Correction, How Worried Should We Be? (Ep. 127)

In the latest episode of Facts vs. Feelings, Ryan Detrick, Chief Market Strategist, and Sonu Varghese, VP, Global Macro Strategist, break down the recent market correction, what history tells us about recoveries, and whether investors should be concerned. Plus, they discuss sentiment shifts, the strength of international markets, and what they see next for stocks.

Key Takeaways:

• Understanding Market Corrections: The S&P 500 fell 10% in just 16 trading days — historically, corrections like this happen about once a year.
• What Happens Next? History suggests strong rebounds after quick corrections, with the S&P 500 gaining an average of 7.5% in three months and 15% in six months following similar drops.
• It’s Not All Bad: While the S&P 500 dipped, international markets like Germany, Japan, and Europe have remained resilient, showing the importance of diversification.
• Investor Sentiment is Shifting: Bearish sentiment is at its highest level since March 2009, often a contrarian buy signal.
• The Fed and Inflation Concerns: Inflation expectations have risen, but real inflation remains under control. The Fed’s next moves will be crucial.
• Diversification Wins: Bonds, gold, and low-volatility stocks have held up well, reinforcing the need for a balanced portfolio.

Connect with Ryan: 

• LinkedIn: Ryan Detrick
• X: Ryan Detrick

Connect with Sonu: 

• LinkedIn: Sonu Varghese
• X: Sonu Varghese

Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com

Transcript

0:01

Welcome to the facts versus feelings podcast. I'm your host, Ryan Dietrich, and I'm joined by my co host, Sonu Varghese. Cutting through the noise in thirty minutes each week with Ryan Dietrich, chief market strategist, and Sona Vardis, VP global macro strategist, taking out the boring and helping investors focus on what really matters. A quick note before we start the show, investment advisory services offered through CWM LLC, an SEC registered investment advisor. Carson Partners, a vision of CWM LLC is a nationwide partnership of advisors. Houston, we have a correction. Welcome to episode one twenty seven of Carson's facts versus feelings, Ryan and Sonu. We're tiling this one correction. How worried should we be? Sonu, before we go there, it's March madness on the YouTube channel. I'm wearing my Xavier shirt. Who knows? By the time people listen to this, Xavier might have lost. We snuck in to the tournament playing up in Dayton, Ohio, an hour north of where I'm sitting. Congratulations. Yeah. Play in Texas. And Ohio State took out Texas in football, so maybe another Ohio team will take them out different sport. We'll Okay. See. But you went to Purdue. We joked last year you didn't even know Purdue had a good basketball team, but, you know, I knew it was good when I was there. Yeah. But the women's was better at the time, and I was, this is like, oh, goodness, about twenty five years ago. Yeah. I feel old. I feel really old. Well, you know? Yeah. Like I always say, you're older than me. So there's, like, six months older than me. I point out to him he's the old he's the old man of this podcast. He's six months old. Graying all around here, man. Yeah. You know? Well, that's probably because we're in a correction. Let let's just dive into it. So we're gonna talk we'll talk about marketing correction, a bunch of stuff, then probably a little macro stuff the second half. But, set the level, you know, we hit an all time high February nineteenth on the S and P five hundred. And then sixteen trading days later, we hit, into marketing correction. And that that means down ten percent, by the way. Down ten percent from the all time highs. It was Is that a hard and fast thing? Like, ten percent is, like, somebody Somebody get a someone on CNBC or something will tell, like, okay. We have correction. Yeah. I think I always think five percent pullback, ten percent correction. Yeah. I don't know what fifteen is, but twenty percent bear market. Yeah. Somebody came up with that long before us, and I I guess we just run with it. You gotta have definition somewhere, so I I can get the flaws and the you know? Well, like, is it a bear market? Well, in twenty eleven and twenty eighteen, intraday, we were down twenty percent. We rallied on those days. So, technically, it won the bear market. I I we get those. But, you know, I I kinda liked it. You know? I mean I mean, let's just put it this way. I know, Josh, the the chart let's we share on the YouTube channel. What happens after stocks move into correction? That chart, we can share that one right now. Again, sixteen days, into a correction is what this took. But the fascinating thing, Sonu, to me, I found I think it's eleven or twelve. It's eleven or twelve, honestly. I'm it I guess twelve. Twelve twelve other times we went into a correction, but did not go into a bear market. Alright. So we're sharing out on a screen on YouTube. Five of them bottomed the day you went into a correction. How about that? I mean, like because a lot of times, yeah, there's still more weakness and this and that, but five times out of twelve, you bottomed. So did we bottom on, Thursday? Listen. I don't know. Who knows? There's time Thursday of last Thursday of last week before the Thirteenth. Yeah. Before the the huge rally on on Friday, a solid rally. And what got me and I'm not calling him out, I hope, because I wanna have him on our show, but I gotta be careful. I say this. Huge fan of Ed Yardeni. I think he's, like, one of the biggest bulls out there. I read Ed stuff. Big fan. Watched him for jackets. Talk about Harry Dent, though. Oh, we can we can talk about we can we can we can poke at Harry Dent more. But on Thursday, Ed Yardeni said that Trump put his or Trump Trump put his kaput, kinda cut some of his estimates, kinda started talking a little worrisome, didn't cut his GDP, but he said it out. Words. Yeah. You like that. Oh, well, that's why Ed's Ed's awesome. Come on our podcast. We can talk about it. But but, you know, so I saw I said, wow. One of the biggest bulls is kinda waving a little bit of white flag. That's something. Then on Friday, then on Friday, everybody's friend, Harry Dent, came out and said stocks are gonna fall ninety nine percent. Certain stocks are gonna fall ninety nine percent. And I'm thinking to myself, wow. You've got a big bold waving the white flag. You've got the biggest bear out there making some real and by the way, you can Google what he does and going Google Harry Dent. You can see what he's been saying for a long time. You know, he's been bearish for a very, very long time. He