No, not at all.

Not at all.

I don't think it's dead, but I think there's a lot of risks there where I can just say, hey, I can buy the banks here, which trade for like a 40% discount to the S&P.

We know the economy is starting to pick up.

Loan growth is going up.

Capital markets are opening up.

I'm getting like a 2%, 3% dividend.

It

What exactly is happening?

Yeah, I mean, we've had a big rotation.

It really started last year, if you think about it.

Um, you know, we had the American, uh, you know, domination for so many years, and last year, we're really starting to see that rotation where money started to move around the world, started to move into commodities.

Uh, obviously, we're having this huge run-up in precious metals.

Um, and, you know, really going from, like, you think physical assets or the physical world from the virtual world, when you start thinking about software and AI, which really hasn't done anything so far this year, and we know we've had this big sell-off in software stocks.

So, you know, I think there is a big shift.

Mm-hmm.

I just saw a forecast in the journal today about, uh, 68% of companies say they're gonna increase their AI spending this year, not decrease it.What can stop that, you know, incredible boom? Anything?

(laughs) Anything? Um, I, I think, look, I mean, there's so much money being spent on AI infrastructure right now, specifically from the hyperscalers.

When you talk about Amazon, you talk about Microsoft, whether it's Meta, uh, Google, and it's gonna be something like, I don't know, $500 billion over the next year.

It's just, like, astronomical numbers.

And like anything else, like the laws of gravity, right? Trees don't grow to the sky.

So, at some point, I think that spending has to slow, but the problem is, like, my crystal ball broke 25 years ago when I got in the business.

I, I don't think anyone's gonna predict ahead of time when that slowdown happens.

this is our last full week of trading, what do you see 2025, the, the tail end of this trading year, and 2026?

(laughs)

If they do disappoint and the markets sell off.

I don't think we know when that day is.

I think in the short term here, it seems like AI infrastructure spending just can't stop.

Um, and I think you're gonna see that in the earnings reports right now.

But I think as an investor, and this is what I think about when I'm allocating capital for my clients, is at some point they are gonna disappoint.

And I always point to the fact that, you know, look, OpenAI, which, uh, created ChatGPT, it's th- it's the largest used large language model, that's the one that's most popular, um, and has lots of commitments to buy lots of, uh, infrastructure from NVIDIA, from Advanced M- Microdevices, Oracle.

At what point would you say we could see this i- you know, having an impact on markets? I mean, right now clearly they're not, but, uh, at some point is that gonna take a turn?

(laughs)

(laughs) But, you know, I think-I think it's more similar than a lot of these experts are saying.

You know, one of the big arguments was, "Well, dot-com companies don't make any money." Well, guess what? Uh, OpenAI, which has ChatGPT, which is the largest used large language model, it's 700 million people, mostly people using it for free, makes no money.

(laughs) So I have to wonder, and they're not even supposed to be profitable till 2009.

So you have to start questioning here, you know, maybe, you know, the profitability of all this investment in AI, which has just been ginormous, right? Hundreds of billions of dollars.

They're gonna continue to spend hundreds of billion dollars, or the, uh, hyperscalers are.

Are we gonna see a return on investment? And my guess is we could be very disappointed 'cause look, Cisco made a lot of money back in the late '90s-

Mm-hmm.

Uh, what will Wall Street and the Fed be looking for in this data, you think? What is- what are the- what- what can tip the balance in terms of the Fed's hands?

Well, I think goods inflation is critical because everyone's talking about the same thing right now, right? It's how are tariffs going to impact inflation.

Um, that's the big question on everyone's mind and of course, you know, we've seen tariffs, uh, and the coffers of the, you know, the federal government are getting filled because of tariffs, which I think is a good thing.

We're paying down some of that deficit.

Um, but the question is, we really haven't seen it show up in the inflation data.

Now, you know, you have to remember, inflation is a lagging indicator.

So for us to see care slapped on the goods and all of a sudden it just reflected in the- in the data, uh, it's probably not going to work out that way.

Um, w- isn't that just a good thing for the US? And do you believe that these companies will invest as much as they are promising in these early talks?

It's Brian Kilmeade.

He's not gonna cut now, but are we lining up for a rate cut in September? That's what everybody wants to know.

Um, and he probably won't cut today, and he'll probably get some mean tweets from Trump, uh, as we (laughs) uh, move along.

(laughs)

Um, but I think he's, uh, between a rock and a hard place.

There's a lot of pressure to cut, but his metrics for cutting, like first off, you have full employment.

The labor market's not falling off a cliff here.

If you look at jobless claims, they've been very, very low, uh, so there's no reason to cut because of the job market.

Yeah.

... um, and now it's kind of the, the cool down or the come down where we're actually looking to make a real deal and a real framework.

And a lot of this for us is around these rare earth minerals, which China is the largest exporter in the world, something that's critical to our technology sector, and on the flip side, China does want some of our technology, uh, for their own technology industry.

So, I think, you know, we're at a point now where cooler heads have prevailed and a real framework is being built, and, you know, markets are great forecasting mechanism, is a great forecast- forecasting mechanism, and I think that's really what the market's been telling you now for a couple of months is we are getting past this.

Deals are gonna get done, especially with China, which has always been the-

Right.

... like any of the Magnificent Seven names.

So if we think the economy is gonna do well this year, which we know I do, I've said it, um, you know, that's, that's gonna bode well for a lot of different segments of the market.

Mm-hmm.

... way of going, going about it any differently the last couple weeks, and now you're getting a nice rebound there.

Um, and I do think we have an everything rally right now.

I think there's so much money sitting on the sidelines.

I think a lot of people have missed this opportunity.

They've been sitting in cash, just specifically institutional investors.

And if you look at the negative sentiment amongst institutional investors, it was very high.

Are we then guaranteed a negative Q1 GDP print, maybe Q2? Do we ignore it if it's negative? How do you think about the health of the consumer?

Mm-hmm.

Um, immigration slowed a lot.

Wages are going up.

Inflation, we just talked about it.

It's moderated a lot.

Um, if you look at the profit picture for companies, uh, it's a little murkier now because of tariffs.But going into the year, it looked relatively strong, right? Double, almost double digits again.

Earnings growth for the S&P 500, like all things you wanna see in a strong growing economy.

Mm-hmm.

Ryan Payne is the president of Payne Capital Management, and I'm pleased to say he joins me now.

So, you know, right off the bat, sentiment has just gotten, like, way negative.

And think about this.

Like, two and a half months ago, everyone had the rosy-colored sunglasses on, right? It was like, "America first.

We're going to, you know, we're going to go out there.

We're going to crush it." (laughs) I'm paraphrasing here.

Um, and just like that, sentiment's changed on a dime, and a lot of it's about the uncertainty of tariffs.

But can a business leader plan around reciprocal tariffs?