Day Two, Part Two at Schwab Impact in San Francisco

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This is Bloomberg Business Week with Carol Messer and Tim Stenovek on Bloomberg Radio.

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We are on YouTube Bloomberg Originals and of course on Bloomberg Radio. We're live in San Francisco, Schwab Impact twenty twenty four, Carol mass or Tim Stenovik. We are surrounded by around I don't know, forty five hundred attendees, so a lot of folks registered investment advisors, all of the support network that works with them, So a lot of conversations about the market environment, the services needed, what's going

It is.

Hey, I'm gonna just do some breaking new You have a headline because I have some breaking news here a redhead coming from our own Mark Germ and Apple is racing to develop a more conversational version of its Serrie digital assistant, aiming to catch up with Open Eyes, Chat, GPT and other voice services. According to people with knowledge of the matter, Apple aiming to launch a Siri up in twenty twenty six, with more in house AI.

I'm a little sensitive having just done a big panel here with some great panelists up on stage in one of the keynotes, and it was.

All about AI. But I do feel like that is.

Such continues to be a big part of the conversation even here at Schwab twenty twenty four. All right, so let's get to it, because we want to start kicking off this whole hour talking global equities, US equities, fixed income. We want to start with US equities. We've got it for a terrific duo to do that. Lyz Anne Saunders, Managing Director, chief Investment Strategist at Charles Schwab Here at Schwab Impact along with Kevin Gordon, Director Senior Investment Strategies

US welcome impack again, thanks for coming.

I want to ask you kind of conversations you guys are having about the markets between yourselves about what's going on.

Is there a debate?

Well, no, it's just such a unique period of uncertainty because of the different directions policy can go. And one way we've been talking about it is we're all always

Might be truth social this time.

Maybe maybe I don't know, he's pretty click tight with Elon, it might be Twitter.

So then how do you think about what can you kind of hang your hat on, Kevin, come on in on the conversation.

Well, I think you know, one of the hard parts about going back to twenty eighteen twenty nineteen is, you know, as humans, with's natural to go back to a period of time and say, yeah, you can bring out that playbook dusted off, especially from.

A tariff perspective.

What's harder this time is that we're in a totally different macroeconomic environment where you're still dealing with ripple effects from the pandemic, You're still dealing with a bond market that is a little bit more unruly this time than

Tell little that the.

FED comes into the mix, because the combination of immigration policies and tariff policies, it's hard to argue against them being inflationary. So then you have what's the FED reaction function? If it's policy driven inflation.

I I based on the first Trump administration, I believe, and I'm not getting political here, I'm just stating sort of a theory. The President elect loves to look at the S and P. Five hundred and talk about the S and P five hundred. That's like his report card for how he's doing. If there is an adverse market reaction to one of his policies, I think that would be enough for him changes too.

I think not just the S and P five hundred. I think markets could be the decider, not just the equity side of things, but the bond markets.

The bond vigilances.

Yeah.

I think the other thing to keep in mind is it's not as if because you know, we know that President elect Trump is very focused on markets, that doesn't mean that you don't get downturns and you don't get volatility. I mean, if you just use twenty seventeen as a case study, if I came from the future and we were in twenty seventeen and told you we were going to get this massive fiscal stimulus in the form of tax cuts at the corporate and the individual level, you'd

Sociating up the hits to manufacturing.

If you look at the ISM Manufacturing index and put a vertical line at the start of the trade war in twenty eighteen, it went straight down. Now we're at lows in manufacturing. So I don't know that we have a potential implosion from these lows, but it could be something that prevents what was the hope for pickback up and manufacturing.

I guess I keep thinking about you know, there's the fundamental stories of companies and profits, right that really matters. But then you've got a layer on top of that the politics that's going to play out, and that's going to kind of kick investors around.

I mean, how are you guys squaring when.

You're going to have a client call up and say, listen, fundamentally, earnings growth is happening, but you know.

