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Welcome to Catalyst. I'm Madison Mills. 30 minutes into the US trading day. Let's get you the 3 catalysts we're watching this hour. First up, we'll break down the market action you need to know to start the week as investors prepare for the latest FOMC rate decision and more corporate earnings. Plus we'll bring you the latest from.Washington as the Treasury Secretary downplays the market correction, investors await progress on tax cuts as well. And a look at the state of the consumer retail sales slightly missing estimates and more retailers report earnings this week. How could tariffs impact the outlook? We'll discuss that and more.Half an hour into the start of the US trading day, let's get a check on the markets brought to you by Tasty Trade. Taking a look at the major averages, all steadily moving to the upside. You've got your S&P 500 up nearly 0.5%. Your tech heavy Nasdaq up just about 0.1%, obviously coming off the back of those 4 weeks of losses. The market eking out gains in the close of last week, continuing that move to the upside this morning just to touch, the big question as to whether or not we'll see that selling and buying continuing and getting.A little bit more volume trading pretty light this morning, but let's take a look over at the bond market. Interesting to see treasury on the 10 year moving to the upside. You've got your front end of the curve moving to the upside when it comes to yields in particular. We initially saw off the back of those retail sales numbers a little bit of losses on your 10 year yield, but you now got it trading above that 43 level. And finally, let's take a look at Bitcoin moving to the upside up over 83,000 for the first time in a couple of days here. Interesting to see that move to the upside following what we.Seen as a pretty risk off mentality hitting the market, but now you've got a little bit more of that risk on trade developing here. I'm going to talk about all of this and more with Adam Johnson. He is the portfolio manager at Bulls Eye American Ingenuity Fund. He's going to join me here for the hour. Adam, great to have you. Thank you for being here. Thank you. We were talking about how you find growth names and you stick with them. Yes. How does that mentality impact the way you view moments like this in the market where we've seen what feels like a catastrophic sell-off for investors whoBeen used to 2 years, so

that's an interesting choice of words catastrophic, right? We've gotten so accustomed to markets always going up that somehow 1013, 14% feels catastrophic. It's not right. Over the past 3 years there have been 9 pullbacks of at least 10%. In fact, for the NASDAQ, which is really what I look at because I'm a growth investor and so there's a lot of technology, but over the past 3 years 9 pullbacks for the Nasdaq of 10% or more. The average decline was 14%.Each turned out to be a wonderful buying opportunity and you look at the current selloff, the catastrophic sell off, and we're down 14%. So in fact, not only is this not catastrophic, I would say it's right on par and the current selloff is probably the first of what will ultimately.3 this year because that's what markets do and each will probably prove to be a wonderful buying opportunity. I've been buying. I'm not up money on everything I've bought, but I look at the AI stocks um they've been decimated. um Nvidia, the name we talk about all the time.At one point last week was cheaper than the S&P 500. Yeah, it went down to 102, 103. It was trading under 20 times earnings, whereas the S&P was trading at 20.5 times earnings. So the selling, you could argue actually that one is catastrophic unless you're uh a long term investor, uh, like I would imagine a lot of our viewers and.as I am, and I look at that as an opportunity to add to some wonderful, wonderful companies.

So talk to me about that kind of decision making moment. If you see that the selling is going to continue, how do you decide when to buy and versus when to go down even more?

So there are two ways to think about buying a stock. There are two ways to do it. You can buy on the way up or you can buy on the way down.And they're both equally appropriate. So when I say um buy on the way up, let the market bottom and then start to tick up and you're adding up. It's that's hard to do, right? You say, oh gosh, the stock's up 5%. I'll wait. Well, what if it's up 5% again tomorrow and 5% the day after? So you buy on the way up, uh, that's what classic momentum traders will do. The other thing to do is to buy on the way down. You don't know where it's gonna stop. however, when you start seeing a name like Nvidia to just stay with that.For a moment when you see that trading cheaper than the S&P 500, I mean that's when you say come on, this is ridiculous or um a Celestica trading or super micro, two other AI names trading in the mid teens 15 times earnings with in the case of Celestica 30 to 35% growth or in the case of super micro 60 to 70% growth trading in the mid-teens come on that's too cheap. So yeah, it could go further, but there comes a point at which even growth investors.Like me, start to see these growth names as value opportunities, and that's when you step in. uh, Delta guided down because of some Q1 outages. They left the full year right where it was. That's trading at 6 times earnings. Delta really the best run airline in the country. So again, there, there are opportunities where you start to just sort of say because you know the names, you know the numbers, yeah, that doesn't make sense. I should be buying it.

