You know, it feels like the ground is shifting
under our feet lately. Yeah, definitely. Look
at the financial markets. pretty significant
moves happening there. And then you turn to the
political arena, both domestically and internationally,
and there's just no shortage of storylines. Absolutely.
It's a lot to track. So we've sifted through
a diverse set of sources for you this time around.
We've got detailed financial analysis and the
latest in political and legal news. Right. Our
goal is really to cut through the chatter, isn't
it? Exactly. Deliver the essential insights you
need to make sense of it all. And we're starting
with a fresh perspective on the market from Hedgeye
AI. They've just put out some really in -depth
analysis looking at volatility, economic numbers,
investor positioning too. Right, digging into
the data. That should give us a solid foundation.
Yeah, I think so. And then keeping an eye on
politics and law, we've got the latest from electoral
vote. Covering the US, naturally, but also looking
north to Canada. Some interesting things happening
there, too. Okay, so the mission for you listening
is to weave these threads together Understand
the intersections and basically get a clear concise
picture of what really matters ready to dive
in. Let's do it Okay, let's start with that market
analysis from hedge. I AI what? What jumped out
at you first? Well, the big thing immediately
striking is their point about market volatility.
It hasn't just come down. Oh, yeah. They expect
it to keep decreasing. They mentioned the VIX,
you know, the fear index. Right, right. Drop
from a high of 52 all the way down to 24. That's
significant. Wow. 52 down to 24. That's quite
a drop. Yeah. And they think short -term vol
will ease up, too. Less fear of near -term shocks,
basically. Which could mean... What? More risk
-taking? Potentially. It might pave the way for
investors to feel a bit more confident, maybe
driving growth in some sectors. OK. But you have
to be careful. Low vol can sometimes lead to
complacency. Right. Good point. So less of that
sort of white -knuckle feeling checking the portfolio.
Hopefully. And they mentioned more opportunities
potentially emerging. What kind of opportunities
are we talking about in a less volatile market?
Well, with a... less wild price swings, it might
be easier to spot the underlying trends. Ah,
okay. See the fundamentals better. Exactly. Invest
in companies, sectors that might have been, you
know, overlooked when things were really choppy.
Makes sense. More long -term thinking, perhaps.
Could encourage that, yeah. Instead of just reactive
trading. And the report actually says, and this
is key, when we have volatility, come down like
that, there are going to be more opportunities
to find bull markets. OK, so a potentially smoother
ride, more chances to spot real growth. What
else did HedgeEye get a beat on, beyond volatility?
Well, their GDP tracking. Pretty impressive accuracy
there. Oh, so? They projected GDP at plus 1 .9%,
which turned out to be very close to the actual
numbers. Huh. And how do they compare to, like,
general market feeling? Well, interestingly,
they noted it diverged quite a bit, pointed out
that over half the folks on Polymarket were actually
betting on negative GDP. Really? 54 % thought
it'd be negative. Yeah. So Hedgeye's analysis
was definitely leaning against that pessimism.
Interesting. And they weren't just optimistic
on growth, right? What about inflation? Still
top of mind. Right. They're forecasting inflation
to decelerate further, protecting it around plus
2 .31 percent. OK, 2 .31. How does that stack
up? It's actually below the general Wall Street
consensus. The street is looking for maybe 2
.4 percent. So a hedge eye is a bit more optimistic
on inflation coming down. Seems so. And those
two things, slowing inflation, steady growth,
those are really what the Fed looks at for, you
know, rate cuts. Exactly. Lower rates potentially
stimulating borrowing investment. That's why
the market gets excited about these whispers
in the wind. Those whispers definitely get people
talking. And hedge isn't just predicting this,
are they? They're actually changing their strategy.
That's right. They've shifted to a net long market
stance. Net long. OK, that's a pretty significant
move. Shows more confidence indicates they believe
the potential for gains outweighs the risks right
now. Yeah. Putting more capital to work. Got
it. Now, the report also mentioned. Preferences
for certain markets, specific sectors. Where
are they seeing good prospects? Yeah, what's
really notable is a strong preference for international
markets. Oh, interesting. Where specifically?
