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This is a joy. She is a Columbia university in for years with golden sas Abbie Joseph Cohen joins us now in an important time for the nation. Abby, let me go out to sixty thousand feet with this administration, with the ying and yang almost of this old administration to new and all, do we risk giving up American productivity? For whatever reason? Are we close to where we upset the long term glow in a f of America?
Tom, I know that you've always had this focus on productivity, and I'm glad that you do because, as you and I both know, long term economic growth and long term wealth creation. And I'm talking about national wealth, personal wealth rather than stock market erratic wealth is very much related to productivity. And I do think that some decisions that have been made and continue to be made right now will be damaging the nation's long term productivity growth. I'll
give you a few examples. First of all, even during prior administrations, we were seeing that our national investment in science and technology as a percentage of GDP had gone down, and it has gone down even further during the last few months. Cancelation just yesterday for example, or excuse me, postponement rather of all NIH grants announced yesterday is an indication of loss of productivity future productivity in the bio
BioResearch area. We've also seen enormous cutbacks in grants from the National Science Foundation, NASA and so on, and these are the things that really gave us a leg up in terms of our technology, especially with regard to things like computer science and a number of other categories that are going to be so critical for the future.
Happy we're going to hear from the Federal Reserve Bank today, and as you know, so much cross currents out there and probably some political pressures that this is a this FED has not had to deal with for a very very long time. What do you expect to hear today?
I think, like everyone else, I will be on tender hooks, but I think the consensus probably has it right that the FED for the time being would like to hold tight on interest rate policy. Keep in mind that even the GDP report this morning had those cross currents in it.
The top line might have looked good, but things like real final sales are showing signs of deceleration, consumer spending decelerating, and very importantly, back to Tom's question about productivity, we see that business investment capex, for example, is also slowing. And these are things that we need to be watching carefully.
But let's remember that the FED is under pressure not just on interest rate policy, but on some other things, including its very important supervisory and regulatory function within financial services. And then, of course there are the questions about the building. I would say that I worked in two of those buildings and they were in desperate need of renovation, experate renovation.
So again, so abby. When you think about, you know, these markets here today and some of the trade policies that maybe the market's trying to discount here, the political issues, the geopolitical issues for topics around the world. Are you surprised that the equity market snapped back as well as it did, and we're talking about new all time highs on a daily basis.
Well, As you point out, the equity market did snap back especially after those announcements in April, and I think the key reason for it has been that economic data has been okay. As I mentioned before, there are now some signs of deceleration, but certainly procession and corporate profits have been quite robust. Particularly it's in sectors that have
been favored. I think that the real question will be in the second half of this year once we see what happens as companies are now beginning to adjust for the tariff policies they see, for example, the announcements just over the last yeays Procter and Gamble and Hershey and of course some of these pharmacy companies.
Abby Joseph Cohen with US of Columbia and of course decades of Goldman Sex. Abby, Are you a bull in this oddest of markets where people you and I know in respect have ten holdings that are forty even fifty percent of their portfolio. Is this a legitimate bull market that you can believe in?
This is a legitimate bull market. The question is how much further can it go? The concentration that we've seen in a small number of extremely well performing shares, and of course the valuation valuations are just not all that appealing. If we look at the S and P five hundred overall, it is, you know, sort of at record deciles visa pe price to sales, price to book, and so on. Doesn't mean that there are some value opportunities, but I
think that investors really need to be very careful. And one of the things that I always go back to is that when the market is undervalued, when the market is too cheap and there are disappointments perhaps on economics or geopolitics, the market has shock absorbers. But when things are already priced for perfection, then you really need to
be careful because that's when the volatility picks up. And we have seen, for example, that when there are those periods in which it's not clear what economic policy will be or what's happening in the rest of the world, we do see that volatility picking up, and volatility works in both directions, not just up but also down.
Abby what have you seen so far and what do you expect to see in the second quarter earnings that we're dealing with at the moment.
The second quarter earnings have actually been quite good, and that I'm sure is a relief to many people. My focus, however, has on guidance. What are these companies telling us about the future. And we are hearing more and more companies saying they are concerned about tariffs. They've not been forced, if you will, to focus in detail on it, because nobody really knows what the tariff structure is going to be.
