WEBVTT 00:00:00.000 --> 00:00:01.860 You know, it feels like the ground is shifting 00:00:01.860 --> 00:00:03.799 under our feet lately. Yeah, definitely. Look 00:00:03.799 --> 00:00:06.290 at the financial markets. pretty significant 00:00:06.290 --> 00:00:08.789 moves happening there. And then you turn to the 00:00:08.789 --> 00:00:11.550 political arena, both domestically and internationally, 00:00:12.089 --> 00:00:14.789 and there's just no shortage of storylines. Absolutely. 00:00:14.910 --> 00:00:17.449 It's a lot to track. So we've sifted through 00:00:17.449 --> 00:00:19.850 a diverse set of sources for you this time around. 00:00:19.929 --> 00:00:23.649 We've got detailed financial analysis and the 00:00:23.649 --> 00:00:25.629 latest in political and legal news. Right. Our 00:00:25.629 --> 00:00:27.670 goal is really to cut through the chatter, isn't 00:00:27.670 --> 00:00:29.890 it? Exactly. Deliver the essential insights you 00:00:29.890 --> 00:00:33.189 need to make sense of it all. And we're starting 00:00:33.189 --> 00:00:36.310 with a fresh perspective on the market from Hedgeye 00:00:36.310 --> 00:00:40.289 AI. They've just put out some really in -depth 00:00:40.289 --> 00:00:43.549 analysis looking at volatility, economic numbers, 00:00:45.189 --> 00:00:47.429 investor positioning too. Right, digging into 00:00:47.429 --> 00:00:49.710 the data. That should give us a solid foundation. 00:00:49.890 --> 00:00:52.490 Yeah, I think so. And then keeping an eye on 00:00:52.490 --> 00:00:55.450 politics and law, we've got the latest from electoral 00:00:55.450 --> 00:00:59.189 vote. Covering the US, naturally, but also looking 00:00:59.189 --> 00:01:02.219 north to Canada. Some interesting things happening 00:01:02.219 --> 00:01:05.480 there, too. Okay, so the mission for you listening 00:01:05.480 --> 00:01:08.200 is to weave these threads together Understand 00:01:08.200 --> 00:01:11.260 the intersections and basically get a clear concise 00:01:11.260 --> 00:01:13.760 picture of what really matters ready to dive 00:01:13.760 --> 00:01:16.359 in. Let's do it Okay, let's start with that market 00:01:16.359 --> 00:01:19.879 analysis from hedge. I AI what? What jumped out 00:01:19.879 --> 00:01:23.859 at you first? Well, the big thing immediately 00:01:23.859 --> 00:01:26.909 striking is their point about market volatility. 00:01:27.290 --> 00:01:29.709 It hasn't just come down. Oh, yeah. They expect 00:01:29.709 --> 00:01:31.709 it to keep decreasing. They mentioned the VIX, 00:01:31.790 --> 00:01:33.629 you know, the fear index. Right, right. Drop 00:01:33.629 --> 00:01:37.590 from a high of 52 all the way down to 24. That's 00:01:37.590 --> 00:01:40.069 significant. Wow. 52 down to 24. That's quite 00:01:40.069 --> 00:01:42.269 a drop. Yeah. And they think short -term vol 00:01:42.269 --> 00:01:46.870 will ease up, too. Less fear of near -term shocks, 00:01:47.030 --> 00:01:49.060 basically. Which could mean... What? More risk 00:01:49.060 --> 00:01:51.079 -taking? Potentially. It might pave the way for 00:01:51.079 --> 00:01:53.019 investors to feel a bit more confident, maybe 00:01:53.019 --> 00:01:55.900 driving growth in some sectors. OK. But you have 00:01:55.900 --> 00:01:59.599 to be careful. Low vol can sometimes lead to 00:01:59.599 --> 00:02:02.000 complacency. Right. Good point. So less of that 00:02:02.000 --> 00:02:04.299 sort of white -knuckle feeling checking the portfolio. 00:02:04.680 --> 00:02:06.739 Hopefully. And they mentioned more opportunities 00:02:06.739 --> 00:02:09.099 potentially emerging. What kind of opportunities 00:02:09.099 --> 00:02:11.419 are we talking about in a less volatile market? 