Analyzing Trends: Market Impacts, Debt Interest, and Tech Stock Strategies

What if the national debt's interest surpassed defense spending? Imagine the implications for healthcare, social security, and tax code reform. Today's episode takes you deep into the world of market trends, analyzing the historic sell-off's impact on equity markets and exploring how the Fed aims to keep inflation at its magical 2 percent target. With a keen eye on the financial horizon, we look at the alarming increase in US deficit spending, the Israeli Shekel hitting lows unseen since 2015, and the oil price surge due to Middle East tensions. 

We also dive into the recent AGCO/Trimble joint venture and its potential to boost both companies. The tech sector isn't left out, as we analyze Alphabet and Meta's performances, and ponder about the appeal of precision agriculture software. Are farmers the best economists when it comes to saving money? The episode closes on a high note for income investors, introducing preferred stocks as an attractive option, offering around 7.5% yields and significant tax advantages. This is an episode packed with insights, market analysis, and tips to navigate the intricate world of investing. Tune in for a deep dive into the currents that shape our financial world.

** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.

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Transcript

Alan Eppers: 0:00

And now introducing Mr Keith Lanton.

Keith Lanton: 0:04

Good morning. Today is Monday, october 9th. It's also Indigenous People Day, columbus Day. The bond market are closed in the United States today, in recognition of the holiday. Typically this is a slower day, but today is super active day and we have a lot to talk about. This morning. We'll say that Columbus Day is a meaningful day for us here at Herald and Lantern Investments.

Keith Lanton: 0:32

Herald and Lantern Investments was formed as a result of merger between Lantern Investments and Bernard Herald back in November of 2020, and both firms have long storied histories. Bernard Herald would have recently celebrated its 50th anniversary and today, columbus Day, would, or does, represent the 30th anniversary of Lantern Investments. So we are very excited to have such longevity from the two founding firms and now here at the merged firm, which will be celebrating its third anniversary in November. So that brings us to what's taking place this morning. I guess one piece of positive news for the bond market is that it's closed today, although perhaps we would be seeing a rally or a flight to safety in bonds although we'll get a better idea of that tomorrow when the bond market does reopen. But the bond market has suffered a significant sell-off or decrease in value in the past year and a half, and this has led to a lot of weakness in fixed income investments, and that has also carried across to the equity markets, as the higher interest rates weigh on equity valuations as well. So today bond markets closed, but we are seeing a weakness in the stock market, and this is predominantly the result of concerns after the attacks against Israel by Hamas in the Gaza area or southern Israel, and we now have a death toll from this conflict between Israel and the militant group Hamas's top 1100, as fighting is now carried into the third day, the Bank of Israel has stepped in with plans to supply dollar liquidity to local banks and sell foreign exchange for the first time since the Shekel was allowed to freely trade, the Israeli Shekel this morning, hitting lows last seen in 2015. As a result of the uncertainty in the Middle East, oil prices have surged as concerns that the inflamed tensions could carry over into other areas and affect oil prices, and we're seeing oil up $3.50 this morning, or about 4%, to $86.27 a barrel.

Keith Lanton: 2:52

So, taking a look at the bond market in particular, which again is closed today, but this is, or has been, the primary force affecting the market for the last year or so, and the bond market has truly endured a brutal bloodbath that ranks among the worst sell-offs in history. And because it's happened slowly, perhaps we haven't realized the full magnitude of the sell-off in the bond market and there is also potential that there could be more pain and volatility to come, ten-year Treasury resting at around 480 after the close on Friday. Some are saying that 10-year Treasury could reach or exceed the 5% level, to put the magnitude of the sell-off into some sort of gauge that we can compare it to. So Treasury bonds with maturities of 10-year or more have tanked 46% since they had bottomed out at just about half of a percent and now we're up at almost 4.8%, and that's in about three years. So 46% sell-off in 10-year Treasury is in the last few years and 30-year bonds are down about 53%. Those line up with the stock crashes of the dot-com era and 2008. We are looking at our third year consecutive year of Treasury bond losses, something that we haven't seen in a long, long time, and this is perhaps creating a feedback loop.

Keith Lanton: 4:20

As Treasury sell-off, they become increasingly attractive in the sense that they offer higher yields, higher returns, and thereby making them more attractive. At the fact that the investors have been burned by owning bonds, or Treasury bonds specifically, has made investors shy away from taking advantage of these sell-offs, as they fear that they are catching a falling knife, and the rates have continued to trickle higher. As the rates get higher and higher, the escape velocity gets better and better. Meaning, if you're earning 5%, if you even suffer a decline in principle of 3%, you're still up 2%. If rates were at 1%, then you had a decline of 3%. You're at negative 2%. So these higher rates are giving you more and more protection, but investors are let's call it battle weary.

