On tv and radio. Im Jonathan Ferro. Tk taking a break, equity market soft, down a 30 on the s p 500. The bowls on wall street getting more bullish. Now looking for 4900 on the 400, the price target set at the end of december. He was bullish and right to be. He raises his price target. City are looking for 5000 by the middle of next year. It is record high watch on the street. Lisa and the potential for a 28 gain this year, the biggest going back to one to 19. Can we get the start of a new bull market given some of the increasing credit contraction, the softening in Economic Indicators check out could this be the start of a new bull market as many are calling for . Jonathan i loved what scott cronin had to say. Clearly we were chasing the tape. Growing conviction in years earnings acceleration is a key point of differentiation. He is looking for earnings to accelerate into 2024. Lisa a key underpinning for a lot of these, more broadly, is that the softness will cause the fed to pivot. It will turbocharge the rally we have seen, including some of the earnings. Borrowing costs will drop. This is the bet that gets people to buy into equities and then people are saying is this what we heard before . How do we get credit standards to this degree without something more systemic . Substantial . Jonathan we saw it in the latest report yesterday, demand is later, but it standards tightening more. But it is not what we expected coming out of the bank three months ago. We thought it would be drastic and it has been slow and has continued at a steady pace. Lisa does it matter if it is slow and steady versus sudden and a breaking credit creation . In the past it has not mattered. Each of the time since this index was created, every time i in Credit Conditions like now has led to a recession. So is this different . Can you put a strong bet on this time is different . People are saying yes. Everyone used to say those are the most dangerous words in finance. Jonathan five months of gains on the s p 500, they continued to july. The equity market this morning, softer, negative down on the s p 500. Lets call it. 25 . Yields unchanged, going into a ton of data later. 110 on the euro. 0. 2 . Lisa jordan rochester will speak to us later and has an interesting call on the euro. The job openings which people say might not be that reflective of where we are with job openings per each employee, unemployed american. Were looking at the potential for loosening market. We also get isi many factory data which you will look at closely, especially in china and europe, manufacturing recession ongoing. 10 00 a. M. , chicago fed president Austan Goolsbee. He sounded close to declaring victory. He was speaking and said the soft lighting is the path that would be a triumph and is a possibility, talking about not raising rates. Jonathan i thought that was the headline, someone has dovish as Austan Goolsbee has not made of his mind for september. I guess it is separate. They want to make you believe that the september meeting is alive in the data between now and then matters. Lisa that is the point that gets hammered home. People are leading toward apollos but the fed does not want to get the signal. When it comes to how long a consumer can keep spending, uber, marriott, jetblue and norwegian cruise lines. We also will get starbucks, pinterest. That year to date gains have been standing. Over shares uber shares basically doubling. How long can people still do the yellow yolo . Jonathan uber is expensive now. Lisa double at least. How long are people going to order their salads and get it delivered . Jonathan you will see me in midtown flagging a yellow cab. Lisa but the quality is different. It is different because the uber drivers are more distant wishing with respect to who they take and dont because of the Rating System and the yellow cabs dont. Jonathan you mean the quality of the uber is better. Lisa and the stories jonathan you have a good rating, 5. 0 . Lisa not anymore. 4. 96. Jonathan same as me. You can find out a lot about someone based on what their rating is. Joining us now, cio of wonderful to catch up. We get these notes on a daily basis and there was a line from you that made me laugh. We continue to own tech and inclusion stocks, brackets, and a lot of people might feel like that if they have been in tech so far year to date. There is a feeling that it is time to get away from the big winners. What are your Core Holdings in technology in the United States still . I own apple, google, adobe, i have a lot. Pretty much market weight, none of them are cheap anymore. Theyre all expensive. Im not planning to sell them. The biggest mistake ive made over the last decade is selling these stocks when they hit three times earning. They moved higher. You can see the scenarios, elevated multiples. The dominant market shares producing above average growth. Fresh money coming in today, i would rather be selling then buying them outright. Just betting against a massive downside that would create a forced discipline of buying them on a selloff. Those of stocks that are driving my portfolio. Ive got a market weight but they are expensive. Jonathan they have done well, doubledigit gains across the board. I mentioned it, there was rotating away from winners. Banks had a wonderful month through july. What would fund the move into energy which you are looking for outperformance from . Patrick jonathan we may have lost him. A great year. Some of the core Tech Holdings we have had your to date, and rotating out of some of the winners in europe, i remember when alfie came on this program. If you have been intact, do you want to stay with it . I think there are so many people like patrick who have sold those names and regretted it later given the performance of the last 10 years. Lisa there is a feeling of arbitrariness to some of these calls. Everyone is writing momentum. Even looking at his comments in his own notes, we continue to own tech and communication stocks. Thank god. There is a feeling that it is almost up to luck or getting a sense of what the zeitgeist is to use toms word or go with the flow and look for the tea leaves of went to get out. These are things people are talking about at a time when skeptics are getting smaller and quieter, but they are saying is this going to sustain a rally . Jonathan i cant believe it is august. Tore through july, to talk about the monthly gains, the fifth month of gains on the s p 500. 