Closing Bell - Closing Bell: 3/19/25

Episode Date: March 19, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

You're listening to Closing Bell In Progress. That was Fed Chair Jerome Powell explaining the Fed's decision to keep interest rates unchanged, also characterizing the outlook as one where policy is in a good place. He acknowledged the uncertainty of policy implications from the Trump administration many times, but conveyed some flexibility in being able to move in response either to sticky inflation or some challenges to growth. Welcome to Closing Bell. I'm Mike Santoli in for Scott Wapner today live from Post9 at the New York Stock Exchange.

We have a big show coming up with Wharton professor Jeremy Siegel, Charles Schwab's Lisanne Saunders and Goldman's Jan Hatzius will get their first take on Chair Powell's comments. Joining me on set for the hour is Truett's Keith Lerner. Keith, market found some reassurance in what Powell had to say. For one thing, essentially saying that we really can only consider the net effects of any future policies,

but also suggesting a willingness to look through an uptick in inflation and still have that outlook for potentially two rate cuts for the remainder of this year. What's your read on how the market took it? Yeah, well, you're exactly right, Mike. I think he threaded the needle pretty well. And we also had a pretty oversold market.

It's not a surprise that they cut the GDP forecast. It's not a surprise that we saw the dot plots, the inflation move up as well. I think maybe somewhat of a surprise is this slowing down of quantitative easing. And when you look at the 10-year tightening, and you're seeing the 10-year treasury come down, and that's given a boost to the market. That is true.

That certainly helped, it would seem, and the S&P 500, just for context, is right up near yesterday's high, just under 1.5% at this point. Keith, you're gonna stay with me. Let's bring in the Wharton School, professor of finance, Jeremy Siegel. Professor Siegel, what's your first read here?

There was not a great expectation that there would be bold policy pronouncements here, but there maybe was a little bit of tension in there that maybe Powell could have been more hawkish than he was. Yeah, most certainly. I mean, I would characterize him as basically optimistic. He said that the real data is still strong. He wasn't alarmed.

He said he saw the sentiment drops in the consumer sentiment and some business sentiment, but didn't say that always translates in the slower economic activity. But as you said, remains very flexible to move on either side. And that's sort of an optimal combination. I also think that he was pretty clear that the Fed would not react to the tariffs

if they brought about price rises, which he thought would be temporary. And that was something I was definitely looking for. I was wondering, would he go against those tariffs or not? He seemed to imply that he would not go against those tariffs unless it sort of caught on to inflationary expectations or, you know, went into some other areas. And I think that the market really probably took some comfort in that statement. And just to be clear, the dot plot,

the summary of economic projections did imply core PCE inflation going up by the end of this year to 2.8%. It had been 2.5, and yet collectively, the median was still for two rate cuts. So there's some tolerance of higher inflation implied there. And in fact, he did say he thought that tariffs perhaps were built into that projection to some degree. Although he, as I mentioned earlier, he said, look, the Trump administration's got a lot going on

with policy changes in play for immigration, trade, regulation, and of course, fiscal spending and taxation. And they're going to have to sum up the net effect of all that before deciding what it means for policy, Professor. Yeah, and absolutely. I mean, that's a big drop from 2.1 to 1.7. You know, it's the biggest drop that we've had in a three-month period in Fed forecasts for growth since the pandemic.

I would have liked to have known how much of that drop was due to the big slowdown, as we know, in the immigration situation, and how much was a drop that he thought could be due to the uncertainty and dislocations caused by the tariff. He didn't tease that out, although you also note that the next two years also showed a slight drop in real GDP growth. So I was wondering if that is immigration or is that more tariffs?