was bullish across the two thousands. Yeah. How'd that work out? Yeah. He he was very bullish in the two thousands, which is like the roaring two thousands. Which was a lost decade and one of the worst literally, the two thousands was the worst decade for investors since the great depression. So, anyway, so we've got Harry making comments like that. You have the AAII sentiment poll above fifty five percent bears three weeks in a row for the first time since March two thousand nine. We finally saw put to call ratio spike by a wide margin last Thursday. Just this morning, haven't had a ton of time looked into it. That global fund manager survey from Maker America showed huge drops in overall bullishness and optimism now. Everyone was, you know, thinking the economy was great two months ago. Now it's like, woah. Not so sure. So to me, it's just a shakeout. We've talked a lot about how early in a post election year. I was on CNBC, like, five in the morning this morning. So who knows how this call this podcast is gonna go. I'm kinda tired right now, to be honest. But talked about this early in a post election year, choppiness is normal. Early after twenty percent, gain, choppiness is normal. The past twenty years, choppiness is normal. Sonu, last thing, they'll let you talk. Last twenty years, S and Ps bottomed on March twelfth on average. You know? Yeah. That's skewed because of two thousand nine and because of twenty twenty. We get it. But at the same time, we bought them so far on March thirteenth. I don't know if it's that simple, but, you know, we've settled this podcast last couple weeks. Late February, early March week, this perfectly normal market in a correction, just pure hysteria out there on a ten percent normal correction, which happens on average once a year. And then we started to bounce a little bit. Who knows what's gonna happen from here? I'm not saying where the low is in. I think we're closer to a low than not. Oh, one more. The cover of economists is president Trump with the flamethrower burning up dollar bills. Okay? That's not a very optimistic cover. I mean, that that that tells you we're sentiment. Now the economists, they're kinda that way. But still, when you see these things, I'm Maybe he does wanna burn Well, you you were looking in it a little bit more. You're like, well, that'd be a dollar to go down. Like, oh, I don't know. Yeah. Alright. So what do what do you think about some of the market stuff that's going on out there? You know, I probably bring up something our friend JC Perrett said. You know, when we talk about our market in a correction, it's let's be specific. You're talking about the S and P five hundred. Yeah. Good point. There are a lot of stocks that are up. You know, look at the developed markets. Look at Germany. Look at Europe. All of that. You know, the MSCI EFA index Yeah. Which is developed markets. We've got Japan, Europe, Canada, Australia, you know, all of that. From February nineteenth through March fourteenth when the S and P five hundred fell, you know, it's a time we went into the correction. It performed since February nineteenth S and P five hundred high. Right? The MSA EFA index is up one point five percent. Wow. Positive. Positive. Right? The S and P five hundred low volatility index is flat, negative zero point one percent. Mhmm. Right? You and I have talked about how we added some of that low volatility Yeah. Exposure before the election, actually. We've been in this now for about I'm I'm trying to count, four months, more than four months, four and a half months. You know, we're sitting here on March eighteenth. And then we talk about, you know, that you don't have to be in one side of the market And then even equity portfolio, we usually talk about diversification. We talk about diversification across asset classes, and gold has done done well. Bonds did relatively well during this period when stocks fell ten percent. Mhmm. When the S and P five hundred, I should say, fell ten percent. Mhmm. Right? So you've had your diversifiers working for you, and they're zigging when stocks are zagging. But even within equities, right, you don't have to be all in on technology. You don't have to be all in even on the S and P five hundred. Right? There's broadening, and that's something you and I have talked about. And, you know, if we discuss this in the outlook too Mhmm. You don't have to be all hundred percent exposed to US stocks, for example. No. I mean, believe me, it was nice if you were the last two years, but we've been saying, you know, things could be changing a little bit. We'll share on the YouTube channel now the, table one of the fastest corrections ever. Now what? So, again, it took sixteen trading days. Okay? So as we're sharing on YouTube, but I'll explain to listeners, six other times, Sunu, we saw a quick correction from an all time high to down ten percent like we just saw. The fastest ever, look look at my phone here, was six days during COVID, so not not surprises with the sixteen trading days. But here's what really matters, I think, to to listeners out there. Three months later, after a very quick move from all time high to a correction, higher every time, up seven and a half percent on average. Six months later, higher every time, almost fifteen percent on average. So snapbacks, whatever you can call it, back, a strong rally coming back after a quick correction is scary as this quick correction has been for a lot of people, especially those that weren't diversified, like you said, maybe just sitting in mag seven because, hey, it worked it worked. Now it's not. That's what this feels like, I think, to a lot of people. But one more thing, and I'll go share this now on the YouTube channel. The past two days, how strong they've been. Now the past few days, let's be clear. That's Friday and Monday. So we saw Friday was the best day of the Europe over two percent for the S and P. Over ninety percent of stocks in the S and P were higher. Followed through on Monday with more than ninety percent of stocks in the S and P five hundred higher on Monday. That's back to back ninety percent up days on the S and P. That is extremely rare. Thanks to our friends over at Ned Davis Research. I use their data going back to nineteen seventy two. When you look for back to back ninety percent, updates as, again, we're sharing on the YouTube channel there. Six months later, higher nine or ten had to hire ten out of eleven times of double digits on on average. A year later, you're up sixteen percent higher ten out of eleven. You know, these are just all these little stats by themselves