3 gained in july. The longest streak on the s p, slight outperformance on the nasdaq. It changed toward the end of the month but the nasdaq outperformance, it was up by close to 4 . With the standout winners, small caps up 6 . Vankes on the s p 500 up by 10 . We have left banks on the s p 500 up by 10 . We have left margin moved on quickly. Lisa the story that will come to the four is oil. The biggest gain going back to january last year in terms of monthly basis. At what point does the start to bite as people talk about the tightness in the market and the fact it might have been distorted by people not wanting to own physical oil because it cost something, opportunity cost of not putting your money in a Money Market Fund . Jonathan i am pleased to read joinreestablish a connection with patrick. My apologies for the connection. If you are not trimming tech, where are you trimming . Patrick i have been overweight oil all year, so it is not been a good call for me. But with more oil consumed today than in the history of the world, Oil Companies down and producing the buyback shares, the dividends, they dont have the issues of the past. And opec showing an inclination to cut the weakness in the oil prices, i think we have got oil prices that will stay at these levels. Lisa is it consistent to see Oil Prices Continue to rise and the rally we have seen more broadly continue . Is there a reason behind some of the decline in oil prices that have fueled the soft landing story that is underpinned the gains in the other sectors of the equity market . Patrick you probably have a little bit better margins across the companies and oil prices have seen a selloff. But i dont think oil prices are going to change the outlook. You can see a spike in oil, dividends would affect markets in other sectors. But prices gradually moving higher, staying sticky at these levels. I dont think it is going to stay with other sectors. Lisa how long can you ride momentum . Patrick i am sticking with the momentum that i have got at the portfolio. But they are not the ridiculous valuations but theyre not cheap anymore. In march, they were creating a 24 times earnings, but now we are up in the high 40s, high 30s. Apple with 20 times earnings in october, if they do have another significant runoff, the rules are to be bond valuation measures. It wont cut completely. But we are rallying these stocks. We will continue to own them. Jonathan feels like we have been in that for the last five months or something. Thanks for jumping on the phone and making this happen. Patrick armstrong of lorena wealth lorena wealth. The past three or four months. Lisa even with the argument it has been all multiple expansion and underlying revenue growth, the same argument people have been making for a while. Inks have continued to melt up which is why a number of people have said we are going to go with it. Why are you going to fight this . We heard this yesterday. Look at these charts, they look good. How can you short this chart . And people are saying fundamentals at some point will matter but not for a while. Jonathan i have Great Respect for the technicals and those people who can say by the chart. It doesnt matter what is on it. Ive always struggled. Lisa i have it i have been wrong. I will admit it. When i start to overthink all of the details, the potential risks, i have been getting it wrong in terms of my expectation of what is going to happen. Do you ignore your instincts and your inner skeptic and go with the float . At what point does that lead to the next turn in the cycle . Jonathan where the gains of the last decade have been. Ignore your doubts. Shut her eyes and keep buying. This year a great example of that. We talk about energy later. Capital returns from bp, shell, chevron. We will have the lease from elise from jp morgan. Good morning. N named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com the market is broadening, moving into more valueoriented parts of the market. The names that have not been bid up are starting to participate more. It is about avoiding the euphoria and looking at the fundamentals. I think youll start to come down over time. This is a market that is feeling like a recovery trade. It is probably not the recovery trade. Jonathan a Global Market strategist at invesco, credit to the people who got this right. Another is john of oppenheimer, looking at close to 5000 on the s p 500. City looking at that biden made to year, next year they are looking at and Earnings Growth reseller a. More bullish it seems. The equity market on the s p 500, we are negative. We are down by. 3 , the tenure at 3. 96, a bit weaker on the euro side of things. A quick look at the pound. The pound against the u. S. Dollar, 1. 28 11. Later this morning we will talk about home prices in the u. K. We will save that. The bank of england coming up later this week, and socgen saying it is vulnerable if the bank of england does not hike by 50. It was speculation that the next next move would be 50. That is died down and we are looking at 25. Lisa you are seeing some to the upside, and mainland europe two. There is concern about how much wages are increasing in london and the u. K. More broadly. At what point is this a credibility issue . At what point do market start pushing back against how much conviction these central bankers have about fighting inflation versus trying to avoid some hard landing . Jonathan based on communication from the ecb and Federal Reserve, i dont think they have conviction. None of them seem to know what is coming in september. They cant commit to september. A dove on the Federal Reserve cant commit. None can commit to anything. Lisa markets have stopped caring. People say i am sick of this conversation. The data is in charge. We can interpret the data, theyre going to follow us. There are no longer trying to tamp down the spirits coming up. It is no longer a concern. The fed as a risky case does not seem to be in these nodes that are upgrading the forecast for s p targets. Jonathan one of them the central bank haters, the haters of centralbank activism of the last 10 years want them to stay at five and go away, disappear and let things function. Joining us now, g10 fx strategist at tomorrow. Numeral nimura. A lot of communication about a ton of nothing. What is it . We think they will do 25. The problem is the first 2. 