Although the very long-term growth, of course that I think is 2028, Trump's end of office, that number wasn't changed. But I would have liked to have sort of teased out some of those sources of that real GDP change because certainly it was substantial. Yeah, although it's also just kind of tracking, I think, where consensus GDP growth estimates

have been going. I mean, the market is backing off just a little bit from the highs. You always have to offer that disclaimer that sometimes the initial reflex move is not the one that lasts. And he really did of course and he Keith there was no way he couldn't emphasize the uncertainty inherent in trying to make any projections. He said I don't know anyone who's highly confident in their forecast and also said that he didn't know anyone who's highly confident in their forecast. And also said that he didn't know that they would be in a particular hurry to move by May.

So, you know, there's something for everyone in here. Yeah, it's very nuanced. I mean, look at the market today. The advanced decline line is two to one. So that's not a rip form, but you are a bit oversold. You're a little bit vulnerable to some good news. But I think ultimately we are seeing some deterioration in the economy, even though we talked about the hard data versus soft data

Economic projections are coming down if you look at the market as a whole, you know valuations have reset somewhat But the key pillar of this bull market has been earnings so far those estimates haven't been cut much But we've seen GDP GDP estimates come down. So I really think we're gonna have to see those estimates come down That's why even though I think you know, we are seeing an oversold bounce Which we thought would happen last week or start last week, I think the upside is going to be capped because we are seeing a change in the economic environment and that's somewhat weaker. But again, a little bit of good news going a long way the last couple of days.

Yeah, we're up only a few percent off those lows, as you say. Still a lot more to be proven. Keith, Professor, stay with me. Let's send it over to our CNBC senior economics reporter, Steve Leesman, who just stepped out of Chair Powell's news conference. Steve, what really stood out to you? You know, it's funny, Mike, I actually pulled the quote that you just quoted from the chair where he said, you know, we, nobody is confident in their focus. In fact, let's just listen to it because I think it really encapsulates where the Fed

is at right now. I'm confident that we're well positioned in the sense that we're well positioned to move in the direction we'll need to move. I mean, I don't know anyone who has a lot of confidence in their forecast. I mean, the point is we are at, you know, we're at a place where we can cut or we can hold what is clearly a restrictive stance of policy. When I think about why the market is higher, which is of course a little confounding, but who knows, right?

Maybe is that when he talked about the options, again, it's a repeat of what he said two weeks ago at the US monetary policy conference. One is that we could cut if we need to or we could hold if we need to but notice no mention of possibly raising rates and I asked him about that stagflationary quandary that the Bank of Canada addressed and he says we're not there now and we'll figure it out when we get there. One other point I want to make Mike which is that the Fed chair mentioned pages in the some some of you can not remember projections that none of us ever look at, I just want to say.

But page nine, I did look at them when he mentioned it, I should also always look at it, but I didn't this time. And he said, and what he pointed to was the idea that for the majority of participants, the risk to the unemployment rate is higher, the risk to growth is lower, this is the risk to their forecast, and the risk to the unemployment rate is higher the risk to growth is lower This is the risk to their forecast and the risk to inflation is higher and that's where they're at right now trying to balance all These issues right now Mike right and you know because he was trying to explain why they eliminated that

wording about the balance of risk being roughly equal and yet sort of pointed to that and saying things got exacerbated on every side of it. You know, he continues to use the mantra, Steve, that policy is in a good place and also that, you know, the cost of waiting for further clarity is relatively low because the economy is hanging in there. So you know, altogether he's trying to convey the idea that they have the luxury of waiting, whether the market believes so or not. Yeah, he's trying to convey the idea that they have the luxury of waiting, whether the market believes so or not. Yeah, that's right. And I think the key here, Mike, is the idea that,

this idea that the sentiment data has not spilled over into what we call the hard data. That's really something that is animating Fed policy right now. If that changes, if you do get a spike in inflation, if you do get a spike down in growth, well then the Fed is gonna face the question that I asked him, but they're not there right now. And I guess he has the luxury, because these are yet early days in the Trump administration