I haven't heard you mention the macro both from a Washington policy perspective and from.The Federal Reserve policy perspective,

you want to go

there? I mean, how much does it impact your stock picking, if at all? Not alot

it? Not a lot. I'd much rather as a stock picker, I'd much rather find a theme that's important, right? I used to work for a wonderful guy, um, uh, he was former vice chairman of Lehman Brothers many, many years ago, and he would ask a question of everyone he interviewed how do you make the most amount of money on Wall Street? And the answer that got you the job was find a theme and leverage it.AI AI big theme we don't have to reinvent the wheel every day. We know that AI is really important so we can find the um AI companies um or or even themes within that that leverage that theme, um, data centers very important we can look at a sterling infrastructure company that builds data centers because, um, data center growth is 20% year over year right now we can look at a company like um uh.GE Vernova, which powers data centers. They takeA gets out of the ground. This is an old spinoff from GE that takes the technology of engines, jet engines, instead of mounting it on the wing, they mount it on brackets. These are huge generators, huge engines. They mounted on steel brackets instead of running, um, jet fuel through it, they run that gas through it, create thrust which spins a turbine that ultimately generates electricity on site. Wow, we just figured out how to power data centers.So you know you can talk about AI and then themes within AI like data centers and then ways to leverage that. So that's what I do and what the Fed is doing has very little impact on um my thought process for obvious reasons. Yes, interest rates are important, but you shouldn't be buying stocks because the Fed's gonna cut rates. um, uh, yes, GDP is important because you don't want a recession. We're nowhere near a recession, by the way.Um, so I'm focused much more on the fundamentals of these companies trying to project cash flow over the next 234 years because if I can get to some sort of cash flow growth and I can put a multiple on that cash flow, and then I can subsequently say, well, there's the pathway for the stock to double, triple, quadruple, fine, I'll buy it and I'll hold it through these cycles.

All right, Adam, really great breakdown. You're gonna stick with us. We're gonna talk much more throughout the show.We are going to broaden out from US stocks after years of underperforming. Europe has emerged as a top trade for 2025. Meantime, economic data from China pointing to some resilience. So where can investors find alpha? Joining me now, we've got Catherine Rooneyra, chief market strategist at StoneX. Catherine, great to have you. So talk to me about this trade. We've obviously seen the narrative of US exceptionalism stalling out here. Where do you find the most value abroad?

Well, we've seen Europe outperform in a significant way, and I think that has to do with um the worst possible scenario being priced into, um, to the valuations, and that's effectively what has occurred year to date. Europe has outperformed the US in large cap, and I, I, I like Adam Johnson, and I think he, nice to see you again. Um, I think there are opportunities in the US, especially as we see this panic set in, um, but there's a price for everything, and our call on Europe.is less a structural call. We're not saying that Europe has become, you know, much more flexible in terms of its labor market or is or is facing a robust economic recovery. We're saying that at some point, the bad news, it can't take the prices too much lower, and that's what we're seeing. We're seeing some rebound in European equities. Um, but I do think that the US will still have a good year. My suspicion, however, Madison, is that we are seeing um that short.Term pain for long term gain scenario play out, so there probably will be additional opportunities, as Adam said, to accumulate positions in strong sectors and strong names as the market potentially goeslower.

And I know that your view is that we are heading into a slowdown, not necessarily a recession. We talked about Europe, we talked about the US, which sector or even specific stocks are best positioned amid a slowdown to benefit from a slowdown.

Well, thanks for asking that because I'm very proud of my answer. My first, my top pick coming into this year was healthcare. It's the top performing asset class. My top pick for last year was utilities. It was about the 3rd best performer last year. Um, I think healthcare is going to, um, is going to do well this year. You have to be defensive, I think, in, in such a volatile time for the markets with elevated uncertainty. We're not expecting recession. We don't think we're lodged in a recession at the moment, but we are seeing aShock of uncertainty which precludes consumers from consuming or it at least pauses their consumption. Same thing on the private sector front. Investment has been paused, perhaps not halted altogether, but paused, and I think that has to do with the shock from tariffs. Now tariffs don't have an immediate and persistent effect on inflation. We saw that from Donald, President Trump 1.0 and the ensuing.Impact on inflation from his first round of tariffs, but they do, and historically have proven to be the case, have a very negative effect on the markets. So we should anticipate some volatility, and that's why I've been recommending the purchase of protection with protective put options. And now what we see today, Madison, is that um we have record volumes of puts. So those puts are attractive when the VIX is low, they become much more expensive when everybody wants them.

Katherine, it's wonderful to see you again and um you're very good at the macro, much better at the macro than I am. I tend to be a stock picker, so I'm hoping you can help explain something to me and maybe even our viewers. How is it that the Atlanta Fed has come up with this GDP now forecast that says the economy is contracting 2.8%? When I look at my individual companies, I don't see anything like that, but can you help us understand that?

