KATHY JONES: I'm Kathy Jones.

LIZ ANN SONDERS: And I'm Liz Ann Sonders.

KATHY: And this is On Investing, an original podcast from Charles Schwab. Each week, we analyze what's happening in the markets and discuss how it might affect your investments.

Well, hi, Liz Ann. Welcome back. So last week, we covered a bunch of recent questions we've been hearing from people. And I wanted to ask if there's any other issues that we didn't cover in that episode that you'd like to mention today.

LIZ ANN: Yeah, you know, we talked, Kathy, about the souring sentiment environment, but last week we concentrated more on consumer sentiment and business sentiment in light of all the uncertainty with regard to tariffs. But there's kind of an interesting backdrop from an investor sentiment perspective, too. And maybe no surprise, you've seen a pretty significant surge in bearishness expressed by investors, given the pullback we're in in the stock market, which hasn't yet hit correction territory for the S&P 500®. As we're taping this intraday, we're down about 8% from recent highs. But we are in correction territory for both the Nasdaq and the Russell 2000 index of small cap stocks. And I've been getting more questions in the past week about investor sentiment and how we should think about it. And I often think about sentiment as falling in two buckets. One, would be attitudinal measures of sentiment. So survey-based data asking investors for their opinion or assessing the sentiment of newsletter writers. But then there's behavioral measures of sentiment, which would be things like the put-call ratio measuring what's going on in the options market or mutual fund and/or exchange-traded fund (ETF) flows. So I think you need to look at the mix of both attitudinal measures and behavioral measures to get a full picture.

And what's interesting about the current backdrop is that there is a lot of bearishness that has kicked in in those attitudinal measures, and I'll get into that in more detail in a second, but it's not yet corroborated by what we're seeing in the behavioral measures, and it makes me think back to the middle part of 2022, when we were in a bear market in 2022. That was the first big, as I like to call it, whoosh down in the market into the June lows. You then subsequently had a rally before you went back down again and ultimately bottomed in October of 2022. But at that first big whoosh lower in the middle part of 2022, you actually saw a record percentage of bears in a particular survey that I'll talk about in a second. Yet it wasn't corroborated by any of the behavioral measures. You weren't seeing a washout in fund flows. You weren't seeing a big drop in equity exposure. Well, that's similar to what we're seeing now, and the attitudinal survey that is most widely watched, one I've been looking at since the mid-1980s when it first came out, is AAII, which stands for American Association of Individual Investors. They do a weekly survey of their tens of thousands of members. They ask three very simple questions: Are you bullish? Are you bearish? Are you neutral?

And a few weeks ago, the percentage of bears jumped to 60%, while the percentage of bulls lowered down to 20%. Right now, it's actually below 20%. So that's a pretty significant spread between a low percentage of bulls and a much higher percentage of bears. Not quite to the degree as what we saw in mid-2022 when we actually had a record percentage of bears, but a noticeable shift relative to the aftermath of the election, even into the start of this year, and that does reflect, I think … when people are getting that phone call, and they're observing what the market is doing, it's a very natural thing to say, "I'm not loving this very much." But interestingly, AAII tracks the equity exposure of their members. So within that same data, you get both the behavioral side of things and the attitudinal side of things. And in terms of their members' exposure to equities, it's only about two percentage points off essentially all-time high levels. So they haven't reacted much. Also, the latest weekly data that we have for ETF, again, that's exchange-traded funds, equity flows, and it's about a week old, but we don't have the updated data for the most recent week, still showed a huge, I think it was 24, $25 billion inflows into large cap U.S. equities.

So you've got the attitudes being expressed as more bearish, but you haven't seen that follow-through with a significant change to equity exposure. The Fed also tracks household exposure to equities. That's still near an all-time high, so if you're looking for the kind of washout that would suggest a contrarian signal for the market, without perfect timing, you would want to see both sides of the equation, so that's something that's been top of mind more so over the past week. What about you, Kathy? Anything in addition to what we talked about last week that's been top of mind either for you or what you're hearing from clients?

