in that eight and a half, almost 9% type levels, which you know, we're looking at housing affordability that's at the lowest levels in quite some time already. So if we get to that nine, you know, eight and a half, 9% mortgage rates, I mean, that could be a real reason why the economy falters even more. So, never say no 0% probability, but my view is that, you know, we could see four and a half, we could see four seven but 6% seems fairly unrealistic given the amount of debt that consumers use on a daily basis.

Jeff Buchbinder (22:25):

Yeah. It's also hard to make the case that we're going to have, you know, nominal GDP, so have the economy without inflation adjustments grow 5% for any meaningful amount of time, right? We're seeing falling inflation already. You know, ignore this Atlanta Fed GDPNow tracker that says growth's going to be 6%. It's not going to be 6% in Q3 <laugh>, and it's not going to be sustained at 6% either. We're heading to a slower growth economy. Think we can all agree on that, less economic growth, less inflation, we think, although there's of course always the chance that inflation re-accelerate like it did in the 1970s and 80s, we get that, but low probability that that happens. So, you know, there's going to be a cap, we think, on rates on how much economic growth and inflation can lift rates.

Jeff Buchbinder (23:16):

So interesting discussion there, Lawrence you know, of course ties to the big event of the week, which is Jackson Hole. You know, we're probably going to get more of the same from the Fed, that they're going to be data dependent but they're going to talk about structural shifts in the economy as I understand it. And so, I mean, I guess it's possible that we get some sort of surprise from Powell and company that the market's not expecting. There's a history for that, right? A few years ago, we got surprised, actually, maybe a couple times since the pandemic maybe we've been a little surprised by Jackson Hole. So could we get a surprise if we do get a surprise, even if we don't expect it? What might that surprise be?

Lawrence Gillum (24:02):

Yeah, so Jackson Hole is a gathering hosted by the Kansas City Fed. I've lobbied for an invite. I've not gotten one ever. So a little disappointed about that. But it is an event where a lot of academics and central bankers, they head out west and they talk mostly about policy tweaks or things that are happening, big picture within monetary policy. It's unlikely that they'll talk about kind of next month's inflationary pressures. This is kind of big thinking type symposium. You know Chair Powell's going to be there. You have the Bank of England going to be there. The new president of the Bank of Japan's going to be there. So there's always the potential for a surprise, even if it doesn't come from Chair Powell, you know, we've talked about this new president of the Bank of Japan, Ueda, maybe he says something that's, you know, controversial in terms of relaxing yield curve control even further.

Lawrence Gillum (25:03):

So you never know but the theme of the event is "Structural Shifts in the Global Economy". A lot of people are assuming that Powell and others are going to present arguments as to why interest rates aren't as impactful in the U.S. economy as they have been in the past. So maybe that does mean Treasury yields and other bond yields are you know, stay elevated for longer. But it's important to remember a lot of this stuff is just academic and doesn't necessarily influence policy. Chair Powell is a very pragmatic chairman and he's talked down some of the academic research that, you know, is potentially going to be presented at this conference or symposium. But yeah, my expectation is that Chair Powell is going to come out, higher for longer, job's not done, you know, more work to do. But, you know, given the amount of Fed speakers that we get on a weekly basis, I would be very surprised to hear anything different from what we've heard over the past couple months.

Jeff Buchbinder (26:07):

Yeah, that all makes sense. I mean, you wouldn't expect, you know, the Bank of Japan to sort of upstage the Fed and announce some big surprise here. It just doesn't seem like the forum for that to me. But I mean, the market's always trying to read between the lines. And so, you know, somebody could maybe convey some sort of message that and not quite the way they intend to <laugh>, right? The market could read between those lines, and you could have a market reaction, certainly to something out of Japan or out of Europe. It'll be interesting to see. In terms of the point you made, Lawrence, about the market not being as, or the economy not being as interest rate sensitive as it used to be. I mean, the fact that so many mortgages are fixed at such low rates is a huge piece of that, right?

Jeff Buchbinder (27:05):

And then the fact that so many people still have, you know, excess cash. I mean, we've drawn down a lot of that excess cash, actually, the majority of the excess pandemic cash, but there's still some excess cash left. And when you're sitting on a bunch of cash, you're not going to be as interest rate sensitive because maybe you're not borrowing as much. People are, you know, borrowing on their credit cards. But in general, I think there's less economic sensitivity maybe on rate increases where people might borrow you know, cars for example or major appliances, things of that nature. People have been drawing down that cash which has mitigated the effects of rising interest rates.

Lawrence Gillum (27:53):

Yeah, that's right. So household credit creation has really slowed outside of credit cards, credit card usage or credit card balances represent about, say, call it five or 6% of total household debt levels. So that other 94% of household debt hasn't really been impacted as much because of these rate increases. And you also consider that it's not just consumers, it's companies as well, corporations termed out debt and issued a lot of debt at very low interest rates over the past couple years. So, we've seen issuance in the corporate credit markets kind of slow to a crawl as well. So, my view is that you're either in the camp that interest rates matter, or they don't, and just because they haven't thus far doesn't mean that they won't. So, I'm a little skeptical that we're in a rate environment where we can get back to these interest rates that were prevalent in the 80s and 90s without causing some, you know, pretty serious economic damage. Because I think we've become a lot more comfortable buying things or financing things using debt. So I don't think that that's going to go away, personally.

