저자: EdYardeni · 외국인
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결론: 이번 영상의 핵심은 AI 주도 경기 호조와 베이비부머 소비력 때문에 증시 상승(7,500 이상 유지)은 8월 말까지 이어질 수 있으나, 금리 상승 압력과 인플레이션 재가속 가능성은 리스크라는 것이다. [경제·GDP] 2분기 실질 GDP 1.5%는 애틀랜타 연은 모델 예측과 일치. 수입 급증이 성장률을 1.5%p가량 깎았고, 최종판매는 2.2%p 기여. 실질 소비는 기록적 수준, 민간 소비 3.2%. [K자형 vs G자형] K자형 경기 우려를 부정하고, 베이비부머·실버세대가 순자산 대부분(63%)과 MMF(76%)를 보유해 소비를 떠받친다는 G자형 경기를 제시. 실질 가처분소득은 정체, 저축률 하락 상황이나 저축률은 마이너스까지 갈 수 있다고 봄. [금리·연준] 10년물 4~5%를 정상 범위로 봄. 연준이 7월에 금리 인상을 했어야 했다고 주장하며, 워시 체제 하에서 중간선거 전 인상이 어려울 것으로 봄. 2년물 금리는 향후 1~2년간 3차례 인상을 반영 중. [인플레이션] GDP 디플레이터 4.3%, 식품·에너지 제외 3.8%, 개인소비지출 근원 3.3%로 2% 목표 대비 높음. 전자부품·반도체 가격 상승, 관세 전가가 원인으로 지목. [증시·밸류에이션] S&P500 7,500 이상 유지, 8월 말까지 '서머 스톨' 지속 가능성. 기술주 선행 PER은 S&P500과 같은 수준으로 1999년 버블과 다름. 반도체 선행 PER 15배, 한국 PER 4.5배로 저평가 주장. 이익 모멘텀은 강하나 알파벳 등의 시장가치 평가익 영향 존재. [AI 트레이드·헤지펀드] 상황인식(Situational Awareness) 펀드 청산 및 시타델 인수가 지난주 변동성 요인. 강한 AI 인프라 트레이드(반도체 롱, 소프트웨어 숏)는 붕괴 후 재평가 중. [지정학] 미·이란 재협상 기대로 유가 하락, 증시에 우호적. 다만 IRGC 강경파 변수 존재. [출연자 질의응답] 트럼프 발언 신뢰성 및 정치 영향에 대해서는 정치 판단을 피하고 경제 펀더멘털에 집중하라는 입장. [리스크] 금리 상승 지속, 인플레이션 재가속, 연준 신뢰도 훼손, 수입 증가에 따른 성장 둔화가 주요 위험.
다듬은 글
Hello everybody. It's August 3rd, Monday, 11:00 a.m. here in Long Island and it's a very rainy day. We're looking forward to fairly rainy week. So, this summer's been a little bit of a a washout. Some a few days too hot, other days perfect. And now the washout. Max is here. Max has actually figured out how to train me.
He I give him a treat to join us here cuz sometimes uh that's what it takes to have him appear and I know how important it is for many of you that Max attends. And as you can see, he's not sleeping now. He's he's wide awake. And I think that's cuz he's expecting another treat. And if he doesn't get it, he's figured out how to train me.
He he leaves and then he goes kind of lies on the floor over there off off camera. And then I have to give him another treat to get him on. So, he's uh he's got me training a Pavlovian method here. So, he's a smart dog. Um [clears throat] Well, let's see. Lots lots of smart things to to talk about. Not so smart uh was this fellow Leo who uh ran uh situational unawareness.
I think it's the proper name is situational awareness. And um I can't pronounce his last name. I can't remember it. Uh long names are hard for me to remember these days. Um but um Leo was a young fellow uh who apparently was at Open AI and he figured he could make a lot more money if he opened up a hedge fund to the on what he knew about um the AI trade and he was a big believer in trading on the infrastructure.