take it for whatever they're worth. But when you start stacking them on top of each other, to me, it suggests, again, six months from now, we're probably gonna be up a good deal. You know? And and maybe next month, maybe we're not. You know? We I know the headline risk is their news trumps charts. We get all that. But some of the things that we are seeing here with seasonality and the over the top negativity and now a potential buying thrust, those are appealing to me, from that point of view. But I guess my question to you then, Sonu, let's say the US bounces oh, heck. What what did I just say it was? Like, almost ten percent ten percent the next six months. Let's say it's ten percent the next six months. Are they gonna lead, or is Europe still gonna lead or China or the dollar or not the doll gold? I mean, what do you think will happen? Let's just play hypothetical. US does bounce ten percent the next six months. Where would you wanna be? And and speaking of that, like, you just mentioned I I will answer the question. I'm not gonna know what to do. Well, like any yeah. I I joked. So did I did a podcast last week. He didn't even answer the question. I was like, god, you're getting good. You're like me. They ask you something. Like, I always say on TV, they say when you go on TV, they said, do you know what they're gonna ask you? I said, no. But I know what I'm gonna tell them. That's that's my that's my saying when I go on TV. But, Pierre, it's just two of us. Right? They're aunts friend. Yeah. Amongst amongst several thousand people listening. People listening. So but the no. Look. What they you said this yesterday when you were on a call with advisers. Stocks take the elevator up, is it? No. Elevator elevator up and escalator Listen. No. Escalator up, elevator down. Listen, everyone. I would I just angling this. I just wanna point this out. Yesterday yesterday was Saint Patrick's Day. All I know is there was one or two of us that might have been in Chicago. Took, like, a three hour lunch with a partner in town. I said, I don't know. Are you you mighta had had a few drinks. I don't blame you. It's Saint Patrick's Day. No. It's the old saying Help me out. Yeah. I'll get there. I'll I'll get there. I'll get there. The, the old saying, investors take the escalator up, but the elevator down. So There you go. There you go. There you go. But six months forward after that, it kinda takes the escalator up again. Mhmm. Right? And that's what your numbers show. Like, ten percent to six fastest corrections. Yeah. And then it takes next six months, it comes back. So it sort of doesn't pay to I mean, condition this. I don't know what's gonna happen. Mhmm. But still, it doesn't pay to, like, sell over here and panic. Yeah. Right. Right? Because it's gonna recover. And if you sell, you may miss a good chunk of that recovery. Mhmm. That's the other side of it. Right? Now with respect to will the US outperform everything else, so far it hasn't, at least year to date. Sure. And, you know, you hate saying this time is different, but I'll put it this way. And this is actually this goes to how we are positioning our portfolios as well. So that's yeah. That's our answer. Right? What we are doing in our models. Right. There's a lot of uncertainty. We don't know. So we pull back to a maximally diversified portfolio. We're still overweight equities. Yep. Right? In an unconstrained model, we are seventy five percent equities, twenty five percent diversifiers. Right? We used to be, like, eighty five, ninety percent. Right? We've pedal to the metal for the last two years. We pulled back actually before this. Correct? This is few weeks ago. Oh, yeah. Right. We've we've done this. Right? And but at the same time, we are not, you know, neutral for us at sixtyforty. That's us new you know, if if we didn't know any better, we'd go to sixtyforty. Mhmm. We're still positive on equity, so we're seventy fivetwenty five. But out of that seventy five, a good chunk is in international equities, maybe close to about twenty percent or so. Okay. You know, and then out of, you know, the remaining, what is it, about forty five percent US equities or fifty five percent US equities, I would say, you know, a good chunk of that is in momentum stocks. Yep. And this you know, during this correction, one thing we have seen, even year to date, momentum has actually done better than high beta. Yes. Yes. Yeah. Very high cyclical stuff. Right? The S and P five hundred high beta index was down about sixteen, seventeen percent during this correction. Momentum didn't get hit as as hard. And you actually think, wait a minute. Isn't momentum the same thing as high beta? Not quite. Right? Sometimes it can look that way because momentum can be, you know, a shape shifter. It can be anything really depending on, you know, how those particular stocks have done over the last six, twelve months. Right? But now momentum actually has financials. Financials is, you know, are the group that have a lot of momentum. And so that's what momentum, you know, essentially has. Whereas high beta is all the other stuff that's, you know, richly valued, etcetera, growth y type stocks. That's all gotten hit really during this correction. So when financials are doing relatively better, momentum's doing relatively better, I think that tells you that this is a growth scare. This is not a recession scare. Right? And I think that's what we are looking at, you know, from a perspective of portfolios as well. So to answer your question, I guess it's really like we don't know, but we are positioned for we don't wanna be left behind Mhmm. If, you know, a or b rally. Whether it's Chinese stocks or whether it's European stocks or even if it's US stocks. Right? Mhmm. But right now, uncertainty is high, and we wanna be positioned with maximum diversification. No. Well said. I mean, twenty seventeen. Right? US did really well, but the rest of the globe did really well also as the US dollar went lower. I think US plays catch up. Yeah. I don't I don't know. Next six months, maybe US does a tad better than the rest of the world. But I think the rest of the world's starting to do pretty well, right, as that dollar keeps going lower. So being diversified makes, a lot of sense. Josh And that's a kicker too. Right? If the dollar goes down. Yeah. And and that's why I was like, when the economist puts put that cover, I was like, the economist is probably trying to make a joke here, trying to be sort of, you know, trying to try to play with the on the negativity. And I was like Oh, yeah. You know what? I actually think they probably want a