Alexander acosta, the dean at the Florida InternationalUniversity Law school. He was also an assistant attorney general under george w. Bush. Well hear more about that, the president without naming his candidate earlier in a meeting with members of congress, said that he is a great man, hes excited about this pick. So well wait and see what happens there. But to give you a sense of just how quickly this press conference has been arranged, i want to talk to some of the press aides just after the president announced it. They didnt know there was a press conference Just Announced by the president. In fact, were still not told definitively the question will take questions. Well see what format here at the white house. We expect the Alexander Acosta nomination to be made formally there, and wait and see if reporters get a chance to ask questions on a whole host of other subjects that have been swirling around this white house in recent days, scott. Eamon, thanks. Well be back to you then. In the meantime, we mentioned the mainly averages rangebound today but going for these new records, at least out of the gates. Yeah. And i think there is an important dynamic. David faber put a report out earlier today, talking about a big trader out there who put on this short gumballs, whatever the option strategy was. Basically, getting very short the market on an institutional side, and we have seen the s p rally significantly from 2300 to 2340. The question becomes, how many others out there, this rally is built on skepticism. How many big institutional players out there have put on these type of larger wagers, okay, that have to be as you go through strikes unwound and you see a short squeeze in the market. And i really believe yesterday that was a significant short squeeze. Are there others that will accelerate the market to go further . Thats a big question out there right now. Has this rally, steve, gotten to the point where its become the trump bubble . Or no. We have to start thinking of this in those terms . I dont think its a bubble. I think that the seeds of the rally were really planted before trump took office. Hes i get it. But, look, weve rallied the way we have for a variety of reasons. Clearly, were closer his agenda is certainly one of them, okay . Ill tell you, we will find out in one or two weeks when the the tax bill or tax proposal or tax plan, whatever hes calling it, is going to come to light, right . He guaranteed last week, well see it in two or three weeks. So that point, when we see whats there, and when we get a sense of how long it will take to come to fruition because part of that is already baked in the market. So your point, yes, thats what has created the bubble. Im saying, is there a bubble . I dont think is there a bubble. I dont think its a bubble at all. There is no bubble. Bubbles are 23 times, 24 times. Right now where you are is not a bubble. Youve got optimistic companies, through the quarter in terms of overall earnings. Wasnt phenomenal, but we saw growth so there are things in place. Were seeing inflation and youve still got historically low rates. With the fed, three times this year. And youll still have very low rates and the rest of the Global Economy is participating, as well. So, josh, at what point in this cycle of this rally do you start to get concerned . Do you start to legitimately question as to whether its a bubble or not . So i mean, to be honest, the whole premise of this doesnt really jive with what we do. We dont get concerned. What we do is, we manage money in a diversified way. Were never all stocks, no matter how good it looks or feels. And whenever all u. S. Stocks, when were in stocks, is number one. Number two, we do rulesbased tactical. So when the market is no longer in an up trend, our posture will change, but it wont be because im stroking my chin. I think the big picture here, were looking at a sevenday s p rally. Rsi is through the roof, probably. It will blow off and pullback makes sense. Youve got to go back to july 2013. But we had a great finish to the year. It doesnt mean if this shorterterm rally ends that its somehow deconstructed for the whole market. By the way, the last nineday rally straight is back in 04 and the bull market continued on for another twoandahalf years. Lets not get overly concerned how many days straight its up or when there will be a pause or pullback. Other things are happening, scott, internationally that provide an underpinning for this rally. Emerging markets look phenomenal. Look at onemonth t bills. Cash now yields. 53 on a 30day treasury. Scott, that is a nineyear high. So there are a lot of other things happening beyond just how many days is the s p up. The Global Economy, obviously, what josh is referencing right now, when you look at that, and you look at the earnings that we actually concrete numbers that we have been able to actually look at and the consolidation of certain areas that all of a sudden get reaccelerating to the up side. And i think specifically, yesterday, that big move in the last couple of days. But the financials and the fact that people have gotten a little bit more comfortable with that, scott. I think when you look across, we have been rotating, rotating, rotating now for over a year in the marketplace. And that rotation has provided a great opportunity. Is there bubbles . I think there are still some bubbles. But the bubbles arent in the financials. Where . When you look at whats on the bottom end right now, im still not a big fan of these utilities and some others that had the big run and then you suddenly look at pes that are in the lower 20s and people are talking about high volatility and talking about high pe levels and certain tech names. Not even close. When you look across cisco, that stock, as its going through this process of transforming itself from being a Hardware Company into a Software Company and a security, and internet of things and all of those things that Earnings Call last night sort of set it off. Thats why that stock is breaking out today. I think the firm that faber had been talking about, they said trump bubble. Yeah, they said trump bubble. They did. And its funny in the last couple days ive spoken to a lot of people who like