So, he was long the semiconductors. Apparently, he was short the the software stocks and worked great until it didn't work so great. Kind of blew up last week and Citadel swooped in and bought um bought it all. Obviously, the the big discount. But, I kind of view that as confirmation that the AI trade makes sense if Citadel granted at a discount got got themselves a pretty good deal on this situational awareness hedge fund.
Then, they wouldn't be buying it if they didn't think there was upside. Then again, the discounts could have been substantial and uh you know, it was maybe it was a no lose kind of situation. But, in any event, it probably contributed to the volatility of the market last week. Maybe some trading desk got got wind of the situation.
Obviously, they had to cuz there were margin calls and somebody decided I guess the people who provided the margin, they made a decision that it was time to to close this fund and to sell it out. So, that undoubtedly contributed to some of the volatility. As you know, at the beginning of June, we called it the June swoon.
And then in July, we started to combine June and July and and August and call it the summer stall. And the idea was that earnings were going to be fabulous. Fabulous earnings momentum. Fema would rule the day in terms of the earnings seasons. But, the problem is the market the analysts were already discounting had great expectations for earnings.
So, how much better could the earnings actually be delivered. So, the the upside of um of uh better than expected earnings uh would be somewhat limited cuz of the heady expectations. Uh and at the same time we uh perceived that uh uh the the Fed uh would remain in a um a tightening uh stance. Uh we actually thought that they might raise the Fed funds rate um at the July meeting.
They didn't listen to us and uh as a result uh the bond vigilantes kind of stepped in. Uh they didn't listen to us in 2024. We told them you cut the the Fed funds rate by 100 basis points, the bond market's not going to going to react well. And sure enough bond yields rose 100 basis points. Didn't listen to us last uh year, they cut the Fed funds rate three times.
Told them the economy didn't need it and the bond yields didn't budge. They they stayed elevated. And uh now we got the two-year Treasury note uh basically telling the Fed you need to reverse all three cuts uh last year right cuz uh the two-year note is basically discounting three rate hikes over the next one to two years.
So, uh that's the predicament the Fed the Fed is in uh I can't quite figure out what's going on with Warsh. Maybe Warsh couldn't get uh the the votes uh to uh raise the rates by a quarter point. Uh maybe he wanted to but uh he didn't want to join the dissenters cuz it'd be kind of odd for the Fed chair to be uh the the fourth dissenter uh and that he couldn't convince the other uh the majority uh to go ahead with a a rate increase.
Then again, another thesis is that um he was appointed by uh uh President Trump. President Trump wants interest rates to decline. He certainly doesn't want to see rates going up. Maybe Warsh and Bessant have convinced the president that in order to bring bond yields down, they they to raise short-term interest rates.
Uh what whatever it's at the other possibility is that the midterm elections are coming through and the Fed's supposed to be non-political, but then again Warsh was pretty political and uh trying to convince the president that he was the right guy uh and that he would lower interest rates and then suddenly he comes in and starts talking about tightening.
Uh president couldn't have been very happy about that and you know, let's not remember let's not forget that one of the reasons that Trump basically how can I put it? I can't put it delicately. He just downright hated Powell and he hated Powell because Powell lowered interest rates before the presidential election.
And obviously Powell will uh uh what was was uh set up for all sorts of trouble as a result of that and president was in revenge mode when it came to Powell. And Powell's still sitting there at the FOMC. He should have retired by now. I think he's waiting for his case to be resolved. But at any rate Warsh may figure that he doesn't want to push his luck and raise the rates before the midterm elections.
So that's a possibility in which case he's kind of counting in the bond vigilantes to do the heavy work. Well, they're they're doing it. Uh meanwhile the stock market doesn't seem to be particularly alarmed by any of that. Uh shouldn't be alarmed as long as a 10-year somewhere between 4 and 5%. I think that's the normal range for rates.
We're back to where we were before the great financial crisis. We're back to where we were before the um Uh we're back to where we were before the great uh inflation uh situation. 4 to 5% yields are reasonable yields in my humble opinion. Um now uh the other thing of course that new today um over the weekend uh President Duterte we're negotiating once again with the with the Iranians um trying to President obviously wants to get this thing over with.