There's been a sigh of relief that the tariff of focus will not be as high as it might have been in April. But where we are right now fifteen to eighteen percent on average expectation for tariff rates, that's extremely high, that smooth Hawley level. And the comments that have been made by some saying, oh, look how much money we're collecting from tariffs, that's great, it's going to help us on the deficit. Well, I would say, hold on a second. Those tariffs are being collected in large
part from American businesses and American consumers. It's a sales tax, and it's something that is not helpful for economic growth. Thus far, what we have seen in corporate reports is that companies willing to absorb to this point, but as they have a better sense of what the tarips will really be, they may adjust their policies.
Having I got twenty seconds it's one hundred degrees out Ken olvetch can do it one more year for the Washington Capitals.
I certainly hope. So I've got my jersey ready.
Very good Abby, and thank you so much. With Columbia University sitting right behind the bench in Washington Capitals opening that it'll be in October. I believe first week of October is the tradition.
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am. E's durn Listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
Studying me, I an't who was silber member with this now our RBC Capital Markets into the great fundamental analysis the mathematics of Abby Joseph Cohen at Columbia University when you were coming up and I was the same way. How did you study Abby Joseph Cohen? She was asconsdin gold and Sacks, hugely active within the CFA Institute. How did you study the applied mathematics of Abby Joseph Cohen?
Well, first I was at Goldman and you know, Abby Joseph Cohen was the star. So it's very cool.
Did you ever speak to her?
I was too afraid that was like a lowly associate in the Derivas research department. I just you know, I looked from afar. But you know one thing I appreciated and that became part of the background is like a lot of the white paper analysis is kind of the fundamentals. It creates the background for a lot of our analysis going forward, looking at back test, looking at systematic factors, and that's our framework now at rbcun Derivetives.
We look at the VIX here. Tom makes us look at the VIXI beats us over the head every day.
You looking at the vix.
What it's here at below sixteen? It just feels like it should be higher than that. I don't know, it's crazy out there, but we have a vix. It seems pretty benign here.
How do you think about that's?
It looks completely benign. You know, I've been joking that I've got to bring back my paddling duck market analogy because I think it still suits the market here.
Look.
The one fact I would add though, is that realize volatilely so thirty day SMP realize volatility is eight. So if you look at that volatility risk premium, it's actually fairly fat. But you know, our joke on the team has been it's a good time to rent Gamma, it's a good time to Essentially, it just means it's a good time to own a little bit of the idea that volatility could increase from here, because just given what you guys just said, think about the heavy weights reporting today,
think about what Al could say today. And yet we're implying an S and P straddle that suggests nothing's going to happen today.
Within the idea of betting on more volatility, betting on more acceleration, if you will, in price change. Is there a bet in this summer? Is there a bet on Wall Street? Are people exposed?
So there is not a bet? Now there is a bet. We've talked about this before Tom longer term, so more in those October through December buckets, you're starting to see more hedging activity. But my one fun fact is when you look at August over the last decade, VIX typically rises about eighteen percent. August is a volatilely potthole month.
It's a month where folks go one vacation. Investors maybe not as much at their desk, you get those liquidity vacuums, and maybe you get an August fifth where VIC spikes to you know, the sixties that's happened before. We're not prepared for that where we're still in July and we're happy as a clam.
So, I mean, I've been in this market game since eighty six.
October.
I don't like those periods. I mean I was on the stock exchange floor in eighty seven.
Not good.
How do you think about that? Do you see clients positioning for volatility and the follow when people maybe.
Do get back to their desks.
Yeah, I think essentially clients are planning on positioning, but they have not yet because it's a little too early and the name of the game and options is not to have to burn premium. But what I'll tell you is there's been kind of too divergent narratives. Right, So the retail population has all has been about by the dip. It has worked for them, but there's always been this institutional angst. It really hasn't gone away. It's gone away,
it has not. I think it's just being very tactical about one to deploy it.
And this is so critical. If they are behind if their angst has not gone away. What's the emotion of institutions when they're oops, it's August or behind?
Yeah?
Are they like retail where they're like, let's get on board, hold your nose, let's buy apple or whatever.
You know.
The one thing we've seen in financial history since COVID is it's not just a left tail risk. There's also this right tail risk. And it's very real, Like you can no longer think of it as something that occasionally happens, like you've you've now gotten a May twenty twenty one. These meme crazes, right, these are very real risks that you,
as a portfolio manager are just as exposed to. If your benchmark runs away from you, You're you're hedging on the upside as much as you're hedding on the downside.
Tom Amy was silveran with US RBC Capital Markt's thrilled to have her with US. Ebby Joseph Cohen joining us in about twenty minute here ready green on the screen the vics fifteen six.