00:02:11.719 --> 00:02:16.060 Well, with a... less wild price swings, it might 00:02:16.060 --> 00:02:19.199 be easier to spot the underlying trends. Ah, 00:02:19.319 --> 00:02:21.819 okay. See the fundamentals better. Exactly. Invest 00:02:21.819 --> 00:02:24.319 in companies, sectors that might have been, you 00:02:24.319 --> 00:02:26.319 know, overlooked when things were really choppy. 00:02:26.580 --> 00:02:28.680 Makes sense. More long -term thinking, perhaps. 00:02:29.020 --> 00:02:31.659 Could encourage that, yeah. Instead of just reactive 00:02:31.659 --> 00:02:33.819 trading. And the report actually says, and this 00:02:33.819 --> 00:02:37.689 is key, when we have volatility, come down like 00:02:37.689 --> 00:02:39.810 that, there are going to be more opportunities 00:02:39.810 --> 00:02:42.770 to find bull markets. OK, so a potentially smoother 00:02:42.770 --> 00:02:45.789 ride, more chances to spot real growth. What 00:02:45.789 --> 00:02:48.430 else did HedgeEye get a beat on, beyond volatility? 00:02:48.610 --> 00:02:51.629 Well, their GDP tracking. Pretty impressive accuracy 00:02:51.629 --> 00:02:55.810 there. Oh, so? They projected GDP at plus 1 .9%, 00:02:55.810 --> 00:02:58.229 which turned out to be very close to the actual 00:02:58.229 --> 00:03:01.349 numbers. Huh. And how do they compare to, like, 00:03:01.509 --> 00:03:03.439 general market feeling? Well, interestingly, 00:03:03.699 --> 00:03:06.159 they noted it diverged quite a bit, pointed out 00:03:06.159 --> 00:03:09.020 that over half the folks on Polymarket were actually 00:03:09.020 --> 00:03:12.520 betting on negative GDP. Really? 54 % thought 00:03:12.520 --> 00:03:15.340 it'd be negative. Yeah. So Hedgeye's analysis 00:03:15.340 --> 00:03:17.439 was definitely leaning against that pessimism. 00:03:18.139 --> 00:03:20.900 Interesting. And they weren't just optimistic 00:03:20.900 --> 00:03:23.539 on growth, right? What about inflation? Still 00:03:23.539 --> 00:03:26.180 top of mind. Right. They're forecasting inflation 00:03:26.180 --> 00:03:30.500 to decelerate further, protecting it around plus 00:03:30.500 --> 00:03:34.180 2 .31 percent. OK, 2 .31. How does that stack 00:03:34.180 --> 00:03:36.840 up? It's actually below the general Wall Street 00:03:36.840 --> 00:03:39.400 consensus. The street is looking for maybe 2 00:03:39.400 --> 00:03:42.479 .4 percent. So a hedge eye is a bit more optimistic 00:03:42.479 --> 00:03:44.659 on inflation coming down. Seems so. And those 00:03:44.659 --> 00:03:46.680 two things, slowing inflation, steady growth, 00:03:47.080 --> 00:03:49.020 those are really what the Fed looks at for, you 00:03:49.020 --> 00:03:52.240 know, rate cuts. Exactly. Lower rates potentially 00:03:52.240 --> 00:03:54.879 stimulating borrowing investment. That's why 00:03:54.879 --> 00:03:57.020 the market gets excited about these whispers 00:03:57.020 --> 00:03:59.139 in the wind. Those whispers definitely get people 00:03:59.139 --> 00:04:01.259 talking. And hedge isn't just predicting this, 00:04:01.379 --> 00:04:02.900 are they? They're actually changing their strategy. 00:04:03.099 --> 00:04:05.620 That's right. They've shifted to a net long market 00:04:05.620 --> 00:04:08.520 stance. Net long. OK, that's a pretty significant 00:04:08.520 --> 00:04:10.979 move. Shows more confidence indicates they believe 00:04:10.979 --> 00:04:13.139 the potential for gains outweighs the risks right 00:04:13.139 --> 00:04:15.439 now. Yeah. Putting more capital to work. Got 00:04:15.439 --> 00:04:18.709 it. Now, the report also mentioned. Preferences 00:04:18.709 --> 00:04:21.569 for certain markets, specific sectors. Where 00:04:21.569 --> 00:04:23.810 are they seeing good prospects? Yeah, what's 00:04:23.810 --> 00:04:26.370 really notable is a strong preference for international 00:04:26.370 --> 00:04:28.470 markets. Oh, interesting. Where specifically? 