Jeff Buchbinder (28:59):

Yeah, you're probably right. I mean, and there's a limit to how much the home builders can buy down mortgage rates, <laugh>, right, to sell houses to first time home buyers who don't want to pay 7%. Totally get that. So certainly those are some of the things Fed's going to talk about on Friday throughout the weekend, I guess, while they're fly fishing, right? That's what Volcker did. I guess it's tradition in Jackson Hole. When you get your invite, Lawrence, bring your fly-fishing equipment. I'm not a fly fisherman, but bring your stuff because, actually, maybe you should talk about what an avid fly fisherman you are. And that's the secret to getting that invitation.

Lawrence Gillum (29:42):

Well, I've thought about just showing up, but that probably frowned upon. You know, I might be asked to leave.

Jeff Buchbinder (29:48):

Yeah, you might not get past the velvet rope there. Yeah. But it's something to think about. You know, we do have a number of listeners to this podcast, so, you know, if somebody who has some pull there, you know, is listening help Lawrence out. If anybody should have the pull, it should be me being from Kansas City, as we know this is a Kansas City Fed hosted event, so I'll try to pull some strings for you, Lawrence. So what else we got this week? We got NVIDIA results on Wednesday. It was such a shocker in a good way, <laugh> such a blowout last quarter. I mean, before NVIDIA reported, I said, tech earnings were not that great, they're fine, they're in line. Then we got NVIDIA and it lifted the entire sector.

Jeff Buchbinder (30:36):

It basically said, move out of the way Apple, I'm taking over <laugh>, okay? And we ended up seeing estimates for tech jump. The whole sector here jumped 2% just because of what happened with NVIDIA, which is one company, <laugh>, right? A semiconductor company that's benefiting from this AI boom. So this will be one of the most closely watched earnings reports of this season. After what they did last season, it's hard to envision them doing anything that would bring the house down like they did last quarter. But certainly based on what we're hearing the demand for AI is not waning, <laugh>, we're probably fairly early innings. So I think you'll hear some good things about the market for AI from NVIDIA, regardless of what the earnings say or what the market reaction is to the company report. So that's a big thing for this week.

Jeff Buchbinder (31:30):

Interestingly, the two biggest events of the week are not on this table, <laugh>, right? Jackson Hole is not on the economic calendar here that I'm showing you out of Bloomberg. And <laugh>, the NVIDIA report earnings report is not on this table either, but I guess I'll just highlight durable goods is interesting, only because this Atlanta Fed GDPNow report. This tracker is saying that GDP growth in Q3 is just going to be massive <laugh>, right? So we would look for you know, cooler heads to prevail maybe after we get the durable goods data that'll start cooling off a bit. Or maybe the new home sales data. If the economy can grow at 3% in Q3, that would be tremendous, right? And it probably means recession can't start until, you know, Q2 of next year. If we get a really strong GDP report in Q3, we'll see, Q3 is not over yet. And of course, the data is reported with a lag, so don't expect that kind of a blowout number, even though initial data is pointing that direction. So, anything else here, Lawrence, that jumps out at you?

Lawrence Gillum (32:44):

No, I mean, it's a relatively light economic week. All the central bankers are in Jackson Hole. You know, the Michigan inflation expectations, those are always somewhat interesting, only because Chair Powell has referenced them on occasion. But frankly, it's all about Jackson Hole and to your point, NVIDIA.

Jeff Buchbinder (33:03):

Yeah. And then, you know, claims we watch every week because we want to see if the job market is weakening, which of course could be a precursor to slower growth or recession. We've been, you know, in the 230 range, 230, 240 range for a little while here. And certainly, we haven't seen any incremental deterioration in the job market that would get us worried about recession or even a meaningful slowdown in the short term. We still think it'll come, right? Consumers drawing down savings, the delayed impact of all of these rate hikes, certainly, just those two factors alone. We think you know, slow this economy down over the next several quarters, but how much remains to be seen? So, you know, watch Jackson Hole, watch NVIDIA, you know, beyond that, I'm not sure anything's going to really move the needle too much this week. And then of course, watch rates <laugh>, because I mean, we haven't seen 430 plus on the 10-year yield in a long time. So definitely wanted to spend a good amount of time on that topic as we did, and we certainly have the right person to weigh in there. So thank you Lawrence for joining. Any closing remarks before we sign off?

Lawrence Gillum (34:20):

No. Thanks for having me. And you know, again, we'll watch the rates market and provide any sort of information out there that's relevant to our advisors and our clients.

Jeff Buchbinder (34:30):

Excellent. So again, Weekly Market Commentary is called "Perspectives on the Pullback" or something along those lines. You can find that on lpl.com. And then certainly we'll continue to follow the thoughts on the rates market from Lawrence and team. So yes, thanks everybody for joining. Thanks, Lawrence for weighing in on the fixed income markets, which are, I mean, they're always important, but they're really important right now, pretty much driving everything. So thank you for that. We will be back with you next week. As always, thanks for listening to LPL Market Signals. Take care, everybody.