He keep it if you're proxying or earning's growth at the S and P level, that's obviously biased up the cap spectrum. You've got forty three percent of the Wrestle two thousand or nonprofitable companies, You've got a similar share that zombie companies.

So I think there's a there's a much.

Wider spread, especially when looking on the cap spectrum.

Okay, but it.

Often gets masked by virtue.

There's so much focus on the large cap indexes.

Well, funny that you say that, because I feel like the last two weeks everybody keeps coming on and said, guess what, it's small caps turn again?

So is it not monolithically Okay, again, when you look at an index as large as a Russell two thousand to sort of just blanketly say yeah, small caps look good, I think that there is there are interesting zombie companies that you said, Yeah, those are not those with not sufficient cash flows to pay even interest on their debts. So I think you know, our our thesis around factors has been, yeah, there's opportunities down the cap spectrum, but you don't want to sacrifice quality.

Yeah.

And to that point about quality, I mean, if you just used positive earnings on a trailing twelve month basis, so earnings of EPs above zero as your your you know, only criterion for the Russell two thousand, and you took all of those companies, you know, it's about eight hundred nine hundred change as a group. On average, they're up by almost forty five percent over the past years. So

The growth environment.

And by the way, all of these pops that you've had in the wrest of two thousand from time to time over the past couple of years, every time they get a little bit of momentum and everyone thinks it's changing for them, it hasn't been consistent with the turned in forward earnings growth and expectations. So until I think you see that actual move where conviction starts to build. From an earning standpoint, it's tough to get bullish on

Than the Nasdaq.

If you look at the top ten best performers this year in the Nasdaq, none of them are large cap stocks. They're all small yeah to me a none of them are in the MAGS seven. So I think we get in this sort of tunnel of the megacap tech and tech related names, and there's less analysis happening on everything else.

On an index level is an Are you concerned about the power of those mega cap tech companies? It's a question I could have asked five years ago, it just wouldn't have included in Vidia.

But I think the problem of concentration in the perceived need to be in those names in order to do well, that's an institutional problem, that's not an individual investor problem. If you're benchmarked against a cap weighted index, you are at the mercy of what those largest names their contribution to the index. But for individual investors, they're not benchmarked against the S and P five they don't have to take that same kind of concentration risk. And it's another

The S and P.

What do you think are the biggest risks right now? Do we have clarity on it for twenty twenty five.

I mean, from a policy standpoint, that's probably the easy one to throw out there. But I think just the lack of clarity.

Policy meaning government will also sand policy.

More Washington policy, but I think they're tied together now. Yeah, because I could see a scenario where if you do get more restrictive labor force growth coming from the outside, but also if there is a chunk of the labor force physically removed from the country, that's probably an inflationary problem.

And I've also yet to I love.

That you guys are going there because I don't think people realize. We certainly hear it from CEOs that they are so worried that they're not going to have access to a labor force and what that means their ability to do things.

And it's an increase in.

The cost of labor costs, right, and it's a decrease in labor supply.

There's the demand side of that as well.

I can shuck in a demansion.

I can't get a CEO to seriously explain that that will affect them at this point in the last two weeks, even if they don't employ people who didn't come to this country illegally. Right.

How how often do you talk to smaller company CEOs.

I recently, did you actually talk to me?

I talked to you in the spaces where migrant work is a large.

Construction in hospitality, construction, restaurants.

Almost twenty percent of the construction sector is undocumented.

I have two brothers who are contractors. They're like, they can't find work.

But I think the important point is that it's not just you could not You could run a company that doesn't employ any undocumented workers, You're still going to see labor costs rise if eleven million people are taken out of this country who are doing work.

That's right.

Yeah, it's a demand shock, it's a supply shock, and I think we sort of lose sight of the fact on the demand side, especially because the supply side is looked at maybe sometimes more of an issue in terms of the makeup of a particular industry or the makeup of the labor force. But if you're taking demand out of the country, but you're also not being able to fill the supply hole that you're leaving, that's sort of a stagflationary shock.