00:04:28.509 --> 00:04:32.149 Quite a few listed as long positions. ETFs for 00:04:32.149 --> 00:04:36.689 Poland, that's E -P -O -L. Spain, E -W -P. India 00:04:36.689 --> 00:04:40.029 Financials, I -N -D -F. International High Yield 00:04:40.029 --> 00:04:43.230 Bonds, H -Y -X -U. International Treasuries, 00:04:43.410 --> 00:04:46.350 I -G -O -V. International Corporate Bonds, P 00:04:46.350 --> 00:04:49.649 -I -C -B. Columbia GXG. Wow, that's a broad list. 00:04:50.189 --> 00:04:52.750 International Real Estate, RWX, International 00:04:52.750 --> 00:04:56.629 Value, AIVS, Sustainable Infrastructure, INFR, 00:04:56.829 --> 00:04:59.930 XUS Low Vol, QLVD, and International Large Cap, 00:05:00.110 --> 00:05:02.829 BCIL. That is a comprehensive global view. What's 00:05:02.829 --> 00:05:04.730 the thinking behind focusing so much internationally? 00:05:04.870 --> 00:05:07.269 The rationale was pretty simple. Less noise in 00:05:07.269 --> 00:05:09.149 these markets. Less noise? Yeah. Think of it 00:05:09.149 --> 00:05:11.269 like the US market gets so much attention, right? 00:05:11.269 --> 00:05:14.069 Lots of competing stories, noise. These other 00:05:14.069 --> 00:05:17.810 markets might be driven more by fundamental growth 00:05:17.810 --> 00:05:20.490 or regional factors that are maybe clearer right 00:05:20.490 --> 00:05:22.850 now. Easier to identify and capitalize on. Perhaps. 00:05:23.290 --> 00:05:25.550 But they do still like some U .S. sectors, too. 00:05:25.750 --> 00:05:28.209 OK, which ones are on the U .S. radar? Within 00:05:28.209 --> 00:05:30.689 the U .S., they're recommending consumer staples, 00:05:30.910 --> 00:05:37.209 XLP, gold miners, GDX, and utilities, XLU. Staples, 00:05:37.410 --> 00:05:39.750 gold miners, utilities. Yeah. Those often seem 00:05:39.750 --> 00:05:42.189 more defensive. They are, yeah. Which is interesting, 00:05:42.209 --> 00:05:44.709 given the overall shift to net long. Maybe they 00:05:44.709 --> 00:05:47.569 see these as offering stability, consistent demand, 00:05:47.730 --> 00:05:50.269 regardless of, you know, broader swings. So a 00:05:50.269 --> 00:05:53.129 kind of bar bill. Broad international bets, plus 00:05:53.129 --> 00:05:55.389 some steady U .S. sectors. Could be read that 00:05:55.389 --> 00:05:58.730 way. Now, about those potential rate cuts and 00:05:58.730 --> 00:06:00.769 the whispers. Ah, yes, the whispers. The report 00:06:00.769 --> 00:06:03.379 had some... Colorful commentary on that. It did, 00:06:03.480 --> 00:06:05.620 yeah. Included some tongue -in -cheek lines generated 00:06:05.620 --> 00:06:08.519 by AI, actually. GPT and Claude. Oh, really? 00:06:08.639 --> 00:06:11.339 What did the AI say? GPT apparently quipped, 00:06:11.800 --> 00:06:13.540 everyone prays for rate cuts, not for the economy, 00:06:13.699 --> 00:06:16.019 but for their tech bags and bonus checks. Oh, 00:06:16.019 --> 00:06:18.339 OK. A bit cynical. And Claude added something 00:06:18.339 --> 00:06:21.220 like, rate cuts aren't economic policy. They're 00:06:21.220 --> 00:06:23.800 Wall Street's bonus plan and Silicon Valley's 00:06:23.800 --> 00:06:27.339 valuation pump. Wow. That definitely paints a 00:06:27.339 --> 00:06:30.139 vacant picture of how some see the market's enthusiasm. 