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00:0020 percent sell off. It's technical it's psychological Ross but is it. But in the beginning are we going to fall further from your perspective. Look it's hard to say whether the bottom is actually end or not. There's plenty of sentiment data and positioning data that would suggest there's more capitulation to come. I do think whatever this drawdown looks like we have done most of it by now. You know to see a drawdown well past this you would be talking an imminent recession. Basically if you're looking at historical data I still think you know we're seeing cracks in the consumer. The other retailers reporting that the consumer is still fairly strong overall and still has all of that access savings that we've talked about. Wage gains are still strong. And so while inflation is really weighing on sentiment and at some point we'll probably weigh on spending the consumer still there and earnings growth is still there for now as well. So this has been mostly multiple contraction. It has been ugly but it's actually been you know under the surface not as bad as what as it looks. More valuation contraction. Anything else. Yeah that's certainly true. Ross in particular when we talk about the multiple contraction the big concern though right now is even if this market has found some sort of bottom. The question is there a spring here at that thought of something that would actually draw a lot of folks back into this market other than just I guess a shift in sentiment. And it's a great question. I mean sentiment is great for helping find a low. It's not really much of a catalyst in and of itself. And I don't think there's a ton of catalysts out there. Certainly a surprise to the downside on a CPI print something that would you know let investors know that the Fed might not have to be as aggressive as they laid out. But really I think you could be looking at environment where even if we don't have much farther to go on the downside there could be a lot of really frustrating sideways job to come. While we search for that catalyst to spring us back into the next bull market at this point because as you know to where especially in a bear market when you go across asset for us what our credit spreads telling you that is one of the biggest places of concern for me is a higher credit spreads. They never really retreated when the market rallied a couple of about a month month and a half ago. They continued to widen out. And so credit spreads are telling you that there are fundamental cracks particularly down the credit spectrum. It's something that we'll watch closely from here. But they're they're showing real strain. And if there's one thing to watch going forward I think it would be a high yield credit spreads because as those widened out they can be a little more indicative of what the underlying health of the economy is than maybe the equity market. It's interesting. I want to talk to you about correlations there because I mean Ashley crypto was lower earlier this morning. It was targeting as early as 10 a.m.. So do you think that there is a cross asset feeling to this and people having to sell out of other positions because of holdings elsewhere or is this really very much some sort of technical drivers within the stock market itself. No I think it's very much a risk of sentiment across the board. So the note you made earlier bonds finally catching a bet and providing a bit of a hedge when they really haven't. Most of this year. So I think it's I think it's a risk off across the board. So you would be looking to more traditional defensive sectors. Staples utility must ask that risk off. Why did China not help Dani Burger this morning. Why did that sort of all fell away. It was nice to try and you know help with a little bit of a bounce by 15 basis points on a on a key rate is not going to it's not going to counteract shutting down your your megacities for months. I mean it's nice. It's great that they're providing some support but that's not enough to outweigh what they've done on the downside to the economy by continuing this Covid policy. For us we still got about done in 0 4 weeks three and a half weeks or so before the next Fed meeting. There's gonna be a lot of discussion here about that proverbial Fed bullet whether the Fed actually would either pause this rate tightening cycle or in some cases I guess maybe even offer some sort of accommodation or else wise. I guess my question here is do you think the Fed A would do that and do you think it's even necessary. I don't think they can at this point. I think the Fed played if not dead is certainly on life support at least in the near term. I think that their credibility would be at risk if they pivoted here unless there were a meaningful change in inflation data. And that's pretty hard to see at least in the near-term. So I think they're looking at 50 basis point rate hike in the near term. I think they want to get up to neutral by year end and then I think they will have the optionality to look around at the geopolitical situation that the supply situation and then with the U.S. consumer demand looks like and say hey do we need to take this into restrictive territory or can we wait and see from here. And potentially like in 1994 95 you know make a few accommodative tweaks on the margins to help boost the economy in years to come. Our higher real yields due in part of the Fed's work for it. Yeah the Fed is getting a lot of help from higher real holds a lower equity market and a stronger dollar. So financial conditions across the board are tightening. You know the problem is they don't want to. Count on any of those things that are a little bit more out of their control and a very much you know publicly committed to this policy. They bleed out. So they are getting some help in the sense that financial conditions are tightening from multiple factors. But I don't think it changes what they ultimately know they have to do.

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S&P 500 Enters Bear Market Dropping 20% From Closing High

The S&P 500 fell as much as 2.3%, bringing its decline to more than 20% from its record closing high set on Jan. 3, the first time that has happened since the coronavirus pandemic hit in early 2020. Ross Mayfield of Baird says the worst of the drawdown appears to be over. He's on "Bloomberg Markets: The Close." (Source: Bloomberg)

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