weaker dollar because in the administration's mind, it's very unclear what they exactly want. But from what they've kind of said, it seems like they want a weaker dollar because it promotes US manufacturing. Mhmm. Now I think then, you know, we've talked about how with tariffs, it's a stronger dollar that actually helps mute that inflationary impact. But if you have a weaker dollar dollar, then you have, you know, more inflation technically, right, because it makes foreign goods that much more expensive. But, you know, we'll see where all that plays out. I think if the dollar goes down, going back to what we are talking about, that is a tailwind Yeah. For international equities. Yeah. No no doubt about it. Also, a chart I thought of that maybe we could share, but we'll share this on the YouTube channel. Josh, I'll get it to you, but just mark the time down. If you missed the best ten days of the year because we get this a lot. Right? If you missed the best ten days, missed the worst ten days, here's the thing people need to remember or need to know. The worst days of the year and the best days of the year, Sonu, happen about the same time. Okay? Just like last week. Monday was the worst. Friday was the best. That's how this works. So if you sell because you've had some big down days, which is what I've seen throughout twenty five years of my career that tend to be able to do. After the worst. Right? Best is after the worst, and then you get the rip higher. So, again, we're sharing on the YouTube channel now. But if you miss the, the best ten days of the year, but since two thousand, S and P is up about nine point eight percent on average. Let's just call it ten percent. But if you miss the best ten, that drops all the way down to negative twelve and a half. So you're talking a twenty percent drop. Just the last two years. Right? Up about twenty three, twenty four percent. Those drops the last two years go to about three or four percent if you miss the the best ten days. So, of course, you know, yeah, if you miss the best ten days, of course, it's not as good. But what if I miss the worst ten days? Listen. If you wanna play that game and do short term trading, be our guest. You're probably listening to the wrong podcast, to be honest. There's probably some other podcast for that. What we're trying to stress to our CarSA partners and the clients and people out there listening, if you're gonna miss the best ten days of the year, you're in trouble. They tend to happen after the worst days of the year. Okay? So this be think of August last year. Right? August last year, really big. That was the biggest down day. Three percent down day. I don't know the exact day, but I think that Monday first Monday in August. And then, like, a couple days later, had, like, the biggest day of the year. Alright? So, you know, and, again, speaking of mid August of August, there was a day when all that credit crunch stuff or I'm sorry. You can carry trade stuff unwind ended. We had an up ninety percent day on the s p four hundred and an up ninety percent day on the multicap data that Ned Davis, keeps track of. So you got, yeah, large caps, then you got everything up. That was a one day period that marked. That's it. The yen carry trade warriors are over. We just saw that on Friday. We saw a ninety percent multicap. Everything that Davis looks at along with S and P for a hundred and ninety percent. Hey. Don't know if that's the low or not, but that that that, I'm optimistic, I guess, that that'll be the case. And there we go. Thanks, Josh. Here we go. If you wanna hear the latest from us, don't forget to subscribe to our podcast. You can leave a review. We'd love your feedback. And the one we did last week, who do we have on? I believe I just forgot the name. Warren. Sorry, Warren. I've been up I've been up forever. I've been up forever. I don't know what I'm saying anymore. Our buddy Warren Pies joined us. We hit a record number of YouTube views, which is awesome. The number of downloads to the podcast has been really good too. But, we're trying to really do a lot more with YouTube there. So, thanks to Warren for joining us. Thanks to everyone that listened to it because it was, the most we ever had. Literally, we've done a hundred and twenty six of these. This is one twenty seven. That was the most views on the YouTube channel we've ever had. So thanks to everyone out there. Give us those likes. Give us those reviews. There's a rumor we might turn comments on sooner than later. We're not there yet. Oh. But there's a rumor we'll have comments on, which I've heard the magic elixir to better algorithms is having the comments on. I don't care if they're good or bad, to be honest. You know, whatever. Just make comments. But they're not open yet. We'll let you know. People. We'll let yeah. Whatever. We'll let you know when those comments are on YouTube and comment away because algorithms love that, but we're not there yet. But we are pushing the pushing, pushing, pushing to try to get that approved. Not there yet. Alright. Sonu, we've gone all over the place. What else you wanna talk about? Actually, just to stay on the topic of stocks, I was gonna ask you something. I think it was a couple of weeks ago, maybe three weeks ago, we talked about tech stocks. Right? Our tech stocks have been flat for, like, eight months, and now it's been flat for about ten months because of this pullback. But when we talked about it, it was flat for about eight, nine months at least. Mhmm. Do you think the market is trying to say something here to us? I mean and then we just talked about low vol stocks, defensive stocks sort of, you know, rallying over the last four months too. And so it's not just before this correction. Right? It was already doing well. I'm curious what signal you take out of that. Mhmm. I guess it's not a here's the thing that might surprise some people. It's not all that surprising because last year, technology stocks underperformed the S and P five hundred. It was, like, twenty three point five to twenty three point three. Not by a lot. I get it. But I think that'd be surprising to a lot of people because tech, tech, tech. It did great. So Magnificent seven. I got a little faster. Yeah. But then the fourth quarter last year, we started to see some pretty good size under or, yeah, underperformance from technology. Clearly, things kinda broke, so far this year. So that's not surprising, I don't think, to see that. Now the big question, and I get it, tech is, I don't know what, thirty percent of the SP five hundred. You got another eleven or twelve in communication