Yeah, I couldn't agree more, Adam. It's shocking the swing that we saw in.weeks' time, we saw that that Atlanta Fed Nowcast predict the first quarter US real GDP grow at 3.9% positive, to 4 weeks later, revised down to -2.8% and subsequently revised to -2.4%. The reasons they cite are front loading of imports, and that's a natural occurrence. We saw that in, um, in Trump 1.0 as well in 2018. Um, we actually saw a verySimilar situation in the economic front as in 2022 when we saw the first quarter come out negative and it was the only negative quarter of growth. You have a front loading of imports to avoid, of course, higher prices down the line. And then you've also seen, and this is according to the Atlanta Fed data, um, the, the five regional Fed banks saying that they are seeing less interest in capital investment. So thatMight be a concerning trend. The third thing, of course, was the January, um, personal spending number that came out the lowest in about a year, negative print. So those are the three things that, that the Fed, uh, the Atlanta Fed pointed to. Um, but I do think that's a tremendously volatile, uh, uh, swing, um, and something to be, uh, aware of. But really, we would have to see more trend data than simply January data. I'm looking forward to seeing additional consumer spending data going forward.

Oh thank you, Mattie. I appreciate that. I guess I get one more question from you, uh, Katherine.The Fed is gonna have their meeting on Wednesday. What would you like to hear from uh Fed Chair Jerome Powell?

I'll tell you what I'd like to hear, but I think what what we're going to hear is, um, that they're on a wait and see mode. I think they're going to talk about being cautious. I think the Fed is not going to even consider cutting rates until the back end of this year, and unless and until we see a move higher, a meaningful move higher in, uh, the unemployment rate, um, and a serious drop off in consumer spending, the Fed is unlikely to cut anything further. I think the Fed might evenTalk about stagflationary risk. Of course that's sticky inflation with decelerating economic growth. And in that environment, Adam, I don't think that the Fed is going to be cutting anytime soon.

All right, Catherine Rooney, I got to leave it there. Thank you so much for joining us. Thank you, Adam. I wanted to ask you something off the back of Katherine's comments that this is just a pause in corporate spending. How do you think about something like that for your AI stocks? If we are seeing a pause in corporate spending, at what point does that pause cause pain?

Well, I think every, um, C-suite right now from chief of officer to chief financial officer officer to chief strategist officer, um, all these people in all these, um, companies around the country are trying to figure out what tariffs mean, and it's very, very hard. I imagine, OK, fine, uh, Mr. Trump says, well, you know, you gotta bring your production back to the US I guess.Fine, that's jobs, but you can't just suddenly say fine, shut off the factory in Spain and let's go rent a new factory and bring all the machines over and we'll fly everyone over here. So it's very, very hard and I think that's what's creating the uncertainty right now which is accounting for the pullback in stocks. We'll get through it.Um, we are incredibly resilient and creative at figuring out solutions, but there's no easy answer to that right now, and that's just the tariff uncertainty that we're all dealing with.

But you'rewilling to hold on to those names because of fundamental businesses that would withstand any pressure from tariffs.

Oh yeah, yeah, I'm not, I'm not buying a company because I think they're going to beat the earnings by, you know, 3% when they report in 8 weeks. I'm buying a company because I can see a pathway for.cash flow doubling or tripling over the next 1824, 36 months, and therefore the stock price is likely to do the same. That's why I'm buying stocks and as long as I'm comfortable with my assumptions and I review them frequently, I'm very comfortable owning stocks.

All right, well explained Adam. Thank you so much. We're going to continue to have you here with us, of course. Coming up, more pain ahead for the markets, what a century old stock market indicator tells us about the path ahead that's next on Catalysts.