josh say were in the marketplace, so were looking for warning signs. We see warning signs everywhere. And my kind of response and reaction to that is, well, have you not participated in the rally higher, and the antibiotics answer is, no, we have actually bet against that. How long do you stay in on a tactical basis . Betting against a market that continues to move so significantly . Any day of any week, over the last eight years. Any market. Guys who find warning signs, look for warning signs. There is always a warning sign. The unanswerable question, when will it matter. Its unanswerable, because youre talking about the mass activities of billions of people in the business community, in global markets, in currencies. There is absolutely no way to determine pu ratios are going to matter now. It doesnt work that way. Its interesting your perspective. Because the people i talk to, they may not like whats going on. I mean, for example, if you saw the headline in the journal today and you didnt know it was the u. S. , you would see next step is a coup. And theyre going to fall. What do you mean the Intelligence Agency is withholding information. George soros got run over, because he fell into his political beliefs in making a marked decision. If you look at the market rationally and you remove your political beliefs and leave that for the social aspects of it, youve got to be invested in the market. You also know that at a point in time, there is going to be a correction. So we start moving away from the market last year, because of where levels were. The bubble to me is in some of the credit products. Direct lending is a pure bubble. They havent vintaged yet. And by the way, does it sound familiar . Im getting 8 to 10 like clockwork every year. Without any variation. Thats the bubble. We can debate the fundamentals of the rally, the trumpness of the rally, if you will. The technicals may be signalling an acceleration in the rally, as well. Jason hunter is the head of Global Fixed Income and u. S. Equity strategy. Jason, welcome. Good to talk to you. Thank you for having me. You have a note today that suggests were entering the acceleration phase of the rally, as you put it. Yeah, the headline is sensational. Really confirmation, basically the market consolidated over the last couple years that is typical of what you saw around the initial fed hikes within a cycle. Especially the ones that came off when the fed had made it very easy policy and were moving back. You saw that in 1983, 1994 and 2004. That was the basis of the call, the market would consolidate in a broad and violent range that could see a pullback from the 2100 area. Once that was behind us and you look back at the past periods, what you tend to see is the rally starts to get going and it starts off as a very choppy affair but then becomes more linear. That was the basis of our call moving into 2017, what we saw just over the past couple of weeks is confirmation of that. Not just a linear price action that you see in the s p 500, but from a Sector Performance perspective, as well. Where weve had over the past several months, particularly with the initial leg of the rally in the second half of last year, or certain sectors or styles rallying, but you basically other sectors getting hit he it same time. So what we have seen now is value in growth, both rallying together over the past couple of weeks. And for us, thats a very good sign we have. The top end of your technical range looks to me to be 2486. About 140 s ps from now. Is that correct . Thats correct. Yes. So we have roughly, you know, base case of 2450 target that we think is reasonable for 2017. That comes with one caveat. And if you look at latecycle rallies of the past, 1986 into 87, 1998 to 2000, you mention this is a macro call, how the economics shape up as the late cycle rally progresses and now even more important than ever, southe certain political aspects as well. Manage our risks with the trailing stop loss, try to be there as the rally develops. And just try and be there. Do we see technical rotations out of certain sectors into others . Like financials have obviously been one if not the Leadership Group of what we have seen, of late, does that morph into Something Else . Yes, so that really started in the summer of last year. And a large basis of our long financials call that we made in the summer was predicated on our rates view. The rates would start to move higher and as everyone knows, thats a highly core ratelated trade. Versus the s p, overlay a chart on top, its more or less the same thing. So that correlation is still there. I think it will stick around for a bit more. And as rates consolidated and in the only weeks of this year and as you saw over the last week or so, moved back toward the cheap end of the range, financials went with that. I think that will persist. Like you said, you saw that as rotation initially. But the thing we find exciting, for the first time in a while, you saw value, which is really the financials, there is some energy in there, and growth. Accelerate together over the past two weeks. So its less of a rotation trade that we saw over the last two weeks and more of a pure rally unfold in equities. How do you see doing both major assets. Fixed income bond, are they finally going into equities, on your Technical Work . We think the bear market extends in the fixed market this year. Our base case view is that the tenyear note could extend as farce 3 and oscillate around the 285 area, given the fed soik he will. Everyone looks at the tenyear note as the proxy. But you should see the Interest Rate volatility make its way in on the curve through the fiveyear note and eventually the two and threeyear notes. If you look at our rates call, we think rates will extend higher. Ten should start to get sticky at some point as we work away through the year and thats where you see the more traditional flattening on the treasury curve. Jason, appreciate the time very much. Well talk to you again soon. My pleasure. Jason looked like a young ben bernanke. With jpmorgan. So josh, you look at the technicals more than anybody on the show. Yeah. Does this sort of make sense to the way you look at things . Well, so a couple