services, kind of a cousin to tech. So that's, like, forty percent. If my math is right, if those two groups fall apart, yeah, it's gonna pull probably the market down. But as of Friday, I don't know, maybe you know, but as of Friday, seven of eleven sectors were up on the year. After Monday's rally, it might be higher. Might not I'm not sure. But it is you know, the rise It it was seven out eleven. It's still seven so seven eleven. Here you go. So seven out eleven, that's not terrible when you see a marketing correction, stocks are down. I will say this. I've had some friends reach out to me that I've heard from from years. I mean, literally, like, years. They know what I do, whatever. Reaching out, panicked. Over the weekend, I mean, I was getting messaged people. I was like, wow. I hear from people like this, no offense to them, when we're closer to a low than not. We all do this. You know, you hear these little anecdotal things, and I'll tell you, I was hearing some things from people getting really worried, rightfully so, with all the scary headlines and all the uncertainty that's out there. But, well, then we're looking at two pretty good updates. So, yeah. But, yeah, bottom line, I guess, the the the fight the fact that we are passing the baton around, as I like to say, is a real positive. It's not like the whole market's just collapsing, obviously. Like you said, Germany's sitting in all time highs. China's multiyear highs. Hong Kong multiyear highs. Like the joke, I think maybe it was in the podcast. Like, India and the United States are only two things really struggling this year, and you're connected to both. You're just bad luck. I don't know. It's like, but gold's doing well. Oh, there you go. That's a good comeback, brother. That's good. That's good. By the way, my name, I you and I I was sharing this with you. I can't believe I never said it. Sonu. Yeah. It's actually off of, like, in in Hindi, it's a Sona as gold. Right? So there you go. Like I belong. Good luck charm there right there. What's your middle what's your middle name? Do you have middle name? Yeah. Sam. So my name is Sam. I knew that. I knew that. My name middle name is Sam. Yeah. Okay. My we have no originality where, you know, this little neck of the woods that I'm from. My dad's name is Sam. You know? Like, it's it's Sam Verghese is his actual name. His brothers are Sam Phillips, Sam Thomas, Sam George, you know, like Sam Alex. So so it's but my grandfather's name was Samuel, and his dad was my great grandfather was also Samuel. Wow. My son's name is Sam. So we're all, like That's a lot of pressure. In a full life. You don't wanna be the one to break the break the string. Well, my I wasn't. My father's name was Orva Homer. So Really? Wow. Orva Homer. I mean, both of those are kinda I don't know. So interesting. Yeah. Thankfully, I'm not Orva. You could be talking to an Orva right now. I I don't know. The good thing is, like, you you know, like, you you're Sony. Like, you've got kinda like you're like Madonna in this industry. It's it's a small little bubble we live in. Oh, they're Sony. You know? It's Dietrich. People kinda know me. But, like Yeah. Orv would be like, Orv. Like, okay. There's no other Orv in in this industry. About it. Anyway You could have just gone with one name then. Yeah. Really, really cool. Oh, you know what? I totally forgot. Should've mentioned this. Don't know why I thought of it until right now, but we're gonna do a little promo for a second. If you're listening to this, hopefully, when it comes out Wednesday morning, pay attention. If it's after Wednesday, we missed it, but that's okay. We're doing a very special livestream. So I guess it'll be today if you listen to it. March let's just put this way. Wednesday, March nineteenth, ten thirty central, eleven thirty eastern for two hours. We're doing a special facts versus feelings live, with I'll let you kinda introduce who it is, Sonu, in a second. With four true women leaders for women's history month, two from Carson, two, a a a kinda external Carson, I guess, if you will, to talk about all things markets, all things being a woman, in this world, in in in in the world of finance, just, you know, trials and tribulations, things learned. It's gonna be really, really fun. We we're excited about this. So if you hear this on Wednesday morning, check out the pod or the live stream a little bit, but we'll share this live stream all over the place. You'll probably hear it. Some of the segments on this very podcast down the road. But, Sonu, jump in there. And who who all do we have join us over the course of two hours? So we have two market strategists. I guess they're both market strategists in a way. Right? Yep. Jess Menson from Bloomberg. Mhmm. Yeah. She's write some great pieces. I mean, she used a lot of your work too. Yep. And then Lindsey Bell. Lindsey is fantastic. We've talked to her, I feel not on the podcast, on Spaces. Spaces. Mhmm. Yes. Lindsey Bell, she's also a fantastic market strategist. We're really pumped to be talking to them. And then our very own, you know, Debbie Taylor. Yep. Right? We're gonna talk about her, career or life as an adviser. It's really life at this point, life as an adviser. And then how she is sort of mentoring other advisers right now and how to you know, how they can how they can make their practices grow and help clients and especially in the realm of taxes. Right? Exactly. We talk about, you know, markets and markets going up like like it has the last two years. And, you know, one impact of that is you have to pay taxes on capital gains and things like that. How do you sort of, you know, help investors think of minimizing things like that, reducing the tax cost and stuff like that? Right? Where do you how do you get alpha from a place of the market that is completely non correlated with you know, we are always trying to get alpha from markets. Like, hey. You know, maybe we overweight tech or, you know, Germany, whatever it is. Right? That's the type of alpha we're looking for. Right? Here is what Debbie is thinking about is completely different. It's like, oh, let's get, you know, alpha from a completely different source, which is tax alpha. How do you reduce tax cost? So we're really pumped about that. And then our very own Kate Hall, she does, she leads our alternative assets due diligence. We talk about public markets all the time, but there is a very big private market. Right? A lot of companies are not public. Kate is really digging into a lot of that stuff, digging into, figuring out which managers, you know, really know these different niche