The Iranians well, who knows? There's probably a contingent um of people who do want to get a deal done. But then there's the IRGC and you know, 2 days into the war I went from thinking that it would be a short war to concluding well, wait a second. What about the IRGC? These These are professional terrorists who basically are running a country.
They're not going to be interested in in surrendering or giving the president what he wants. Let's not forget where the where the Satan is far as they're concerned. So, we'll see. Market is sort of gotten used to the idea of the price of oil fluctuating up up and down. Today it's fluctuating down because of the renewed discussions between the US and Iran.
And that's obviously helping the market go up. So, this is all consistent with the summer stall idea. We're back above 7,500. We went above 7,500 on May 14th and we're still there. I think this could continue through the end of August. We've got a lot of anticipation of what Warsh will say. Maybe I'm wrong about that.
Maybe we've all figured out that there's nothing to anticipate when it comes to Warsh that he's basically uh going to you know not not make any relevant comments and let the bond market do do the heavy lifting. Um, but um, there will still be some anxiety I presume about the AI trade. Uh, maybe the washout of situational awareness uh uh marked the bottom in the in the in the tech sell-off.
Um, tech has gotten be off awfully cheap when you look at uh uh the uh the the the forward PE of the um uh technology center sector it's back to the same forward PE as the stock stock market. Uh, the um semiconductors are selling at a 15 times forward PE. By the way, Korea South Korea is selling at 4.5 at a 4.5 uh PE.
So, it's it's really cheap. So, um you know, the the the problem is not valuation. I remember it wasn't too long ago, maybe a few months ago, uh when people were comparing the current situation to um 1999 tech bubble followed by the tech wreck. Well, from a valuation perspective that doesn't uh look like anything.
The the current situation doesn't look anything like what we had back then. Um, let me just look at my notes here. Uh Oh, yeah, the um uh manufacturing PMI came out and uh as as was uh suggested by the regional uh surveys, it was uh very strong. Uh, the prices paid uh was down but still elevated. Uh, the employment numbers were actually pretty strong.
Uh, so all the manufacturing indi- indicators are coming out uh uh showing that uh between the AI boom and uh onshoring manufacturing is in fact mak- making a comeback. Um, let me see what I'm doing here. Should have And I don't think I wanted to do that. I have to do a share. So, where's the share?
[clears throat] Oh, there is. One of these days I'll get the hang of this. Okay, here we go. Okay, so in in theory and I think in practice you should be looking at our charts from from the morning briefing August 3rd. Uh let me know if that's not the case. I have a couple of questions already set for our Q&A.
Uh but um yeah, always uh I'll give me a heads-up if uh the sound isn't right or the video isn't right, but I think we're we're okay. So um the GDP numbers came out um they weren't disappointing because they were expected to be weak. The Atlanta Fed got it nailed it. The Atlanta Fed GDP model uh said 1.5% and that's exactly what came in for the second uh quarter.
Uh uh and um the uh so at first brush uh uh obviously some of the pessimists jumped at it and said this proves that uh the economy's slowing, that uh you know, the pessimists have kind of latched onto this K-shaped economy idea that uh the rich are getting richer, the poor are getting poorer. Uh disposable real disposable income has been flat for a year, uh yet consumption keeps going up to a record high.
How how long is that sustainable? How long can real consumption go up to record highs when real disposable income is flattening out? Uh Moody's has come out with uh some study uh which I uh I just doesn't make any sense. Just I mean, at some point you got to start with common sense and and then do the data analysis.
Uh but the Moody's analysis is something like 10% of uh consumers uh high-end consumers uh obviously do something like 50 or even 60% of consumption uh which makes absolutely no sense. Uh Just go to a Costco. Just go to uh res- restaurants. Uh go to Cheesecake Factory. Uh I mean, uh the places are absolutely mobbed and it's not the hoi polloi and the and the and the 10% of the wealthy that are doing all all the consumption.
