Scott Colbourne

[music] Hello I'm Greg Bonnell and welcome to MoneyTalk Live, brought to you by TD Direct Investing. every day I'll be joined by guests from across TD many of whom you'll only see here. We will take you through its moving markets and answer questions about investing. Coming on today's show: we will discuss whether signs of a strain we are seeing in the financial system means a potential said pivot back in the table with TD Asset Management's Scott Colbourne. You can email us anytime, moneytalklive@td.com or fill out that your response box on WebBroker. Let's get you an update on the markets. Of course, we were off for a long weekend. What they traded on Wall Street yesterday and right now it's a bit of a mixed session. You have the TSX under some pressure. Down to 192 points. … It seems to be a bit of economic concern today for crude. Shopify off the lows of the session. South of the water, some movement to the upside. a lot of the big energy names, some downward pressure in this space today. a bit of a mixed session south of the border the S&P 500 modestly in positive territory. Up a little shy of six points. A lot of big data points on the docket this week including another US inflation… Retail sales, a lot of market moving potential in those numbers. We keep track of those all week for you. Let's check in on the tech heavy NASDAQ and see how it's bearing and the broader market, the S&P 500 and modest territory. The NASDAQ still modestly in negative territory down 22 points. Let's check on the big financial names on Wall Street. Some pressure here as well. Bank of America $30 and change down a little more than 2%. An aftermarket update. There are more signs of strain in the financial system today as the Bank of England has once again had to intervene in the bond market and warned of a material risk to stability. What do these cracks suggest that the central banks will pivot away from rate hikes? May that be on the table? joining us is Scott Colbourne, Managing Director for Active Fixed Income at TD Asset Management. Will the bank have to step in again? How should we read this as investors? >> It's an interesting topic to follow. The whole debate as to whether or not the Fed remains bearish and committed to the inflation fighting mantra and the fishers, I guess as we start to see in the market, as an example her. … This concept of financial stability and the worry that it might bring in… It really feeds back of the most important thing for governments and that's the ability to finance their debt. If they cannot have a functioning debt market than it is, everything else becomes superfluous to that. A broken bond market is really quite concerning. So, we got the bank of England using these, or extending rather, this tool that they have had for the volatility market. That's one example. Obviously, we have this also in Japan. They are using yield curve control and they also have certain dysfunctional bond markets that are not trading as well. So you know, it's sort of something to keep in mind but I think, at the end of the day for me, is this evidence or is this the catalyst for a pivot? I come down on the no side. I do not think that this is sufficient enough to break the Fed at this time. There is a variety of reasons and we can dig into that. >> Let's do that. The Fed and all the other central banks for the most part of the Western world are singing from the same playbook. "We know you might lose your job, that's pain, we gotta do it for inflation. We might fall into a recession, that's the pain and you have to accept it." But people do wonder once against the bond market, can they really ignore that? >> For the time being, I think it's too early to talk. From Jackson Hole, there is no room for nuance here. We are continued to be committed to inflation and will sing that song. CPI this Thursday, still unacceptably high. It has peaked here and I am in that camp but it is still very high and it is coming down. Core inflation is still high. It's coming down but there is evidence that it is sticky. So for the time being, with that in mind, you've got okay growth, you have reasonable… Last week, I think problems outside of the United States, as they say, our dollar is your problem. It's not enough for a systematic issue in the market. It has not broken anything domestically, it has not changed. Their view on what growth will be or inflation. So, you know, we can suggest that we are getting close to an inflection point but I don't think you will see any change. We've got about 125 basis points. Big deal between now the end of the year. I'm pretty sure we will get there and some next year. >> Did we end up, this is part of the debate all is well, that terminal rate getting where they want to be and then you pause because you've reached the end of the mission. You have people saying "they will have to cut fairly soon after that as well". I have not, I've had many people sit in this chair saying not to hold our breath for that. Is that how we are seeing things? >> I think that's a reasonable excitation of the moment. When you look back this year, the pivot from aggressive rate hikes to a quick cut seemed a little out of sorts. I think, given the backdrop, we are in an inflationary regime. We have been in this regime for a long time and this has changed central bank reaction function to expect them to quickly move to terminal right to cutting… Without something meaningful breaking in the US market than anything else, then no, the Fed