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  • ALI McCARTNEY JOINS US

  • YOU'VE BEEN PRETTY CAUTIOUS, ALL

  • OF LAST YEAR, REALLY, ON THE FED

  • HIKES AND THE ECONOMIC FORECAST,

  • ARE YOU TELLING YOUR CLIENTS

  • ANYTHING DIFFERENT TO DO RIGHT

  • NOW?

  • >> I THINK IT IS A BIG THING

  • THAT HAS CHANGED IS THAT IT IS

  • 2023, NOT 2022

  • AND ALTHOUGH FOR ALL OF US

  • HAVING GONE THROUGH ONE OF THE

  • WORST YEARS IN THE HISTORY OF

  • BEING AN INVESTOR, IT IS REALLY

  • TEMPTING TO WANT TO COLLECTIVELY

  • EXHALE AND START TO LEAN INTO

  • MARKETS AND THINK POSITIVELY

  • NOW, YOU WERE JUST TALKING ABOUT

  • THE OPTIMISM FUELING THE LAST

  • COUPLE OF DAYS OF TRADING, THE

  • BEGINNING OF THE YEAR.

  • AND MIND YOU WE ARE ALMOST

  • EXACTLY A YEAR OUT FROM THE

  • HISTORICAL HIGH ON JANUARY 3rd

  • LAST YEAR AND THAT'S BASED IN

  • THE STEEP DECLINE WE SAW IN THE

  • ISM NUMBER, THE EARLY SIGNS OF

  • MODERATING INFLATION, MOST

  • SPECIFICALLY AND MOST IMPORTANT

  • THE HOURLY EARNINGS.

  • THAT IS MODERATING

  • AS YOU SAID, IT IS COMPLETELY AT

  • ODDS WITH WHAT THE FED IS

  • MESSAGING TO US.

  • AND SO WHILE I CAME ON A NUMBER

  • OF MONTHS AGO AND SAID,

  • UNFORTUNATELY I THINK IT IS

  • EARLY FOR A PIVOT PARTY, I THINK

  • IT IS STILL TOO EARLY FOR A

  • PIVOT PARTY.

  • I THINK INVESTORS, IT IS GREAT

  • TO BE OPTIMISTIC, AND I THINK

  • WE'RE GOING TO HAVE MORE CLARITY

  • THROUGH THE NEXT EARNINGS CYCLE

  • AND THROUGH THE NEXT TWO FEDERAL

  • RESERVE AND GPI PRINTS

  • BUT MARKETS AND INVESTORS ARE

  • FAMOUSLY FICKLE AND FRAGILE AND

  • I THINK THAT STAYING DEFENSIVE,

  • BUILDING CASH, LEANING INTO

  • QUALITY RIGHT NOW WITH A

  • SHOPPING LIST IS THE WAY TO GO.

  • >> SO, LET'S TALK ABOUT THEN

  • WHAT THE STRATEGY SHOULD BE.

  • SHOULD YOU STILL BE LEANING

  • DEFENSIVELY AND IF SO, WHAT DOES

  • THAT LOOK LIKE

  • CASH, IS IT UTILITIES, WHAT DO

  • YOU LIKE

  • >> FIRST OF ALL, I THINK YOU

  • LOOK AT FIXED INCOME, I THINK

  • YOU HAVE TO PUT CASH NOW BECAUSE

  • OF THE LEVEL OF RETURNS IN THE

  • SHAPE OF THE YIELD CURVE IN THAT

  • BUCKET

  • AND SO IF YOU ARE AN IDEAL WITH

  • LARGELY EXTRAORDINARILY TAXABLE

  • INVESTORS, AND YOU CAN GET THE

  • KIND OF RATES, STATE AND LOCAL

  • TAX FREE YOU CAN NOW FOR

  • SHORT-TERM TREASURY PAPER,

  • THAT'S SUPER INTERESTING AND IT

  • BUYS YOU SOME TIME TO SEE WHAT

  • HAPPENS AND WHAT HAPPENS WITH

  • CREDIT SPREADS IN THE MARKET

  • IN ADDITION ON THE ACTIVE SORT

  • OF -- LOOKING FOR EQUITY

  • EXPOSURE, WE LED -- YOU LED THE

  • SEGMENT TALKING ABOUT HEALTHCARE

  • MORE IN CONSUMER DISCRETIONARY,

  • BUT WHEN YOU'RE TALKING ABOUT

  • HEALTHCARE, THERE IS A PLACE YOU

  • CAN HOPEFULLY HAVE YOUR CAKE AND

  • EAT IT TOO

  • WE'RE TALKING ABOUT FROM A

  • DEMOGRAPHIC PERSPECTIVE, ONE OF

  • THE FASTEST GROWING DEFENSIVE

  • SECTORS THERE IS

  • FROM A VALUATIONS PERSPECTIVE --

  • >> I'M SORRY

  • WHAT WERE YOU GOING TO SAY.

  • >> RELATIVE TO THE BROADER

  • MARKET AND OTHER DEFENSIVES, IT

  • IS STILL UNDERVALUED AND THAT'S

  • A PLACE YOU CAN LEAN IN DURING

  • WHAT MIGHT BE A POTENTIAL

  • DECELERATION AND RECESSION, BUT

  • ALSO EVEN INTO ALL THE POSITIVES

  • THAT WE'

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