00:06:30.319 --> 00:06:33.000 A humorous take on that self -interested angle, 00:06:33.019 --> 00:06:35.439 yeah. Were there any other US economic bits they 00:06:35.439 --> 00:06:38.639 mentioned? Just briefly, yeah. Noted a decreasing 00:06:38.639 --> 00:06:41.720 trend in initial jobless claims for federal employees. 00:06:41.759 --> 00:06:44.139 OK. And also some job cuts in the government 00:06:44.139 --> 00:06:46.899 sector, presented as data points for the overall 00:06:46.899 --> 00:06:49.699 narrative, but not deeply analyzed in this report. 00:06:49.980 --> 00:06:53.600 Got it. OK, so summing up the market side, generally 00:06:53.600 --> 00:06:57.120 positive outlook, lower vol. stable growth hopes, 00:06:57.660 --> 00:06:59.879 and growing talk of rate cuts driving a shift 00:06:59.879 --> 00:07:01.680 in strategy. That's a good summary. Alright, 00:07:01.720 --> 00:07:03.579 let's switch gears then. Turn to the political 00:07:03.579 --> 00:07:05.800 and legal landscape, looking through the lens 00:07:05.800 --> 00:07:08.579 of electoral vote news. What are the key developments 00:07:08.579 --> 00:07:12.300 there? Well, one area is the continuing challenge 00:07:12.300 --> 00:07:14.300 filling the U .S. ambassador to the UN post. 00:07:14.399 --> 00:07:16.500 Right, that's been open a while. Yeah. They report 00:07:16.500 --> 00:07:19.839 NSA Mike Waltz is now the likely nominee, but 00:07:19.839 --> 00:07:22.439 importantly, his confirmation needs Senate approval. 00:07:22.699 --> 00:07:25.279 And this follows the earlier potential nominee 00:07:25.279 --> 00:07:28.300 Lisa Stefanik, yeah, who was reportedly deemed 00:07:28.300 --> 00:07:33.139 unqualified. So difficulty filling a key diplomatic 00:07:33.139 --> 00:07:36.160 role like that. It might point to broader issues. 00:07:37.079 --> 00:07:39.550 And speaking of roles. Senator Rubio seems to 00:07:39.550 --> 00:07:41.329 be collecting them. According to electoral vote, 00:07:41.329 --> 00:07:44.870 yes. His portfolio apparently includes four distinct 00:07:44.870 --> 00:07:47.430 things now. Four. What are they? His Senate seat, 00:07:47.449 --> 00:07:50.589 obviously. Then involvement with Jared Kushner's 00:07:50.589 --> 00:07:54.009 insurance policy v2 .0 thing. Okay. And now also 00:07:54.009 --> 00:07:57.170 responsibilities for USA and even the architect 00:07:57.170 --> 00:07:59.129 of the United States. The architect of the US. 00:07:59.149 --> 00:08:01.410 That's unusual. Holding that many diverse roles 00:08:01.410 --> 00:08:03.769 at once. Certainly noteworthy. Maybe indicates 00:08:03.769 --> 00:08:06.430 a concentration of influence. Okay. What about 00:08:06.430 --> 00:08:08.519 friction between Congress in the administration. 00:08:08.879 --> 00:08:11.800 Any action on Capitol Hill? Electoral vote highlighted 00:08:11.800 --> 00:08:14.199 a couple of things. First, the Senate voted pretty 00:08:14.199 --> 00:08:17.680 strongly, 59 to 49, to overturn those emergency 00:08:17.680 --> 00:08:21.079 tariffs, the ones tied to the DOGE program. 59 00:08:21.079 --> 00:08:23.319 -49. Were there any Republicans crossing the 00:08:23.319 --> 00:08:26.060 aisle? Yeah, that's what's notable. Rand Paul 00:08:26.060 --> 00:08:28.620 and Lisa Murkowski joined the Democrats to oppose 00:08:28.620 --> 00:08:31.420 the administration on that. Interesting. Suggest 00:08:31.420 --> 00:08:33.980 some bipartisan unease there. Definitely. And 00:08:33.980 --> 00:08:36.360 then in the House. They unanimously passed a 00:08:36.360 --> 00:08:38.990 new rule. It modifies how the minority party 00:08:38.990 --> 00:08:42.330 can bring up resolutions of inquiry. Sounds procedural, 00:08:42.450 --> 00:08:44.730 but what's the potential impact? Well, it could 00:08:44.730 --> 00:08:47.070 be seen as a strategic move by the majority, 00:08:48.110 --> 00:08:51.309 maybe limiting the potential for investigations 00:08:51.309 --> 00:08:54.629 into the administration. Ah, okay. So checks 00:08:54.629 --> 00:08:57.870 and balances, but also maybe some strategic maneuvering. 