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Was unresponsive. Directors Guild of America has reached a tentative agreement with the Alliance of Motion Picture and Television Producers, one of the unions that represents Hollywood studios on a new contract. The deal will include a 5 % wage increase in the first year, a 4 % increase in year two with a 3 .5 % raise in the third year. The agreement also says that generative AI will not be allowed to replace humans. This deal could used be as a benchmark as other industry unions look to finalize their own contracts. The agreement will be extended unauthorized and would then allow a 5 % with what happened at the French Open. Fourth round action. High seeds all moving on in the men's draw. Top ranked Carlos Alcaraz, third ranked Novak Djokovic, fifth ranked Stefanos Tsitsipas and eleventh ranked Karen Khachanov, all winning their matches. Upset though in the women's draw. 9 seeded Daria Kazatkina loses in trade sets. Selena Svetlana, who moves on to the quarters. 2 seed Irina Sabalenka knocks off the American Sloan Stevens in straight sets. At the memorial in Dublin, Ohio, it went to a playoff. Victor Hovland has won it. He beats Denny McCarthy, Scottie Shuffler one stroke back. Seewoo Kim two strokes back of the winners. PSG has opened talks with who they believe will call TA. They hope to come to an agreement and have him head to the ballpark. The brands NBA Finals game number two. It will tip off in about let's say 15 or so minutes in Denver. The Nuggets hosting the Miami Heat Denver leads best that of seven finals. One game to none. Denver of course is the favorite in this one to take up two games to none lead back to Miami. I'm Dan Schwartzman. That's your Bloomberg News and Sports Update. Back to you Brian. Outstanding Dan. Thank you very much. The time here is about 16 minutes before the top of the hour. Let's get to Joe Gilbert, our guest. Joe is portfolio manager at Integrity Asset Management. Just looking at your you're notes, looking brilliant here. You've added to cyclical exposure. We had a big bounce on Hi you. Brian. I think that ultimately our base case is that we're headed for a mild recession. Unfortunately or fortunately, stocks tend to discount that and so we kind of feel like that was discounted last year, probably earlier part of this year. So we think that cyclical trade will actually be on the place to be. It feels like the growth trade is pretty crowded. Everyone is scared to get in there with a lot of the AI frenzy, which we think is justified from a concept, but we just think that stocks are just way overvalued and ahead of themselves. So you've hinted at two things there, okay, and I just want to make it easy for our listenership to understand that one thing is mean reversion. Cyclicals have underperformed growth lastly here in the past couple of months, several months, but then there's also the kind of concept that recession has already been discounted. Now that would seem to favor cyclicals, so you're saying it's just not mean reversion, it's because growth going forward won't necessarily be as bad as, you know, in other words, they've already discounted it, so these stocks can recover. Yeah, yeah, exactly, Brian. I think that, you know, the worst case scenario in a extents lot of has kind of been taken off the table, and when I say that, I'm thinking more about the banking system and the crisis that we went through in March, you know, through April, and I guess there's still some tentacles of it, but we think a lot of that has been contained. There will be still aftershocks, think that but we ultimately, you know, when we think about the economy going forward, a lot of that bad news was pulled forward into the performance of the cyclical trade earlier this year. Let's talk a little bit about the bond market. So, if you look at investment grade, that's one thing, and then high yield. Let's get to high yield first. What are your Well, thoughts? you know, high yield, we think of high yield the same way most investors, or at least from an equity side, think about small cap stocks. And so, you know, the biggest worry there is that high yield tends to, you know, ratify what is presumably going to happen. If you're going to get a bad recession, high yield is going to be your tail there. And so, that's why, when we look at how high yield has performed this year, it gives us confidence that we're not headed to some economic perilous outcome. So, that's why we think high yield is still, you know, we when look at small cap stocks, we look at high yield, both of those areas seem to still be pretty attractive for us. Now, you say that history has shown us well that there will be a financial crisis if the Fed keeps raising interest rates. Do you mean from here? Exactly. I think that, you know, for next week where it seems like all is pretty certain that they're going to pause, I don't think anybody would be surprised unless we get a CPI number is extreme. pretty I think that Powell has pretty much suggested that they want to wait and digest some of the incoming information. Unfortunately, though, if they decide that there is still some tightening that needs to be done, I think that they're reading a chapter but not actually reading a book there. And so that's kind of the worry that we have. That's one of those extending exogenous shocks that can be created by the Fed of his own doing. What's your outlook at the market for emerging markets? You know, emerging markets, it seems that those always are very correlated to currency strength or weakness. So right now, we think that probably the dollar has peaked for the year, similar to when we look at the fixed income market with two -year Treasury yields. I think a lot of that has peaked. Once again, obviously, this is contingent on the Fed's outlook and how they see the world. But we think that a weaker dollar or at least a flattening dollar strengthens their emerging growth trade. We did see some outperformance the at end of last week for China and greater China stocks. Is that something that you'd consider getting more exposure to? That's tough a one, Brian, because there's always that duplicity when investing in China as far what can you believe? That is why you're

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