and for these policies to be working their way through the system. He did say the substantial amount of the increase in inflation is probably from tariffs, but you'll note that it doesn't pass on into 2026 and 27, which is maybe an initial sign that the Fed sees this as at least one time rising the price level rather than a broader inflation problem. Exactly, Steve, thanks so much. And Professor Siegel, one other thing along those lines on the soft data is the chair

was not really willing to endorse a close focus on the, for example, the University of Michigan inflation expectations, which have really blown out to the upside. Sort of says that survey is suspect. So I guess he didn't use it as an excuse to be more hawkish. I guess the real question is, is the economy still on a decent path to absorb some friction from tariffs, if that's what's going to happen first, and can the Fed respond in time? This is always going to be the interplay between expectations and the Fed's ability to be timely. Right.

He did mention that the market-based long-term inflationary expectations. For instance, the difference between the Treasury bond rates and the tips rates, which is often used, has really not moved much. So that's, I think, when he was talking about that stability. What did interest me is I don't think one person mentioned April 2nd, which I think is one of the most important dates we have coming up, that hopefully will clarify the whole situation on tariffs, how big they will be or how they'll be negotiated or some path to how they will be negotiated. I mean, I think that that's going to be very, very important and it's only two weeks away.

So hopefully, you know, things will be clarified and certainly we'll learn from statements by the Fed members after that April 2nd date. Right, and you know, before the Fed meets again, which is in early May, we're gonna get the April 2nd date, we'll know presumably what we're dealing with in terms of tariff levels and breadth and everything like that we're going to have the start of corporate earnings season will probably

have a better picture of what first quarter GDP was what are your assumptions professor Siegel for whether the fundamental story is going to hold together from between here and now and then. Well, I think that really does really depend on tariffs. I mean, you know, I've stated on your show that I think, you know, the tariffs and the scare of the tariffs and the uncertainty of the tariffs and the on and off of the tariffs has been the by far major reason

why we've had this 10% correction. If we can get clarity on what it's going to be and if it isn't going to spark a trade war, although it was interesting that Powell did mention that the trade war retaliation was actually built in to some of those forecasts, but if we could be certain that that probability is low, even though this market could be very much poised

for a nice recovery. Yeah, you know, we are seeing treasury yields back off pretty substantially on, you know, the collection of what we heard from Chairman Powell, Professor, and I wonder if that seems to be mostly reacting to a modest surprise perhaps on the slowing of the shrinking of the balance sheet. Maybe that's going to mean less issuance, it will mean less issuance this year, or if it's just a conveyed greater flexibility toward easing. I think we are pricing in maybe a little more of a chance of more than two cuts this year.

Yeah, I think it's both. I mean, at first I think it did react to the, you know, slowdown in quantitative tightening, which I don't think is material, and certainly Powell did downplay it. It's not a change in the final policy but I mean his statement you know clearly is I think that this is as well as the stock market is that I think the tariff increase prices is going to be a temporary increase, and I do not believe that it would be appropriate for the Fed to react to those temporary increases.

Now we got some pushback from one question of the reporter about, well, didn't you call the pandemic the temporary increase? And he said, this is a very different situation. So holding that position, I think, is encouraging both to the bond and to the stock market. Right, yeah, Keith, you had a kind of, I guess, modest defense of transitory as a framework for thinking about how inflation works its way through.

And I think it's been a legitimate question as to, you know, is being super vigilant on inflation if it's coming from tariffs fighting the last war? Yeah, no, it's a good point. I actually think the Fed's in a bit of a pickle, right? Because if we didn't have this August 2nd date and we saw some of the data change recently, they probably would have been talking about cutting rates now. That discussion wasn't even in the room for today.

So and the longer this goes on with the uncertainty, the longer it challenges businesses. The one thing we talk about uncertainty from a market perspective, we always deal with uncertainty is, is the market priced for that? That's right. After the highs and back in February, we downgraded stocks, we said no. Now we're pricing some of that in, but it's more, I think more of a balance at this point right now. I don't think there's a more of a balance at this point right now. I don't think there's a big risk reward call to be made right here.