KATHY: Well, I will say the most frequently asked question over the last week has been, "Are we going into a recession?" And with consumers, I always say, watch what they do and not what they say. And it sounds like, at least with investors, what they're doing is staying invested or even increasing investment, even though they're really bearish on the market. And I would say with consumers, it's not quite the same story. We see some softening in consumption.

But consumers drive the economy, and so far the evidence is that they're still spending. And a lot of that is because the top 10% income-wise account for about half of all spending. And so those folks, even if the market goes down a lot more from here, they're in very good shape and continue to fuel spending. It's as you go down the income spectrum that you see the softness showing up. So it's going to take more than just a minor sell-off so far, even a bigger sell-off in the stock market or a bigger slowdown, I think, to call a recession. But I will say there is some softness that we are seeing. And if that continues to develop or deepens, then we may be looking at that in 2026. 

And I'll just mention, you know, the slowdown in hiring that we're seeing, and now with the layoffs at the federal government level and however far that extends, that puts a chill into the labor market and could put a chill into spending as people, you see your neighbor lose his job, you maybe tighten up a little bit and say, "Well, I don't know how secure I am these days." And we've seen some softness in both manufacturing and consumer confidence, as you mentioned, and the economy is deteriorating. So we've seen a lot of things kind of raising the warning signals, but certainly we wouldn't say that we're on the cusp of recession at this stage of the game. Just something we're keeping an eye on. I think the markets are in the grips of a growth scare, and it's been an abrupt turnaround from the beginning of the year to now in terms of expectations, but with policy changing day by day, really hard to say where we're going to be in six months from now.

But I will say we're more attuned now to signs of softness than I think we made the assumption that we would be monitoring earlier in the year or late last year. So something we're keeping an eye on, but I think you would agree we're on recession watch, but we're not in recession warning territory yet.

LIZ ANN: Totally agree.

KATHY: I also want to mention this week marks the five-year anniversary of the start of the COVID pandemic in the U.S., or at least the start of the lockdown phase. And that's when we saw the markets and the economy go through, you know, a huge, unprecedented shock. And I wanted to ask if you have any thoughts or reflections at the anniversary now.

LIZ ANN: Well, it's not one of these anniversaries that you're going to hear a lot of "happy anniversary" comments. It was a pretty brutal time. Some interesting things about that era that I think back on, especially now, as we just touched on, that we're maybe in some sort of recession watch, or we at least want to dust off what the advance indicators tend to look like. A lot of people think that the recession associated with the pandemic was completely out of the blue and that the economy was humming along fine in the lead-in to that. The reality is there were a number of leading indicators that were suggesting enough of a slowdown that, by the end of 2019, we were sort of in this recession watch, not recession warning, territory. So there were signs of slowdown. Obviously, then it hit us like a ton of bricks. 

And what we now know with the benefit of hindsight, it was a very short-lived, only two-month recession, although very extreme in terms of what we saw in the data, particularly metrics like a job growth or lack thereof, layoff announcements, actual layoffs, and then a pretty significant surge in the unemployment rate. But it was fairly short-lived, and that's in part because of the massive amount of stimulus that kicked in during the lockdown phase. It was also very brief in terms of the bear market.

If I'm remembering correctly, I think the market peaked on February 19th. So in advance of the lockdown phase, started to roll over, and the tumble really kicked in once we got the lockdown news. But the market bottomed, I think, on March 23rd. And by August of 2020, we were back above the pre-pandemic levels, back at all-time highs.