Quite a few listed as long positions. ETFs for
Poland, that's E -P -O -L. Spain, E -W -P. India
Financials, I -N -D -F. International High Yield
Bonds, H -Y -X -U. International Treasuries,
I -G -O -V. International Corporate Bonds, P
-I -C -B. Columbia GXG. Wow, that's a broad list.
International Real Estate, RWX, International
Value, AIVS, Sustainable Infrastructure, INFR,
XUS Low Vol, QLVD, and International Large Cap,
BCIL. That is a comprehensive global view. What's
the thinking behind focusing so much internationally?
The rationale was pretty simple. Less noise in
these markets. Less noise? Yeah. Think of it
like the US market gets so much attention, right?
Lots of competing stories, noise. These other
markets might be driven more by fundamental growth
or regional factors that are maybe clearer right
now. Easier to identify and capitalize on. Perhaps.
But they do still like some U .S. sectors, too.
OK, which ones are on the U .S. radar? Within
the U .S., they're recommending consumer staples,
XLP, gold miners, GDX, and utilities, XLU. Staples,
gold miners, utilities. Yeah. Those often seem
more defensive. They are, yeah. Which is interesting,
given the overall shift to net long. Maybe they
see these as offering stability, consistent demand,
regardless of, you know, broader swings. So a
kind of bar bill. Broad international bets, plus
some steady U .S. sectors. Could be read that
way. Now, about those potential rate cuts and
the whispers. Ah, yes, the whispers. The report
had some... Colorful commentary on that. It did,
yeah. Included some tongue -in -cheek lines generated
by AI, actually. GPT and Claude. Oh, really?
What did the AI say? GPT apparently quipped,
everyone prays for rate cuts, not for the economy,
but for their tech bags and bonus checks. Oh,
OK. A bit cynical. And Claude added something
like, rate cuts aren't economic policy. They're
Wall Street's bonus plan and Silicon Valley's
valuation pump. Wow. That definitely paints a
vacant picture of how some see the market's enthusiasm.
A humorous take on that self -interested angle,
yeah. Were there any other US economic bits they
mentioned? Just briefly, yeah. Noted a decreasing
trend in initial jobless claims for federal employees.
OK. And also some job cuts in the government
sector, presented as data points for the overall
narrative, but not deeply analyzed in this report.
Got it. OK, so summing up the market side, generally
positive outlook, lower vol. stable growth hopes,
and growing talk of rate cuts driving a shift
in strategy. That's a good summary. Alright,
let's switch gears then. Turn to the political
and legal landscape, looking through the lens
of electoral vote news. What are the key developments
there? Well, one area is the continuing challenge
filling the U .S. ambassador to the UN post.
Right, that's been open a while. Yeah. They report
NSA Mike Waltz is now the likely nominee, but
importantly, his confirmation needs Senate approval.
And this follows the earlier potential nominee
Lisa Stefanik, yeah, who was reportedly deemed
unqualified. So difficulty filling a key diplomatic
role like that. It might point to broader issues.
And speaking of roles. Senator Rubio seems to
be collecting them. According to electoral vote,
yes. His portfolio apparently includes four distinct
things now. Four. What are they? His Senate seat,
obviously. Then involvement with Jared Kushner's
insurance policy v2 .0 thing. Okay. And now also
responsibilities for USA and even the architect
of the United States. The architect of the US.
That's unusual. Holding that many diverse roles
at once. Certainly noteworthy. Maybe indicates
a concentration of influence. Okay. What about
friction between Congress in the administration.
Any action on Capitol Hill? Electoral vote highlighted
a couple of things. First, the Senate voted pretty
strongly, 59 to 49, to overturn those emergency
tariffs, the ones tied to the DOGE program. 59
-49. Were there any Republicans crossing the
aisle? Yeah, that's what's notable. Rand Paul
and Lisa Murkowski joined the Democrats to oppose
the administration on that. Interesting. Suggest
some bipartisan unease there. Definitely. And
then in the House. They unanimously passed a
new rule. It modifies how the minority party
can bring up resolutions of inquiry. Sounds procedural,
but what's the potential impact? Well, it could
be seen as a strategic move by the majority,
maybe limiting the potential for investigations
into the administration. Ah, okay. So checks
and balances, but also maybe some strategic maneuvering.