Gotcha. Professor Siegel, we appreciate your time today. Thank you so much. Thank you, Mike. Let's now turn to Charles Schwab, Chief Investment Strategist, Lizanne Saunders, who joins us on the phone. Lizanne, it's great to have you weigh in here. We've been talking about the interplay between what Powell said, what the market heard, bond

yields down, stocks breathing a bit of a sigh of relief. Did anything much change about the investment equation here? Maybe not in the near term. I was surprised that after Transitori left the Lingo building a couple of years ago that it got let back in uh... i think that maybe what what the market rallied off of i thought in terms of of that dot i thought it was the wider distribution that would interesting you know you had you had eight dot that were for a left and the

two cuts that are still priced in right now for for no cut one for one cut uh... You also had seven of the DOTs believe that PCE is higher than the median and you had 18 of 19 viewing there to be upside risk to core PCE inflation. So I think there's still going to be a lot of digestion of everything that happened today, what Powell said, what was in the DOT, in the FCP and in the statement. Yeah, and I think the multiple acknowledgements of the inability to settle on how things are going to break with all these policy questions perhaps is the main takeaway.

And it's not as if the Fed's pretending it has a handle on how these things are going to go. And we were just talking here about everyone is sharing these charts of the policy uncertainty index at record highs. And that both reflects an uncertain moment, but also historically, that's when you kind of want to add to risk assets. I mean, do you think that's actionable at all? Well, you know what?

I think it was Jeremy Siegel with whom you were speaking to just before, I believe it was he who rightly pointed out that there wasn't a mention of what could happen after April 2nd. You know, with the fits and starts of all of these policies that are causing the uncertainty index to go through the roof, particularly the trade policy uncertainty index, we won't really have a sense of what this means, not to mention any additional retaliations. So I think that's the next important date to maybe put a little bit more sort of facts around this stuff right now.

At this, we're all at the mercy of how we get the news and trying to judge what that means for short-term inflation. Sure. The correction in the S&P 500 that, you know, maybe culminated in the short-term late last week, you got 10% downside, it obviously was digesting this huge rush out of mega-cap stocks at the same time we got some kind of an economic growth scare. Where does that leave us in your view, Lizanne, in terms of, you know, the valuation, the kind of tactical

set up for stocks right here. Did much get accomplished, I guess, with that pullback? Well, anytime you have a correction, you do ease some of the valuation excess. I guess the rub for some segments of the market inclusive of the

Magnificent Seven is you've had the numerator going down, but you've also had the denominator going down. Not in negative territory, but a year ago, the MAG 7's earnings growth was more than 50% year over year at a time when the rest of the S&P was low single digits. Now, based on consensus, that MAG 7 earnings growth is going down maybe close to the 20% by the end of the year,

where you actually are getting a little bit of acceleration in the rest of the year, where you actually are getting a little bit of acceleration in the rest of the S&P 500. So as I always say, better or worse can often matter more than good or bad. And I think it's the trajectory. But we did see a little bit of easing of those valuation concerns. Now we have to see whether the setup, given that estimates have come down for 2025 broadly for the market, but even those names, whether yet again the bar has been set too low and we have a first

quarter reporting season akin to what we had for fourth quarter, which was too low a bar, nine and a half percent expected at the start of the season, 17% is what we ultimately got. I think that's the next important test for the market beyond this tariff step is once we start getting earnings reports and what the outlook is for companies especially with regard to profit margins. Yeah definitely too low a bar in terms of consensus going into the reporting season but I guess in terms of the market it wasn't able to really gather a whole lot of sustainable strength from that high beat rate. So I guess that's going to be the question heading into this quarter too.