It was relatively smooth sailing, at least up until 2022, when we had about a 10-month bear market. But it was it was short lived in keeping with the notion that when stimulus kicked in, you got this sense that we were going to be at an important inflection point in the economy. And as you know, my well-worn adage about better or worse tends to matter more than good or bad. And we have to remember that the stock market as a leading indicator itself tends to do a pretty decent job of sniffing out inflection points when the data stops getting worse, starts getting better. And of course, it does the same thing in the opposite direction when it starts to sniff out potential weakness in the economy or severe enough to be a recession. You probably have a much better memory, Kathy, of what was going on in the bond market during that time. So what are your memories of five years ago?

KATHY: Yeah, you know, for me, when I think back on that, well, I think about where I was at the time. So I was on vacation, actually, spring break in St. Kitts. And, you know, obviously, we knew things were dicey, and we kind of decided, "OK, we'll just go on this vacation anyways," a one-week vacation. And what's the worst that happens? I get stuck in the Caribbean, a beautiful Caribbean island, for an extra week or two, right? Because the thought was it was only going to last a week or two. And of course, the whole world changed. I think we got back the day they started to cancel flights and shut things down. So it was really kind of a really odd experience in that way, personally. Of course, I was in New York for that phase. And it was a combination of scary and nice, you know, it was frightening because it hit New York really, really hard, and you could hear sirens all the time and evidence of the devastation. On the other hand, it was so quiet, and there was sort of a serenity about things when you were inside, feeling safe with your family. It was so quiet and unlike New York City or any experience that I've had. So it was a really kind of strange time. But yeah, then trying to follow up with a Fed's playbook, they came in with the rate cut to zero, quantitative easing. At one point, they went ahead and they did extraordinary measures to buy ETFs in the bond market in order to shore up credit availability.

And it was like one thing after another after another trying to monitor what was going on. So a time I don't want to repeat, but a time I think where we learned a lot of lessons about our capability of dealing with a crisis. And in that way, it's kind of reassuring that many of the things that were done really did prevent a much worse outcome for the economy and for people in general.

LIZ ANN: Yeah, I forgot to mention my own personal circumstances during that time, maybe because it was completely the opposite of being on vacation at that time. We were moving out of our home in Connecticut, and it was 22 years' worth of collected stuff in the home, and movers had to cancel. 

KATHY: I remember this story.

LIZ ANN: Kids were out of the house, you know, the youngest in college, the older one out of the house, and my husband and I had to pack up an entire house in 22 years just by ourselves. So I've tried to block that out of my memory, that's while also dealing with the market and reporters that wanted to talk. So hopefully we won't ever repeat that again. 

KATHY: Yeah, I think we both agree that the biggest takeaway is just the devastation of all the people we lost and the heartache and the pain that it caused everyone. And no one wants to repeat that experience ever again. So I hope we have safeguards in place now that we can prevent that outcome again.

So Liz Ann, I'm going to turn it over to you now as we welcome Kevin Gordon onto the show, well known to all of us and I think to our audience by now.

LIZ ANN: Yeah, so thanks, Kathy. So frequent listeners will remember Kevin. He's been on the show several times in the past. Kevin is my key research associate and a senior investment strategist. 

So Kevin, thanks for being here today.

KEVIN GORDON: Yeah, thanks for having me. Great to be back.

LIZ ANN: So one of the things that Kathy and I riffed on a little bit earlier, we had done a show a week ago about frequently asked questions from clients, and each of us covered a number of different ones, and then we kind of added in a little bit of an update this week. I talked a little bit about investor sentiment, and Kathy, rightly so, brought up the increasing recession risk, or at least it being more top of mind for economists and strategists, and we're all kind of dusting off the recession checklist so to speak. And you and I actually have a report coming out next week on this topic, so I thought one of the things that you and I could start with is just a little bit of perspective on what a recession checklist looks like, what we're keeping an eye on in particular as we all digest what just rapid fire news coming out of Washington and the impact it's having through the confidence channels, but more recently in some of the actual economic data. So just give us your thoughts as we head into this next report that we're going to publish.