So you mentioned meme stocks and Amy. Whenever I see that, and we see it from time to time, that to me is a red flag that all right, this market's getting a little silly here, and how do you pros think about it? Because just from a lay person, when I see that stuff, I get nervous.
I'd say two things. The first is, and I'll bring this back to game stop. So the reason game stop became an issue for the broader market was at one point was actually forty percent of all of the XRT. So the retail etf it started to become a benchmark risk for folks who didn't want to have anything to do with it. I'd have investors tell me I don't care, this is a side show. But then they're starting to get that concentration risk in the benchmark. We're not there yet.
It's been a little bit of you know, a storm and a tea kettle. But if that starts to spread, you better believe again that right tail risk is going to spread and people have to catch it.
I look at the math, the math, and let's go to the cross moments. Folks, we're not going to get into it. It's the summer. My head's hurting. But if you look at the variant study, the cortosis study, the rest of it is the math working right now.
For pros, you know, I think one thing that all us folks who work in the rivers have to do, and you know this is a slugs You got to date these spreadsheets. Maybe AI can help, but that the rise of zero data xpre trading really just changes how we have to think about things. You know, we used to have the standard monitor that's one month, three months, six months, twelve month, that's your standard substructure. It kind of has to be right because everything's happening in such
shorter duration. You know, I've kind of called it this theme of duration shrinkage, meaning we're getting just as much activity to.
LEB is that then on theta the X axis is the advantage because of the focus short term to make your bets out longer term is now seen to LEB took small, longer term bets.
Yeah, so you can get. What I will say is the reason I think zero data XPRA is a healing is because you get less of that problem with fatal, a less of that carry problem. But what it has also done is people are paying less attention I think to the longer tenors which have been telling us something this entire time. So I think it has sliced bow ways and what you know what you want to deploy. I think it really depends on your risk framework.
We're going to hear from a couple of big stocks after the closed day, Microsoft and Meta Slash Facebook, and that kind of goes to the concern that some people have about concentration risk in this market? How has that expressed AAR is your market? The derivatives market? Is that concern about concentration risk? Is that there? And are people trying to hedge it? Somehow?
It's one hundred percent there? And so one thing we like to look at is to think about, you know, one of our other themes is just how the meat is made really matters. You know, what's in that sausage and so you get I'll just give an example. I'll give a component like XLC. So the SMP Communications ETF. You go into your Bloomberg and you go to MMB
and what do you find there? Two to three stocks max right, And so some of the opportunities that we think are interesting is to essentially own the options of the ETFs where it's essentially the same meat, but it's not pricing as.
If it is.
Certainly your famous line here how the meat is made is a general statement you could go in cash market, buy the ETF buy whatever by Nvidia, or you can buy the option, which is basically four to one leverage. You're using one quarter the cash as a simplistic statement. Or you could buy futures ages ago before you were born, or it would be ten to one. You'd put up one tenth the money. Is there an implied leverage there based on how the meat is being made today?
Sure?
And so one thing I'll say that's interesting about Nvidia, And this is why I think when people ask me are we at peak froth? I say no, because if we were, we'd start to see that call exuberance in Nvidia the same way we saw it in May twenty twenty one, which which is when you have to start worrying about that right tail risk. It's very clear right now we are not pricing that way. Why I think because you know, like this one, the meme crazes its
own thing right now, it hasn't spread. But two, there still are these institutional concerns that have not gone away, about tariff transmission, about valuation, about a whole host of other things that again you don't see the near term, but have not changed from the longer terms.
You've mentioned ETFs several times this morning here. How pervasive are atfs. It's part of just deris trading and hedging and that kind of stuff.
I mean, ETFs kind of trade like water, so something like the cues or spy you you know, from an options perspective, these are just as active as your big mag seven names. And then in options it gets even more fun because there it's not triple lever at all cash time, it's actually just triple lever queues or in video or what have you. And it just amazed, It never sees to amaze me how much people pile into leverage.
But is there almost like a hidden Is there a hidden leverage in the market given legit derivatives or crafted marketing derivatives if you will, Is it like eighty seven? I didn't know what Portfolio and Assurance was until a Thursday evening at six pm with a cocktail in my hand in October of eighty seven? Is there a leverage issue out there because of all this new fangled stuff?
So I get asked this a lot. My short answer is I don't think so. I think again, the meet is made has changed. I don't think we're in a February twenty eighteen volmaged situation, which you did have with a lot of the inverse levered ATPs. So like your your t VIX, your sbx Y that imploded lots of fun. But you know what we have in the market that's grown a lot and notional are more your plain vanilla overwriting strategies, which just has a different sense of leverage.