00:08:58.210 --> 00:09:01.039 What about legal challenges? Any big court cases? 00:09:01.360 --> 00:09:04.240 Yes. Several ongoing legal battles. One really 00:09:04.240 --> 00:09:07.600 notable one. A federal judge ruled against using 00:09:07.600 --> 00:09:11.080 the Alien Enemies Act of 1798. The Alien Enemies 00:09:11.080 --> 00:09:13.919 Act? For what purpose? The administration was 00:09:13.919 --> 00:09:16.240 trying to use it to deport undocumented immigrants. 00:09:16.519 --> 00:09:18.399 The judge basically said, look, there are existing 00:09:18.399 --> 00:09:20.799 immigration laws for deportation. Right. But 00:09:20.799 --> 00:09:24.080 this act from 1798 was meant for times of declared 00:09:24.080 --> 00:09:27.179 war with foreign powers. It doesn't apply here. 00:09:27.320 --> 00:09:29.830 Wow. That's the first direct ruling on that specific 00:09:29.830 --> 00:09:32.590 point. Seems so, yeah. A detailed opinion. An 00:09:32.590 --> 00:09:34.590 appeal is pretty much expected. Could have big 00:09:34.590 --> 00:09:36.610 implications for immigration enforcement, then. 00:09:37.049 --> 00:09:40.649 Potentially, yes. Another significant case involves 00:09:40.649 --> 00:09:44.049 TPS temporary protected status for Venezuelans. 00:09:44.309 --> 00:09:47.139 OK, what happened there? A judge in San Francisco 00:09:47.139 --> 00:09:50.039 blocked the administration from revoking TPS 00:09:50.039 --> 00:09:53.879 for over 600 ,000 Venezuelans. Blocked it? Why? 00:09:54.299 --> 00:09:56.960 Electoral vote pointed out that the administration's 00:09:56.960 --> 00:10:00.399 reasons for ending TPS seemed to shift over time. 00:10:00.659 --> 00:10:02.679 That likely played into the judge's decision 00:10:02.679 --> 00:10:05.379 to halt the revocation. Shifting justifications. 00:10:06.159 --> 00:10:07.940 And North Carolina's election issues are still 00:10:07.940 --> 00:10:10.740 dragging on. Seems like a recurring theme. Indeed. 00:10:11.200 --> 00:10:13.460 The state Supreme Court issued a stay on some 00:10:13.460 --> 00:10:15.720 lower court rulings about a election procedures. 00:10:15.960 --> 00:10:17.779 So things are still up in the air. Well, most 00:10:17.779 --> 00:10:20.460 ballots are being accepted, but challenges remain 00:10:20.460 --> 00:10:22.919 for voters who moved or whose registration was 00:10:22.919 --> 00:10:24.940 questioned. And the report suggested this might 00:10:24.940 --> 00:10:27.480 have affected an outcome. Yeah, hinted that the 00:10:27.480 --> 00:10:29.879 winning candidate in one race might have benefited 00:10:29.879 --> 00:10:32.519 from the sort of ongoing legal uncertainty around 00:10:32.519 --> 00:10:35.340 eligibility. Okay, shifting to something a bit 00:10:35.340 --> 00:10:37.440 different. The electoral vote mentioned former 00:10:37.440 --> 00:10:40.539 President Trump's take on Victory Day sounded 00:10:40.539 --> 00:10:44.500 unconventional. It was somewhat surprising. He 00:10:44.500 --> 00:10:47.139 posted on social media suggesting Victory Day 00:10:47.139 --> 00:10:50.200 should be May 8th. May 8th. That's VE Day, right? 