KEVIN: Yeah, I mean, it's interesting because the recession checklist to me for a lot of people actually has been dusted off in the past few years. I mean, you kind of think back to the 2022 to 2023 period when, number one at the time, because ultimately this was revised away, but at the time, the first half of '22 GDP was negative, and we had the two consecutive quarters of negative GDP, which we're always quick to remind people that that is not technically the definition of a U.S. recession. It's defined differently by the National Bureau of Economic Research. But that sparked a lot of recession fears at the time. And admittedly, if you look at a lot of the underlying components, it really wasn't indicative of what you would think of as a classic recession. 

Most of the weakness, if not all, was really just driven by the net exports component and the private inventories component, the change in private inventories. Consumer spending was still relatively healthy. Business investment was also relatively healthy. And it's interesting because that's a similar dynamic that we have today in the sense that if you look at some of the NowCasts that have been put together by some of the Fed regional banks, most notably and what has gotten a ton of attention lately is the one coming from the Atlanta Fed, their GDPNow model. You know, last I checked as of last week, it was at negative 2.4% for the first quarter. Almost all of that is driven by the net exports component because we've had a huge ramping up of imports lately with consumers and businesses trying to presumably, you know, get in front of or ahead of the increase in tariff rates that have been coming down the pike that they've known of for a while. So the latest data we have of January is that the goods deficit and the overall trade deficit has blown out to a record. So that's been a really key driver lately of the presumed weakness or the anticipated weakness for first quarter GDP. And that has led a lot of economists and market watchers to sort of dust off the recession checklist. 

But it's interesting because in the post-pandemic cycle, the reason why I talked about the checklist kind of having been dusted off over the past few years is that there has been notable weakness. And you and I have written a lot about this, where at one time we had these recessions in manufacturing and housing and parts of the sentiment world where surveys, both across the business and the consumer sides of the spectrum, were telling you that the economy was going into recession. You just had the offsetting resilience of services and the labor market. 

And I think that the concern now is that given we're five years after the start of the pandemic, things have not completely normalized, but they've started to normalize a bit where maybe we can take more of a signal from some of the depressed business confidence that has crept back in and also some of the signals that are being, you know, shown from the labor market. And I think that's going to be a really key thing here because over the past several years we've been able to rely on the resilience of labor, and now we can't really count on it as much. And even the latest slate of some labor data has been, I'd say, skewing to the soft side, definitely not recessionary, but when you look at things like the job cut announcements report we got for February, which comes from the firm Challenger, Gray & Christmas, that was showing the largest spike since COVID. Really, the spike that you only see in recessions. And it's not as if it's a perfect indicator telling us we're in a recession right now. But given the sector that was affected the most was government and then nonprofit, it's clear to see that a lot of what's coming out of Washington is already starting to change some of the dynamics in the labor market.

So I think rightly so, you know, a lot of these, as you say, you know, recession checklists have been dusted off, but maybe with a bigger brush this time because the labor market is starting to show, you know, some signs of cracking even more.

LIZ ANN: Yeah, one thing I wanted to mention on that front is that many federal government workers, their filing for unemployment insurance to the extent they're doing it, does not show up in the traditional initial unemployment claims. There's a separate measure for government employees. I wouldn't be surprised if we started to see that somewhat side-by-side with the standard initial unemployment claims so we really get a sense of the capture of the federal worker layoffs. The standard initial unemployment claims is going to pick up areas like contractors, and for every one federal worker, it's estimated there's between 2.5 and 3 contract workers. So there are ripple effects to consider here. One other thing I wanted to mention, and then I want to ask you to dive in maybe a little bit more on some of the survey data, especially the ISM Institute for Supply Management releases of their PMI Purchasing Managers Index.

You know, you mentioned GDPNow, and it got a ton of attention, especially with two drops in a row. First was a negative 1.5. And then to your point, it actually got to negative 2.8, and then the latest reading brought it to negative 2.4. And that was fairly alarming. One thing that's interesting, and I don't know whether you've gotten the details on it. I haven't, other than the knowledge that a big part of the surge in imports was non-monetary gold.