I mean velocity shares two times fixed. I mean you can have a lot of fun. Yes, I mean you got to stay on top of this. Amy, does your world care about two o'clock today with the Federal Reserve chairman and what we hear?
I think very much so. And I think there's been this hotly contested do we get do we get a crack into September? Does he admit that maybe there possibly couldn't be an opening? I think that's gonna that's going to be again a reasoner rent Gamma.
Right to see, Amy was silvervan with us with RBC Capital Markets this morning. Let me get one more in here quickly. The idea here of this bull market in MEGS seven. Can you play derivatives in mags seven?
Absolutely? And look if you are bulled up Tom in Nvidia again that that collsk you that call exuberants where everyone's piling to those options not seeing that yet. For August twenty seven.
Thirty, it was Silvervan Thank YOUBC at Capital Market.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Corplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
My first intern at Bloomberg was a high achievement and got one of the great Covenant scholarships and jobs. He migrated to State Department years ago. Ryan Majaris was under Ramundo at Commerce and a very extinguished career in trade in law in Washington, and he joins US now. He's the former Assistant General Counsel for US Trade. Is a broad sense for President Biden. Ryan thrilled to have you with us. This is arguably our interview of the day. What was it like at Georgetown when you won a
Harry S. Truman scholarship? That had to have been.
Life changing, You know, it definitely set me on kind of a different trajectory for sure.
And you'll get a kick out of this.
But at Georgetown, my worst grade and undergrad was actually international trade. So I've always wanted to go back to and talk to that professor and say, you know, look what I've done since.
Then they the quality see.
Yeah.
You know what's interesting is I think back on my college experience at the Hilltop, which was great, but you know, it was at a time when globalization was kind of at its peak, and really every lecture I had in college was about how globalization is a tie that lifts all boats. Everybody is better off from because the value
added from globalization. And I sat there in those lectures thinking, I feel like we're missing half the story here, and I think what we've seen with this administration in the past decade kind of underscores that.
What is so important here and why I think this series timely is all the smart people of whatever their politics, say these are verbal agreements in not written agreements of detail. Discuss how you perceive the Japanese and EU deals that the presidents as are massive, except does anything written down.
So this is a very different way of negotiating trade agreements. And I actually don't think you can look at these framework deals in the traditional sense as trade agreements that we've seen in the past, where there's multiple negotiating rounds where you refine the text before it gets to the principle and then it's issued. I really view these as the start of negotiating rounds that we're going to see over the next weeks, months, and.
Maybe even years.
The reality is it takes a long time to get at this significant kind of politically entrenched trade issues between countries, and I do think at the end of the day, that is what they're trying to get at. They're frustrated by years and years of jobs getting offshore and want to deal with those non tariff barriers and unbalanced trade through through different levels of tariffs by trying to counteract that.
And get folks to the negotiating table.
There's clearly a shock and ah aspect of this to threaten the use of tariffs and bring them to the table. But right now I think we're seeing the result of that. There hasn't been enough time to really negotiate among the parties, and you're seeing these kind of like high level framework deals that have investment commitments, but it's unclear at the stage where they're going to go. I think we're going to see more discussions.
Ryan, Why do you think that Trump administration believes it's good trade policy to tax American businesses and tax American consumers to bring back manufacturing jobs to an economy that is already at full employment.
So I think the story is a bit more complicated than that. Certainly there is going to be degrees of tariffs getting passed on to consumers, that's unquestionable, But they're trying to deal with these kind of broader concerns of we have liberalized our market over the last seventy or eighty years and other countries have not done that to
the same degree. And I really do think at the end of the day, you have to even with all the kind of shifting sands in the trade policy and the on again off again, at the end of the day, they're trying to bring back manufacturing jobs and rebalance trade and they think the tariffs are the best way to do that. That they create leverage and they're going to get folks to the table, and there's no question that's done that. I think the ultimate question will be what
are the impacts of this. What are the kind of is.
The President listening to our conversation.
I'm sure he is sure ran aren't the greatest beneficiaries of globalization the American consumer.
But undoubtedly we've been afit.
Why are we changing policies?
So there's two sides to the story.
We've benefited from globalization, but there's no question that admitting China to the WTO and kind of the broader scope approach that we took a globalization as that impacts on the country, and so I think you're seeing kind of a response to that.