is not going to quickly cut the rates. When you are starting to see nuances around the world and other central banks. They are not as hawkish. The Fed has its laneway and it can stay hawkish for the time being. >> That leads us to the question of other central banks. What about Australia delivering a hike but perhaps not as big of a hike as expected. You see other regions of the world based on purely their circumstances saying "we know the Fed is doing this thing we can do our own thing here"? >> There are differences of nuances between some banks. RBA is supposed to go 50, 125. That was a bit of a surprise. When you look at what is priced in in Canada versus the US, there is a gap that is opened up between Canada and the US. Even though I would say the Bank of Canada are on the hawkish side of the spectrum of central bankers, the markets are saying there is room to see a differentiation next year, where the Fed might get to three quarters of a… Perhaps the Bank of Canada for 1/4, maybe 4 1/2. That gap opening up is a little bit of saying "look, there are some things domestically that will drive things differently. Perhaps it's the market, the housing market and the impact of spending on consumers. Perhaps there was speculation about Germany looking at, you know, a bond for across the EU to support the energy market or the energy… As it is undergone, you are seeing evidence that perhaps the margin you will get slightly different nuanced takes here than what the Fed is pushing ahead with. So yes there is evidence. On the other extreme is the Bank of Japan. >> Let's talk a bit more about that. That's curious right? There doesn't seem to be a market right now for Japanese bonds. What is happening? How serious is that? >> It's very serious. We see these episodic losses in the US dollar. The Yen rallies or the risk market rallies. We are in a bear market in the US dollar is King and occasionally we get these position driven rallies and we had a brief episode where the Bank of Japan intervened in the market to stem the depreciation in the currency because they are the only buyer of JGB's. They have yield curve control they have capital interest rates and continue to do that while the rest of the world, particularly the Fed, the interest rate gap opens up and continues pressure on their currencies. So it is at odds with the broad global trend. But it is leading to a depreciation in the currency and a lack of proper functioning in the JGB market. We have not participated in the JGB market in long decades. And we will not. It is dysfunctional and driven by one buyer primarily. If the government bond markets broke, and you needed support, you could see the yield curve control going elsewhere. To what extent? The intervention that we have seen by the Bank of England is not yield curve control. It is not QE. Do we need this long-term down the road for bond markets it to be more stable for government financing? That is an interesting question to explore and some people are raising that. >> A fascinating stuff and a great start to the show. We will get to your questions about fixed income with Scott Colbourne in just a moment's time. You can email us your questions anytime, MoneyTalkLive@td. com are fill in that viewer response box on WebBroker. It's another warning of tough times ahead for the global economy. The International monetary fund says global GDP growth will slow to 2.7% next year. The agency is pointing to higher interest rates, conflict in Europe and China struggles to contain COVID-19 and the IMF as "for many people, 2023 will feel like a recession". Fears of a global slowdown or weighing on energy prices today. While crude oil rallied off the back of last week's productions cut from OPEC and its allies, it appears economic concerns are front and centre again for investors. Another jumping COVID cases in China is also weighing on investor sentiment. Nissan Motor is taking a $687 million loss as it sells its Russian operations for one euro. The company's shares are being transferred to a state owned enterprise with our right to buy the business back within six years. Nissan is the latest high profile company to exit Russia following the invasion in Ukraine. And here's how the benchmark index in Canada is trading. South of the border, we started to show the S&P 500 managing to break into positive territory. Right now it slid just on the other side of breaking even line. 3608, we will call that 1/10 of a percent. We are back now it's got Colbourne, taking your questions about fixed income. So let's get to them. The question of the Summer: persistent into the fall as well, how do GICs compared to bonds in this environment? >> It's a tool for investors. Many ways to express a fixed income market. You can see buying bonds. … The trade-off that you have for GICs as you lock yourself up and the rates that you might get could be substantially lower than what you could be getting in the fixed income market. I see a significant difference between that. But who am I to say… It provides comfort for people in a portion of the market to develop layers and that's fine. But though the liquidity trade offers the yield, elsewhere is sort of the trade-off you have to think about. >> Of course, the bond market will offer you yield as well. But also option analogy in case you decide to change your strategy. > Absolutely. >> Depending on how the world goes. I don't have any clue on what is going to happen… >> That flexibility is very important and there's a cost to