You still favor Lizanne sort of lower volatility and higher quality that still makes sense to you. Yes I think you're going to get rally days like we've seen in the last few days where you see some money come in and look to

bottom fish and some of the hardest hit names and then you see a reversal on those days into the higher beta, higher volatility names. But I think still sticking with that broader quality wrapper, low volatility being a component in a broader sense than just from a trading perspective does still make sense, yeah.

Yeah. And then I guess the other piece of it that he didn't get into too much detail, but the idea that we're doing fiscal restraint or at least gestures in that direction at the same time that these tariffs might go up, it's sort of fouling up everybody's GDP number, or at least it's putting pressure on that. Do you think that that is going to drive waves of downside in that forward estimate as we go from here for earnings?

You know, in terms of the connectivity to earnings, it really is the profit margin story. And I think one of the problems with fourth quarter reporting season, which just finished a few weeks ago, is not so much that there was direct downward guidance. It was just the uncertainty factor. And when left with that limited guidance, I think analysts erred on the side of lowering numbers. They certainly didn't extrapolate the stronger than expected number for fourth quarter into this year.

And if consensus is right, overall for the S&P, you're looking at a growth rate expected in 2025 that those still double-digit positives is're looking at a growth rate expected in 2025 that those still double digit positive is lower than what the growth rate was in 2024. Therein lies the, you know, better or worse can matter more than good or bad. So it could be a make or break quarter in terms of the outlook, not just for the first quarter, but what the trajectory looks like into your end. Yeah, for sure, when you typically have some back-end loaded forecasts. Lizanne, great to have you weigh in today after this FedMeeting. Appreciate it.

Thanks, Mike. All right. So, Keith, the S&P 500 is still holding this 1.3, 1.4 percent gain. It's about half a percent off the highs right here. What are you viewing as sort of the next key catalysts or signposts we're looking for here? Well, I think it is economic data. I mean, I think the market has really focused more on the health of the economy from inflation. And that's what the tenure is telling you as well. You've had a night, I mean, if you think about last week, you had the capitulation with the

spike in the put-to-call ratios. You had the back-to to back 90% updates, historically that's a positive. So far you're seeing a good reaction to today's news. So I ultimately think this market is gonna move a little bit from fear to greed, but then as we move up to say 5,800 to 6,000 on the S&P, I just think you're gonna be capped somewhat

because during this period of uncertainty, and when we go into the quarterly earnings season, I don't think you're gonna see a lot somewhat because during this period of uncertainty and when we go into the quarterly earnings season I don't think you're gonna see a lot of upside guidance going forward so I just think we're gonna be in a choppier range and you're gonna look for some tactical opportunities but right now you're maybe towards the lower end of that range and you know if you're a trader you're gonna trade there if you're a longer term investor you buy towards the bottom side and if you get towards the top end of the range we're telling our clients dial back risk a little bit. Right, yeah, so those all-time highs are like

around $61.50-ish. I think it's gonna be a challenge to get to break through that in the near term. All right, Keith, we'll get back to you in a little bit. A quick programming note, Scott Wobner is back tomorrow and we'll bring you an exclusive interview with Double Alliance Jeffrey Dunlack right here on Closing Bell. We'll get his first take on Sherpal's comments at 3 p.m. Eastern Time. And up next, Goldman Sachs' Jan Hansias is here with his first take on Sherpal's comments at 3 p.m. Eastern time. And up next, Goldman Sachs' Jan Hansias is here with his first reaction to the Fed decision. That and much more when we take you inside the Market Zone.