So there are some economists that are X-ing that out of the mix, as it isn't necessarily a pre-tariff, "get ahead of tariffs" kind of move. And that if you adjust for that, the decline is not as much. And the last thing I'd say about GDPNow is it's what's called a Nowcast. And I know you probably find the same thing, Kevin, if you post anything like that on, you know, your X feed, as I do, I inevitably get immediate replies saying, "Boy, didn't you perfectly cherry pick a negative forecast for GDP because it aligns with your, you know, bearish view on the economy." You know, my view of the economy is colored by what the data is showing. You know, I'm not prospectively trying to establish some narrative that comes from my own mindset, but it's not a forecast. It's a "NowCast," meaning it is taking in the data that feeds into GDP as it comes in and plugging it into this model. And as a result of us still being in the first quarter, and three or so weeks left in the first quarter, as data comes in, that will adjust as data comes in. So it's a perspective on how is GDP looking right now? It's a NowCast, so I think it's always important to point that out because people see the letters "-cast" at the end of that and just assume it's some sort of forecast from the economists at the Atlanta Fed. 

Leaving that aside, what were you seeing? It was an interesting pair of reports with the ISM data that came out. A little bit of a contrast to some of what we saw in S&P Global's version of those purchasing managers' indexes, but maybe share your thoughts on what we're seeing both on the manufacturing side of the economy and services side in those very widely watched PMIs.

KEVIN: Yeah, and for those who are maybe not as familiar, I mean, the pair of indexes that comes from ISM, it's really the kind of the first key data point you get at the beginning of each month. It gives you a pretty clear read as to what the activity looked like for manufacturing and services, which I feel we should always caveat. I mean, you know this, Liz Ann, but services, the name used to be "non-manufacturing," and it really is everything except manufacturing. 

LIZ ANN: It's the ultimate catchall. 

KEVIN: Exactly.

LIZ ANN: It's like when Kathy talks about the term premium, it's sort of the catchall in the bond market for everything that is not the traditional explainers for what bond yield moves are.

KEVIN: Yeah, it includes everything. And I find it interesting, you know, even things like construction, that's captured in services. You would think that that's maybe captured in manufacturing, but, you know, that's lumped in the same index as leisure and hospitality. So services, if anything, is maybe more of an important indicator from the standpoint of the size of the economy. But we always like to take our cues from manufacturing, not only because it comes out first, but because I still do believe that manufacturing as a cyclical industry provides important tells for where the economy is going. But what I found most fascinating, and I think what I find most fascinating in every report that comes out each month for these indexes, is the comment section, and these are pulling direct quotes, you know, verbatim from respondents to these surveys, and I mean you could look across manufacturing and services in the past month for February, just completely littered with a sharp focus on tariff policy and the fact that it's causing, and just kind of the stop-and-go nature of tariff policy over the past month, has caused this dramatic increase in uncertainty. 

And we know this by looking at certain indexes, whether it's the economic trade uncertainty index, or whether it's the uncertainty index that comes out from the National Federation of Independent Business, the NFIB Small Business Optimism Survey. But now we have it within ISM. A lot of the respondents just saying, "Listen, we're kind of in a state of paralysis. We can't really operate when we've got this stop-and-go nature of tariff policy, when it changes seemingly, you know, by the day." And I think even more interesting leading up to the national indexes per ISM, the regional Fed banks also released their own. So the Dallas Fed has one. The Richmond Fed has one. New York and Philly, they have their own. And I think what was most interesting was actually the one that came from Dallas and the comments section pointing to not only tariff policy leading to this increase in uncertainty, but also the supposed goal of bringing all this manufacturing back to the U.S. and wanting to close trade deficits.

