This episode explores the state of the labor market, trade negotiations, and equity markets, set against the backdrop of cooling economic indicators and potential tariff impacts. Neil argues that despite a seemingly positive jobs number, underlying data suggests a labor market slowdown, further exacerbated by tariff shocks, potentially pushing the Fed towards considering rate cuts. Against the backdrop of these economic concerns, Jeff notes the market's resilience, particularly in credit, which signals a potential mitigation of supply shocks related to tariffs. Steve shifts the focus to trade, highlighting encouraging developments in negotiations with China and the European Union, particularly Ukraine, emphasizing that dialogue is preferable to hostility and actions speak louder than words. The discussion pivots to equity markets, where a tactical bullish call is maintained despite negative trends, driven by oversold conditions and improving credit spreads. The episode concludes with an analysis of leading economic indicators, with Neil advocating for a holistic judgment-based approach rather than relying on single indicators, while Jeff emphasizes the importance of market signals and credit spreads in assessing economic health.