We are now in the closing bell Market Zone. Tourist Wealth Co-Chief Investment Officer Keith Lerner is back to break down these crucial moments of the trading day. Plus Courtney Reagan on the moves we're seeing in some of the retail names. And Goldman Sachs' chief economist Jan Hansjes joins us For his reaction to the big Fed decision. Yeah, I'm gonna start with you. I mean you were looking for

The summary of economic projections to lift the year-end core PCE forecast to 2.8 percent. That's what happened They did downgrade GDP growth, but kept the two rate cut median expectations. So all of that pretty much in the zone. What you thought, what'd you hear from Powell in the press conference? Overall, I thought this meeting was generally in the zone. I think at the margin, he was probably a bit more dismissive

of the increase in inflation expectations that we've seen, especially in the University of Michigan survey, but also in a couple of the other surveys, Atlanta Fed Business, Inflation Expectations, Conference Board. So not to the same degree as on Michigan, but I think there has been some increase and we don't know how that evolves as tariffs actually come into force, but I thought he was a bit more, he was downplaying it a bit more than I thought. And so the takeaway from that, of course, is that he's a bit more concerned

about risk on the growth side, or at least would be tolerant of higher inflation in the context of potentially nudging rates lower. I think that the meeting was, when you take it all together, just a touch more dovish for those reasons. There's also the additional taper on QT that's not a monetary policy tool. They're very focused on the idea that it's really rates, but nevertheless, it's also

taken that way. And so, I mean, he didn't profess any greater vision of exactly how things are going to unfold than any of us have But he's saying you know there's these four policy forces Trump administration on fiscal immigration trade deregulation and the Fed will have to assess the net effects of these things and how it bears on the economy and policy seem like That would take a long time to get a handle on all those things. So what do you think the next? Kind of hundred feet of road

for the Fed is at this point ahead of it? Well, I think it will take a while. Now, of course, we've got April 2nd, we've got the announcement, we'll see what happens in terms of tariffs, how they calculate the reciprocal tariffs in particular, because there's a big bid ask on what you can do if you just look at tariffs

that our trading partners impose on us and compare that with US tariffs. That difference is very small. But if you say VAT is also tariff-like, that would imply a very big increase. So we'll learn quite a lot over the next month. But you're right. If you take all the other aspects of policy, that's going to take a long time, especially because fiscal policy is on a much slower path.

And so that would suggest, you know, it can still take a while before they actually get to cuts. When asked directly about the prospect of a May rate cut, he tried to downplay that. He said, I don't know that we'd be in any hurry to make any moves. How does that jive with what you're expecting the Fed to ultimately do? Yeah, I mean, May, I think, is highly unlikely. We have two cuts in the rest of the year similar

to the Fed. We've got a June cut and December, I think June is at risk of being delayed. Yeah, and I certainly think despite the slightly more dovish tone, it doesn't sound like they're super close. And in terms of, I know you've recently kind of curtailed your GDP forecast for this year. Does it seem as if the market, I mean the economy has that either the momentum coming in or solid consumer balance sheets, you have these offsets to whatever pressure points we're getting that it seems like it can fight its way through this period okay.

Well, I think there is a lot to like in terms of the US economy, right? The productivity numbers have been great. We were still getting a tailwind from the post-COVID normalization. Wages have been growing a lot more quickly than prices. So we're coming into this period of policy uncertainty in a good spot.

We're going to have to see how much of a drag we're going to get from, especially the tariffs. We're in a similar place as the Fed. Our Q4 to Q4 growth forecast is 1.7%. And so I do think there's going to be a slowdown, but we're going to have to see how substantial it's going to be. And that probably is going to take a little bit of time.

And I know you've done a lot of work on the immigration piece here, which perhaps is a little bit more of an immediate impact if you look at a lot of the real-time data. What does that mean? Because it would seem as if it might help put a lid on the unemployment rate at the same time it could curtail payroll growth.

Yeah, I mean, it's also going to be a drag on growth from both the demand side and the supply side. It's going to be smaller. I mean, we don't think that the impact of that is going to be smaller. I mean, we don't think that the impact of that is going to be all that large. Certainly, if you compare the pace of immigration with what we saw pre-pandemic. Of course, if you compare it with 2023, that's a huge change. But 2023 was such a big outlier that you really ought to be comparing it with pre-pandemic.