spaces, whether it's, you know, real estate or private credit and private equity and venture and all of that. And we'll talk about how it all comes together in a portfolio too. That's what I'm pumped about. So I think that we've got a nice little arc of you know, we've got everything there, really. We I mean, yeah, we wanted to just go all different routes there. You know, Lindsay is at Clarinomics now. I've I've known them and used them when I heard she went there. I thought it was a great fit. Jess is literally like an anchor on CNBC. She she does she writes. She's on the Bloomberg. Does this does this seem Bloomberg? Bloomberg? Bloomberg? Bloomberg. Stop. Sorry. Sorry. Can't can't can't make those two up. But she's she's on Bloomberg Radio. She's on Bloomberg TV. Does a lot of writing. And then, of course, the the the tax I think the the I'm gonna paraphrase what Bert White, our CEO, says is tax is the last great alpha out there, and we're gonna learn a lot more about how Debbie has been so, so very successful in building her career and her practice. Here with us. Right? Right? Yeah. Well, that's true. This this this podcast is great alpha, along with Debbie and tax. And and then Kate on our team's amazing. Talking about some things to be blunt, we don't usually talk about on this podcast, but I think it's extremely important, because we're not really experts in the in the field that Kate is. That's why we don't. Alright. So now we've probably got ten minutes. Let's let's try wrap this up in ten minutes. We've done a lot of market stuff. You wanna talk about Fed, economy. Where do you wanna go for next ten minutes? About you mentioned it's a it's a good segue. We bet it's no totally different direction. Yeah. Who knows? Who knows? Literally, before we started, I was like, what what do you wanna talk about? He's like, I don't know. So literally, this is the most unscripted podcast we've ever done. Yeah. So you said people are scared. I mean, people have been coming to me as well. Like, people like never I usually never talk about markets and things outside of my life here in this room really or when I'm with you or adviser and things like that. Right? Because it gets really heavy really quickly. And how much do people really wanna, you know, hear about that? But like you, I've been hearing a lot about, oh my god, like, should we panic? What should we do? And I'd say, just listen to the podcast and they have. I like it. My my other joke is gonna be, you should just be like, well, you know, in the fed beige book last week, their eyes will glaze over. They will just bring up the fed beige book. They will leave you alone if you wanna get out of that conversation. But on that, let's talk about sentiment, consumer sentiment. Right? Consumer sentiment so a couple of, you know, different ways of measuring it. There are different people who measure it. We have the New York Fed. We have the conference board. We have the University of Michigan index. The University of Michigan, to Ryan's chagrin, is the one that is the most popular one, the most cited. Even though I I it's like, you know, I I mean, no offense. It's a very long running survey as well. Yeah. I think it's a reasonable one, but I prefer, like, the New York Fed survey. But still, you know, it's not about what I prefer or, you know, it's it's about what everyone else is looking at. Right? So you notice the Michigan sentiment index just collapsed in March. Mhmm. Fell about seven points to about fifty seven point nine. Doesn't matter what the numbers are. It's more than reversed its gains, not from just post election or the last two years. It's been rising. You know, it always has those dips and things like that. I'll we'll put up a chart on this as well. Right? This is the consumer sentiment index. You know, it's in Michigan, Josh. I mean, you know, if you wanna throw it up. So there are two things that drive it. One is how consumers feel about where things are right now. It's called the current conditions index. The other is how they expect things to be in the future. That's the expectations index. Both have gone down. Right. And the other part is consumers also expect stagflation. Now, what is stagflation? Right. Stagflation is if you look, okay, it's what happened in the seventies. What happened in the seventies? You had rising inflation and you had two big recessions in there where you had rising unemployment. So you have two conditions for stagflation, rising inflation, rising unemployment. Let me be clear. We don't have either of those things right now. Right. And we can talk about why we have time. But consumers think the one year inflation expectations jumped from four point three percent to four point nine percent in March. That's the highest since November twenty twenty two. Remember, twenty twenty two was when we were having we actually had high inflation. Right. We don't right now, but continue to say, oh, you think one year ahead inflation expectation will be four point nine percent. Five year ahead inflation expectations, which tend to be a little more stable. That's why the increase is a little concerning because the Fed looks at the stuff too and like, uh-oh. But that jumped to three point nine percent. That's the highest we've seen over the last decade. That's crazy. It's higher than where it was when we actually had a lot of inflation. That that doesn't make a lot of sense, but then again Yeah. But where it does make a little bit of sense, and I'll come to the unemployment side. But part of it is a lot of this is colored by policy. Well, but that's exactly right. Right. Democrats expect, you know, inflation to be six percent, six and a half percent, whatever it is. It's a very high number. Republicans are expecting zero percent inflation, which is almost a deflationary recession type of conditions. I think the signal is actually independence, Right? If you just forget Republicans, Democrats. Put that aside. Look at the signal from independents. That's actually rising. Same thing. Unemployment, inflation expectations for one year ahead inflation and even long term inflation expectations have gone up. So that is like if you ask me, I am not too concerned about it, honestly. I I just stopped. Like but I'm concerned about it from the perspective that I think the Fed is going to look at it and start getting worried. They'd be like, oh, we can't reduce rates. Right? Then the other thing is consumers expect unemployment to go up as well. And here I think there is a little bit of a signal. Right. Even independents, right? It's not just Republican or it's not just Democrats. Republicans