So what does it do to the market if that policy ends up coming to fruition.

Well, I mean, I think it's it depends if it's phased over time.

Yeah, and you know, we don't know the logistics around whether we even possibly could get to the high end of what the campaign pledges.

The reality of that, right, But Peterson.

Institute on if you guys saw it, just did a study on okay, let's take it to the extreme, both on the immigration side of things, on the tariff side of things, and they actually added an interesting little wrinkle into the mix. If there continues to be a threatening of FED independence, all three of those collectively are unquestionably higher inflation, lower growth.

Kind of backdrop.

Now we you know, the real answer maybe somewhere in the middle of nothing gets done and the extremes both on immigration and teriffs.

But it's a wait and see.

Mode, right.

Yeah.

Even on the tariff front, I've yet to see a model, and all the research that we read, I've yet to see them out of that doesn't suggest it's a stagflationary shock where over time you get this boost to inflation, but you also get a hit to growth.

I want to go back to the market as kind of a clearing house for all of the information, because they do feel like the market smacks down policies or initiatives very quickly. I feel like much more than it did. I don't know ten years ago. Maybe it's because of social media and stuff just piling through. Do you assume that will continue and that will send messages to Washington and maybe so that things aren't so severe.

It will send messages. How much they're heated, that we don't know.

But especially when I think about the FED and the independence of the FED, like that to me would be something that would bring well to me.

The most fascinating part of Palace press conference at the most recent FOMAC meeting was the definitive no. As soon as that happened, I thought, that's the headline, and that should be the headline. So I don't worry about that piece of it all that much. But all of this gets to what we are One of our thesis is that this sector dispersion, these rapid fire rotations that are

Hey, we're speaking with Lizene Saunders, Managing Director, chief investment strategist at Charles Schwab on site at Schwap Impact, along with Kevin Gordon, Director, Senior investment Strategist at Charles Schwap. Kevin, I believe a year ago we were sitting here it was October of last year at Philadelphia s and P five hundred is up forty percent since our conversation with a What a thunk?

And what was interesting too?

I remember talking to you guys about the unique nature of this bull market, and at that point it had been so unique where even for something like small caps in the rustle of two thousand, it was breaking new bear market lows and that has just never happened before.

Financials were strong heading into the election.

Industrials were strong heading into the election, so it's not as if you got this massive shift in the leadership profile of the market. I think that's been a relatively healthful all year.

There's been massive churn under the surface of these cap weighted indexes. So the Nasdaq had a thirteen percent draw down in that Midsummer period of time, but the average member draw down for the NASDAK is forty seven percent year to date. So sometimes when people talk about the market. It sort of begs, well, what piece of the market are you talking about? These half weighted into right dangerous?

Actually, and we've been calling for a good chunk of ear. We're calling it the Michael Caine Duck market. You know, just calm on the surface, the pattern like the tickens underneath. That's that's been how we've been describing it.

So does though, all right, so what's the environment for twenty twenty five?

Can you make a call?

Well, we never make a call, okay, So I mean I keep worrying what are we missing? We haven't had a recession, we have had pockets of recessions, we've.

Had the role through.

How are we done with it?

Then?

You know, my hope was that we were going to get to a point where if we started to see weakness show up more acutely in the services sector, in large part, probably driven by any further weakness in the labor market, that, especially if the FED was an easing mode, you might be in a position to see stabilization, if not recovery in those areas that already taken their hits, like.

Manufacturing, like housing.

I don't want to say that's off the table now, but it's a little bit more difficult post election to come up with the case for stabilization and improvement in those areas, especially if the FED doesn't stay in easing mode. We saw this and tempted some recovery in housing, and then it faltered again courtesy of the move up in long yields.