And there, it's not that big a difference. So I am mostly focused on the tariffs. That's where the uncertainty is greatest. And I think that's what's going to have the biggest impact. Sure. You did mention the balance sheet move. I mean, I guess maybe there was a little bit of surprise in there on the dovish side. Rates have reacted to that. I mean, what levels would you be looking in terms of, let's say, 10-year treasury yields to indicate that you could actually have them either become stimulative or help housing? I always look mostly at broader financial conditions, not just the 10-year yield. But

we've been running in a low to mid-fours kind of environment for 10-year yields. So if we were to go back below 4%, I think that would be more stimulative. And general financial conditions at this point, you feel as if they're okay, they're relatively in decent shape? Well, we've gone from having a fairly meaningful, positive impulse from financial conditions late last year on the order of half a percentage

point to growth, maybe three quarters to a mild negative impulse because of the recent sell-off in the stock market and tightening in financial conditions. But nothing dramatic so far. Call it a quarter percentage point. Got it. Jan, great to have your views here. Thank you very much. Thank you.

All right Courtney a lot of retail names Going their own way today. Tell us about it. Yeah, absolutely Mike I mean the major retail related ETFs those are largely higher today But also outperforming the broader indices because of some of those travel related names at least in the consumer discretionary ETF rather than sort of pure retail itself. But there are some other retail movers that I want to talk to you about. So let's talk about Signet Jewelers. That's up really big here today, about 17%. After reporting, let's call it better than feared quarterly results because they gave us a preview in January. Mixed guidance though, but Q1 above consensus,

full year lighter, still looks like the street giving them the benefit of the doubt. This is the parent of Jared, Zales, Blue Nile and others and they're noting that all categories saw growth. New CEO JG Symantec outlined a new strategy even in an uncertain consumer backdrop. It seems like the street likes

it. Now we've got closeout retailer Ollies bargain outlet that put up a mixed quarter and mixed guidance. A new stock buyback program. Jeffries does say there's a lot to like here including

liquidation of competitor big lots, which is good news here for Ollies. But Jeffries believes the valuation does sort of account for some of that already, still shares up 9%. Not all rosy in retail, to your point, Mike. Williams-Sonoma shares, those are lower with light earnings and margin outlook. And that's overshadowing the fourth quarter's

positive comp sales that it saw really across the, across all of its brands, those shares down about 3%. And then we'll get another read on the consumer one five below reports after the bell today, so that's coming up. Court, you know, it's hard to quantify these things, of course, but retail has been a sector that's been so unfocused on the prospect of heavier tariffs, and I know it's sort of a very complex interplay with how these companies operate. Seems like today in general there's a little bit of relief on the

areas of retail that have been most pressured. Yeah absolutely I think that that's very true. I think there's a lot of homework that needs to be done to your point when it comes to the tariff impact on each of these individual players because obviously their sourcing is going to vary wildly whether it's Canadian or from Mexico or Canada, Mexico, China or maybe none of the above. And I think some of the street is doing a little bit better job today parsing out which is going to be impacted, which isn't what they feel relief about and what's not. I think the signet action is actually pretty interesting because by and large, there's

a lot of work to do at that company. The CEO admitted it to me on the phone here this morning as well. That being said, it was better than what was feared. And so the street may be giving some benefit is out there. Well, William Sonoma has had some strength for some time and so they're not continuing that forward momentum into the first quarter from the fourth and the street kind of disappointed about that a little bit. So maybe some pressure away from that overarching tariff story on retail, at least today.

Yeah, well, and you mentioned travel as well, which had been really pressured pretty heavily coming into this period. Court, thank you very much. Thanks, Mike. As we head into the close, still holding on to about a 1% gain here. Keith, what do you make of the kind of violent rotations

that have been happening within the stock market here? Really, what do you make of the kind of violent rotations that have been happening within the stock market here? Really outside of the Mag-7, the market's kind of flat year to date, even though it's down maybe 4% or so overall in the S&P 500. Does that continue or is that prime for a snapback? Well, I think part of what you're seeing is that money going from that Mag-7 is going to everything else. That's why it's relatively flat.