5 basis points price for the eveningz. That will move sterling, it is not a 5050 chance of them going for a 50 basis point hike but you saw it overnight. When it is around eight basis points or so priced in for a potential hike and they dont deliver, it can see a big move lower in the currency. Thursday we could have bank of england doing 25. It is too early to declare a victory lap. We think there will be another few hikes, five basis points 75 basis points from where we are, this year. Sterling is trading well, it has come one of the highest carry currencies in the g10. But all that we follow, where inflation is going, is saying it is going to slow down noticeably. The good sect sector is really slowing down. The problem with the u. K. And services inflation, indicators suggested it shouldve gone down sorting a few months ago and it did not. The last cpi print was possibly the peak of Service Inflation in the u. K. That is why the bank of england might take note and say there are early signs that policy is working to slow down that sector. It is just one data point. We need more cpi reports until the victory lap can be declared. Jonathan we have had a similar conversation of whether the Federal Reserve is sufficiently restrictive. Can you draw the conclusion that the bank of england is sufficiently restrictive . Jordan i think they are. We are seeing evidence on the supply side all saying it is restrictive. Demand is slowing down, retail sales, these indicators nowhere near where they were last year. But a lot of the announcements that go into it, it just proves wrong in terms of the hard data. The pmis have been weak on the Manufacturing Sector but the Industrial Production fears have not been as weak. Soft versus hard. If you are looking at hard data, realized inflation, you are the bank of england saying we need to do more. But if you are looking at the forwardlooking indicators, they suggest we are close to being sufficiently reductive. Lisa that is in england, john was mentioning u. K. Housing prices. We will talk about this later in europe, the european union, there is question around whether they are sufficiently restrictive at a time when core inflation has exceeded headline cpi, the most going back to 2021. At a time when youre started to hear more of a dovish conversation from some members. Can you still get bullish and long euro versus dollar if you do have that shift even among the hawks . Jordan weve had a shift already. That is kind of why it has reformed to where we are today, below one time. We felt like the eurodollar might break to the upside and downside but the pain has been this range we have had for most of 2023. We need a trend. The false breakouts are mutton dressed as lamb. It is strong enough. We will see the dollar weakness or the ecb perhaps does not need to cut rates at all next year, or if they do, toward q4, if we get that story, the eurodollar can be supported from the great angle. The problem at the moment, equities are rallying. It is a reason to buy euro. We are looking for 114 by september. While prices are picking back up and the rates market in the heb space have softened in terms of what has priced that ecb by yearend. We think that is possibly the last rate hike by the ecb. The Little Market pricing left will be disappointed. We are pricing less than one rate hike now. But that is a drag on the euro. If equities go to 5000, like your previous guests were talking about, only weighs the dollar weakness in that environment. Lisa how disruptive could Higher Oil Prices be given the disruptions and costs on carriers echo carriers . Jordan that is my biggest headache. Before this oil price rally, energy was down 40 year on year. If i had stated those levels before this rally, it would have drag down you have cpi. Now we have seen retail gasoline prices in the u. S. Picked up by 5 or the end of july and it could go further. If we break 19 a barrel in oil, central bankers will be too cautious and they will say we dont need to discuss about cutting rates. We need to stay higher for longer or even surprise for an over hike this year. The fed needs to be outdone but if we get oil to 90, 100, that is a mixture of supply concerns probably due to demand picking back up in a surprising fashion. If youve Central Banks have to turn hawkish in the second half of this year, which we dont expect. We think most Central Banks are close to the end of the cycle. But if we get 90 to 100, a lot of things will have to change in the narratives. Jonathan is it too early for predictions for next season . Jordan i think we are now a top 10 club. That is a massive improvement of where we were. Jonathan jordan, settled take at gerard. The legend at liverpool. Tk not here because he is doing with the transfer taking it poorly. I have to say, not being covered extensively and it should be. We are going to annmarie about it later. Governor ron desantis of florida , his declaration of economic independence might be some echoes reminiscent of what the former president said in 2016 on the campaign trail. Lisa talking about the Federal Reserve and the potential independence or lack of it. Jonathan Annmarie Hordern has rate of the document and listen to the speech yesterday. Well catch up with her in next hour. Next, sarah of standard shadow