There was one comment in there saying that, you know, that goal in particular by itself would close the business of this particular company that was responding. So it's one anecdote, but I think that it does speak to just kind of the volume of concern that has come in from the business community and almost this reversal of what I was, you know, kind of calling and still thinking about this, you know, so-called vibe expansion after the election. You know, the "vibecession" was coined by, you know, Kyla Scanlon a couple of years ago when all of this sentiment data was kind of telling you that we were going into recession. It was consistent with a recession. That was the soft data. The hard data was telling you that the economy was largely fine. I almost thought about it in inverse terms this time, where you did have this huge spike post-election in all of this business confidence around hiring plans and capex plans and just maybe a pro-business or business-friendly environment, so to speak. 

But now lot of that has come off the boil and it's reversing. So it's kind of this catching back down to or at least matching the hard data, which definitely hasn't moved to the upside, but if anything, has kind of just moved sideways in aggregate. So I think that to me was a really important takeaway and just highlighting and really exposing the fact that businesses can't really put together strong capex plans or strong hiring plans, and you're in a more fragile part of the economic cycle. If you're going to do that from a policy perspective, if you're going to go with this, you know, stop-and-go policy for tariffs and trade, I mean, it really puts businesses in a tough spot, and that's what they're telling us. That's what they're telling these surveys.

LIZ ANN: You know, and it's a good segue to the last question I wanted to talk to you about is earnings. It was a unique earnings season, which just concluded, which, of course, was reporting for the fourth quarter of 2024. And it was largely a better-than-expected earnings season. At the at the outset of earnings season, I think expectations were that S&P earnings growth would be about 9.5%. And when all said and done, it looks like it's going to be more like 17%.

But interestingly, you are not seeing that translate into heartier expectations for 2025. In fact, quite the contrary. So share your thoughts on the earnings outlook in 2025, at least based on where consensus sits right now.

KEVIN: Yeah, it's fascinating. I mean, of course you're going to have a significant adjustment to the fourth quarter because of base effects. And when we talk about base effects, we're really just saying that when you bring up the growth rate for right now, it's just going to lessen the growth rate later because you're bringing up kind of the level right now. So it's not that it's going to be bad necessarily. It just means that your starting point is a little bit higher. So that's what we mean when we talk about base effects.

But if you look at first, second, third quarter, there has been a pretty dramatic rerating of earnings estimates for this year. And admittedly, we are in that time frame. It's kind of the first quarter, maybe call it, I don't know, first four to five months of the year, where you do see revisions come lower. It's just kind of a natural part of the earnings estimate cycle. 

However, I think if you look at what was apparent in the fourth-quarter reporting season, which was the fact that even for companies that beat on earnings estimates, if they beat analyst estimates, even by a significant degree, if they didn't follow it up with positive guidance, then their stock prices got crushed relative to the market, but also in absolute terms. And that to me basically explained that if they were providing hazy guidance for the year, and if it was related to anything from a macro backdrop standpoint of, "Hey, it's just not as friendly" or "We just don't know what's going to happen." The market clearly doesn't like that. 

And it kind of speaks to the old, you know, I think about when we put it in our outlook, and we did a little bit of a play on the phrase, but, you know, the market's hating uncertainty, perhaps it being, you know, a lot truer this time. But I think that, you know, the fourth-quarter reporting season definitely underscored that aspect. In addition to the fact that, yes, when you look across the spectrum of earnings estimates for the S&P 500, they have come down. But also, even within that, if you look at the industries that are most sensitive to trade policy, but also anything labor policy related. You know, think about kind of hotel companies or anything that's a little bit more, you know, manufacturing and has an import bias to it. Those have been the industries that have seen the largest negative revisions so far. So I don't think it's a terrible surprise. You know, it's terribly surprising to see that. But you are starting to see it at least now baked in almost real time. And it reminds me a little bit, you know, back to not saying at all today's environment is the same as the dark days of the pandemic. 