It just doesn't make any sense. They they don't eat any more than the rest of us. Yeah, they got some fancier cars, but how many cars do they really have? Once they have their house, they have their house or couple of houses. Anyways, we're promoting we've been promoting the idea of the alternative idea that the economy well everybody agrees it's AI powered and there's only the kind of question of whether how long that's sustainable and the answer in our opinion is for a while.
And then there's the question of the then the alternative is the G-shaped economy which is a generational concept based on my observation from my family from friends friends that we have, relatives and that is the baby boomers have done extremely well. They're sitting at a tremendous amount of net worth and they are helping their their kids.
So so the real affordability issue is for the the kids. Made a little list here. We wrote about it in the morning briefing of all the all the things that the baby boomers don't really care about. They don't care about interest rates. They don't care if interest rates go up because they they have 60% of money market funds.
So for them higher short-term rates, you know, bring it on baby. It's just just more interest income. They don't care about the unemployment rate. They're retiring. What do they care? I guess they do care though if their kids are unemployed or aren't making enough to to make ends meet, but they as a result are helping them.
They don't care much about mortgages either because they locked in extremely cheap uh mortgages. So, uh uh there as rates go up, they feel like they're really smart. Uh they they locked in um the mortgage low mortgage rates. Um and as a result, they're in no hurry to sell their homes. And the kids do come visit.
Maybe the kids actually live at home because they can't afford to uh rent an apartment. So, they're not selling their their their homes, uh which in turn it leads to the higher home prices, which makes them uh feel even smarter. Uh they don't have much in the way of consumer credit. So, you know, if if every now and then we get news about delinquencies going up, it's uh not the baby boomers.
Um they are concerned about the kids and they're helping them out. Um and that's uh that I mean, these are not kind of trivial uh oh, by the ways. These are uh the the these are all factors that I think have uh tremendous macroeconomic implications. So, here we go. Uh real quick, we got uh real GDP growth slowing down.
Oh my god, uh the K economy obviously can't can sustain sustain growth. Uh then when we actually look at uh the breakdown, we see that it had nothing to do with the K economy. Uh consumer spending uh is somewhere here. This is uh PCE. Uh durables, where is it? Come on, you can find it. Um services. Well, it's in here somewhere and that I think it was actually yeah.
Well, final sales to domestic purchases were up 3.1% and that includes uh uh consumption. Why why am I not seeing it? Uh don't want to eat up all my time here obsessing about it, but the the total should be there. We know durables was super strong. Uh PCE goods therefore were were super strong. Non-durables, uh this is real a real GDP, so it wasn't a price phenomenon.
And here's the PCE services. The consumers are strong. Uh and then the capital spending was very strong. Uh the reason that uh real GDP didn't come through as with strength is because total imports really really shot up and total imports means that you know, we basically have an AI boom and we we don't produce everything we need for the AI boom, particularly some semiconductor and and and so on.
So we we import a lot of that and uh that uh means real GDP is a measure of production, so it kind of weighed it down. If you look at the contributions, you see final sales of domestic product actually contributed contributed 2.2. At least here I've got the uh personal consumption. I'm really obsessed with this.
There Oh, there it is, right there. Staring me in the face. It's like when my wife asked me to get something in the refrigerator, I go there and I I'm just standing there like, "Where is it? Where is it?" She sees me standing there and she comes in and right in front of my face. So there it is, right there, 3.2%.
I mean, that's not a K economy number, but that's a that's a strong number. Uh so you can look at the contributions on your own, but you can see that uh weighing offsetting the the 2.2 increase in uh the contributions for final sales was total imports, which just took away 1 and 1/2 percentage points.
Uh here's the the uh uh chart that uh a lot of the K economy folks misinterpret. Uh this is real disposable income, looks kind of flattish. Looks like it peaked uh but at any rate, for the past year it hasn't done much. Uh meanwhile, consumption keeps going higher and higher. And um that uh looks to them to be unsustainable uh because the savings rate's going down and how much lower can the savings rate go go down?
And our answer is it could go negative. And uh that's just taking into consideration the G-shaped economy, the generational economy, the one driven by the baby boomers. Obviously, disposable income is going to start going flat. Maybe it'll actually go down cuz all these baby boomers are retiring and they Well, what were they making?