pay for that. GICs, I know there are cashable GICs in that. But for the most part they are pretty locked up. >> This is a nice sort of follow-up question to that. What points of the yield curve are looking the most attractive right now? >> I really like the front end, particularly through that one to three year area of the yield curve in terms of finding opportunities, particularly in that market for companies that are comfortable with it. You pick up, roughly speaking, government of Canada, to yield is at 4% right now. Then you can buy yields north of 1 1/2% in the credit market on top of that. On top of that 4%. So buying corporate credit, in the 6% range, 5 1/2% range, something we can access is something very attractive where I think things will sort of play out over the next couple of years. Content… I don't care if the bonds rally or not. I think it's a good return and I do think inflation will come down. Over that time frame. >> Is outside of a different way to start thinking of the bond market? I think of the traditional thing about a self director may have had in their head about a 60/40. However you split that up between your equities and your bond. You could do one thing in your portfolio, but one thing is cushioning. That didn't work this year. We need to think about it differently? >> I think when you look at and study the history of the market, the inflationary regimes that we are not in a distant inflationary time for central banking at a low inflation. Outside of those periods of time, the correlation between equities and bonds changes. And, you know, we've gone through this shock to the extent that central bankers regained credibility and see inflation come back down. You will see that shock absorb play out. In addition to the teeter tottering, collecting income is not a bad way even if it's not necessarily going to be correlated the way you thought over the last 10 or 15 years. It's not a bad time to sort of clip those coupons and bring in some high-quality corporate credit. >> As long as we are talking about points along the yield curve, here's an interesting question. When you think the Canadian yield curve will revert to the normal upward slope? What will it take for this to happen? >> Well we are on the path to try and restore inflation back to the inflation target, to the extent that that gets back to inflation target. Yields and the front end will decline. And you will get the upward sloping yield curve layout but in the absence of, you know, confidence on inflation, confidence on the trajectory, there are lots of global uncertainties whether they are geopolitical, fiscal or monetary policies. In the absence of that, you know, we have this inverted yield curve. It's going to play out and it's going to be a while before we go back to that whole traditionally upwards yield curve. > When people hear about it around here, they think of the other thing that comes with it. Does that necessarily mean there will be a recession, but… In times like these to the old rules applied? Is it telling us something? >> It's always a dangerous tightrope to walk to say "it's different this time." You can use the yield curve and other indicators give your probability of a likelihood of a recession. Ours indicate in the neighbourhood of around two thirds, 60% right now. Commentators like yourself… You have Jamie diamond out there talking about global recession and others. I think the fact that we have inverted the yield curve, we have growth that is slowing to trend and in some places below trend, sticking inflation raises the bar very high for the likelihood of a recession. So, you know, can you pick the exact yield curve points that tell you it's a recession Russian Mark with the timing no. But I think they are pretty good indicators to say will happen. > Alright. Interesting stuff as always. Nature you do your own research at home before you make any investment decisions. We will get back to your questions for Scott Colbourne fixed income in just a moment's time. A reminder of course he can get a … Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box at the bottom screen right here on WebBroker just type your question and hit "send". We will see if one of our guests can get you the answer right here at MoneyTalk Live. Let's get you updated on the markets. We will start here at home on Bay Street with the TSX Composite Index. The weakness in the energy trade is being felt as we return after our three day weekend. At 18,307, we are down to a and 13 points. Right now little more than a percent. Definitely affect your seeing American benchmark crude price pullback. Pretty big rally last week. Some pretty big news out of this space with OPEC and its allies agreeing to production cuts. But with COVID flaring up in China again, their concerns about appetite and consumption. So it is weighing in on the energy trade. Crescent Point Energy down almost 1/2%. There were some green on the screen at least earlier this morning. West Fraser Timber up 4%. South of the border, the S&P 500 trying to find its way to positive territory back there again at 3620. A little more than eight points or 1/4 of a percent. The tech stocks are still under pressure as well the financials and some of the energy aims. But pushing back against that downward pressure are some of the consumer stocks. Healthcare industrials and some of the material stocks starting to push in positive territory south of the border. Of course the tech heavy NASDAQ, a little shy of approved third