Keith Lanton: 5:06

One of the reasons that the Treasury market has been selling off has been the concerns about the deficit, and this is something that we have largely as economists and as market participants, and as Americans. We haven't paid as much attention to the mounting national debt, the amount of money that was handed out or spent during COVID in the 2008-2009 financial crisis, because interest rates were so low and the cost of this increased deficit spending was not as painful. But now we're looking at a deficit of around $33 trillion, and that's up from $32 trillion just earlier in this year. So we've added a trillion dollars just in the first nine months of this year alone. Now we have reached the point where the US is currently spending more to pay interest on the national debt than we are on national defense, and obviously, national defense becoming increasingly important. With all the uncertainty in the world situation in Ukraine, the situation in the Middle East and, of course, the ongoing disagreements between the US and China all pressuring the US to maintain military awareness. Military alert and having the best of the military technology in the world has been the goal. We are spending more than anyone else in the world, but yet we are spending more on our debt now than we are spending on our military. To put these numbers in perspective, in the current fiscal year, through August, the Treasury has shelled out $807 billion in interest on debt securities, while the Department of Defense's budget for military programs totaled $695 billion in the same period, and this is particularly alarming when you consider how much of the federal budget goes into defense, with the US outspending every other country.

Keith Lanton: 6:52

Getting the debt under control will take a serious look at healthcare, social security and the tax code. Much of the borrowing in the past couple of years happened while interest rates were historically low, but now that they're not, with prices still climbing, the cost of debt will be amplified. Nearly $2 billion is spent every day in interest on the national debt, and when the government owes a lot of money, it makes it harder for our corporations to borrow money, because the federal debt squeezes out other debts in the economy. There's only so much money in the economy, and so, with the government borrowing such large amounts is only so much money that people are willing to lend over all. So it pushes out other types of borrowing, having effects on the economy that transcend what's taking place in the federal debt and influencing the corporate market as well, and again, that's one of the other factors that's perhaps moving the needle on stock prices.

Keith Lanton: 7:48

Now, last week we got employment report. That may have been another factor pushing up interest rates the anticipation of what the jobs number was going to look like. Earlier in the week we got what's called the Jolt's report, which is job openings, and that number came in significantly higher or hotter than expected. We were looking for a reading of about 8.8 million job openings. We got about 9.8 million. That caused a meaningful sell off in the markets concerning that there are a lot of jobs that potentially are still not filled, which indicates that companies may still be hiring more. And then Friday we got the employment report that showed that 336,000 jobs were created. That was well ahead of expectations of a number of around 179,000, which was expected, and on top of that, prior two months were revised to show that 119,000 more jobs were created than initially reported. The good news was that the average hourly earnings rose just two tenths of a percent. That was expected to raise the arrays of three tenths of one percent. So the silver lining is that we had a little bit of a Goldilocks story. We still had job growth, although much hotter than expected, but we were not seeing that translating at least last month into higher wages, which is certainly a positive.

Keith Lanton: 9:05

We have a growing economy and we don't have growing inflation in terms of wage inflation, which is one of the biggest concerns of the Federal Reserve, and you can look at that as a scenario where we have continued growth without inflation. However, the concern is and the markets are focused on this is that labor has certainly been able to extract some concessions recently in some of their negotiations with employers, and we've seen this with the Writers Guild of America. We saw this with UPS getting meaningful wage increases. We saw this with airlines paying a lot more to pilots. It's not to say that these folks are not deserving. This is just to say that we have seen significant wage increases. Albeit arguably deserve it wage increases, but nevertheless this is something that creates a potential inflation in wages and something that the Federal Reserve is mindful of. We now have healthcare workers at Kaiser Permanente out on strike, and, of course, we've got actors out on strike, and we have the big three automakers here in the US suffering from strikes as well, where we have the UAW suggesting that they are in need of higher wages so that their folks can maintain the standard of living that they're accustomed to. So we certainly have challenges here in the economy where there's this wage spiral. We have CEOs getting paid a lot of money and we have workers saying, hey, we deserve some of that pie as well, and this is something that the Federal Reserve is going to have to thread the needle on. This morning, s&p futures are down about 26 points, about 6-10th below fair value, dow futures down 159, about half a percent below fair value, and NASDAQ futures down about 110 points. Market participants this week are looking ahead to the September CPI report, which comes out on Thursday, and third quarter earning season getting a kickoff later in the week Before that Thursday report on CPI. We will get the PPI out on Wednesday, which will give us a little bit of a peek at what the producer prices are doing.