100,000 to 500,000, maybe maybe more. Obviously, the younger generation may benefit from that in in sense that they'll move up to their their positions and get paid more. But, I think since the baby boomers are such a large group cohort in terms of numbers, inevitably, they're going to be weighing on labor income and depending more on their net worth, their household net worth, and maybe interest income.
So, that'll keep the consumption going. This is selected personal consumption expenditures contribution to real GDP. You can look at it on your own, but basically, what we're seeing is people are spending on services. They're going out for meals. They're Here's food services, accommodations. And services, as I said, and healthcare.
And so, a lot of it is related to the to the consumption by baby boomers. But again, they are helping their young'uns. This is the retail sales weekly. That So, a lot of This might have been boosted by the World Cup and by the tax rebates, but we're still looking at a solid number of 8.1% as of late late July for retail sales.
You're probably tired of these charts. Maybe not. They're They're pretty. They're colorful. And we've we've shown you We've added some some more sparkle some more charts uh that that are that are pretty. This This is the same thing showing you the percent of uh household wealth uh held by baby boomers in in total.
So, they they hold 52%. You can see that's kind of widened to 52%. The silent the folks uh the older folks uh are at uh 11%. So, 63% of household net worth is held by seniors, mostly retiring people. Um and I don't think there's ever been anything like it. Uh I'm starting to sound like Donald Trump.
Um then we've got um mutual fund corporate equities, and they have 54%. The silent has 15%. So, that's uh 69, almost 70% uh is held uh of uh corporate equities and mutual funds are are uh owned by seniors. Uh this is the same thing for mutual fund shares. Um I think I got that here. Actually, this is showing real estate, but you can see the mutual fund shares.
I think that's 60% of um of mutual funds are held by uh uh the baby boomers. And if you add in uh the seniors, it's uh the the silent's even bigger than that. And then what else here? Uh real estate, um they own a lot of real estate. Uh 41% of real estate plus eight is uh 59% of real estate. Um I think we kind of got the order of these charts a little bit backwards, but but you get the point.
Uh here's money markets. Look at this. This is uh uh household money markets in trillions of dollars. And now I got the order right. This is money market funds by generations. The boomers have 60% of money market funds. uh so together with Silent they have 76% of money market funds. So, higher short-term rates, they love them.
Um makes them feel better. Just gives them more income. Distribution of household liabilities, let's go straight to um mortgages. Mortgages, look at this. They've paid off their mortgages. I mean, they have 18% of uh more mortgages, uh 20% all told. Um and I thought we had consumer credit. See, I should come more prepared with these things.
So, I think we uh mismanaged some of the order of these things, but uh trust me, the consumer credit was was the same story. So, um meanwhile the economy's is doing great. This is the regional indicator for the ISM and PMI, and sure enough it it came out this morning very strong. The non-defense capital goods orders are are flying.
Um Uh and then we got the inflation problem uh that uh Warsh wants to study and wants to think about and wants to decide what uh inflation indicator we should be looking at. Well, why not look at all of them? And uh right now we have a problem in an area we never had a problem in, and that is uh electronic components, semiconductors, etc.
The various measures of inflation are are flying. Uh not this one, but uh at least two out of three are are flying, and uh Apple and other electronic consumer electronic companies are raising their prices because of that. Uh import prices of uh of technology are are increasing. Uh and then here's the the GDP deflators.
Uh Elias and I looked look at looked at them. And it's hard to see uh any reason why the Fed shouldn't be um moving to to tighten at least for credibility's sake. And um so and again, I think the economy can tolerate it. It's not not a you know, 25 basis points for starters is uh not not uh going to uh do anything terrible to the economy, but it is going to increase the credibility of the Fed if they had done it.
Um now it's going to be harder as they get closer to the midterms. Uh at least for Warsh. Uh so it's going to be a messier FOMC uh meetings up ahead here until the midterms. Uh but you can see this is the total uh you know, if you want to look at at an overall inflation numbers, the GDP deflator comes out quarterly and that's not a happy number, 4.3% uh take out Let me make it a little bigger for my eyesight.