So I think the other thing too, from evaluation in a sentiment perspective, is that you're getting pretty stretched across most of the metrics that we track, and it's not just in the traditional attitudinal how do you feel about the market? You know, aaii bulbear indicator. It's now filtering over into what are investors actually doing with their money. We've seen equity ETF inflows completely spike akin to levels that you saw a.

Market funds too.

Absolutely, yeah, So I think that becomes a little bit more of a risk in the event there's a negative catalyst. We always say sentiment for off. The sentiment and of itself is not a reason that the market just goes lower. It has to be tipped in that direction. It's just the sentiment backdrop that makes things more proper.

I also don't think we should look at the money and money markets as some giant pool of imminent funds dying to go into the equity market. I think that's a lot of that is pretty sticky money.

That's exactly.

We get one trillion, two trillion, we'll go into the avenue market. Well, last we just talked about US equities. It's time to go global, which for many years has lagged the US. Let's just go to the numbers here, because over the last decade, the S and P five hundred has on average returned thirteen zero point one five percent.

To be here. I'm doing fantastic. Thanks, thanks for being here.

What's top of mind for you? Especially against a backdrop where, gosh, every year it's like this is not international year.

Yeah, no, you're not alone.

People.

You have time to buy internationally well.

And it's for a couple of good reasons too, right, I mean, the obsession with AI and stocks like Nvidia have just really been focused on the US market, and tech has been the best performer in the US, and tech is the biggest sector in the US and it's not elsewhere. The other thing is that those other economies have been lagging US economic and earnings growth.

That could be different next year though.

We're actually already seeing a shift towards financials leading markets overseas. That could be the next step for the US as well, big break cup beneficiary. In addition, we're seeing global economic growth finally begin to converge. US and China expected to slow next year, but Europe, Japan, Canada, Australia all expected to pick up economic momentum next year, along with earnings growth. As a matter of fact, here in the third quarter,

We may be starting to see a turn there.

But what are you seeing in terms of flows, because it does feel like investors are still holding back and just kind of all in on the US trade.

They are in post election. I think a lot of investors believe, hey, we just had an election. I probably need to make changes in my portfolio. But they can be detrimental. Think back to twenty seventeen, right, So, coming out of the twenty sixteen election, America First policies were thought to really help US small caps and really hurt emerging markets. The exact opposite occurred to emerging markets were the best performers in twenty seventeen, small cap US the worst.

Of all that, but the flows can be misleading.

What happened last year, because we were thinking about our conversations that we had with you and some of the other members of the SHWAP team.

You were bullish on internationals. What happened last.

Year that you think okay was a surprise or just why it didn't pan out, or you misread.

The tea leaves well a few different things.

One, I think the technology thing has just run longer and harder than I thought of what I thought we'd see a broader trade in particular exactly, yeah, and so we didn't see that broadening. I think we're starting to see some of that now, but we just didn't. The other thing was we did see a stumble in the manufacturing recovery. So I was basing this on a what I call it a cardboard box recovery, that demand for making things and shipping things would would pick back up again.

Where do tariffs come into this equation? Boy, this is a tough one. If you're thinking internationally, you're saying, wait a second, Okay, we get this America First policy coming once again, starting in you know, January twentieth. There's a lot of Republicans in Congress right now who look like they're ready to help the president elect to push through

Yeah, and the numbers are scary.

Sixty percent on China, twenty percent across the board, two hundred percent on John Deer tractors coming from Mexico. If you add them all up and I have, and you wait them by their import percentages, you get a twenty six percent an import tariff in the US on average. That's up from two point six right now. That's like smooth Hally level great Depression era level tariffs. But I think the reality is going to be quite different from that.

Within two days.

Chinese delegates where they are working out a way to get rid of those, they seem to make some technical progress over the last couple of weeks, maybe scrapping those tariffs in favor of import quotas, which is a far less disruptive way of doing things. So I think that's probably maybe a way we can look at what the future path of tariffs might look like.