00:10:50.220 --> 00:10:53.159 Victory in Europe. Exactly. Not November 11th, 00:10:53.159 --> 00:10:55.740 which is Veterans Day, historically Armistice 00:10:55.740 --> 00:10:59.259 Day, marking the end of WWI and honoring all 00:10:59.259 --> 00:11:02.659 veterans. So conflating VE Day with a general 00:11:02.659 --> 00:11:06.480 Victory Day or Veterans Day? Seems like it. It's 00:11:06.480 --> 00:11:09.620 a departure from historical accuracy. May 8th 00:11:09.620 --> 00:11:12.820 wasn't the overall end of WWII, and Veterans 00:11:12.820 --> 00:11:14.940 Day has its own distinct meaning in November. 00:11:15.279 --> 00:11:16.659 Yeah, that would definitely raise some eyebrows. 00:11:16.980 --> 00:11:19.259 Historians, veterans, groups. It drew criticism, 00:11:19.500 --> 00:11:22.200 yeah. An unorthodox interpretation. Okay. And 00:11:22.200 --> 00:11:24.779 finally, electoral vote look at Canada too. What's 00:11:24.779 --> 00:11:26.879 the latest from up north? The ruling Liberal 00:11:26.879 --> 00:11:29.399 Party lost a recent by -election, reduces their 00:11:29.399 --> 00:11:32.080 seat count to 168. So that probably impacts their 00:11:32.080 --> 00:11:34.179 coalition. likely means they'll need to keep 00:11:34.179 --> 00:11:36.899 relying on support from the NDP, the new Democratic 00:11:36.899 --> 00:11:39.500 Party, to maintain their government. OK. And 00:11:39.500 --> 00:11:42.279 the conservative leader? Pierre Poliev. He also 00:11:42.279 --> 00:11:44.679 had a loss in a by -election in his own writing. 00:11:46.000 --> 00:11:48.360 Any thoughts on why? Electoral votes suggested 00:11:48.360 --> 00:11:51.179 his past support for Trump and stances on things 00:11:51.179 --> 00:11:54.379 like mandatory vaccination might be contributing 00:11:54.379 --> 00:11:56.840 to some current challenges he faces. Interesting. 00:11:57.320 --> 00:11:59.419 Political shifts potentially underway in Canada, 00:11:59.460 --> 00:12:02.769 too. Seems that way. So taking it all in. It 00:12:02.769 --> 00:12:04.350 really highlights the interplay, doesn't it? 00:12:04.389 --> 00:12:07.070 We've got this potential market optimism brewing. 00:12:07.169 --> 00:12:10.169 Right. Driven by falling ball, rate cut hopes. 00:12:10.460 --> 00:12:13.600 happening right alongside these significant political 00:12:13.600 --> 00:12:16.419 and legal headwinds and shifts. That's exactly 00:12:16.419 --> 00:12:19.039 it. It's crucial to look at both sides, the economic 00:12:19.039 --> 00:12:21.519 forecasts and the political legal realities. 00:12:21.539 --> 00:12:24.080 They don't exist in separate bubbles. Yeah, they 00:12:24.080 --> 00:12:26.320 absolutely influence each other. Definitely. 00:12:26.580 --> 00:12:29.120 So for you listening, as you sort of process 00:12:29.120 --> 00:12:32.159 all this, maybe consider this. How might this 00:12:32.159 --> 00:12:34.659 market optimism we're seeing be affected by all 00:12:34.659 --> 00:12:36.500 the political and legal challenges we just talked 00:12:36.500 --> 00:12:39.620 about? Could those uncertainties act as a drag 00:12:39.620 --> 00:12:43.659 on market's current mood? Or, conversely, how 00:12:43.659 --> 00:12:45.980 might a sustained period of market stability 00:12:45.980 --> 00:12:48.620 or growth impact the political stories and outcomes? 00:12:49.019 --> 00:12:51.679 Yeah, it's a two -way street. Huh. Are there 00:12:51.679 --> 00:12:54.320 potential blind spots in how we're looking at 00:12:54.320 --> 00:12:56.820 the economy or the political scene that we should 00:12:56.820 --> 00:13:00.179 be aware of? Lots to think about there. As always, 00:13:00.220 --> 00:13:02.059 if any of this sparked your interest, we definitely 00:13:02.059 --> 00:13:03.879 encourage you to dig deeper into the sources 00:13:03.879 --> 00:13:07.100 yourself, form your own conclusions. Absolutely. 00:13:07.259 --> 00:13:09.120 Thanks for taking this deep dive with us today.