of a percent down. Netflix, we want to check on this name is one of the major tech names under pressure today. $219 and change down almost 5%. Back now with Scott Colbourne taking your questions on fixed income so let's get to them: what is your view on corporate bonds right now? >> I like high quality, particularly corporate credit to continue to pick away given the yield curve, where I expect things to play out of the next few years. As he got the yield curve, and as you go out the lower quality credit, there's a lot more risk where it is high-yield, you know, we talked about the scope for a recession, which typically invites wider credit spreads and I more comfortable just taking the certainty and the visibility in the front end of the yield curve or the credit yield curve. So, you know, it's, I do like it but you have got to pick your names. You have to pick part of the yield curve that you're comfortable with owning. But I would highlight that you got to be mindful of the downgrade risk, the recession risk, the earnings risk going into the earnings season and then the challenges we are going to encounter there. That is the headwind on the sort of longer end of the down quality cycle. > The importance of earnings season. There is such a focus. Obviously equities get a lot more attention than bonds. Maybe outside of this year. In terms of financial journalism. If you are a bond investor, how carefully area watching from where things are going? >> We are very mindful of the earnings season and the guidance. We listen to what management is saying. What are we doing for the equity market? The dividends, the buybacks, what are they doing about debt retirement? That's all very important. So earnings is incredibly important and, like our equity colleagues, we spent a lot of time pouring over the reports as they come out during earnings season and what it means for the credit profile. >> You mentioned choosing quality if you're going to be a corporate bond space and the fire in the face of the fact that we are seeing economic slowdown in the face of a recession. Does that choosing quality process go into the listening of those kinds of things? What constitutes quality times like these? >> You have your understanding that this is a constant process. We decide which sectors are more attractive and just like the equity market, relative evaluations change in all the time in the credit market. You have insurance sectors. You have the utility, you have pipes… So there are different sectors that you can look to and see if what is, one of the fundamentals playing out and you can just look forward to the opportunity to add, particularly if you are confident in your credit outlook. It's a combination of credit outlook and talking to her equity colleagues as well. You can buy into weakness or distress sometimes. >> You mentioned high-yield. Before we get off this topic, I mean, people search for yield, they see high-yield whether it's equity or fixed income… It looks attractive but sometimes the yield is high for a reason. If you're talking quality, you're talking about duck dark economic clouds and you're in the high-yield bond space, what you need to be aware of? >> A lot. The broad, you can watch the broad indices to give you a broad measure of where the trend is in high-yield. Look, I am a fan of high-yield and I think it's a very valuable portion. It's a return that is actually less volatile than the broad equity markets. It gives you almost equity -like returns. If you think right now, we are sort of between 9 to 10% of the broad high-yield index. But, as we go into a recession, and a less favourable refinancing environment, their potential strains emerging whether it's recession risks or, you know headwinds to refinancing, you can get weaker, you can get 11% or 12% or higher. We have seen that episodically. But I would say as we move closer to those levels, broad high-yield morning is a good place to invest. That gives you lower volatility in returns. It's not all bad but in a lot of cases it is when to get invested. Time matters. I would say not yet. >> Not yet. Okay a good rundown of the bond space there. Let's get back to the central bank action with this question. How he will rate hikes to think we will see out of the bank of Canada? We touched on is of decoupling. The Fed might be the most powerful central bank in the world. But the. . . >> The employment market is slow down in the last few months. It perked up a little last week that you are definitely seeing evidence that economic growth in Canada slowing down. We continue to see adjustments in the housing market. there is a lag. This impacts consumers into next year for the housing market and the disposable income. Changes in your salary… This is feeding through into next year. So I think, this will have a greater impact, given the extent of the leverage in the domestic and Canadian economy. So, yes, the gap will open up between the get Bank of Canada, potentially between the Bank of Canada and the Fed so what is the market pricing it right now? The about three or four more hikes, the Bank of Canada. So we are 3 1/4. Can we get up to 4 1/4? That would be … We still might have another 50 basis points out of the Bank of Canada and the Fed probably 75, barring some real shock this Thursday on the CPI. Said at 67, the Bank of Canada at 3 to 4. There is still a lot of uncertainty and a lot of commodity markets can still surprise to the upside. You talked about the ups and downs in pushing and