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Ed Klissold, Ned Davis Research Chief US strategist. Ed, always great to see you. So let's start with that jobs report. Stronger than expected, Ed. Um, I'm curious if you saw that report, did you think, you know what? Stay long this market. The indeed, indeed, the soft landing looks like our base case, risk on.

Yeah, there's been so much consternation over, you know, what's the what's the data point to data point movement in in the labor market with all the revisions and what does that mean for the Fed? Sometimes we miss the big picture, which is the economy's doing pretty well. And I think today's labor market was confirmation of that. And when the Fed has been able to cut slowly, that is cutting like every other meeting on average throughout the entire cycle, then the market has actually done better than when the Fed has cut quickly. Because you know, it cuts quickly because there's a problem they're trying to avoid a recession. Usual by time they're doing that, it's it's been too long. And uh and the economy's going to recession anyway. So I think today's news combined with Powell's comments earlier in the week tell us that the Fed is on course to do what its objective is, which is to bring interest rates down slowly, um and uh and kind of normalize the interest rate environment. And that would achieve a soft landing and that that's bullish for stocks.

Is is that a done deal at this point, Ed? Do you think the soft landing, we were there? Is it is it sort of the that battle's been won?

Well, you know, it's it's never really won, is it, Julie? You know, you always have to look for the next next data point. But I think that the the argument that the economy has really been weaker than what uh than what the data was showing because of revisions to the labor market, um data over the past year, you know, maybe hiding something. We get the GDP revisions um uh last week and then and then the good data this week from the jobs market. I think it it tells you that if things like the yield curve that was pointing to a recession for the last two years, the leading economic indicators from the conference board telling us recessions coming for two years, I think we can put that to rest. Going forward, I think if you want to look at say the next next six months, odds of recession are pretty low. And that's important because the stock market peaks, you know, three months, maybe six months before the economy. So I think if you're worried about a recession, that's a later 2025 problem. And so from an equity perspective, you can go ahead and and stay in the market and then keep an eye on the economy to see if it if we're going to have a recession later on.

Ed, turning back to stock market. I'm I'm curious to get your take on valuation for the market. We spoke to CFRA's Sam Stovall this week and I asked him that question. He said, you know what? He looks at it, it's a bit unnerving, he said. Ed, do you agree with that?

Well, if you look at any sort of PE ratio for the S&P, forward or trailing earnings, they're in the top 10% um of PE ratios the last 40 years. So obviously, like for there to be lower, as would be more of a margin of safety. There's a hiccup in the market, but they're not at the real extreme levels where valuations by themselves cause a problem. So we've been telling indeed our clients is watch the bond market. Because unlike last decade when rate interest rates were so low, didn't matter, um if rates went up a little bit because, well, stocks were still better deal. Now the bond yields are higher. If rates back up too much, investors are going to make the decision, I'm going to switch from bonds to um from stocks to bonds. And so the decline in interest rates so far this year has been a big reason for the rally. Bond yields picked up today, didn't seem to be a big problem for stocks, but they move up quickly. You see that 10-year getting well above 4%, pushing 4 and a half, then I think the valuation question becomes much more a front burner issue.