Keith Lanton: 11:16

Overseas equity indices in the Asia-Pacific region ended Monday mixed, signed by the uncertainty surrounding the response to Hamas' attack against Israel over the weekend and market closures in Japan and South Korea, as well as a typhoon warning that canceled Hong Kong's morning session, which restricted overall trading volume. In Europe, major indices have taken a mostly defensive posture in the wake of Israel declaring war on Hamas after Hamas launched a surprise attack. As we mentioned over the weekend In news this morning, israel formally declared war on Hamas after the militant group launched the attack. They killed hundreds of Israelis. Prime Minister Benjamin Netanyahu has vowed retaliation. Perhaps most concerning would be if Iran helped Hamas plan the attack on Israel. So far, us government officials have said that they do not have a smoking gun that they can point to yet, but this morning the Wall Street Journal is reporting that they have reports that Hamas was helped by Iran, so we'll see if that leads to further confirmation from governments and government agencies. Cnn is reporting that Israel has retaken control of all communities around Gaza and that identified hundreds of more people who have died. The Department of Defense has directed the movement of the USS Gerald Ford carry a strike group to the Middle East. Other news from Washington Bloomberg is reporting that House Republicans are expected to have a new speaker of the House elected this week, obviously becoming increasingly important as geopolitical events unfold and action in Congress may be necessary, and having a speaker of the House becomes obviously critically important.

Keith Lanton: 12:57

With respect to interest rates in Japan, kay is reporting that the 10-year bonds in Japan have moved close to the Bank of Japan's 1% effective cap rate, which could induce a decision to tweak the Yield Curve Control Policy at the October meeting. Japan's interest rates are critically important. They do have a meaningful effect on the US interest rates. So the market participants here in the US Treasury market who are sophisticated, will be paying a lot of attention to what the Bank of Japan does and Fed Governor Michelle Bowman, who is a voting FOMC member, expects it will likely be appropriate for the community to raise rates further and hold them at a restricted level for some time to return inflation to their 2% goal. That is the Fed's goal of 2% inflation. Also, this week mentioned earnings season. We are getting third quarter earnings, kicking off on Friday as a big day for the Bank City Group, jp Morgan and Wells Fargo, all reporting before the bell.

Keith Lanton: 13:57

Talking about interest rates and the jobs report and the creation of jobs, I mentioned that we saw 336,000 jobs created last month. Give a little perspective on that. Over the last 12 months, the average rise in payrolls has been about 266,000, which has been stronger than what the Federal Reserve was expecting at this point. What would we need for the unemployment rate to kick up to what the Federal Reserve has been talking about, expecting it to increase to, which would be an unemployment rate closer to 4 or 4.1 percent? Well, you would need to see a job gain instead of averaging about 266,000. You would need them to average about 105,000.

Keith Lanton: 14:38

Now what's the market saying about the next Fed meeting? I mentioned that Governor Bowman suggesting that the Fed could raise at the next meeting, but at least at the moment, fed funds futures, which is the summary of all the bets of market participants, are suggesting that there is a 73.4 percent probability of no change in the current target rate at the next meeting. Some are suggesting that Fed Chairman Powell may be on hold, especially given the geopolitical uncertainty. But we'll see, because we talked about concerns about wages, even though the last report showed that wages were benign, but with the labor market suggesting that it's strong and we are seeing strike activity increase, this could put some pressure on Chairman Powell to potentially increase that inflation, depending on how some of these labor issues are resolved. What has happened is, in the last year, production and non-supervisory workers have seen their average hourly earnings growth slow to 4.3 percent, which is down from 7 percent a year ago. So we'll see what the future holds for wages here for American workers.

Keith Lanton: 15:52

What happened last week? Well, last week we saw the market absorb the impact of the jobs report and that Joltz report, but the Dow Jones industrial average the only one of the major averages to have declined it, was down three-tenths of 1 percent. The S&P showed some resilience, was up half a percent and NASDAQ was up 1.6 percent. The volatility index of the VIX finished the week relatively flat at 17.3, after reaching a high of 20.88 on Wednesday, which was its highest level since May, driving the volatility, as we mentioned 10-year Treasury yield, which surged as high as 4.8, 9 percent last week, up from a March low of 3.23 percent.