Ryan, the President tweets, now, the August first deadline is the August first deadline. It stands strong and will not be extended. A big day for America, Ryan, is August first, a big day for all Americans.
I honestly think they're going to issue a lot of tariffs on August first.
I don't think we're going to see many extensions.
I think we may see them on China, but you know, I think they feel empowered to. You know, despite the high level of tariffs that we're currently seeing, we have an average teriff rate of nearly twenty percent. The stock market's doing great, consumer prices have started to uptick, but aren't asked concerning as speared you know, inflation as an ticked up. So until those things start to become headwinds, significant headwinds, I think they're going to fill embolden to try this out and test it.
And John Tucker, you had Hershey reporting and you stated the tariffs came in much higher for Hershey's Chocolate's unexpected.
I think it was like one hundred and eighty million dollars. Is what the tab's going to be from the earlier projection in May? I think is this where we're heading?
Ryan?
I mean, is a final question? Is this where the path we're heading? Do is substantially a substantial intake on tariffs and expense?
I think so.
I think we're going to see that tariff rights stay in the fifteen to twenty percent rage going forward unless we start to see these headwinds take hold.
This has been wonderful. Ryan, don't be a stranger. I love to have you and was king and spauling Ryan and Jeris with this the former Assistant General Counsel of Trade.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am East on Applecarplay and Android Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.
Mark Hart with is now BNP Pariba with a really really smart folk talking about the optimist trifecta that could be out there. But you bring up a word which I'm going to associate, you know, ages ago with the likes of Robert Mandel and Jacob Frinkel, which is trilemma. And in the foreign exchange in international space, a trilemma
indicates that within a system, there's a constraint. On this crazy Wednesday with the newsflow, we have, what is the constraint and the system that we have is it monetary policy? Is it this trade fiesco we're in. What's the constraint in our trilemma?
Well, I guess Tom there number and good morning, thanks for having me. You know, I think the constraint has been for most of the year has been overarching uncertainty unknown, and that's been holding back corporate America, in particular away from the mag seven, it's been holding back animal spirits.
And with the.
Passage of the Big Beautiful Bill, with the resilience of the economy and with you know, getting deals, you know, preliminary deals done with with key partners like the UK, Japan and the EU. Some of that uncertainty is fading, and we're seeing animal spirits pick up. Tom, We're seeing M and A look at the Union Pacific deal, look at some other M and A that's that's in the works. And the comments we heard from big M and A
banks recently. So the big constraint has been uncertainty, and I think that constraint is starting to wan.
So what do we do here? I mean, I think that a lot of folks are saying, boy, the stocks look expensive twenty two ish times, pe credit spreads are tight. Boy, gold's had a rip. You know, where do you find? Are you looking for value or you're just looking for quality here and just saying I can hold my nose at values.
You know, it's a little bit of both. And mean sometimes we're just looking for generic carry or yield. You know, it's not because that uncertainty can come back with just a tweet or two, or with a shock, a tsunami. Who knows, there's there's a lot of outliers that can destabilize these days. But but Yes, quality with growth that that is levered to a firm economy in the US and slightly diminishing uncertainty is what we're looking for talking about.
I mean with the unknown of the European deal, the unknown of the Japanese deal, maybe the unknown of the legislation. Are al we living here on this huge day is a lot of stimulus in a lot of tone of deregulation.
Tom, I think that's a.
Great way to put it, is that some of where we are, Yeah.
The Big Beautiful Bill is a lot of stimulus, tax cuts and targeted spending and.
Overlaid on a union Pacific deregulation just a.
Yes p train and in the banking sector deregulation. There changes at the FED and other recite bodies. But importantly there's also the AI evolution, and that's we're going to hear a lot of that today, like yourself. And that's also a catalyst not just for the mag seven but for your firm, for my firm. It's being deployed more broadly and that is fueling growth. That's the under the surface mark.
So what are we doing here at US versus rest of the world. There was a trade earlier this year where a lot of folks were taking money out of the US, maybe even the US dollar, the US stock market and employment the rest of the world. Was that kind of a short term trade or is there something else going on out there?
What do you see?
Well?
I think that was a tactical rebalance to reflect both the acute uncertainty in April and as well as the divergent prospects or hopes for more stimulus, more growth in Japan, in Europe and other parts of the world. Now we've seen a more of an equilibrium and the de dollarization, as people call it, I think as much more or
of a slow burn. It's not it is not a significant theme that we're hearing from clients in the near term, but when you talk about twenty six twenty seven, I think it will continue to be a force, particularly with the steepness of the curve and the prospects for some cuts next year.
