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For more on the latest market movies, we want to welcome in Skylar Wine Reagan Capital Chief Investment Officer. Skylar, it is good to see you. So it's talking to Julie. There are different cross currents today, Skylar. You know, consumer confidence disappoints, of course, the news out of China. I think got to mention geopolitics as well. US sending more troops to the Middle East, Skylar. But tell us what's front and center for you.

Well, the bazooka obviously from Fed lowering interest rate 50 bips, but also Waller, Bostic, some of the big Fed governors coming out and saying, there's a lot more to go in terms of interest rate drops. And you just talked a little bit about the financials performing the worst today. Uh it's kind of counterintuitive, but these big Fed drops actually hurt these banks in the short term. Okay? They were investing at five and a quarter a week ago. Now they have to put their their new cash or that fresh cash to work at four and a half, four and three quarters, if not lower, uh which is where front end bills are. So in the short term, financials get hurt because they're not earning as much on their cash and they're not able to lower their deposits that quickly, yet they still have these loans and uh investments out there that are still only earning 2 to 4%.

When does that start to turn, Skylar?

We need the people have been talking about the curve uh de-inverting. Well, that's only two-year to 10-year, okay? Whereas the front end of the curve, one month, three-month bills, where uh deposits go, CD, you know, overnight repo, that needs to come down a lot more, couple hundred basis points to like 3%, which is where they're scheduled to go in a year from now. Whereas a lot of these banks are still lending in 30-year mortgages or in five-year balloon loans to uh multifamily real estate and commercial at like four to four and a half percent. So that front end needs to get below four real quick before these banks are in the black in terms of where they've already lent money versus where they're where they're borrowing money.

What about Scala's other big news today? China's Central Bank taking action here, these measures to try to support that economy. I just get your analysis of that, Scala. Does that get you excited about owning Chinese equities?

Uh, stimulus is great. Stimulus is great for the market, no matter whether it's coming from China or the US, whether it's coming from lower interest rates or stimulus, whether uh Kamala or Trump get elected, we're going to see further stimulus vis-a-vis deficits in the next few years. All that adds up into the market continuing to roll along, okay? And that's broadly speaking worldwide. Uh and I think the end goal here on the China front is to keep the economy humming and keep the populace uh not not protesting, not coming into the streets, not worried about losing their jobs, not worrying about the unemployment situation, and the Fed's in a very similar boat. Okay? They need to keep unemployment at three and a half to four percent here, not let it get above five, otherwise people are going to start to, you know, get mad and and and start protesting. And so that's what the Fed's worried about. That's what China's worried about. Um, and this stimulus, whether it's coming from lower interest rates or uh pumping the economy with money, are going to keep the market rolling.

Um, and Skylar, uh as our Josh Shafer wrote about in this morning's uh morning brief newsletter, we're seeing some more six handles for the S&P 500 in terms of year-end targets, which sort of makes sense given the pace that we have seen thus far. Are we back to not fighting the Fed? Is that is it time to trot that out again?

I think that's true on the on the equity side, uh when you're talking about what's actually going to really be helped from call it 3% interest rates. We're already at 3.5% across the board. You can still get about four and three quarters on the front end, but twos out to 30s are three handle. Twos to tens are, you know, call it three and a half to 375 right now. So you're not getting compensated really for generic fixed income, that's boosting stock market values. To say we're going to go

up another 5 to 10% between now and the end of the year's hard. Maybe over the next 12 to 15 months, sure.

Sky, I was going to ask you about the election, but and and granted we're only weeks away here from the big day, but do you believe, you know, is is the market even focused on that right now, Skylar?

No. I I think the market sees them in one and the same. You know, uh if Harris gets elected, maybe that affects taxes. If if Trump gets elected, maybe that affects, you know, uh the currency situation between us and in Europe or us and China, whether or when or where tariffs get put down. Um, but the market really looks at them as one and the same. They're both going to be stimulative, they're both going to run deficits and, you know, so we're going to have to wait and see. I think what is going to turn the tables one way or the other is if there's a sweep. So if you have a democratic president and both houses of Congress or vice versa, then we're going to have some some microscopes on how is this really going to affect the market, but the jury's out on that sweep happening. We'll see.

We will. We got to wait. Skylar, thank you so much. Appreciate it.