pulling in that market as well. If that continues to put pressure on inflation, it will cause central banks to be slow on stopping the rate hikes. >> You said something about Will there be pause or pivot or cuts and when will the cuts come? At some point it doesn't have to be that. Maybe it's 50, maybe it's 25, dial back. Could the market does interpret that? When that day comes will they think "there is the pivot and there's this and that". Done a lot of supersize rate hikes already and want to keep the cost of borrowing just not as aggressively. >> Absolutely that's a recipe from his interpretation. That can be a delicate dance for central banks to make the transition. They've been very hawkish and it's going to be the one we have to watch is the fed. They have been super sizing it but you know, we have under 25 Christ and by the end of the year. We have two meetings. One will be less than the other. So that is the scope for misinterpretation. But I think, you know, it also is, you know, healthy that we have to transition away from those and beyond sentiment and positioning which will cause these adjustments, the trajectory will, they will try to lay out a trajectory that is probably less of a scope for cutting in the market may initially interpret. >> Okay. Your comment earlier in the program, our dollar, your problem. This question for someone in the audience. How much longer do you think the US dollar strength will last? >> The US dollar is not as cyclical of a currency area to the extent that the US dollar weakens we see other currencies rally. Then we worry about global inflation. You know, so it's that transition to when the market feels more comfortable that the Fed is stepping back. We have confidence on inflation and more confidence the global growth will return. So, for the time being, the headwinds are still pretty choppy. You episodically get these rallies positioned during our sentiment during the rallies. The selloff of the US dollar, the rally in Canadian euros… I think the broad trend right now is still a solid support of the US dollar. >> Interesting. We talk about haven assets. If you had your first year understanding things… You know, the US dollar is a haven for gold. The problem is if the US dollar becomes a haven, things don't look good for gold. That has huge ramifications in so many different asset classes. >> Yes it's been a real headwind and you are seeing stress and emerging markets as an example. Particularly in front tier emerging markets. I'm not talking about mainstream, Mexico and Brazil… But you are seeing in Sri Lanka, Pakistan, Ecuador, there is evidence of distress and emerging markets and that is 100% related to the strength of the US dollar. But also, there are unique circumstances in each case. But definitely pressures on emerging markets from this strong US dollar. >> This is us an impossible question for you to answer but I will ask anyway: it just popped into my head for everything we've been through since the great financial crisis over a decade ago now, where is the path to getting to some sort of normalcy? Functioning markets, bond markets, we seem so far removed from what might be a normal existence for us as investors. >> I mean I think the exercise, monetary experiment with zero interest rates, when we look back in history is misplaced. It was a mistake in my opinion. It simply just is a misallocation of capital that happens when you have the risk-free rates so distorted and I don't think, I really hope we don't ever get back to that point in time. That we need zero interest rates if we ever are beholden to central banks buying out the yield curve and yield curve control, it's just a recipe for disaster. We've seen it in the bubbles that have emerged over the last, I think, since the great financial crisis. I can even think off the top my head. Nine years, 14 years or something like that that we have been in it. Zero interest rates is ridiculous. We need to get back to the yield curve that tells us something for the risk-free rate and everything to get priced off of that. To me, that will become evidence of stability. Lots of debate. "Can we get back there? We have too much debt?" But I think that is the recipe for the return to some normalcy in the financial markets. > I'm getting tired of living in interesting times. Ha ha. We will get back to your questions for Scott Colbourne on fixed income in just a moment. Make sure you do your own research before making any investment decisions. And a reminder you get in touch with us at any time. Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box at the bottom screen right here on WebBroker just type your question and hit "send". We will see if one of our guests can get you the answer right here at MoneyTalk Live. >> Let's get you caught up in the market action. We had three days were we were not trading here in Canada. During the Thanksgiving long weekend. Off the lows of the session. Down to 4% of right now is that TSX Composite Index. 