Keith Lanton: 16:34

So at the moment, gone are fears of recession, replaced with worries that the economy remains too hot. In the Federal Reserve, which in September, said it wants to keep interest rates higher for longer, we'll have to do more to ensure that inflation gets back to its 2 percent target. Those worries hit a crescendo on Friday with the Superstrong Jobs Report and the stock market seeming prepared to move on from bonds as their primary driver. So what is the market potentially going to move on to? The market is going to move on to earnings. This October, earnings get ready to roll in. Pepsi is going to be reporting earnings on Tuesday, delta Airlines and Walgreen Boots Alliance on Thursday, jp Morgan City and well, as I mentioned on Friday, third quarter profits are expected to rise 0.05 percent and the hope is that companies will beat as they did during the first and second quarters and push expectations higher. Unfortunately, earnings estimates have risen heading into this season, setting the market up for possible disappointment. A robust third quarter earnings season may be needed to support a year-end rally, writes Ed Clishold, chief US strategist at Ned Davis Research.

Keith Lanton: 17:47

Moving on to a few individual ideas in Barron's, barron's had a round table of pros discussing healthcare stocks. This was the cover story saying that weight loss isn't the only big deal in medicine. Healthcare stocks have been in a sick bed this year for a host of reasons, ranging from rising interest rates, regulatory pressures, as well as the launch of revolutionary weight loss treatments whose uptake could reduce demand for other drugs and medical procedures. In fact, interactive surgical ISRG, which makes robotic surgical equipment, recently said that they have seen a decline in demand for surgery for gastro-bypass. So some unintended consequences, perhaps, or unexpected consequences resulting from these revolutionary technologies that may lead to weight loss appetite suppression. This is causing concern about the snack food companies and the companies that cater to Americans and their desire to have snacks. We'll get a greater clarity on this perhaps when Pepsi, which owns Frito Lay, reports earnings on Tuesday. But yet In the healthcare space, these healthcare roundtable pros are saying that the prognosis is better than many investors assume for the healthcare sector.

Keith Lanton: 19:06

That's the collective view of the panelists that participated, and they say that they are seeing enticing opportunities not only in the high flying shares of weight loss giants Eli, lilly, symbol LLY and Novo Nordisk, nvo, but also other pharma, biotech, hospital and medical device stocks that Wall Street has beaten down. So what are some of the stocks that they are suggesting investors consider? I would say the one that was most frequently mentioned is Birktex Pharmaceuticals. They have a pipeline of pain treatments. This is a sector that they say has been lacking in new drugs because of worries about the last round of pain medication, which were opioids and led to the opioid crisis here in the US and that certainly led to a pullback in companies seeking a pain reduction. But Birktex has been pushing ahead and they have a non-opioid pain killer, vx-548, which is in phase three trials with a readout expected at the end of this year, the beginning of next year. This is a $4 billion plus category, despite 90% of this current space being dominated by generic drugs. Pain has not been disrupted in a long time and the panel saying Birktex is breaking new ground in a category that has been a graveyard for years.

Keith Lanton: 20:25

Investor expectations are tempered but they say if you calculate the opportunity for Birktex in both chronic and acute pain, it could be worth more than $100 a share for the stock. Also, birktex has been working for decades with on drugs for cystic fibrosis and this has resulted in Birktex becoming one of the best small molecule drug designers in biotech. It has generated a pipeline of products that could dramatically change the value of the company, these analysts say by the end of 2020,. Birktex, with respect to with cystic fibrosis, has created a meaningful franchise with their drug, tricapta, which is currently generating about $10 billion in annual revenue and has helped normalize the lives of many people with cystic fibrosis who would have previously died in their 30s. Birktex is also working with Moderna on a therapy to target an additional 5,000 cystic fibrosis patients. That data will come out at the beginning of next year and these analysts suggest that this therapy is successful, it could be worth an additional $30 a share. So if you're looking at Birktex and you consider the base business, which generates strong cash flow, the exciting pipeline analysts suggest that there is a path to valuing the company at more than $500 a share in less than a year. They say obviously there are risks involved and that's up from about $350 a share where the stock currently trades.