Jeff, how do you think about the pushback in globalization? We have a lot of CEO say, listen, it's not going away. Yes, supply chains are changing or bringing do more nor shoring or on shoring. But I'm just curious how what's going on in globalization wars around the globe, how that is impacting the international investment play.

So it seems like there are multiple supply chains now instead of just one. Right, So you don't just assemble your product in the cheapest labor market, You're going to have to multiple supply chains.

That seems to be what's happened.

Is that good for companies, costs their earnings there, what their balance sheets look like, for their investment potential.

But it's less efficient, so it should be more costly. At the same time, we've been able to miniaturize manufacturing globally in a way that's made it not as inefficient to have multiple supply chains as it used to be. And with perhaps AI robotics, a number of these potential innovations, we could maybe scale that even further to where it's less of a dragon corporate profit.

Interesting. Okay, So how do you see this happening outside of the US versus inside the US? If we're if we're thinking about the companies that are doing this type of innovation, who are the beneficiaries here?

Well, I mean, you know, I think it's those that are really looking to scale up their productivity per worker. So you're looking at healthcare, You're looking at financial services. Those are two areas very much more representative outside the US than inside the US. So the potential for productivity gains I think are skewed to those businesses. Financials are the biggest sector outside the US, and there's a whole lot that can be done.

With AI there.

All Right, we know you don't do individual stocks, but when you look around the world, then I do feel like I just want to talk some regions. I think about Japan, and I do feel like the momentum this year has definitely changed on Japan. Give us kind of your thoughts about what we see in twenty twenty five.

So I think you see radhikes from the Bank of Japan, and so I think that begins to bring some strength back to the end and we start to see some capital come back to.

Japan.

We've got a number of businesses really ramping up their share buybacks and their dividends, and so the return to shareholders seems to be picking up. And so if we get a manufacturing recovery, that's what Japan does. And so if we get that global manufacturer recovery, I think that does disproportionately benefit SPAN.

What about Europe in terms of wars and stuff, So what's the kind of smart I hate to put everything in a bucket because I don't think that's fair. But what are you thinking about for twenty twenty five in terms of where are the pockets of opportunities in particular for investors and where maybe not so much.

You know, One of the things I think Europe might look to do is buy US weapons to fund the war in Ukraine, to narrow the trade deficit with the US, avoid across the board tower and actually achieved maybe their objectives in keeping Russia at bay. One of the things I think it's interesting is European automakers. They could be

Maybe for the reverse is.

Your what is the region of the world where you're most optimistic.

I think it probably is Europe. One thing, because price arnings ratios are pretty attractive. They're below their ten year average.

Such a great good deals valuation.

Yeah, I mean, take a look at difference between Coke and Nestley. Nestley trading at a four pe discount to Coca Cola. They have literally the same customers and operations around the world, which you're paying a big premium for Coke because the investor base is different. So I think that comes back. I think earnings growth does pick up next year. We're already starting to see signs of that. And then five rate cuts by the ECB by June

And I'm glad you went there because I do think a lot about the differences in central bank policy right based on their specific outlooks and what that gap means in terms of opportunities for investors. And you're saying that spread between what Europe does in terms of monetary policy versus the US could provide opportunity.

It's a drag on their currency versus the dollar. Obviously the dollar we go up, but maybe that's a few percentage points. Each point of pe expansion in Europe from fourteen is a seven percent gain on prices, So you get one or two of those, and that's going to outweigh anything you're going to get in terms of currency drag.

I want to go back to Carol's question about the war, because if you are most optimistic about Europe, how do you factor that into how you're thinking about the region, Because there is a chance that with the incoming Trump administration and the rhetoric around how they want to support Ukraine or they don't want to support Ukraine, that there could be a risk of that war ending in Ukraine losing.

