Bond market sending clear message Fed may be moving 'too aggressively': Morgan Stanley's Dan Skelly

So let's begin with the market on a largely positive session with only two sectors finishing in the red for the S&P. Joining us now, Dan Skelly of Morgan Stanley Wealth Management and Dan Ai of Fort Pitt Capital Group. We've got double Dans here today. Welcome to you both. And we did have a higher day, a higher close for all the major averages. So Dan Skelly, I will start with you here because what's interesting to me is that despite some of the negativity and mega cap tech, most notably in Alphabet, the fact that the markets did end the day higher and the equal weight S&P and the Russell 2000 in particular were strong tells us what? Well, it's great to be back with you first, Morgan. Thanks for having me. What it tells us is that there's a risk on sentiment in the market where people are buying other industries, other sectors. And really, that's been the trend prior to the election and then gaining steam after the election. So it's all of those value oriented sectors like banks, like industrials. And then even as you mentioned, going down the cap curve, we're seeing a lot of demand there as cash comes off the sidelines into what is, as you know, usually a very seasonally positive period. All right. So, Dan, I want to get your thoughts on this market here, especially given the fact that we do have, I will call it more hawkishly tilting Fed speak in recent days. We've had a little more mixed data today, but in general, economy continues to be resilient. A lot of talk still about animal spirits looking to 2025. And yet on the flip side of that, rates have been higher and we do have lofty valuations when you look at stocks. Yeah, well, good afternoon. Thanks. Thanks for having me. I would agree. You know, I think we've been pleasantly surprised with how well the overall economy is holding up. We continue to grow at above trend growth rates. We are expecting a supportive environment for corporate earnings next year. And we expect that to be, you know, more broad based growth across market sectors. And we think that that explains a lot of the rotation that we've really seen over the last three or four months. And, you know, I don't think it gets enough attention, but a massive amount of liquidity on the sidelines with, you know, something like seven trillion dollars in money market funds. We think that supports kind of the dip buying mentality from investors. But, you know, we are just like everybody else concerned with the straight up move that we've seen in interest rates since the Fed started cutting in September. We think it's the bond market sending a pretty clear message that they may be moving a bit too aggressively.