Keith Lanton: 21:54

Another stock mentioned by this group is Merck, symbol MRK, saying Merck's growth rate is at the upper end of its peer group at 7 to 9% on the top line in 10 to 12% in earnings per share. Valuation, they say is undemanding at 12 times next year's earnings estimates, below the group median and below a median of 12 for other biotech and pharmaceutical stocks. Merck, they say, has shown consistent execution. They have exceeded expectations for at least the past six quarters based on the growth of some of their leading franchises in oncology and the Gardasil vaccine. Analysts here say that they have been making the right decisions in terms of pipeline augmentation, the right moves from a capital allocation perspective and they have been diversifying their portfolio away from oncology. The company has some interesting drugs in its pipeline, including a personalized cancer vaccine with Ketruda that it is working on with Moderna, mentioned again here. 12-month price target one of the analysts here is 131 versus current stock price at around 108.

Keith Lanton: 23:03

Another company mentioned in Barron's is the farm equipment manufacturer, agco, symbol AGCO. Agco's big competitor and the company that has dominated the tractor space is DEER, symbol DE but AGCO recently announcing a partnership with trimble, symbol t r m b in the. In this deal they will combine their precision agricultural business with trimble. Ad goes gonna pay trimble two billion dollars and is gonna oh eighty five percent of the joint venture c? O of a co calling at the largest agricultural technology deal in history.

Keith Lanton: 23:45

Precision agriculture, which is the application of computing power and software to farming, is a relatively new business in the context of the twelve thousand year old farming industry. Applications here includes self driving tractors guided by gps, better seat placement to improve crop yield, targeted application of fertilizer and pesticides to save money and lower farms impact on the environment. All of this requires real time data and connected hardware to make it happen. This deal with trimble will enable ad code compete with deer in this precision agriculture software space. Trimble's agricultural business generates profit margins of thirty two percent on earnings before interest, taxes, appreciation and amortization, far higher than ad goes twelve percent either the margins which are based on traditional farm equipment. Farmers like this precision software for agriculture because it saves money, improves yield and farmers are good economists. They don't mind paying a dollar to make two dollars. This deal, analysts say, will help ad code develop its own precision farming technology is a faster rate and make it a more viable competitor to John Deere. And it isn't just management that likes the deal. It has gotten the reviews on wall street. Barrett analyst wrote that he thinks that this is a good strategic option for both ad code and trimble, jp Morgan analysts calling it a positive catalyst for both companies. William Blair analysts saying, in addition to being a creative and at a reasonable valuation. This deal should not only reduce some of the inherent cyclicality in ad code machinery business, but also put a floor on the stock's valuation. One of the analysts here has a target of one fifty seven, that's up from the current price of one fifteen four ad code.

Keith Lanton: 25:33

And finally, if we're talking about individual stocks, one group that the focus of many investors are big tech stocks. This is the group, like Apple, microsoft, amazon, nvidia, tesla, meta and Google, and this group, barrett is saying some of them, not all, have taken a beating and the case for buying them now may be attractive. The two that have held up relatively well of that group are alphabet, which is down three percent, meta, down six percent from their highs. But this group has by and large, you know, suffered along with the overall market. Nothing, of course, goes up forever and there are plenty reasons for declines in this space, ranging from nosebleed valuations, increased by the federal trade commission, nosebleed valuations, the rise of the ten year treasury yield, all hampering the bull case. But if you're looking for silver lining, interest rates for one have gone up at such a steep rate. It's unlikely that they will continue climbing at this rate and the valuations have now come into line Barrett is suggesting to become more attractive.

Keith Lanton: 26:39

Of course, each of these companies have their own unique economic numbers associated with them and they are not necessarily all equally attractive, but the net income from this group is expected to rise about twenty percent in two thousand and twenty four Stocks are far cheaper than they were a few months ago. They now trade in an aggregate of twenty seven times earnings estimates down from thirty four times at this year's peak. Yes, that's more expensive than the S&P 500. But it's not a commanding valuation given the stocks expected growth rate. Analysts for the group and aggregate expect long term annual earnings per share growth, as I mentioned, about twenty percent. We mentioned that the multiple is twenty seven times earnings. So what does that mean? That means that these stocks are trading at a peg ratio, which is price earnings to growth of about one point three, which is lower than the median for the other four hundred ninety three stocks in the S&P 500 of one point nine.

