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it's December when they raised the funds rate to 240 the ten year was that three and a quarter and everyone thought it was going up I think if they had known I the fact that the tenure dropped to 240 is a game-changer had they known back then that the long mon would be at 240 I don't think they would have raised in December it makes no sense for the Fed Funds rate 3 exactly the same as the 10-year bond so you it should be lower you think there's a 2% or so you think the Fed made a policy mistake in December and now he's gonna be harder than wind it now well I mean they can unwind it uh-huh I mean I don't think I know you do but you say yes or did you say no but I think it's you think they did a mistake I thought they made him well they made a mistake of raising it and then they made a terrible and sinking the statement that came out that sort of implied they were to keep on raising in the 2019 which they walked back immediately when the markets collapsed but the move itself was a mistake if they had known the long bond was 240 in March they would never raised it to do 40 they wouldn't have flattened the curve they know the you know the history of flattening the curve so my feeling is oh my god Lee we thought the long bomb would be 350 by now we'd have 90 basis points 200 basis points we're not flattening the curve turned out after the fact they flattened the curve yeah so they made this big dovish double down now so what's a stock investor to do well I mean I mean the the bottoming at 240 is a boost but you know take a look at growth this first quarter it's gonna be about 1% maybe 1/2 I mean that's a third of what we had last year is it really gonna are we sure it's gonna pick up in the second and third quarter are we really going to get you know two percent two and a half I mean you know I think earnings are going to be the challenge I mean I agree with what Steve said I think that earnings expectations are still too wide I mean we brought them down from what double digits down to 7 or 6 I don't know what they are now 8 my feeling is it's going to be tough meeting though got 20/20 by the way I don't know if you looked at 20/20 crazy 13% up from you know 2019 that doesn't make sense in the economy either I'm not talking about a big break in the market because with if the long bonds are 240 again where do you go but let me tell you some people said I'm going to cash to 40 I'll take the 240 in cash no no venture t risk higher than the dividend yield right now in the SMB you know in this sort of a world that ain't bad that's why I think if the Fed went down to 180 190 they'd get a little bit of a curve boost over there and things would be lit more better are you saying this is fatal I'm just telling you what the situation but are you saying that the gains are in for the year at best I think we're maybe up five percent the rest of the year most of the gains are in maybe a slight upward tilt I think the market staying up because I think everyone expects a you know no one wants us to be stored when it went ray when Trump announces the deal with China and that's clearly a deal with China is priced into the market so everyone's scared aren't gonna be short because the markets gonna shoot up five six seven eight percent but then I think the bloom is off the rose I think then well let's look at her earnings who are they really up oh okay and enthusiasm are going to is going to wane at that point again you don't get it you're not gonna crack the market on when the long bonds at 240 but it's gonna be hard to move really forward in a major way professor I'm confused by what you just said you said at one point that the China deal is all in the mark but then you said it could move up yeah 90 okay pop it will pop we're gonna get a five six seven percent move if he says we made a settlement I agree that everyone's gonna say okay now what about her but that's why people are afraid I think to be short because they think an announcements coming on and as a result I think the market is sort of being held up by the fact we're gonna get good news from Trump on this trade deal and I think there will be good news you'll blow my goodness you know I don't want to be short through that I know but you're also suggesting we forget about earning your say you're suggesting that you would fade the pop that you would get from a trade deal because that would be the piano I would I would I would sell the pop I would say if I'm a short-term trader I'd sell the pop on the trade move move in my opinion and you're gonna get a pop I may be wrong on that I'm you know I've as you know I'm a usually an advocate for long-run investing but everyone's interested in the short-run I think that that might be a trade on that pop you
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