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An indicator seasonal pickup in rebar prices ahead of the construction period has failed to materialize and could be a canary in the coal mine this according to Bloomberg intelligence. S&P 500, 41 points higher than sub 1%, 4097 on the index. The Dow is up 234 points. That's up 7 tenths of a percent NASDAQ 100 right now up 250 points that's a rise of 2% right now. The two year yield, ten basis points higher 4.05%, Robert and Brooklyn, here you go, ten year yield is up 6 basis points were at three 50. We're doing customer ports now. Nice. We should be fine. I should do. I encourage listeners to write in. Yeah? And make requests. Sure. My email, everyone knows MT Miller at Bloomberg dot net, or you can I beam me, that's the best way. Yeah. We're talking financial reporting requests, by the way. Not the kind of requests you get. I'm going to leave that there. Leave that there. All right, let's talk fixed income here, folks. John Tucker, thank you very much. A fixed thing of 2020 to brutal year. I don't care. There was no place to hide equities or fixed income and really not too many places to fix to come space to hide it. Either a little bit better this year, the Bloomberg aggregate U.S. aggregate total return value is up about 3.5% this year. So they're doing a little bit better and when you want to talk fixed income you need to go talk to the folks at TC W, they're pretty big in that biz Steve Kane co CIO and generalist portfolio manager for TC W investment management joins us. Steve, you guys are doing a little bit better this year than last. What's kind of driving or what are the areas of opportunity you guys see in a fixed income space this year? Well, we're seeing quite a bit of opportunity actually. First of all, sort of getting up to your general point of returns being positive is we think we're getting towards the end of the fed hiking cycle and the market's beginning to anticipate that. And that means that rates are likely to be coming down. So the first thing we like is the overall rate market and specifically the front end of the market where you're getting the highest yields and we expect that part of the market to rally the most going forward. And then beyond that, I think, would rather pessimistic about the economy. We think that the reason rates are going to be going down is because you're going to be entering a recession sometime later this year early next year, which means we're defensive on lower quality credit, but we like lots of areas of the higher quality parts of the fixed income market away from treasuries. You've heard us talk AD nauseum about the agency mortgage market. We think that's very attractive that continues to lag recently. It's lagging due to the fact that the FDIC through BlackRock is selling agency mortgages that were taken over through the SVB and signature bank takeovers if you will by the FDIC. But we like that area. We're modestly constructive on investment grade corporate credit. We think that's fair. And then we like high quality parts of the securitized market, including non agency residential mortgages. Why do you think, I mean, in light of today's inflation data, which I realize is only one point, but core PCE quarter over quarter up to 4.9% from 4.4% in the last reading and more than economists had estimated. We were looking at 4.7. So we're going back to 5 and it looks like climbing, how can the fed even consider lowering rates in that type of environment? It's a really good question. And the answer in the short term is they can't cut rates. As a matter of fact, they're the markets pricing this in. They're likely to hike next week if they're at their meeting and maybe even another time. I think we're at the view that the market is getting a little ahead of itself in terms of expecting easing as early as September of this year. But we do think whether it's one or two more hikes that the cumulative effects of all the tightening 5.5 and a half percent is ultimately going to slow the economy down. We're beginning to see signs of it in various areas, housing, certainly the business investment part of the GDP report suggests that businesses are pulling back in a fairly significant way. The last thing to go and it's still hanging in there is labor market and we do think that it's just a matter of time before you start to see bigger and bigger layoffs and loosening in the labor market. And that's sort of the key part of the equation that's going to get overall inflation heading towards that 2% total. I'll just repeat the GDP numbers that we got this morning for our listeners. We got annualized GDP quarter over quarter of 1.1%. That compares to 2.6% in the previous reading, and we were looking for 1.9. So much worse than expected much worse than the previous number, a real decline, what happens if we get into a situation where GDP is coming down unemployment is going up and inflation is stuck at 5%. Is that something you could imagine? Yeah, yeah, certainly. As a matter of fact, it's very typical at the beginning of a recession because inflation lags that you get this sort of temporary period of stagflation where kind of economic activity is declining, unemployment is rising, but inflation is yet to adjust to kind of adjust with a bit of a lag. So yes, there will be a period of time where it looks like a real conundrum for the fed because inflation will be lagging. And the risk is that they are too focused on that lagging indicator. State too tight for too long and worsen the recession instead of sort of looking forward and understanding that inflation trends are heading down. Hey, Steve, unlike my colleague Matt Miller, I'm willing to take some risk in life. And I'm willing to go out to the high yield space here. You know, I'm not really not recession camp, or if it is one, it's going to be pretty shallow. Some willing to take on some credit risk here. Can you steer me somewhere or not? Says the guy who has the bulk of its wealth and munis. Exactly. Here's high yield, there's a wide variety of risk within high yield. There's the double B's down to the triple C's things trading at par yielding 7.8%. Things trading 50 cents on the dollar and likely to default. So big range. I think what I would advise you, Paul, is your financial adviser for the day. You stay

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