Uh take out uh food and energy, you got uh 3.8%. Uh the GDP deflator's personal consumption, we all look at it monthly, but there's also quarterly. And the quarterly are showing that ex-food and energy, we're not close to 2%, we're at 3.3%. And then uh this is the various components of it. Uh the durables, which tended to have a deflationary streak, has been boosted by uh by tariffs.
Um and uh we've got tariffs again uh this year as an issue, so they're 3.2, so you're not getting the downward pressure on inflation from deflating durable goods. Uh non-durables includes the energy and food services. Again, uh uh well above uh 3%, not even close to 2%, uh the deflator's for fixed investment, uh they typically well, yeah, forget about typically.
Right now, uh you got a problem with equipment, 4.8, uh intellectual property is still low, but that includes software. Uh structures is 4.1. Uh and then finally, goods imports. Let me jump over here to uh what do we have here? Let me jump back to the year. The you know, what I like to do is also look at the quick takes a situational unawareness hedge fund blows up without blowing up the market little graphic here for you that make a dramatic tech stocks.
We think they're going to hold their 200-day moving average. They're weak today again. So they're obviously still testing the 200-day. But some of the AI trade stocks the hyperscalers are doing better today. Softwares been doing better of late. The broadening of the market thesis we've had still working out the the S&P equal weight outperforming the market weight our thesis that the 493 would show some relative outperformance is working out in relative and absolute terms.
As you can see the X Mag the 493's outperforming year-to-date the mags and the and the spy. Another indicator that the economy is doing well Russell would 2000 is very sensitive to recessions. They will they would that be a record high if investors were starting to worry about a recession another sense of area broadening bull bear ratio is kind of mixed.
So neither here nor there the monthly indicator in the in the consumer confidence index on expectations for the stock market remain very very bullish. Well, isn't that very bearish? Well, I don't know. I mean right now it correlates pretty high. This is the 12-month average of the the above it correlates pretty well with the the trend in the PE.
So if if you're wondering why the PE is so high, it's cuz people just uh um are no longer easy to scare about a recession being imminent. The FEMA forward earnings momentum fabulous earnings momentum uh is keeping the PE high uh even as uh rates have gone higher. Uh the PE, of course, for the S&P 500 is has come down, but some of that is because of other income uh from mark-to-market uh Meanwhile, as I said, I you look at where we are now in terms of forward PE information technology versus the S&P.
Well, this Man, people were kind of worrying that this was going to look like this. Well, forget about it. It's looking much different than what we had during the the tech bubble. Uh earnings uh this was boosted, as we said last week, uh by Alphabet's capital gains in some of some of its investments, particularly SpaceX.
Um we are increasingly looking now at Q3, Q4, which obviously the analyst expectations are not going to incorporate um MTM, so those are still going up. Uh the 2020 We're looking more at 2027 than 2026. Uh again, cuz there's no MTM here. This was an MTM increase, uh but the forward earnings continue to move higher.
Uh forward earnings uh across the board, small cap, mid caps, large caps, these are not being affected by MTM, uh and those are at record highs. And um bond market uh a lot of things driving it right now. This Today, the lower oil prices are are helping quite a bit. So, that's a quick run-through, maybe not quick enough.
But, let me do some uh quick Q&A Q&A here. Um I don't know why I have such a large audience. Why aren't you folks all on the beach or are you doing this from from the beach? Um so Michael um Because baby boomers and silent generations hold 110 trillion net worth um and approximately 20 trillion in money market funds, should we be more concerned about too many dollars chasing after too few goods and impending inflation?
Uh well, yeah. That's a reasonable way to look at it. If the baby boomers are interest rated and sensitive uh other than interest rates going up make them feel even better. Um if uh home prices rising makes them feel better in stock markets yeah, then they they're going to continue to spend and they're going to share some of that with their kids who will continue to spend and we're seeing that in in retail sales and uh it's another reason that to believe that um the the Fed just doesn't really appreciate how strong the the economy is.