A century-old stock market indicator is flashing warning signs, signaling warnings to investors in the near term. I'm Jared Blickery, host of Stocks and Translation. Let's talk about Dow theory. We all know Charles Dow, right? He lives in the 1800s and 1900s, lent his name to the indices that we talk about, not just the Dow Jones Industrial Average, but also the transportation average or just the transports, and heUse them together to kind of figure out the market trends kind of a confirmation. So let's take a look at Dow theory and we'll we'll define it here. Developed by Charles Dow in the late 1800s, it gauges stock market trends by seeking confirmation between the Dow industrials and the Dow transportation averages. So that's the confirmation, and I thought it was important to highlight a different term, which is kind of the opposite of that.Called divergence, divergence occurs when two related markets or assets which typically move together start to behave differently. So let's take a look at the Dow Jones Industrial Average and the transports over a long period of time. This goes back to the mid 80s and we have both the transports and the industrials up here. You probably can't tell them apart and that's fine because the point of this is to show that they closely track each other over time.Now down here I have the 1 year trailing performance of the industrials minus the transport. So when the oscillator is above 0, that's the industrials outperforming, and you can see this happens for long periods of time. For instance, here's the dot-com bubble boom and bust into the global financial crisis. That was a period when the industrials led for years at a time. Early in the pandemic we had transport.And the theory behind Dow theory is that you want to see strength or weakness if you're looking for weakness if you're a bearer, but you want to see strength in the industrials, that's the companies that make things as well as the companies that ship things, and that would be the transports. So this is a long term view, and I thought we'd take a look at a shorter term view so we can see what's been happening with the industrials versus the transports recently.This is a 6 month chart, and this goes back to the 4th quarter of last year thereabouts, and we had the transports peaking. In other words, this was at a record high in late November for the transports. What they did from there, they came down, not shown as a 200 day moving average. They bounced off of it, came down, but they finally broke that in late February and were really leading to the down.Side industrials on the other hand, and I'll take care of these annotations, the industrials peaked a little bit afterwards. They peaked in early December and they didn't sell off as much and they also rebounded more. And in this latest sell off they have not sold off as much as the transport. So on a relative basis we have seen the industrials outperforming now we happen to be in the midst of aday rally. So I thought we'd show what's happening in this rally and so far the industrials are up 2% versus the Dow Transports 1.71%. It would be ridiculous to read too much into this, but if we do have a rebound from current levels, I would want to see these two kind of confirm each other, and it might be nice to see the Dow transports play a game of catch up. In other words, lead for a little bit.So I thought we'd close here by showing some of the companies that we have in each of the indices, and I'll show you the year to date performance. These are the industrials. This is year to date indeed, and you can see a lot of the mega caps as we've been telling the story, have been under pressure this year. While there's a little bit more green on this side and some of the smaller names. Now here are the transports and you can see the biggest is Uber there. We also have a railroad UNP down there, Uber.22% probably don't talk about that enough, but there's a lot more red in here and that just kind of illustrates the pervasive weakness that we've seen in the transports year to date. So wrapping it all up, I want to see the transports outperform a little bit if we do get this bounce and make sure you tune into Stocks and Translation for more jargon busting deep dives, new episodes on Tuesdays and Thursdays on Yahoo Finance's website or wherever you find your podcast.

All right, Jared, thank you so much.It's time now for some of today's trending ticker scan the QR code below to track the best and worst performing stocks of the day. Yahoo Finance's trending tickers page. First up, filings confirming Warren Buffett's Berkshire Hathaway raising its stake in 5 Japanese trading houses. Buffett forecast this move in his annual shareholder letter, sharing that the trading houses relaxed the 10% cap on Berkshire Holdings. Analysts expecting that move to provide.A modest boost to Japanese equities. The Nike 225 is down 6% year to date, but you can see those Japanese trading houses that Buffett has been piling into all moving to the upside in today's trade, at least. But this points to an interesting question, Adam, which is this focus on what Warren is up to that we get a lot of questions about here at Yahoo Finance, selling his US equity holdings, a little bit more in cash, looking abroad.How much should investors read into the oracle?

Well, I don't read anything into it, and that's not to take anything away from the great Mr. Buffett, but we're very different type investors. He tends to be much more slow and steady growth and, uh, with a much bigger tilt towards uh value. I mean, you look at at the names that he has classically owned, you're like a Coca-Cola or a Gillette or on.On, I mean these are big chunky names. They're not the young uh exciting AI startup companies um they're not uh power generators uh they're not companies that are changing the world, uh, with new technologies there's very little that's, um, even internet related or cloud related. I mean it's, it's, it's the stuff that it's just Americana.And so I think what he's really saying is there's not a lot of value in Americana traditional Americana and the way he likes to invest, so he's holding cash fine, he's looking at Japan. I don't look at Japan. I run the Bulls Eye American Ingenuity Fund. That's exclusively by definition in the US, so I won't look at China, I won't look at Japan. I won't look at Europe, anything, but he is, and I respect him for doing that. Um, so to your question, do, do I put a lot of credence or concern into the fact that Mr. Buffett.Is holding a lot of cash. No, I don't. His style is very differentfrom mine,

and it sounds like the theme in your investment style that I'm learning too is that you're not concerned about any of these indicators that people should be holding on to more cash that we're heading toward a recession. If you are looking at the fundamentals of a company for the long term, in your view, they will be able to withstand any of that macropressure,

