Dan discusses the market continuing to remain in bear market territory.
Dan comments on Mike Wilson stating that something is about to break here.
Dan also talks S&P estimates and says it is one step forward and two steps back in bear markets like this.
Dan comments on Mike Wilson stating that something is about to break here.
Dan also talks S&P estimates and says it is one step forward and two steps back in bear markets like this.
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00:00 What is going to be that catalyst for rates to settle down?
00:02 We've got just craziness happening around the world.
00:05 I mean, if you took a look at the UK 30-year guilt,
00:08 we hit levels that we have not seen since 1998.
00:12 What is going on in fixed income broadly is just unprecedented.
00:17 Yeah, and again, we keep hearing this expression
00:20 by people who kind of get some of this macro stuff
00:22 better than we do, that something's about to break.
00:24 And if you look at what's going on in basically the British town,
00:27 we've been talking about what's going on with the euro.
00:30 The 20-year took 20 years, the BOJ intervention there with the yen.
00:34 I mean, there's things going on here where stock markets are just
00:37 kind of a pawn here.
00:38 And we're sitting here trying to find out individual names.
00:41 And really, it comes down to--
00:43 Mike Wilson, who comes on the show a lot from Morgan Stanley,
00:45 he just took down his S&P estimates.
00:47 And per facset, they're coming down year over year.
00:50 I think 9% growth was expected.
00:52 Now consensus is about 7.5%.
00:54 You tell me what the right multiple is
00:56 in a recessionary environment that we have not even
00:58 hit the recession yet, and we're going
01:00 to be in a profits recession.
01:01 I don't know.
01:02 You want to put 14?
01:03 You want to put 15 times?
01:04 He's got $2 in earnings for next year.
01:08 You put 14 on that, and you get below 3,200.
01:11 It's not far from Guy's level here.
01:13 So again, nothing's going to go in a straight line.
01:15 And the C word is a dangerous word, especially this time of year.
01:19 I just don't think we go down there like that.
01:21 Well, the crash.
01:22 I mean, I just--
01:22 I didn't know where it was going, but I got it.
01:26 You made me say it.
01:27 I didn't want to say it.
01:28 I don't want the headline to be that.
01:30 But my point is it is one step forward, two steps back
01:32 in bear markets like this.
01:34 And that's clearly what we're in.
01:35 Well, the C word could also be double C or C squared
01:38 or constant currency.
01:39 And all we hear about is the dollar.
01:40 But what we haven't heard about even in mega cap tech
01:43 is in constant currency terms, where they're going to cut.
01:46 In other words, we know the dollar has been a beast
01:49 and is certainly a major headwind.
01:50 And I think that at some point it becomes a tailwind.
01:54 The dollar is so overbought.
01:55 It doesn't mean it can't go further, especially based
01:57 upon what's going on with the differentials in policy.
02:00 But I haven't heard talk of budget cuts
02:03 as it relates to enterprise or CapEx or software.
02:06 That hasn't flowed through from any of the mega cap tech
02:08 companies.
02:09 And again, forget the dollar.
02:10 How about constant currency?
02:11 How about some of these companies
02:13 that really have been the lifeblood of this move?
02:16 Again, Apple's outperformed the S&P by 175%
02:19 over the last five years.
02:21 It's clearly been a major boost to the entire marketplace.
02:25 And I just don't think those comps-- things we can hold up.