Keith Lanton: 27:35

Finally, I mentioned the bond markets closed today. So I will take this opportunity to highlight one sector of the income market and that is preferred shares, which have dropped in price and gone up in yield, and the barons in the income investing column saying preferred shares offer higher yields and lower tax rates, bond yields having surged in the past month. One of the more appealing areas now, barons is saying, in the preferred in the market for income is the preferred stock market. We're yield top seven percent. Preferred stock is a senior form of equity, but the three hundred billion market tends to track bonds rather than stocks because the dividend rates are usually fixed and its maturities are long and often perpetual.

Keith Lanton: 28:19

Preferreds now offer the combination of high and, they say, secure dividends, their opinion and tax advantages. Some of the most appealing preferred deals were issued in recent months come from Goldman Sachs, wells Fargo and Citigroup. They have yields around 7.5%. One analyst, ed Eric Chadwick, saying we haven't seen these kinds of yields for more than a decade. On top of that, preferred dividends generally are tax favorably, like those on common stock, and a maximum federal tax rate of 23.8% that includes the Medicare surcharge if you're subject to it, while corporate debt is taxed as ordinary income and a maximum federal rate of 37%. Therefore, a 7.5% preferred yield is equivalent to more than 9% on a corporate bond than a taxable account. Investors would need to buy junk grade corporates to get similar after-tax yields on what is mostly an investment grade preferred market.

Keith Lanton: 29:12

Now bank stocks account for about half of the preferred market. Jp Morgan is the largest issuer. Bank preferreds, invariably, are taxed advantage. Now banks are not completely risk-free and this was highlighted with the collapse of Silicon Valley Bank and First Republic earlier this year. As a form of their equity, their preferreds weren't protected when the banks were seized and now trade for pennies on the dollar. Now preferreds aren't as safe as corporate debt, but problems have been isolated this is the two I just mentioned and companies are loath to eliminate their preferred dividends, in part because common dividends can't be paid if preferred dividends aren't being paid.

Keith Lanton: 29:51

Barron saying the best value in preferreds now lie in $1,000 face value securities, which is known as the institutional market. Although individuals can buy these $1,000 face value securities from their advisors or brokers, the $1,000 market now yields an average of about 8%, while the $25 retail market, which is what you typically see trading on the exchanges, has an average of around 7%. In the past few months, wells Fargo, citigroup and Goldman have issued $1,000 preferreds with yields of 7.5 to 7.5 eighths percent. The Wells Fargo and Goldman issues are trading around face value, meaning they're yielding about 7.5 percent, while the Citigroup issue is trading down at around $0.96 on the dollar, lifting its yield to 8%.

Keith Lanton: 30:36

These bank issues are known as fixed to floating, meaning that after five years the dividends are reset. Based on the five-year treasury, which is now about 4.7%, the spread above the treasury yields are typically more than 3%, resulting in yields that could top 8% in five years when these securities start to float. One negative is that, instead of allowing the securities to float in five years, the banks have the option of redeeming or calling these securities, potentially limiting the upside in them. If the interest that they could potentially be paying is high, the banks could simply say we don't want to pay that rate and call them in five years. The returns for the first five years can't be called away, so the first five years you would earn that 7.5 to 8%.

Keith Lanton: 31:21

Downside is, if interest rates continue to rise, that the preferreds are certainly interest rates sensitive and we've seen that in the first half of the year that the preferreds did drop in price, which is why the yields have gotten so high.

Keith Lanton: 31:33

So investors have certainly incurred the pain of those falling prices and if the interest rates were to continue to increase they could suffer more pain, but with rates now touching 7.5 to 8%, barron's is suggesting that the risk from higher rate is a partially offset by the fact that you're getting a very high current income or return, offsetting potential depreciation in value, and the potential for a value depreciation has diminished now that rates are significantly higher. I will mention that, as we've been speaking, that the futures have accelerated modestly to the downside, with Dow futures and now down a little over 200 points, s&p futures are down about 30 and Nasdaq futures, which are down a little over 100, are now down about 118 points so far this morning. Wish everyone a good week and hope that we will see some peace in the Middle East and in Russia and Ukraine and elsewhere in the world, as the world has gotten increasingly volatile.

Alan Eppers: 32:41

Thank you for listening to Mr Keith Lanton. This podcast is available on most platforms, including Apple Podcasts, spotify and Pandora. For more information, please visit our website at www. heroldlantern. com.

Sophie Cohen: 32:59

Opinions expressed herein are subject to change and not necessarily the opinion of the firm. Past performance is no guarantee of future results. The information presented herein is for informational purposes only and is not intended to provide personal investment advice. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. The material does not constitute research, investment advice or trade recommendations.