But one of the hallmarks and one of the features of that time frame in the late-2020, early '21 era was companies just saying, "We have no idea what's going to happen. We have zero visibility. So we're going to pull our guidance." And we're not seeing guidance being pulled in record numbers or in numbers similar to what was the case in 2020. However, I think that, as a business, it seems like the logical and practical thing to do. 

Because how could you give a solid forecast if you don't know whether the cost of your materials are going to go up significantly tomorrow or the next month or later this year? And if it is this kind off-again, on-again scenario for planning for tariffs, then I think it keeps businesses kind of on the back foot. So I think, if anything, it reduces definitely the visibility for people like us in trying to see where earnings are going, but also ultimately the visibility of the market. And I think that's been a key contributor to the weakness that we've seen in the stock market just in the past couple of weeks.

LIZ ANN: Yeah, thanks, Kevin. And just as a reminder to listeners, once this quarter ends, which is at the end of March, it takes about a week to 10 days before we start yet another earnings season. So about a month from now, we'll all get to hear another update from companies and their outlooks. And also, thanks, Kevin, for giving us a little bit of a tease of what will be our next report coming out. That'll publish on Monday, March 17th, in the usual spot on the Learn tab of Schwab.com. So keep an eye out for that. Usually it's the case that once it's posted, Kevin and I will also both put it on our X and LinkedIn feeds to let everybody know that it's available, and we'll attach a link as well. So stay tuned for that. But Kevin, thanks for joining us.

KEVIN: Yeah, thank you. Always great to be back, and I love these chats.

And if you want to give me a follow on X or LinkedIn, on X I am @KevRGordon. That's K-E-V-R-G-O-R-D-O-N. I have had actually a pretty big increase in imposters lately, so make sure that it's actually me, and make sure that you're not following an account that just has zero followers. But for LinkedIn, I'm on there as well. But no other social media, just those two.

KATHY: OK, Liz Ann, let's take a minute to look ahead to the coming week. What's most important for you to be watching next week?

LIZ ANN: Oh, there's a lot that comes out. We get retail sales. That's obviously always provides a pulse on the consumer. We've got housing starts and building permits. Those are key leading indicators. In the case of building permits, it's actually one of the members of the leading economic index. We've got import and export prices. Maybe these days that can bring some interesting tidbits as it relates to trade and inflation. We get industrial production and capacity utilization, also manufacturing production. I think those are a little more top of radar. And then we've got everybody's favorite week. We've got a Fed decision. So I assume that's probably one of the top things on your mind. And I think, Kathy, are you writing the, I think you're writing the Fed commentary this month, correct?

KATHY: Yeah, I am. And you're right, the Fed meeting's the big event for me for the week, although these days they've signaled that they're probably on hold for a while, so we may not get any rate decision. But this is a meeting where they have to put pen to paper and come up with some economic projections. There's summary of economic projections, which includes the dot plot, which we all follow really closely because it gives us some insight into how the various Fed members feel about where policy is likely to go.

So that's going to be the big event for us in addition to the economic indicators that you're watching. And of course, we'll be keeping an eye on everything coming out of Washington because that seems to be the major focus of attention these days.

So that's it for us this week. Thanks for listening. As always, you can keep up with us in real time on social media. I'm @KathyJones—that's Kathy with a K—on X and LinkedIn. And you can read all of our written reports, including charts and graphs, at schwab.com/learn.

LIZ ANN: And I'm @LizAnnSonders on X and LinkedIn. I'm only on X and LinkedIn. So make sure you're not following me on one of the other platforms, and make sure you're following the actual me because I've had just a rash of imposters, continue to. And if you've enjoyed the show, we'd be really grateful if you'd leave us a review on Apple Podcasts or rating on Spotify or feedback wherever you listen.

And you can also find all of our episodes on YouTube. Just search for "On Investing podcast." And we will be back with a new episode next week.

KATHY: For important disclosures, see the show notes or visit schwab.com/OnInvesting, where you can also find the transcript.