There certainly is a lot of uncertainty, of course, the next year in terms of where they draw borders into sometimes cease fire agreement, and in anticipation of that, both sides trying to you know, gather territory and try and redraw those lines. Ukraine is funded through twenty twenty five. Most governments have already committed those resources. There's a lot of weapons on the way, So the whole idea of

Jeff, you know, we've all been doing this a long time and seen a lot of different market cycles, and I'm just curious how you're thinking about, you know, the investment environment for the international play or global play today versus kind of where it was a few years ago. Is it more difficult is it more transparency.

Give me some thoughts on that. You've seen a lot of market cycles.

Yeah, it's so this one is so much tied to sectors. I think.

So the US is basically a tech ETF and nothing wrong.

With that, it's just recognizing it.

But there are other countries that align with a particular sector as well. You know, Germany is an AUTOETF, Australia is a metals and mining ETF, a Canada's a financials ETF. So if you think about sector diversification, you may love the US, but honestly, it's a tech ETF. So if you want some sector diversification, move away from just what has become really kind of a really concentrated AI play.

In the past thirty seconds on China.

China is very likely to slow next year.

They're not allocating the resources to the consumer and to the property market. It's still a strategic focus on self sufficiency and semiconductors and so many other things.

So slower growth but not really rebounding.

What type off would it be?

Yeah, what.

At this point, maybe an infrastructure ETF.

Yeah, do you still feel like we're lacking transparency? China just got about twenty seconds.

I think it's getting better.

I don't think they have the same incentives to create the same type of economic data that we create in the West.

Yeah, all right, great stuff, Thank you so much. Around the world, we went well done.

Well done.

Jeffrey Kleinapp, managing director, a chief global investment strategist at Charles Schwab. Right here at Schwab impact bond investors searching for some direction today. This is you know, there's so many factors. You've got Russia's escalation of warfare and Ukraine. You've got the Murphy Murky outlook, excuse me for what the Fed's going to do in their interest rate cut policy going forward. And then there's the leadership of the

Yeah, they're also traders thinking about, okay, what's the FED going to do for the remainder of the year and next year. Well, we got two great voices who focus on fixed income strategy at Schwab with us now Kathy Jones, Managing director, fixed income strategist and Colin Martin, director of Fixed income Strategist. Good to have you both with us.

How are you good?

Little tired?

Been a big busy week, but nothing going on in the treasury trade this year kind of thing.

Well, I want do you want to start with you, Kathy, and how you're thinking about what the FED is going to do and if that changed it all given the election results a couple of weeks ago.

Yeah, I think the case for a pause is growing a bit stronger at this stage of the game. So you know, we've had stronger than expected economic data now for a while, particularly like the retail sales telling us the consumers doing well, and so then the question is does a FED.

Really need to cut rate to help out?

We have very easy financial conditions as the stock market keeps going higher and credit spreads get tighter and so you know, and then we have all the uncertainty about what fiscal policy will be going forward, so we don't know what tariffs will or won't be imposed, We don't know what tax policy will be, how it will affect both the economic.

Growth big like if list or what might happen.

And then immigration reformist, I particularly think is one of the most important components for inflation and growth going forward, because again we don't know what the actual policy will be, but if you kind of take things at face value, that could reduce the workforce by seven or eight percent. That's a huge, huge issue.

So Colin, you guys, you guys, you and Kathy have to figure out though fixed income strategy and what you're thinking about. Right people look to you to kind of get an idea of what's to come maybe in twenty twenty five. So what do you feel comfortable kind of saying right here on this Thursday after NU about that.

Yeah, Well, we've kind of revised our guidance a little bit lately because of so many of the uncertainties that Kathy just highlighted, where there's this wide range of outcomes because of the proposed policies, what gets implemented, when they get implemented, and what that impact is. So given that, and given the I think the risk is to higher yields than lower yields if we do get some sort

But just be prepared that if we see yields in.

Shop when we talk about our upside, maybe maybe we go to five percent on the ten year treasure yield.

