Anna let's talk about 4,825 year end on a S&P 500. 4,825 and then
something closer to forty seven hundred next year. Just frame The view at Wells with your buddy Chris Harvey for us. Well I
think for this year and what's really given us confidence into Our price target for the next two months we'll look at how 3Q
earnings have been coming in. As much as all we hear about is Supply chain issues labor costs going up. Labor shortage is
really what we're seeing is that margins have been growing Overall for the S&P 500 companies. That's telling us that this
earnings growth has been robust. And it's partly because like You guys were talking about before that demand has been rather
inelastic demand has been booming and it's helping us and our Prospects going into year end.
But like you said now for it next year for 2022 we're going to See tapering start to finish probably around midyear. Then
you're starting to see rumors about that rate hike being priced In. And that's the kind of environment we're showing from this
more mid cycle to late cycle. So really your experts called Dow Thirty seven thousand five hundred ish you know who knows and
maybe will overshoot to SPX5000 which would be remarkable on The way up. Adults are going to come to you and say we must
hedge this great bull market. And yet with this convexity this Acceleration hedges becomes so expensive. Is that where we are
now that you can intelligently head hedge a great bull market. Well as the pace has been accelerating what's been interesting
is you look at the volatility markets and you're seeing that Implied over realize is actually not too expensive right now. I
think a lot of that's been brought down by the additional Confidence in earnings growth and just sort of better outlook
and clarity where I'm getting so in fact hedges. I don't think Hedges are that expensive here. I think it's possible. You just
got to pick your time. This is Lisa. This is absolutely Critical. And it's an indication that there's not cathartic.
You're not getting the emotion is indicated by expensive hedges. Where you go I can't take part in part of this is how do you bet
against a market that seems by some maybe would call it Teflon Like in its appearance in terms of rallying honestly. And I do
wonder how much this hinges on this idea that there still is so Much liquidity in the market based on where the Fed is in their
policy that even if they become a little more hawkish if they Start to taper their bond purchases you still have negative real
yields of around negative 1 percent on the 10 year yield in the United States. How much is this driving everything at this point
regardless of fundamentals regardless of what story you tell in The economic cycle. Now Lisa you're absolutely calling out that
big elephant in the room even as we start tapering these Purchases are massive. Is this the most monetary liquidity we've
had in quite some time. And don't forget we've had a lot of Fiscal stimulus down the pipeline as well perhaps more coming.
So in that kind of environment is helping people and it's giving Us that flexibility to spend and to move markets around. I think
that as that tightens you know tapering is just the beginning And even yields yields are still coming off very very low low
levels in credit. While it's winding off tight it's still Historically low. So all that context it's a great point.
I think that's a lot of the reason why enjoying this sort of Boost we're seeing now. And just give me a second.
This could be one of the biggest contrarian indicators we've had In quite a while. Lisa you sounding a little bit bullish now.
Are you sure. I mean what is bullish on which you go that it is Starting to sound like theory. What is bullish. Think is coming
home. Honestly tough line is what the market has been doing. And I do wonder John to the point how much is is just completely
backed by the Fed. Don't bet against all that is still Accommodative. Started screaming. We got you there. We got you.
You're just doing this to get a recording studio to focus. Take. The floor is yours. I've heard this so many times John. It is
the conflation of Mac well-intentioned macro analysis into the
Bid ask of the market and particularly of the stock market. And
you've got to combine that in with a careful Gina Martin Adams And Hahn kind of analysis. Just to confirm Lisa is not bullish
based on what Lisa just said we've done with that. Now Lisa Flirtation I'm not going to forbearers. You know I'm trying to
look around corners that I can get in there because that's what the corners are That are concerning. Thanks for clarifying time. And a final
question how big is the Fed's involvement in this equity market. It is no it is undeniably large. And if anything the Fed has
made sure to communicate their stance because they know the Impact on the equity market. And you know to Lisa's point there
is going to be one sector will look in particular the favorite Tech that is going to be having a harder time is real yields
start to take off. And I think real yields will start to move Higher away from the negative
habits they have. Yes that's a fact. Right. Yeah. What's been interesting is as we are getting this
consensus on tapering you would expect real yields to really Start picking up. They've been going a little bit the other way
lately and that's what's giving us pause. You know talk about Looking around the corner. That's a little point of the market
that we're wondering is this signaling something different to Us. But I think you need to give it time. You know we're looking
on this day to day framework. We need to think in months and Quarters ahead.
