Frank Holland (Anchor) 00:00.070
john want to come over to you one thing i've been talking a lot of traders about is the idea of japanese bond yields rising and that becoming a more attractive place for japanese investors to put their money and maybe even other asian investors to put their money do you agree
Frank Holland (Anchor) 00:11.590
with that thesis
John Stoltzfus (Chief Investment Strategist) 00:13.190
you know frank i i would think it's a little bit overblown at this point the the what the benchmark rate for japan now at seventy five basis points that compares to ours what's ours three fifty to three point seven five and our ten year over four percent and their ten year and
John Stoltzfus (Chief Investment Strategist) 00:30.150
around two percent if i'm correct it doesn't look really like a big competitive attraction away from the US treasury that said we think it's it's a healthy move to diversification related to global investors we we don't see this as a dramatic negative for the US if anything you
John Stoltzfus (Chief Investment Strategist) 00:53.150
know when we say the US currency we can somewhat although i think the yen actually weakened versus the dollar today on on the news as it crossed the tape effectively a dollar that's a bit cheaper than where it's been for the last couple of years is good for US companies and we
John Stoltzfus (Chief Investment Strategist) 01:09.760
are big exporters in terms of services and and it helps us be much more competitive but john
Frank Holland (Anchor) 01:16.550
totally understand that but we are also talking about foreign money coming into the US the idea of rate cuts coming up and i think a lot of foreign investors are looking at the situation whether it be lisa cook a new fed chair coming and expecting to see more rate cuts and a
Frank Holland (Anchor) 01:27.950
more dovish fed doesn't that set up the stage for a weaker dollar that may stop a lot of people from doing their hedges and carry trades and things like that and again another factor that could take money out of the US and out of the US markets
John Stoltzfus (Chief Investment Strategist) 01:39.830
i think you know if anything it it it what what we have seen is is while central banks around the world are most certainly looking to compete against the dollar and some of that is related to the the gold purchases we've seen over the course of the last year and a half two years
John Stoltzfus (Chief Investment Strategist) 01:56.310
by central banks outside of the US but in effect you know the US has the edge that the US has is innovation accountability transparency and governance and what we see is we see private investors and and and corporations still very interested in in US assets this is foreign
John Stoltzfus (Chief Investment Strategist) 02:19.190
companies and foreign investors we haven't seen anything that looks any kind of a sea change that would be detrimental to the US and if anything it sort of returns that again that global diversification of portfolios as you know i've been in this business forty some years forty
John Stoltzfus (Chief Investment Strategist) 02:36.030
two years it ebbs and flows and the one thing it's been the last few years it's been so concentrated us it's nice to see some diversification
Frank Holland (Anchor) 02:47.870
by the way john over those forty two years i'm pretty sure you never used an abacus i'm not gonna let you off the hook though we gotta talk about quadruple witching day about seven trillion dollars in notional option exposure set to expire today five trillion of that's tied to
Frank Holland (Anchor) 02:59.430
the S and P does that mean we're gonna see some volatility does that in any way in your mind jeopardize the quote unquote santa claus rally that i think a lot of people are hoping for it and out the year
John Stoltzfus (Chief Investment Strategist) 03:09.270
yeah i don't think it it it it jeopardizes the santa claus rally because that even runs into the first few days of january so we got a little bit room to edge not edge but edge in here for that santa claus rally but you know we go through these we go through these witching
John Stoltzfus (Chief Investment Strategist) 03:28.710
fridays on a regular basis and thus far it's always going in there's a bit of trepidation but the market has been remarkably able to digest it the liquidity in the US market and the opportunities