correct? And there have been some nasty pullbacks. I remember a few years ago I was buying, not that many years ago, what, about 3, it was in.22, what a miserable year that was for all of us. Um, and, and Facebook, if you remember or meta if you prefer, went down to $82. I started buying at $150 and I bought it all the way down. Actually, I did buy some in the 80s. People thought I was crazy. I said, you're buying this thing down 50%. I said, well, but it's meta and at this point, if they just cut back on all this money they're spending on the metaverse, whatever that is, um, we're gonna see earnings double and suddenly it's trading at 8 times earnings. That's crazy. Well, the rest is history. It's.600 bucks. You have to be willing, yeah, you have to be willing to buy stocks on pullbacks if you've done the work and the thesis is still valid. I think that is incredibly important. And so I tend to look past a lot of the volatility. And here's another thing, Madison, that I don't think a lot of people focus on, but it might be worth um elevating or shining a spotlight on for for our viewers, and that is right now corporate bond spreads are the tightest they've ever been.In other words, a corporate bond spread is the difference between what a corporation is able to borrow money at and what the federal government is able to borrow money at. And when that spread is very narrow, the risk premium by definition is very low. In other words, investors are not worried about, uh, uh, corporate America. They're saying fine, I only get 50 more basis points, 0.5 a point than I do if I buy a US government. Fine, I don't care. I wanna own the, um, the government bonds, and I'm, I'm thrilled to get the extra 0.5 point.If corporate, or I should say if bond investors were worried about the state of the economy, they would expect a lot more incremental return above treasuries for those corporate bonds, and they're doing the opposite. They're saying they're happy to own here. So I look at the market, that aspect of the market, and I say, yeah, why should I be worried if if all of the bond investors in the world are not worried about corporate America, why should I be? That gives me some added confidence to go in and buy these down.10 15% market dips, right,

andan important reminder of looking at the bond market as an indicator as well of that of that activity. We do want to transition gears a little bit here. PepsiCo is set to acquire prebiotic soda brand Poppy and a deal valued at $1.95 billion. PepsiCo anticipating $300 million of cash tax benefits, bringing the net deal to $1.6 billion. Now Poppy is a low sugar soda that incorporates apple cider vinegar, was launched in 2018.Featured on Shark Tank, more recently, the brand had an ad during the 2025 Super Bowl. You can see here shares of Pepsi up nearly 2% here, but interesting to see them taking up Poppy here. You can see this is a very direct to consumer brand, lots of big influencers the likes of Alex Earl. You can see here they've been sending vending machines full of Poppy to influencers' houses to increase brand awareness, and I think this is smart of Pepsi to acquire a potential competitor.In the space, especially given the health movement of younger soda drinkers here, but I wanted to talk to you too just about what this signals to us about deal making, which we haven't really been seeing as much of as I thought we would see following the election of Trump. Yeah,

I would agree. I would have expected a larger pickup in M&A. Maybe part of the issue is rates are still relatively high. Look, I remember my first mortgage was around 7 and 1/8 and whenI refinanced a 5 and 7/8s. I thought I was the king, right, and now all of a sudden everyone is just lamenting the fact that oh I can't get a 3% mortgage anymore. So it's, it's, it's, you know, what we've grown accustomed to. But fair enough, over the past 15 years we've gotten accustomed to money that was probably far too cheap. It should rates should never have gotten as cheap as they did, but they did. We got used to it.And uh we're still used to it and so that may be one reason why deal activity is lower because uh financing costs are just higher. I think that's going to be correct. I also think rates will start to come down a little bit, not a ton, but they don't need to, but they'll start to come down a little bit. That'll stimulate housing that may still stimulate some deal activity. What's also fascinating is that.M&A, yes, as we're talking about is low, but so too are IPOs. So the capital markets, um, haven't really percolated in the way that um up until 3 weeks ago the stock market has percolated. I expect that to change. Um, I expect that we're gonna see a pick up in activity as we get over this concern about recession. We're not having.Session as we get over the uh concern around um tariffs um they're a bargaining chip they're not necessarily a means unto themselves and we've already seen some indications that they might back off a little bit fine so C-suite executives like to see clarity, and I think they'll get more clarity as we get into this year, but yeah, to get.Back to your original question, am I surprised that we haven't seen the pick up in uh M&A activity? Yeah, I'm surprised. I do think it's coming though,

right? Maybe once we get that clarity from tariffs, clarity on corporate tax cuts as well, potentially we do see an extension, I feel like that is something I continue to hear from investors, right? Adam, we'll continue the conversation for our viewers. Stick with us. We'll more markets action ahead.Amid trade war, uneasiness and market volatility, Federal Reserve Chair Jerome Powell faces a tricky task of reassuring investors about the economy while conveying conveying the Fed's readiness to act if necessary. Joining us now, Bridge Kran, a fixed income portfolio manager at.Wellington management to discuss that task at hand bridge, how much do you anticipate Federal Reserve Chair Jerome Powell giving us insight into how he is thinking about the policy risks coming from the White House right now to this soft landing that he has worked so hard to engineer?Oh Bridge, we might not have your audio. We may check on that and come back to you in a second. Adam. I think it's really interesting to get a sense of whether or not he'll certainly be asked about it, Fed Chair Jay Powell about about the impact of Trump's tariff policies on the economy, but it seems like we've heard from him time and time again. We're in no rush to cut until we see the impact of that policy and the hard data we're not cutting.