don't expect unemployment to go up and Democrats do, but, you know, forget those two sides and just focus on independence. And I have this chart. Josh, you can put this chart up. This is from the Wall Street Journal. I think it shows unemployment and inflation expectations for independence. So consumer expectations of unemployment is actually it's not a bad indicator. Neil Dutta talks about this as well. And consumers are actually the first one. Before, you and I look at the data. We look at the unemployment rate. We look at initial claims data for unemployment benefits. It's like a leading indicator for the labor market. And I say, okay. Things are fine now. But what Neil's argued that consumers see, you know, people around them, and these are the first ones to see if people around them are getting laid off. Right? So when they consumers tell you that the labor market is not going great, you know, there's some reason to be worried there. So am I worried that there'll be a recession at the end of the day? No. I'm not. I think the probability of recession maybe at the beginning of the year, I was at maybe fifteen percent. Okay. Right now, I may be, like, twenty percent. Right? I I don't think you know, that's far from the base case of a recession. Doesn't mean there'll be a you know, there won't be a slowdown. I I think, yes, we will see that. But we weren't expecting three percent growth at the beginning of the year when you and I wrote the outlook. Right? Right. We were expecting maybe, you know, something closer to two percent, maybe slightly higher, but maybe we are slightly under two percent for the next six months, nine months, or even rest of the year. So I think the rest of the market and investors are just rerating growth down. Is it a time to panic? It goes back to what we are talking about. Look, if you're concentrated in one side of the market, it looks very scary. I think a lot of people are. This is a time where I think you want diversified portfolios. Mhmm. Right? Uncertainty is high, and that's when you want diversification. Well said. Again, this is episode one twenty seven, Carson's facts versus feelings. Correction, how worried should we be? And like Sonu just pointed out, I guess if you're chasing the shiny objects from the last few years, maybe you should be a little more worried because as we've seen throughout history, the leaders one year are not necessarily leaders the next. That's why you should be diversified. I do wanna spend maybe ninety seconds here. I've been compiling a lot of things which I consider to be over the top negativity, and I just I I I hope that I can read my own writing when I do this. I'm just gonna start listing some of these off. The I have a question for you after that. Okay. Go ahead. Let's do it. I'll I'll try to do this quickly here. The Ned Davis, research trading sentiment composite lowest since COVID. Bill Mower. I like Bill Mower. He's a pretty funny guy. He talked about the stock market at the start of his show last Friday, not something he normally does. Harry Dent stocks are gonna fall ninety nine percent. Goldman Sachs prime brokerage arm hedge fund saw selling, at a record, record I can't remember writing. Record selling of equities. Ed Yardeni, the Trump put is kaput. He cut his seven thousand target this year to sixty four hundred. Investor intelligence, largest two week drop in bulls that they've ever seen. Bears are larger than bulls, for the first time or more bears and bulls for the first time since November twenty two. Consensus is another survey. Lowest number of bowl or bowls dropped eleven points. That's the largest drop in ten years ex COVID. S and P global IMI survey. I don't even know what it is, but I saw it. One of the lowest levels ever. Equity put the call ratio Thursday, zero point nine four. Spikes up around zero point nine two or more have marked some near term lows historically. University of Michigan, you just mentioned it. Labor expectations, lowest since two thousand and eight. That's not very optimistic. Trade uncertainty index is the highest ever. Economic policy uncertainty, second highest ever. Consumer Michigan consumer confidence has the lowest level since twenty two and a record drop in business expectations. There's more. I mean, isn't this amazing? Citigroup global risk factor is the highest since twenty two. QQQ, the the ETF had its fourth highest volume day ever. Tends to happen when things are worried, when things are scaring, but also Yep. When things tend to bottom. The AAII already talked about three straight weeks of bears above fifty five percent, first time since the lows in two thousand nine. The Ned oh, Ned Davis itself reduced their US equity exposure ten percent. CEO confidence dropped seven point two. That is, the largest drop in three years. The NFIB uncertainty of small business's second highest level ever. I'm almost done. I swear. Goldman, Morgan Stanley, JPMorgan, all cut, GDP forecast. President Trump is literally burning US dollars on the cover of The Economist magazine, and the Fed's own beige book, your favorite reading to put yourself asleep, Sonu, said the word uncertainty forty seven times an all time record. That's not even including the Goldman, the the report that came out this morning, global fund manager survey. We saw some of the largest drops ever. I know that's a lot, but that's what we've seen literally the last seven days. That? No. I was kidding. Yeah. God. No. God. I could barely read half my writing. But that's just the last seven days. That's a that is why everyone's worried because everybody's seeing that stuff out there. The market's in correction, all this stuff. Mhmm. Just remember the market's a forward looking mechanism. Could things get worse? Sure. Things could get worse. Could we go into a bear market? Sure. We could go into a bear market, but I love to look at the market from expectations point of view. Those are some lowered expectations, and a lot of the things I just mentioned had marked lows, significant lows throughout the last ten, fifteen years, and a lot of them are triggering right now. So just something to think about, you know, for everybody out there. So, yeah, we're kinda at the end. What else do you wanna talk about before we sign off here? Just one question for you. Scale of one to ten. Mhmm. Zero to ten. Zero being Oh, boy. Zero to ten. Zero being not worried at all. Okay. Okay. Ten being, you know, extremely Harry Dent. Right. You know? From zero to Harry Dent. I got it. I got it. I got it. I got it. Where where are you? Where are you right there? In terms of equity