let's turn now to the major averages once again and
joining us now to talk about it is tom Kosslick,
head of research and analytics at Hilltop Securities tom
thank you for being here now the dow remained
under pressure for most of the day after under
whelming earning reports from big banks today. So your thoughts on today's close.
Yeah, Thanks for having me, ken. I really appreciate it.
There's a lot of important things that are going on
right now to end the second week of the year.
And really one of the big things that I've been following really closely is
that it seems as though the economy is really shifting below our feet.
I mean literally as we speak.
And I've spoken to dozens of people over the last week, week and a half about
the numbers that I'm seeing related to covid and
almost no one is paying attention to the,
I think really what it is that this,
a micron wave is likely to end up looking like at
the end of this month and the beginning of next month.
Now we sold broadly in 2021.
Many companies outperform on top and bottom lines, big banks today,
not looking so great so far, no, Macron is not even a big factor
in those reports, your expectations for first quarter earnings results
this year.
Well, and I think that that's, you know,
one of the things where overall numbers are concerned whether it's, uh,
companies reporting their earnings or the economic data
that we've seen come out this week.
I think that a lot of the numbers that we're
seeing are going to be stale once they are announced?
And I think that Really, you know,
the numbers that I'm really paying close attention to
is just the fact that when a lot of economists
and strategists were putting their outlooks together for the beginning
of this year is around the end of November.
The being of December, the number of cases of ο were around 100,000
per day To start the year. They rose 500-600,000 a day.
You know, just over the last day or two, there's now 800,000 cases a day.
And what we're being told is that
the omicron variant is, is more contagious, but less lethal.
And we are seeing it being more contagious and depending on how you look at that,
how lethal it is.
Uh, you know, as a percentage of the number of folks who are getting it,
it is less lethal.
But the fact of the matter is, is that
The CDC is now projecting that there could be over
4000 deaths today by the beginning of next month.
And so in my mind, I think that this shift is really going to start,
is going to start to unravel a lot of this, uh,
financial and economic data that we're going to see released in the next,
not just a couple of days, but several weeks, if not months
up until now ish markets have still mostly shrugged off omicron.
So do you think that's the right move or do you think they're
gonna posture up once we start seeing more data down the road?
No. Yeah.
I think that what's happening is I think that the analysis that a lot of the
economists and strategists we're looking at is really
it's just it's it's dated and and,
and and typically what happens is that, you know, this is what folks will do,
they will, they'll do their analysis, you know, at the end of november and december.
But this omicron is shifting so quickly.
I mean I would, you know, just a week to week,
I'm shocked at how quickly this has been spreading and shot.
And I mean I'm going to use that word again,
shocked at how it is that or what the numbers are telling us
and I think that it's just not being covered and understood really well,
you know, across the board.
I mean I was, I did a
A Webinar, I gave a webinar to over 200 analysts
yesterday.
And the feedback that I got after that webinar was that most of the folks,
if not almost all the folks didn't realize what you
know about the numbers that I was referring to,
wow.
Now we also heard from the Federal Reserve in recent weeks that
they will be pursuing more aggressive monetary policy
including raising interest rates several times this year?
During high inflation. So do you think that this is aggressive enough
in his March rate that hike at that time the right time?
Well,
and I think that this is you know what it is
that I'm talking about is going to factor into this.
It's not factoring into it yet.
I mean if anything over the last week or two,
some folks who were expecting three hikes for this year or you know, you know,
expecting potentially four.
I'm wondering I don't know yet but I'm wondering if on
the one hand the normal if the normal maybe the normalization
uh with the Fed activities is not going to happen as quickly if
this wave is as severe as what some of these numbers are showing.
Uh you know, but we'll have to wait and see what happens over the next 2 to 3 weeks.
Alright.
So both Cp and PP out this week were higher than expected,
but mostly in line with expectations.
So do you think inflation we'll ease anytime soon?
Well and I think you know one of the one of the
issues that I could see developing uh and could make it.
So those those numbers are even a little older quickly is because of the fact that if
there are more supply chain issues and employment issues
if there are folks at schools and in other
Uh jobs if they're not able to get that they're not able to get to work.
We could see issues all you know, almost all around the entire economy.
And this is just something that not a lot of people are expecting to start 20,.
Alright. Anything else?
You're keeping an eye on headwinds, tailwinds in the market this year?
Any expectation of
any market correction?
Yeah.
One of the things that I was talking about a lot I wrote about and talked about
a lot a lot last year was I was expecting a golden age of public finance.
There was $650 billion dollars of federal relief that went to state,
local government and other public finance entities.
And
I was pretty confident being December that that golden
age was absolutely going to continue into 2022.
But you know,
this shift that I see developing is something
that is putting the golden age that threat.
So I'm going to have to see how that develops.
I think that state local governments are probably
more insulated where that's concerned as opposed to
things like mass transit and healthcare.
But again, we're gonna have to see how this plays out over the next couple of weeks.
Alright. Tom Kosslick, head of research and analytics at Hilltop Securities, Tom
thank you for being with us and have a great weekend, appreciate your time sir.