Oh yeah, he's made very clear in very specific terms he has said the economy is in a good place and my interpretation is that is so steady as she goes. He's a very steady guy. There aren't going to be suddenly cuts. um, he's probably not gonna hike rates. It's just steady.

Enjoy the glide path if you've got it, Bridge. I think we have you back with us. Talk to me about that glide path. Just how big a risk is the policy coming from the White House to the Fed's soft landing that they've worked to engineer and do you anticipate Fed Chair Jerome Powell capitulating it all to the White House and the Fed meeting this week?I think we've lost you again, Bridge. So sorry about that. We will work on what's going on with Bridges audio mute button that mute button it gets you every time 5 years out of the pandemic, we still struggle with it. No, but it is very interesting to continue to see kind of this question from investors about whether the Fed.Or the White House is going to blink and you would know better than me, but I think the answer is neither, and that's OK. The market will continue to be fine regardless of whether or not we get 5 cuts this year. Do you want that many cuts? That means that we're in too much of a slowdown and the Fed had to cut, so it seems like.You know this Fed meeting this week is is not great for news headlines, but a little bit much ado about nothing when it comes to. Yeah, thank

you. I think that's right. I think that we all get sort of fixated on this notion about the Fed, and we, we've just sort of, we, we give it too much importance. So think about where inflation is now. It's around 3% actually 3 of the 4 of inflation indicators are under 3%. Inflation was as high as 9 to 11% depending on which of those indicators you want to use.And yet the Fed has only cut rates by 1% point. They took them up to 5.5% because inflation was 9 to 11, and now they've brought them down to 4.5%. So the Fed should probably cut another couple of times. But with an economy that's growing as strong as it is and inflation still above that target, um, they don't need to do a whole lot, and I think that's the whole point. So let's not rush, let's be steady. That's the message I think from, uh, Mr. Powell. And so yeah, I think, I think 225 basis point.Cuts between now and December is reasonable. The market's gonna want more, but the market doesn't deserve more. You have to, uh, find companies that are actually growing. That's why you buy stocks because of earnings growth, not because of Fed rate cuts.

And also, as a reminder, you brought up the Atlanta Fed GDP now data we're gonna be getting an update on that today, so we will bring you that as we get in all your markets action ahead, so stick around for more. You're watching Catalysts.Amid trade war, uneasiness and market volatility, Federal Reserve Chair Jerome Powell faces a tricky task of reassuring investors about the economy while conveying the Fed's readiness to act if needed. Joining us with more, Bridge Karan, a fixed income portfolio manager at Wellington Management. Bridge, great to have you. We've got that key Fed meeting coming up on Wednesday. To what extent are you anticipating hearing from Fed Chair Jerome Powell, any capitulation when it comes to policy from the White House and the impact that could have on our economy?IOh Bridge, we can't hear you unfortunately we're gonna have to uh we're gonna have to try and get you back with us another time I really appreciate you making the time here and I, I know Adam, this is something that we've continued to talk about just the impact of the policy on the market but it sounds I I mean I think it is an important thing to remind investors of that if you are picked.individual stocks if you are an investor who has the investor hygiene to stock pick which is something that maybe we can talk about um you know it it sounds like the policy from the Fed and the White House is not going to necessarily move the needle, but maybe we can talk about that a little bit. How good does your investor hygiene have to be to be a stock picker?

Well, the thing that I've learned over the years is everyone who does what I do pick stocks, needs to have a process. Where do you start? What are you looking for? Uh, are you a growth investor? Are you a value investor? Are you someone who likes to try to um figure out where a company is going or are you just comfortable sort of figuring out where they are.What they're doing, I would say that um a growth investor is looking into the future. That's what I do. I try to create a model for cash flow project into the future what those cash flows will be discount them back to a present, uh, apply a multiple to it and say, ah, therefore that's what I think the stock is worth.Someone like a Warren Buffett is saying, well, you know, Coca-Cola typically trades between 12 and 20 times earnings, and it gets down towards uh 13% ding ding ding, I get an alert. Look at the company. Has something changed? Is something wrong? Oh no, it's because the market's down, maybe I should buy it. What's the dividend yield? Uh, what's the cash flow coverage? Um, that's his process and, and value investors like him.An international investor might be looking at capital flows and foreign direct investment between countries, right? So there are any number of different ways to approach the market. No one way is right. There are traders out there too. I sort of, I kind of poo poo on traders because, you know, oh they don't really know anything about the company. They're they're just taking a view between today and the close. Fine, God bless. I actually have.Known a lot of traders who've made a ton of money, but I think it's really hard to do because they have to come in and reinvent the wheel every day. So you know, figure out what how you're wired as a person, what are you good at, and then build a process around that. I

likethat a lot. know the plan heading in. All right, Adam, stick around with us. We'll be chatting more. President Trump told reporters over the weekend both reciprocal and sector specific tariffs are coming on April 2nd.

