00:00 Speaker A
And I also want to start with you in some of the strength that we are seeing this morning, even despite the tariff headlines and interesting that Bank of America notes saying, “Well, maybe there could be some caution beneath the surface.”
00:17 Speaker B
Yeah, that’s right with Michael Hartnett of Bank of America writing in a note about what they’ve been seeing over the past week with respect to money flowing out of US stocks and into cash funds. So basically their data is saying that for the week ending August 6th, they saw a $28 billion pulled out of US stocks and $107 billion put into money market funds. And that is the highest level since January. So perhaps investors are expecting some sort of a pullback. Of course, we this comes on the heels of that week jobs data that we had last week and then also the rollout this week of these tariffs and the questions on how much they will be impacting earnings. So Hartnett has warned of a bubble in recent weeks. His note also says that the majority of bank clients are expecting a Goldilocks scenario. So that is that the economy is not too hot, it’s not too cold, and there’s an expectation of lower rates and perhaps that will fuel the rally later on this year.
02:23 Speaker A
I haven’t heard too, I haven’t heard Goldilocks invoked in a little while, you know, so I guess it’s time for it to come around again. Um, what Hartnett is saying sort of goes along with what feels like consensus right now in that we are heading for maybe some more volatility in in the equity markets.
03:03 Speaker B
Yeah, and that’s what we’ve heard from quite a bit of Wall Street strategist basically saying, look, there may be volatility in August, but dips should be short-lived. You have UBS that came out with a note yesterday saying that the effective tariff rate for the year will be probably 15% when all is said and done, around 15%, depends on who you listen to, it may be anywhere between 15 and 18% according to strategists. But UBS is saying, yes, that will have an impact on company earnings, but that is is not enough to put the US in a recession, and it should not long-term derail the equity rally that we’ve seen.