things. The first is rotations are positive, not negative. Specifically when youre in range of new highs or at new highs. In other words, what you dont want to see is a narrowing Leadership Group. You dont want to see fang part two. Youre not seeing that. And youre even seeing some days where staples and utilities absent any kind of rally in bonds, youre seeing those names have their day in the sun. This is exactly what you want when youre at these levels. And then the second thing that i think is worth pointing out, its not all perfect underneath the hood, scott. Were not a perfect conditions. You have in highs versus new lows starting to drop off a little bit. Or at least not confirming new price highs. Thats something that technicians are watching. So you know, i dont think were talking goldilocks here. Were just talking about an advance in the market, part of which is being built on the earnings reports were seeing. Part of which is being built on optimism surrounding things like repatriation and tax breaks. We dont know whats actually going to happen with any of that stuff. But at the end of the day, youre not selling 30 times earnings like you were in 1999. Youre selling at 16. 5, 17. 5, in that range. If you only get up a small percentage of what trumps promising by 2018, its not the most insane multiple. Its not the biggest bubble or whatever some of the superlatives have been saying. Whats the biggest risk, then . Thats out there to what we have done . Maybe take the trump side out of it. If you say it depends some characterize whats happening at the white house as turmoil. Others characterize it this is exactly what the president said he was going to do. Hes doing it. We havent discussed the fed. A lot of commentary is saying no, the market is ready for it, being done for the right reasons, the economy is strong enough. You have an 11 correction last year, because china did something with the yuan overnight. That only 20 of the people in the market expected. So nobody was talking about in advance came right back. Whats going to cause that next 11 whoosh . Very hard to see. So were talking about a lot of fundamentals. You know, you asked josh originally, what are the technicals in the market. Its very hard to examine the current technical picture and say this is going to be what is going to identify what a correction is going to be. Steven mentioned something before about people participating in the market. What generally tends to happen is when ranges expand as they currently are and the price begins to accelerate to the up side, what jason just talked about, most people have a tendency to kind of bet against that, which is the wrong move. If you think back gal assy. If you think about 2007, the price of oil went from 50 in crude oil to 147. You have a very combustible situation right now. You have computers that are following this momentum. If ranges are expanding and people are betting against it, getting short, that is going to create one hell of a move to the up side that could be parabolic. And thats how technically you know this thing ends. So speaking of sort of momentum and where the money has been going into, you know, some are questioning today whether the financial run is getting a little bit out of hand. I mean after the consolidation phase . Credit suite suisse took down wells fargo today. I think that actually made a lot of sense. What they did was, they had a great call. We sat on call of the day. How many people were scoffing when john was sitting there, buying that stock and everybody is like, ooh i dont want to get in front of that thing. Whats going on. 43, 44 share. Now the stock has pushed up to the up side, scott, and you continue to look. The interesting part of this, it still has a 56 price target. The idea is, hey, look, this is a guy who was right and hes taken some of the chips off the board and thinks theres other places that i think react to the up side. And if you look at the financials right now, and we all talk about pe all of the time. But with financials, youre talking about price to book whether to pe oftentimes. You look at citi right now, as much as i like bank of america, i own bank of america stock, i have citi calls. I think citi has the most up side. Citi is the last one trading below. Well below. Ive been buying citi and over the last week. Citi i think is my biggest lieu kady is still my biggest financial position. Lots of up side there. You need a positive view in terms of bonds. That will be the top tangible book. Well, you dont need it to get there, though. Tangible book of 28. And now its 25. A lot of up side there too. Youre talking to a group, that dont keep static positions. If you ask pete, your bank of america position three months, what was it. I believe its always going to be different. I know positions are going to be different. My Goldman Sachs is going to look different than at 250. Youre always going to be managing around where the current price is adding. Pairing back as the market extends. Bank of america is a stock ive liked for so long and have actually held it and had absolutely no changes. The changes that do happen there is buying call options because i get even more bullish about it and try to get those bumps along the way. Its one of those stocks like an apple i just want to hold on to. Now that its youre using options im trading around but its a stock hold. Were doing the same thing. Were saying, okay, we believe Goldman Sachs and financials, since november, thats the place to be. Okay, maybe we dont own hypothetically 100 shares. Now we own 500 shares. And then we take it back to 100 shares. Youre managing the position youre always saying long ill give two names i think high 80s right now. These are 100 stocks disguised as 8 oh 0 something. The first is jpmorgan, doesnt have as much up side percentagewise as Something Like a citi if thingsing it to go well for the space because the stock sells at a premium multiple and everyone already likes it. I think its going to claw its way up into that triple digit area. The other one is visa. Visa continues to be under accumulation by berkshire. They have even trimmed some master card to buy more visa. This is a name at 88, 86, 87 in that range. I t