RUSH TRANSCRIPT Expect My ░░░░░░░░ the tapering even if ░░░░░░░░ is announced probably won ░░░░░░░░ happen when they say ░░░░░░░░ will Equity markets are ░░░░░░░░ valued not overvalued but ░░░░░░░░ re not cheap That ░░░░░░░░ give the Fed pause ░░░░░░░░ if inflation is moderating ░░░░░░░░ tantrum is hanging over ░░░░░░░░ a dark cloud or ░░░░░░░░ of damocles Thank you ░░░░░░░░ Lavorgna I want to ░░░░░░░░ about today s session ░░░░░░░░ opened much lower Bond ░░░░░░░░ tumbled pretty hard Gold ░░░░░░░░ up Bitcoin was up ░░░░░░░░ is the message of ░░░░░░░░ market Dan what do ░░░░░░░░ think is going on ░░░░░░░░ Well Charles you know ░░░░░░░░ is a market this ░░░░░░░░ nothing new This is ░░░░░░░░ we ve been seeing ░░░░░░░░ the market for the ░░░░░░░░ three four five months ░░░░░░░░ it just can t ░░░░░░░░ out what the leadership ░░░░░░░░ here Week to week ░░░░░░░░ to month we see ░░░░░░░░ reversals in the market ░░░░░░░░ market basically can t ░░░░░░░░ we re in a ░░░░░░░░ recovering or reopening or ░░░░░░░░ re going into imminent ░░░░░░░░ My view we re ░░░░░░░░ going into imminent slowdown ░░░░░░░░ think what you saw ░░░░░░░░ wreak is the right ░░░░░░░░ of market interpretation but ░░░░░░░░ market really can t ░░░░░░░░ out which way it ░░░░░░░░ Charles even before today ░░░░░░░░ session this record breaking ░░░░░░░░ I think has been ░░░░░░░░ deceiving If you look ░░░░░░░░ breadth the last week ░░░░░░░░ was awful especially on ░░░░░░░░ NASDAQ You have far ░░░░░░░░ declines than advancers More ░░░░░░░░ week losers than winners ░░░░░░░░ down volume than up ░░░░░░░░ The question shah when ░░░░░░░░ see the market up ░░░░░░░░ new highs in the ░░░░░░░░ of internals this bad ░░░░░░░░ it an ugly sign ░░░░░░░░ red flag or maybe ░░░░░░░░ is good that the ░░░░░░░░ can still rally despite ░░░░░░░░ bad internals I don ░░░░░░░░ think it is a ░░░░░░░░ that it is an ░░░░░░░░ market or sloppy market ░░░░░░░░ I think it s ░░░░░░░░ sign of the times ░░░░░░░░ markets and investors are ░░░░░░░░ the cycles of interest ░░░░░░░░ rising and then falling ░░░░░░░░ idea of delta variant ░░░░░░░░ things down again The ░░░░░░░░ of maybe the vaccine ░░░░░░░░ herd immunity turning things ░░░░░░░░ on again I think ░░░░░░░░ up and down is ░░░░░░░░ Covid centric Investors have ░░░░░░░░ a very good job ░░░░░░░░ it Charles right I ░░░░░░░░ t think this is ░░░░░░░░ best time to focus ░░░░░░░░ internals including breadth Look ░░░░░░░░ the outside look at ░░░░░░░░ fundamentals you look what ░░░░░░░░ driving the market higher ░░░░░░░░ better earnings The mother ░░░░░░░░ milk of stock valuations ░░░░░░░░ are hitting it out ░░░░░░░░ the park Profit margins ░░░░░░░░ 13 for the quarter ░░░░░░░░ is a record the ░░░░░░░░ since 2008 Investors need ░░░░░░░░ focus on the externals ░░░░░░░░ fundamentals rather than on ░░░░░░░░ internals right now Charles ░░░░░░░░ point Dan early own ░░░░░░░░ were big on cyclicals ░░░░░░░░ growth They have been ░░░░░░░░ even the last six ░░░░░░░░ You already mentioned they ░░░░░░░░ back and forth Does ░░░░░░░░ whole debate growth versus ░░░░░░░░ value over this mostly ░░░░░░░░ a stock picker s ░░░░░░░░ to shah s point ░░░░░░░░ I think Charles it ░░░░░░░░ a huge decision again ░░░░░░░░ is what is driving ░░░░░░░░ market back and forth ░░░░░░░░ story is ultimately going ░░░░░░░░ be true Are we ░░░░░░░░ into secular stagnation some ░░░░░░░░ slowdown in growth Or ░░░░░░░░ the economy still have ░░░░░░░░ lot of runaway or ░░░░░░░░ we will improve from ░░░░░░░░ This is the big ░░░░░░░░ of the markets and ░░░░░░░░ devil is in the ░░░░░░░░ Look at way we ░░░░░░░░ our cyclical positioning our ░░░░░░░░ sector overwet overweight is ░░░░░░░░ The biggest underweight is ░░░░░░░░ The economy is still ░░░░░░░░ here Charles we see ░░░░░░░░ defensive nature in the ░░░░░░░░ and overall obviously financials ░░░░░░░░ been great shah You ░░░░░░░░ were ahead almost of ░░░░░░░░ I knew you were ░░░░░░░░ about this coming into ░░░░░░░░ year Definitely want to ░░░░░░░░ you props on that ░░░░░░░░ financials can they keep ░░░░░░░░ higher if bond yields ░░░░░░░░ sideways or come lower ░░░░░░░░ whatever reason They can ░░░░░░░░ I called on the ░░░░░░░░ last summer that we ░░░░░░░░ have a long runaway ░░░░░░░░ all the fundamental reasons ░░░░░░░░ think markets recognize the ░░░░░░░░ of financials especially as ░░░░░░░░ re coming out of ░░░░░░░░ we re coming out ░░░░░░░░ the recession moving forward ░░░░░░░░ has been phenomenal Doesn ░░░░░░░░ have to stay phenomenal ░░░░░░░░ financials to do well ░░░░░░░░ just has to continue ░░░░░░░░ moderate There will be ░░░░░░░░ of loan demand out ░░░░░░░░ and the banks are ░░░░░░░░ meeting it as head ░░░░░░░░ as they should They ░░░░░░░░ potential headwind We ll ░░░░░░░░ rates rise Interest margins ░░░░░░░░ rise We ll see ░░░░░░░░ rise I think banks ░░░░░░░░ a great handle on ░░░░░░░░ especially the big banks ░░░░░░░░ atmosphere for banks has ░░░░░░░░ few quarters in it ░░░░░░░░ we even see them ░░░░░░░░ down Charles wow Hey ░░░░░░░░ have got to hop ░░░░░░░░ but I do want ░░░░░░░░ ask you real quick ░░░░░░░░ the greatest risk to ░░░░░░░░ rally right now Charles ░░░░░░░░ think the biggest risk ░░░░░░░░ this market is embedded ░░░░░░░░ this market is a ░░░░░░░░ and so you know ░░░░░░░░ think that is a ░░░░░░░░ risk to the markets ░░░░░░░░ that bubble deflates What ░░░░░░░░ cause that I think ░░░░░░░░ big move up in ░░░░░░░░ or a slowdown and ░░░░░░░░ think a slowdown is ░░░░░░░░ imminent We have to ░░░░░░░░ an eye on what ░░░░░░░░ do here Charles shah ░░░░░░░░ two of the best ░░░░░░░░ we could start this ░░░░░░░░ off with you Thank ░░░░░░░░ both very much After ░░░░░░░░ weekend of silence