April 2nd is a liberating day for our country. It's going to be reciprocal. In other words, whatever they're charging, we're charging very simple.If they're charging us, we're charging them. That's no longer they charge us, but we don't charge them.

It's the latest move amid rapidly escalating trade tensions between the US and its largest trade partners. Previous tariff announcements have roiled US markets and fueled stagflation concerns. Greg Vallier, AGF Investment's chief US policy strategist, is joining us now with more. Greg, great to speak with.You here we've had a lot of investors telling us throughout the morning that we're just in a pause moment. We're in a wait and see moment here. At what point does the wait and see, particularly over policy coming from the White House, start to cause serious pain both in the stock market but also in the economy?

Well, I think it already has. Good to see you. Good morning. I think this is going to continue to be an irritant. right up until April 2nd, there's going to be, you know, will they or won't they, you know, what does Howard Lutnick say? Does he change his mind? It's a hell of a way to run a government, and I think this confusion is going to persist.

But Treasury Secretary Scott Bessin just says that this is a healthy market correction. Do you disagree?

Yes, absolutely, uh, he's, he's a lot richer than me and probably smarter too, but I would say that, uh, that he's, he's not right. I, I think the markets are really jittery and you, you, you can't ignore how nervous the markets are right now and I again I think this is going to persist for quite a while.

Greg Adam Johnson, have you raised cash because of this uncertainty right now?

Oh, no, I'm not in that part of the business. I, I, I'm, I'm in the research, but, uh, so I, I can't answer that.

It it's interesting though, Greg. I, I think that what Adam is speaking to is something that we've heard a lot of investors talk about raising their cash allocations because they're so concerned about the path forward for the White House. I, I wonder how you're thinking about Treasury Secretary Scott Besson's insistence on keeping the 10 year yield lower and what you're telling clients about what the bond market movement and Treasury secretaries the sense focus on the bond market might mean when it comes to the economy moving forward.

Well, you have to say it potentially one of the better stories that you could see interest rates stay roughly where they are and might even fall a little bit because of all of this uncertainty. investors are going to have to look for a safe haven, and I think that uh treasury is a safe haven.

And I know a safe haven coming amid a lot of policy uncertainty. One of the things that I've been wondering about is that investors seemed to get it wrong when it came to tariffs, this idea that they were just a negotiating tactic and now we've seen markets selling off every time we get a new tariff headline. To what extent could the same be true when it comes to tax cuts? Do you think that we're going to just get an extension of the same, or could we see additional tax cuts which investors would be happy to see?

I think that one is a little easier to handicap than uh than the tariff story. Uh, I do think that by the end of the spring we'll be pretty close to having a an extension of the 2017 Trump tax cuts. I, I think the votes are just barely there.But then the second part of his tax cuts, let's have cuts for people who make money through tips, uh, state and local housing. There's lots and lots of other tax proposals that also look a little less likely, but I think the extension of those 2017 cuts are coming. I think it's just a question of when.

What do you think that road looks like then because obviously given what occurred with the government shutdown, you could argue that that maybe is indicative that the path to corporate tax cuts is is a little bit smoother than we might have thought. What do you think that journey is gonna look like?

Yeah, I'm not sure, smoother, but I, I, I must say that all of us who follow Washington, myself certainly included, have underestimated Mike Johnson, the Speaker of the House. You got to give him credit. He has had quite a, a record, I think.He'll have the votes and in the, in the Democrats, you see utter chaos, real animosity toward Schumer. So I think you've got one party that's divided, another party that's determined to get the tax cuts done.

And talk to me too you since you mentioned Chuck Schumer, I'm curious what you think about what we're seeing in terms of factions within the Democratic Party that obviously played out during the shutdown discussion. What does that tell you about what the sort of push back to the Trump administration is going to look like from the Democratic Party from here on out?

Uh, weak, uh, limp, uh, tepid. I, I don't think there's, there's going to be a big pushback from the Democrats. They have looked awful. Uh, they continue to look really discombobulated, and I think that's a major reason why we will get a tax bill later this year. All

right, well said, Greg. Thank you so much for making time for us. I appreciate it.

You bet.

Coming up, we're diving into the state of the consumer after this morning's retail sales data. What you need to know next.US retail sales were weaker than expected in the month of February, rising just 2.1%. January's numbers revised lower, sparking concerns over the health of the consumer. With more retail earnings ahead, I want to bring in Oliver Chen, TD Cowan, senior research analyst for more on where retail.Investors can turn for safety amid uncertainty and Oliver, great to speak with you and I specifically mean in this case investors who are interested in the retail sector, where can they find safety amid all the questions about the health of the consumer right now? What names are you looking at?