But maybe likely possibly possibly yes, okay, to all three.

Yeah.

So you know what we do is you try to model out we deconstruct the tenure yield. Then we try to model out, well, if we change this component, what happens in that component?

Or if you just look at the spread.

There's a lot of components to play around with, right, yeah, exactly, and or you just look at the spread between the Fed funds rate and tenure yields.

Historically it can be a you know, one hundred to one hundred and fifty base point. So if the FED can't go below four percent, you could easily get to five percent plus just based on history. But we do think the FED will get below four percent by some amount.

But again, a lot of ifs in.

There, and so we're just trying to be as cautious as we can right now without giving up too much income.

Hey, Colin, play that scenario for us, if we do hit five percent on the ten year, what that looks like, What the implications of that are for the economy? And I mean I think a lot about different areas of the market that have expected lower interest rates. If we don't get those, what happens.

So I think what it looks like.

I think it looks attractive, and I think if we get there, I think that can draw in a lot of demand. I think whether it's domestically or internationally, I think there'd be a lot of demand, especially that we're seeing these interest rate differentials. We're seeing other central banks expected to cut more than the US. I think that's number one to what happens to the economy and to

They refined, right, they refined.

So if you look at I'll use high yield bonds for example.

The average which is having a moment.

They're having a moment. Spreads are at you know, the fifteen year lows. The average coupon rate. Now that's there can be high or lower. The average coupon rate of that index's right where it was in twenty nineteen. It's risen a little bit over the past year or so. But because companies just refinance. So if rates keep rising from here, although the trend is the opposite right now, but if they were to move up a little bit,

So the opportunity.

So when you know someone comes to you and says, so, where are the best opportunities right now? If I have to, I want to put some money in the fixed income area, Kathy, what do you say.

Well, again, if your time horizon is five years plus and you're willing to kind of ride out the ups and downs, you're looking at five to five and a half percent yields without taking much credit risks.

So I'll see their investment great corporate bond at treasuries and mbfs.

If just look at the egg, your total return is going to be pretty attractive and your income stream is going to be important. So keep in mind, you know, we had a rocky period in twenty twenty two because there was no coupon income. We're coming off zero now we're starting with coupons, you know, close to five percent.

That keeps your return much more solid going forward.

So we like higher credit quality in general, but definitely lots of places to lock in that yield.

How oh go ahead?

Oh you got.

I wanted to talk a little more macro and think about policies come January, because Kathy, you mentioned a lot at the top when it comes to labor market, when it comes to tariffs. Do you believe these policies are actually likely to be implemented given that they actually could have severe economic consequences.

I have no idea, and I will be honest with you, because we know that one thing that President elect Trump has has has been in favor of it forever's tariffs. So we do believe pretty strongly there'll be some sort of tariffs. Now, will they be modified, Will will industry is affected by the tariffs be subsidized as they were in his previous administration with the farmers. We don't know the details of that, but tariffs seem very likely after that.

Will really happen? Just got about thirty seconds.

Is there a moment in time that you're thinking, Okay, maybe six months from now, eight months from now will much more clarity about what this new administration can get done and we can be more definitive in terms of our thinking about going forward. Is there a timeframe that you're thinking about for next year?

Yeah, I think when they actually have to debate the Tax Cut Act that was previously that will be expiring, then we should get a better idea of what Congress is willing to do.

Final thought from you, Yeah, no, I would agree. I think I think yes, we'll have more clarity just because more time will have passed, but I think we're going to have a lot of uncertainty over the next year, two years, four years. So yes, more clarity, but not all the answers that we're going to need.

Keeping us on our toes again.

Thank you both so much, so appreciate what we could kind of finish up with the Fixed in Coventry. It's been such an important one, no doubt about it, and something we've been following so closely. Kathy Jones, Managing director of Fix Comes Strategist, Colin Martin, Director of Fiction in Comes Strategist.

Right here at Schwab Impact