18,398 will call that. Hundred 85 points of the downside. American benchmark crude coming down of course in China, fears of what happened to the global economy. The IMF cutting back some of its growth forecast and wanting some people 2023 will feel like a recession. This is for the commodities trade. So let's check in on Suncor. We will show you a lot of the oil managers today under pressure. Suncor a bit off of a low. Down about 2 1/2%. Notice some weakness in Air Canada as well, that stock right now is off the lows of the session though still in negative territory down a little less than 2%. S&P 500, about to break even? Where is it now? 16 points out. Consumer stocks leading the way right now on Wall Street. We are seeing some money moving into healthcare in industrials and even some of the mining names. So your seeing a bit of a turnaround in the trade there of course as Scott and I were discussing, a lot more data points for potentially market moving ahead. Let's check on the NASDAQ, weighing heavily towards tech, coming off the lows of the session, still struggling to break into positive territory down a pretty modest seven points. Huber, were hearing news of the Biden administration workers seeing a lot from Huber, under pressure to the wake of that news a 26 bucks and change, down 5 1/2%. We are back now with Scott Colbourne from TD Asset Management, we've been talking about fixed incomes. Let's take another Bureau question: what fixed income assets perform well in a recession? How you position yourself? >> The traditional government bonds quality is that it's a typical response and recessionary environment. To the extent that we have greater clarity on, you know, the recession that is coming. And particularly if it's a severe recession. The government bond market is probably the safest place to be. You know, generally, what that would lead to you is a sense that the central banks are going to stop great so even if they don't cut necessarily, I would say that, you know, buying five year government bonds would be a great place to park your money, even if you want to take a little more than 10 years. That is typically the safest place to be in a deeper session. And typically, anything that trades off the government bond market, whether it's corporate's or provincials or other types of Securities, they typically widen out. That's the best place to be in the recession. >> What is the downside being in that space? Nothing is ever perfectly 100% right? Yes indeed, sovereign bond, the taxation power of the government and blah blah blah. … >> I mean a deep recession has huge implications in the portfolio so there's a lot to think about in terms of the fixed income market. I mean, I think we are in an inflationary environment. To the extent that we go into a deeper recession and we don't have confidence on inflation, you may not get the relief from central bankers on that side. You are looking for, you know, a real return to the extent inflation is higher. That might be a drag on the government bond yields should be lower than inflation. So, yeah, there's always a balance in your portfolio. >> Did I say "blah blah blah" as part of my question? That's a technical term. >> Central banks want people to spend less therefore… >> The key to this question is what one means by inflation. When you look back in time the of prices and sectors that go up due to shocks. You seen that prior to the recent energy shock that we've had. Where, you know, the energy prices go up but the rest of the broad prices are relatively stable. So that is what central bankers would call inflation. In fact, they look through, typically looks through food and energy shocks at the core. So, you know, just hoping that high prices cure that, but when it moves from just sectoral to different parts of the broader economy to broad-based inflation, that's the problem. Central bankers worry about that being embedded in. So everything, if every prices going up across the board, you and I will put our hands up and asked for salary increases above inflation. That is what becomes the problem for central bankers where they want inflation and that sweet spot of 1 to 3% here in Canada. And you are saying "no, look, I want six, seven, eight, nine, 10". Whatever the number is it is well above that and that becomes embedded in and that produces, it's harder for governments or corporations to plan. It becomes embedded in the economy and that's the inflation expectation issue the drives central bank thinking. So that is the difference between pockets of inflation and broad-based inflation. > Great insight on that front. We are out of time for questions but any final thoughts for the viewers? It's been a tough year so far. We are definitely not of the woods yet. Where do we need to put our heads as investors? >> I mean I came out and I said "look I don't think the market is pivoting yet. We are too soon for that. " But we will see evidence, and we talked about that, central banks stepping back to slower paces and rate hikes. There is concerns about financial stability and cracks in the market. So when you asked me about "where we are in the baseball game or what meaning we are in?" We are getting later in the innings and I think it behooves one still to continue to pick away their spots the market to buy fixed income, to bolster income over the next 1 to 3 years. Particularly, as we talked about. So I think about prudent and thoughtful exposure to fixed income makes a lot of sense despite these headwinds. >> Scott, always good to have you it's a pleasure to have a conversation. >> My pleasure. >> Our thanks to Scott Colbourne, Managing Director for Active Fixed Income at TD Asset Management. Stay tuned on Wednesday, Nicole Ewing, Dir. of tax and estate planning at TD Wealth will be our guest taking your questions about personal finance. And a reminder that you can get a head start, just email MoneyTalk Live it. That's all our time for today. Thanks for watching and we will see you tomorrow take care. [music]