markets or economy? Because honestly, I might have never heard of that. Let's do let's do, equity markets. I'll I'll actually, do both. Do equity markets and economy, I'll do both. Two on two on equity markets because I think we're pretty close to a low. Economy may be more like a five. And I'll be honest, I was on a a call, a podcast earlier today. I've been talking all day, it feels like. And they asked you this and that, and the and I kinda gave some answer. I don't know. I don't really think I like my answer to be blunt. But the other guy said, you know, a lot of this could change right now with president Trump's policies. Like, this could change in a hurry. Right? That can go both ways. I mean, I can go both ways. Right? But it's just hard for me to think there's gonna continue to push on this stuff. April second's a big day with the with the tariffs and and all the uncertainty. Maybe we get some good news on some fronts here, and that can be a positive. But the economy, I'm more worried about the economy and the slowdown and, self fulfilling prophecy, if you will, of consumer confidence and and inflation expectations. But from a stock market point of view, you wanna buy lowered expectations. Last thing, I'll never forget the headline. Well, I guess, clearly, I forgot it already because I don't know what I'm talking about. It was Jim Cramer, like, on his show in, I think, like, April of two thousand twenty. It says, like, record number of people lost their job last month. And at the bottom, it says Dow had best week since nineteen thirty eight. Alright? Things it's a famous image. I've used it in presentations before. Actually, maybe what maybe, assuming compliance, let's just share it. Josh, I'll share that right now too. See that. Two weeks. I don't see why we couldn't. It's CNBC. I do. We'll share the image, but it's Jim going nuts about the market going crazy, people losing their jobs, but or I'm sorry. The economy going crazy, going down, people lose their job. But the stock market had its best rally since nineteen thirty eight. These things don't always make a lot of sense. Okay? Markets can go up on good news. They can go up on bad news. They don't like uncertainty. We just get a little more certainty. And maybe it's tariffs or seventy five percent. I'm not saying it's gonna be there. Just let us know if If that's what it is, that's what it is. You've said before, companies are gonna find a way. Now seventy five percent is too extreme. I get it, but you know what I'm getting at. Just give us clarity on where it is, and companies will find a way and consumers will find a way. It might knock the economy for a minute, but I think I don't know. I'm optimistic we're still gonna find some some some good places here. Jeff with two and five. So three You know Let's say three and a half. You know, I mean, I'm never I'm never that worried. I'm more worried about this right here. Xavier Xavier's game tomorrow against Texas. That's what I'm worried about. Okay? That that's what I'm worried about right now. Yeah. So I'll tell you my score. My you know, it maybe tells us tells you something about how both of us look what we look at. Mhmm. I'm a you're a little more worried about the economy, less worried about markets. I'm a little more worried about the markets and less worried about the economy. There you go. That's why we have a podcast. So I but but still, I for me, the economy would be at four Mhmm. And markets would be at three. Okay. Yeah. Right? And and by markets now, I'm kind of cheating here because I'm thinking about everything. I'm not just thinking about the S and P five hundred. I was focusing more on S and P, I guess. I see what you're saying. I cheated there. Yeah. But I I I'm looking at everything. There there's Europe, there's what's happening in China, there's what's happening with what's happening with, you know, low volatility starts, all of that. Right? That that's what is like, if you just ask me, like, what are you how how worried about you are are you about the S and P five hundred, then I'm thinking, oh, it's got forty percent tech and tech adjacent stuff, and maybe it would be a five for me just from that perspective. But if overall stocks as a whole, you don't have to be just in the S and P five hundred, and we are not. Oh, yeah. Like I said, I I cheated a little bit. That's why I said three and four for the economy. So, yeah, base case, I'm not fired. I'm not too worried. Yeah. I mean Not right now. That could change. Oh, it could change. And the good news is you and I do these podcasts every single week. So if it changes, we'll let everybody know. Again, this was episode one twenty seven of Carson's facts versus feelings. Exact title was well, where is that? I've got it written down somewhere. Correction. How worried should we be? Thanks to everybody out there. Thanks to Josh, our producer, for getting this out there. And, I got up, like, over seven and a half hours ago. It's still early because I got up to sleep. I need a little sleep. And you don't even drink coffee. No. That's a thing. Get a milkshake. Yeah. Maybe. I don't know. I'm I'm thinking I I Raiders. When you get up that early, I am starving. So I'm listen. I've been on the go all morning. I need a little time to chill here. So, hopefully, the podcast made sense, everybody. We really appreciate the listeners and and leveraging the YouTube channel a lot more and all the cool stuff we're doing. And definitely, well, the next two podcasts are probably gonna be some of the the livestream that we did. So, hopefully, you enjoy some of that, or you can make the livestream live on Wednesday, March nineteenth, ten thirty central, eleven thirty eastern time. With all that, Sona and I, we are traveling a little bit the next two weeks. We're doing a little vacation, spring breaks and stuff. That's why we're kinda doing the podcast that way. But we'll be back, and, just reach out if we could help. Keep listening to these podcasts. Give them likes. Give them follows. Once the comments are on, give us com you can make fun of Sonu in the comments, but not me. That's the rule. That's the rule. Make fun of Sonu, but not me. But anyone who knows, like, just go to my x feed. Anything I say on x, people hate me. It doesn't matter what I say because, oh, kid kittens are cute. I mean, you're an idiot. Like, that's that's how social media works. But I You can't talk about kittens. I mean, who don't like a kitten? You know? I don't know. Whatever. Alright. With all that, everybody, we'll see you soon. Thank you. Take care. 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