BNP perrybat has a just fabulous specific rim heritage. I was honored to be part of that years ago, and I if I look at your study of EM, the fact is dollar is really doing well against EM. There's a lot I looked at Argentine peso today, it's grim. I mean, is this the main store. The surprise for the second half is dollar resilience.
You know, I think that's that is a story, Tom. I don't know that that's the story. I think that the you know, we had a major you know, ten plus percent move in the dollar versus the basket, and that that's an outlier. You don't see that every year.
So I think we're going to settle into more of a groove around that, and you know, other things will will influence the major pairs, including the EM pairs, but we're seeing a lot of money go into EM assets as you can imagine as the hunt for the hunter return and the hunt for yield and frankly an alternative to the dollar.
Mark, thank you so much for starting as strong today. Mark Hawarden Studio with this. He is with BNP Burry Bob, his senior Multi Asset call specialist.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty Arie World with us.
Right now, I had a technical analysis Oppenheimer Ari. In the fundamental space, John stolf is making headlines with an optimism on a bullmarket. Is this bullmarket charterable? Does this bullmarket display a trend?
Sure does only it's a fresh breakout above its February high points. I think the key message that we've been conveying to clients here is that the rally is surely overbought, but that doesn't mean that the bullmarket is over that. Historically, when you get these very swift recoveries from a fifty two week low to a fifty two week high actually been followed by above average forward returns for the S and P. So I think this is consistent with an intact bull market. We do want to invest for a
third year bullmarket. However, with that said, so Ari.
I'm just looking at the relative strength index for the S and P five hundred. It's now it's seventy one point eight, typically suggesting an over bought here. How do you think about that short term.
It is, Well, that's a difficult timing indicator. I was looking at that. I heard you lead in with the RSI and I quickly checked it out myself. It hit seventy actually coming into July. That was right ahead of a three and a half percent rally in the S and P five hundred, So that relatives are the indicator. That's a measurement of the speed of price. It's indicating that price is still accelerating. That's actually a good thing.
We call that confirmation in the technical analysis space. Typically you want to see those divergences and signs of deceleration before getting more concerned.
How do you use volume? My school thought, ari is I really try to ignore volume as noise. I would suggest you go another way. How do you treat volume in this odd summer of a bull market.
It's a great question.
It's really become secondary confirmation for us tom as we think about the market since the Great Financial Crisis, we've had these lightly traded rallies followed by heavy volume selling, and the textbooks tell you that that's what you don't want to see. But it's been a terrific move to the upside since then, So it's secondary confirmation for us looking at individual stock ideas, I'd like to see volume with the breakouts, but it's not necessarily necessary.
That's right where I wanted to go. I mean within Stolfus and walled. Oppenheimer's got some real experience. And the basic idea here is we haven't seen this before. Is it because of the index funds? Is it because of the ETFs? Is it because Michael Barr's in the triple leverage SBX fund? Is it a new market where technical analysis doesn't work? Oh?
No, I think technical analysis is probably more important than ever, just given the acceleration in index scene and move towards ETFs. Now investors are saying, do I want to buy the XLK or XLF. It's not do I want to buy JP Morgan or Bank of America. They're all moving the same, and you're seeing the correlations rise and the importance of macro investing and getting me into the right ballpark. And I think technical analysis is a big part of that.
Talk to us about breath in this market here, ari or lack thereof. It just seems like so much of the S and P five hundred fo romans is anchored in a handful of stocks here. Historically, how do you view that?
Well, now we're getting into some of our concerns here. I think Anyone trying to say that breadth is healthy here is kidding themselves. This is probably our biggest concerns that this has been a more narrow move to the upside kind of thinking in terms of stocks trading above their two hundreday average on the Russell three thousand, got his high as fifty nine percent, more recently was as
high as seventy percent throughout twenty twenty four. Net new highs on the NYC three hundred and seventy in twenty twenty four, only about one hundred and forty this time around. So this is a yellow light, it's a warning, it's what you don't want to see. I would say it doesn't become a red light until really trading starts to deteriorate here, and I would argue that there's been these offsetting positives. The leadership of the market been very pro cyclical.
We've seen high data cyclicals outperforming low volatility defensive. So it is a mosaic for the bread piece of the puzzle being the more concerned here than us.
Ariwald, thank you so much. With Oppenheimer on technical analysis.
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