Uh Adam, is it why the market keeps falling for these quote-unquote deals? Iran What you're talking about the geopolitical deals. Iran is not talking to us. Trump just says that uh is happening and he's the world's most documented liar, okay? That's uh I I make no political judgments uh when when I when I do these things.
Uh I just wonder if and when the market will ever wake up to to his lies. Uh well, uh Adam, let me let me tell you something I learned over the years. Never let uh politics get in the way of making money of investing. And the other thing I've learned is uh it's extraordinary how well the US economy and the stock market do despite Washington.
So that's that's kind of the way I look at things and uh I I kind of uh increasingly try to not not not to get to get emotional or all that concerned when it comes to investing and giving you my opinions on uh politics and then I think you all can vouch for me that I don't get political. I don't see any point in doing that and I keep telling you try try to tune that out and focus on what matters.
Obviously Washington matters but it's not the only it's the only not the only influence on the market. And then there's all of us who uh working stiffs who uh somehow or other manage to do uh pretty well. Uh why did the Treasury secretary Oh, this is Adam again. Uh why did the Treasury secretary uh and Hassett both say GDP would grow at 5 to 6% in Q2?
What do you think happened? Do you think they honestly believe the estimate or were or lying? Um you know um what's the difference between being lying and being a politician? I mean uh politicians uh tend tend to exaggerate. Uh I'd rather use that than lying but uh um Yeah, I I think uh they've been hyping things up and the reality is different but you know, I can come up with a pretty happy story without uh exaggerating or lying.
Um Well, Adam's got one more. Uh are there risks to the US economy given it it appears the government is manipulating oil, interest rates, and currency markets while also taking act while also taking active positions in equities. Has the government ever intervened in the free market like they have recently?
That's a very good point. The market is uh uh obviously being uh somewhat influenced by by Washington and there does seem to be uh uh uh the the the the the taco idea that Trump always chickens out uh seems to be a still a relevant trading idea. When the market goes down, all of a sudden you see him saying that uh we're we're not going to attack him, we're going to uh we're we're in negotiations.
So there's there's certainly something to that. But again, that's not the whole the whole that's not all that's going on here in the in the market and driving the market. Okay, I think Adam got got it off his chest. Now Eva, I had despite the April 25th Liberation Day panic, tariffs don't seem to have any impact and consumers are the tariffs are not getting implemented or or we're not buying more expensive products or use producers are substituting with domestic products.
What do you think is going on? I had a big cantilever umbrella that malfunctioned and I only bought it a year ago. So I called the patio store and they sent somebody over to to fix it and I asked them, you know, have your prices gone up a lot? So well, we've increased them some. So I said, has that affected your sales?
He says, not at all. While he fixed my cantilever umbrella and I got a little insight. But I think uh You know, I think some of the increases in tariffs have been passed through and as a matter of fact, Amazon has announced that they're going to rebate some one way or another these the refunds they they've gotten.
Now the tariffs have been adding to government revenues somewhere in the order of 300 to 400 billion dollars. So Now that's that's a substantial tax that has to be paid by somebody. And again, I think it just demonstrate the resilience of the of the consumer, particularly the the baby boomers. And maybe maybe not only are they interest rate insensitive.
I mean again, they like interest rates going up but they they you know, but it doesn't they're they're insensitive in the sense that interest rates going up are supposed to weaken consumption. Well, they it actually works the reverse with them. And maybe they're also price insensitive. Um You know, um I don't know about you, but we're still going out to restaurants and uh you know, every now and then uh I'm not a big fan of eating uh red meat anymore.
Um but uh every now and then I do like to have a filet mignon. And uh what it used to be like uh $25, now it's like $30, um and we're still going out, they're still paying it. Uh and the restaurant's full. And it just doesn't look like it's all the hoi polloi. Uh Okay, finally uh Adam, great session.
Got to jump to another call. Thanks for your questions, Adam. Thank you all for joining us. Uh have have a good week. And uh may- maybe you can just go ahead take some time off for the rest of the summer. Uh if I'm right, it'll be a summer stall, and maybe you you won't be missing that much. Uh thanks, everybody. All the best.
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