What about legal challenges? Any big court cases?
Yes. Several ongoing legal battles. One really
notable one. A federal judge ruled against using
the Alien Enemies Act of 1798. The Alien Enemies
Act? For what purpose? The administration was
trying to use it to deport undocumented immigrants.
The judge basically said, look, there are existing
immigration laws for deportation. Right. But
this act from 1798 was meant for times of declared
war with foreign powers. It doesn't apply here.
Wow. That's the first direct ruling on that specific
point. Seems so, yeah. A detailed opinion. An
appeal is pretty much expected. Could have big
implications for immigration enforcement, then.
Potentially, yes. Another significant case involves
TPS temporary protected status for Venezuelans.
OK, what happened there? A judge in San Francisco
blocked the administration from revoking TPS
for over 600 ,000 Venezuelans. Blocked it? Why?
Electoral vote pointed out that the administration's
reasons for ending TPS seemed to shift over time.
That likely played into the judge's decision
to halt the revocation. Shifting justifications.
And North Carolina's election issues are still
dragging on. Seems like a recurring theme. Indeed.
The state Supreme Court issued a stay on some
lower court rulings about a election procedures.
So things are still up in the air. Well, most
ballots are being accepted, but challenges remain
for voters who moved or whose registration was
questioned. And the report suggested this might
have affected an outcome. Yeah, hinted that the
winning candidate in one race might have benefited
from the sort of ongoing legal uncertainty around
eligibility. Okay, shifting to something a bit
different. The electoral vote mentioned former
President Trump's take on Victory Day sounded
unconventional. It was somewhat surprising. He
posted on social media suggesting Victory Day
should be May 8th. May 8th. That's VE Day, right?
Victory in Europe. Exactly. Not November 11th,
which is Veterans Day, historically Armistice
Day, marking the end of WWI and honoring all
veterans. So conflating VE Day with a general
Victory Day or Veterans Day? Seems like it. It's
a departure from historical accuracy. May 8th
wasn't the overall end of WWII, and Veterans
Day has its own distinct meaning in November.
Yeah, that would definitely raise some eyebrows.
Historians, veterans, groups. It drew criticism,
yeah. An unorthodox interpretation. Okay. And
finally, electoral vote look at Canada too. What's
the latest from up north? The ruling Liberal
Party lost a recent by -election, reduces their
seat count to 168. So that probably impacts their
coalition. likely means they'll need to keep
relying on support from the NDP, the new Democratic
Party, to maintain their government. OK. And
the conservative leader? Pierre Poliev. He also
had a loss in a by -election in his own writing.
Any thoughts on why? Electoral votes suggested
his past support for Trump and stances on things
like mandatory vaccination might be contributing
to some current challenges he faces. Interesting.
Political shifts potentially underway in Canada,
too. Seems that way. So taking it all in. It
really highlights the interplay, doesn't it?
We've got this potential market optimism brewing.
Right. Driven by falling ball, rate cut hopes.
happening right alongside these significant political
and legal headwinds and shifts. That's exactly
it. It's crucial to look at both sides, the economic
forecasts and the political legal realities.
They don't exist in separate bubbles. Yeah, they
absolutely influence each other. Definitely.
So for you listening, as you sort of process
all this, maybe consider this. How might this
market optimism we're seeing be affected by all
the political and legal challenges we just talked
about? Could those uncertainties act as a drag
on market's current mood? Or, conversely, how
might a sustained period of market stability
or growth impact the political stories and outcomes?
Yeah, it's a two -way street. Huh. Are there
potential blind spots in how we're looking at
the economy or the political scene that we should
be aware of? Lots to think about there. As always,
if any of this sparked your interest, we definitely
encourage you to dig deeper into the sources
yourself, form your own conclusions. Absolutely.
Thanks for taking this deep dive with us today.