Yeah, Madison, our best ideas include BJ's wholesale. We also like Walmart and Costco. So thematically, bigger is better in terms of scale, and clearly Walmart has a lot of supplier scale as well as navigating this dynamic tariff environment.The other thing we'd say, Madison, is this is the year of and, meaning retailers that offer needs plus wants, meaning retailers that offer food as well as discretionary. And these fit the bill too, Costco, Walmart, and BJ's. BJ's is our best idea this year in terms of the valuation being closer to 23 times versus Costco's 40.6 times PE ratio. We also love what Walmart is doing with technology in terms of digital advertising, the marketplaces, and artificial intelligence. So each of these uh carries a really nice places to be. And the bottom line is also understanding and buying into into the safety and the free cash flow, and bricks meets clicks and stores plus digital.We're more concerned on discretionary. And as we look at the numbers, the numbers speak for themselves in terms of Macy's guiding to -2% or more, K at -4 to 6%. Uh, on the other hand, Walmart at +4, Costco running at +8. Uh, there's a real effurcation in terms of pure discretionary and then that need plus 1 theme.

Yeah, that's interesting in the context of another name that you sent to us which is LVMH, and I, I am interested in that given some of the concern we've heard about how you know the market being down is going to impact wealthy consumers. They're not gonna have as much money to spend on on some of those retail names. How are you thinking about a name like LVMH?

LVMH has tremendous scale. It's the 2nd biggest market cap company in Europe, and it really has power brands such as Louis Vuitton, as well as Dior. They also in Sephora too, and they have champagne and wine, so it's very diversified. The bottom line is we love the scale at LVMH. However, we're being pretty selective. We recently upgraded Richmont Cartier, and what's happening there is consumers are still buying jewelry. They also like the quiet luxury.trend of a lot of the franchises within Richmond and Cartier, such as Love and Santos. But we like LVMH too, but cautious optimism there, I'd say, especially because of China and lots of issues happening in China with the property market. Something we're watching and you're right, uh, what happens in luxury is the feel good factors important as well as the wealth effect on the S&P movement. So this recent market volatility is not helping consumer confidence, and it's a risk factor to look at.Diving deeper into luxury are preferences for hard luxury versus soft, meaning Cartier, Richmont, jewelry, that's benefiting in this current environment as well, because overall, there's less anxiety than when the election was not resolved. It's been helping the Cartier numbers a lot. It's growing at around 10%.

Oliver Adam Johnson, I run a tech fund, a growth fund, and I would love to leverage your expertise on retail. Can you help us understand how companies like Walmart, Costco, etc. are using AI to drive sales, whether it's tracking people around the store, tracking sales over time, um, uh, rationalizing supply chains. Can you talk about that AI impact for these retailers, please?

Yeah, Adam, we are thrilled and excited. I teach at Columbia class in AI as well, but what's happening on a very boring level in AI is inventory management and specifically using visual AI to determine if this product's in stock or not. One of the biggest issues was we think about curbside pickup and delivery is how annoying it is if that product says it's in stock and it isn't. So AI is being used to manage inventory, and if you keep retail very, very simple, it's matching.Supply and demand, inventory accuracy is fundamental to this whole system. Beyond that, there's a lot of magic and logic in AI, meaning magic in terms of product innovation, augmented reality, and magic in terms of predictive moving to prescriptive and sending atom items you didn't even know you wanted, or helping you with boring stuff. Meaning, how do you fill your car up and anticipating what you may need for a holiday or a party. Uh, what, what's really important for retailers isIndustry leading loyalty programs, because as you know, Adam, the data is so important. So having the best training models and having the money and scale to fund data science is very important, but as we look around, personalization will continue to reach a new levels, and AI will be interesting because in many ways, this is very decentralized and open source, but companies have to test, read and react to, to the myriad of of things available here.

And one of those things that is available here from the macro level level all over is the economic data that we've been getting and obviously concerns about consumer spending here 30 seconds left. How worried are you about the macro?

Yeah, it's something we're watching. Consumer confidence has been volatile, and the consumer really feels these egg prices and dairy, and that feeling matters. That being said, on the positive side, unemployment is low at 4.1%, and also we still have wage growth, which is running at 4% above inflation at 3%, and there's $1 trillion of dollars on the sidelines. That being said, lots has happened. That's not.Positive, including adverse weather, flu, as well as, as well as these real egg prices that's making everyone scared and jittery. Also headlines. How many times have you mentioned tariffs in the past couple of days or weeks? It's not helping in terms of consumers, um, feeling not great, and a lot of the stuff I covered nobody really needs at all. So this this is impacting.Uh, how we are seeing and what companies are seeing.

Yeah, all right, Oliver, thank you so much. Everything that you cover matters for us. Appreciate your time this morning. Also, a big thank you to Adam Johnson for joining me in the hour. Really appreciate it. Coming up, you've got wealth. It's dedicated to all your personal finance needs. Brad Smith has you for the next hour. Stay tuned.