Markets Will Get A Deficit President No Matter What | Jim Bianco & Jeremy Schwartz
Episode publishedPodcast: Forward GuidanceForward Guidance
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Welcome to a special edition behind the markets from Leeds Lodge. I think today's episode we're gonna call fishing and finance. We got Jim Bianco, who is the founder of Bianco Research, Jack Farley from BlockWorks, the forward guidance podcast. I'm Jeremy Schwartz, the global CIO of WisdomTree. We're gonna talk about fishing here in Maine, but what's happening in the economy of Blockbuster Week. Gentlemen, welcome to behind markets. This is our first episode broadcasting live from a deck overlooking a lake in May. Now for we're gonna talk a lot about the economy and what's what's happening her
After some data that was a bit inconsistent in the beginning of the month, highlighted by the payroll report being less than expected, The data did somewhat rebound as we moved throughout the month. We had some good initial claims numbers, meaning the number of people filing for unemployment insurance fell. We had a good retail sales number as well saying that spending is still continuing, and the inflation data came in at least at what people expected, if not a little bit below in terms of producer prices so that inflation wasn't a real problem. So the market, after getting a period of indige
Jack, you're talking to a lot of people on forward guidance. What's what's your sense of what's going on?
Well, I think that the I'm gonna take and borrow and steal an insight from Peter Bookfar who's, inside as as we record this, that bad economic news is now bad news for the stock market, and good economic news is now good news for the stock market. Over the past 2 years, maybe a year and a half, good economic news, news that shows strong nominal growth, whether it's spending or investment or employment, was taken as a bad news in the stock market because that's inflationary. I
think now we could be in
a regime and probably are where bad economic news is gonna be bad for the stock market because, oh, great. Bad economic news is gonna drag inflation lower, but it also could cause a recession. So I think there is definitely a gross scare. And I'll say that the unemployment rate going from 4.1% to 4.3% in 1 month, it's it's not great. Jim, what do what do you say about that?
And, Jim, the context, we have professor Siegel on here every week. We'll hopefully get some comments from him this week. Hard for Maine, But he came out aggressively saying the Fed with 4.3 unemployment has passed their employment mandate, and he thinks inflation is sort of 90% there. So he thinks they should be cutting aggressively to neutral. What's your view on Siegel Siegel calling out the Fed, and where is the whole cycle in your view? You
know, there's always what the Fed should do and what the Fed will do. So I'm in the wheel camp that they will be cutting interest rates in September. I think they're gonna cut by 25 basis points. The big thing that we'll have to look at is next week, the end of next week, is gonna be the Federal Reserve's Jackson Hole meeting, and I think that Jay Powell will use that meeting to kind of frame the discussion of what they wanna do with interest rates over the next year or so. Yeah. I think they're gonna cut rates. The market is pricing in the idea that there might be 8 to 25 basis point rate cut
the reason
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