I think tech is getting a little bit oversold on a short-term basis so probably some rotation back but I was listening to Jan's view as well. Think about what he just said GDP estimates coming down. He's saying that the Fed may have to be delayed even further and you have some fiscal timing. Not an environment to us as far as new highs. Now the one thing I think we have to keep an open mind after the election we new highs. Now, the one thing I think we have to keep in open mind, after the election, we were all focused on all the positives. Now we're focused on all the negatives.

The question becomes, when do we start focusing on deregulation, tax cuts, and maybe the Fed cutting rates? But in the interim, I just think we have this pretty choppy period where the risk reward is just mixed in. I hate to say it, being so neutral here makes sense. I think there will be better opportunities later this year to be more aggressive.

It's almost as if you, to be more aggressively bullish in the near term, you'd probably be making the bet that they're going to really pull the punch on tariffs. Because that is within the administration's power, but it doesn't seem like that's where they're headed. It is, but we also have to think, those terrorists are, some countries are going to be here with terrorists. And I think we're going to continue to see other issues come to think those terrorists are, some countries are gonna be hit with terrorists. And I think we're gonna continue to see other issues come up where those terrorists slowed down

in part of the global economy. So yes, we can have a short-term pop because of that, but ultimately, I think that's the story is gonna be, does this economy once again prove resilient like it did coming out of the pandemic, like it did when the Fed had the fastest rate hike hike in cycles since the 80s, and how it did as we dealt with this high inflation.

Because we've been proven over and over again that this economy has been more resilient. So it's an open question at this point. Right. A heavily services-based economy that mostly just sells to itself and usually can hang in there. Speaking of that, though, the major rotation this year has probably been to non-US. Yeah. And, you know, it's been so long in coming. Is it the kind of thing where it's just a trade or is it a new trend? I think it has likely longer to go.

You know, if you think about coming into this year, markets are all about our expectations. US expectations will appear. International expectations down here. And a little bit of good news has gone a long way for international. It's actually following the playbook following 2016 where you had that outperformance, and I think that fiscal change is somewhat different.

So we are still overweight to the US, but we have brought in that bet and it raised International somewhat, just offset, that we think it's gonna be a more even playing field, at least in the near term. You know, you can even look at, I know the popular trade was equal weight, get away from the mega caps coming into this year,

and equal weight valuations are kind of long term average. They're not compelling, but they're not excessive. And yet, the process of getting that rotation in place seems like it needs more choppiness and more volatility. Well also, when you look at the equal weight of the value, a lot of times what you need to see is an accelerated economy. Yeah.

For something, there's something about relative performance versus absolute and yes, the RSP and the equi-way is holding up fine on a relative basis, but it's not blowing the doors out either. So, I think you actually, for that trade to actually have a lot of upside, you need to go through that peak uncertainty phase and see the economy re-accelerate. Now, the market will sniff that out ahead of time, I just don't think we're there yet. Right, yeah, no, the market is gonna try to get ahead of it, often overshoots, maybe we saw that recently.

Keith, hey, great having you here. Great to be here, thank you. Thanks a lot for spending the hours. We head into the close. The S&P 500 has been losing a little bit of altitude in the last little bit, still up more than 1%, it's on pace to close. Below yesterday's high

though pretty significant move within the bond market though yields did come off a fair bit 10-year yields below four and a quarter in response to what was taken as a net dovish tone by the Fed the volatility index also easing back though far from super calm levels it did tick below 20 briefly for a little while there before popping right up around that level and we do have pretty good far from super calm levels. It did take below 20 briefly for a little while there before popping right up around that level. And we do have pretty good growth on the market today. About 70% of all volume under the stock exchange

is to the up side to the average stock exchange. Hanging in there. That's as of the closing bell.