Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
Speaker 2: live on Bloomberg Television weekday mornings from six to nine
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or
Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business app. Brian Leavitt of Invesco
Speaker 2: joining the chorus of warnings, writing this, for the first
Speaker 2: time and a year, we favor a more defensive posture
Speaker 2: in the near term. That does not mean that we
Speaker 2: eliminate equities from the portfolio, but rather shift towards higher quality.
Speaker 2: Brian joins us for more.
Speaker 3: Brian and Morningtier. Good morning.
Speaker 2: Before we get into what you're doing beneath the surface,
Speaker 2: this is a big change for you. Typically you come
Speaker 2: on the program, you sort of push all the bears aside,
Speaker 2: and you say, I O want to be part of
Speaker 2: this market.
Speaker 3: What's changed for you?
Speaker 4: Well, the first thing I want to say, is I
Speaker 4: still believe over the intermediate term we want to be inequities.
Speaker 3: I still come.
Speaker 4: Back to peak inflation, peak rates, peak tightening is favorable
Speaker 4: for equities over the intermedia term time peer What we're
Speaker 4: looking at is more of a tactical indicator that says, look,
Speaker 4: the global economy is growing below trend and it looks
Speaker 4: like things are starting to soften. So when your below
Speaker 4: trend and things are weakening, you want to be more
Speaker 4: defensive in the portfolio. And some of that global weakness
Speaker 4: is being led by the United States.
Speaker 3: Things are slowing. It's not a recession call.
Speaker 4: It's not you know, something ominous is coming, but rather
Speaker 4: tactically things are slowing down and we're still waiting on
Speaker 4: the FED to respond.
Speaker 2: That's the change, and I think that's the important distinction.
Speaker 2: We've been talking about global growth xus below trend for
Speaker 2: quite a while now. The new ingredients is the US
Speaker 2: slowing down's slow, And something we've been talking about is
Speaker 2: at what point does someone like you become more concerned
Speaker 2: about what's slow down, that it's not just slowing, that
Speaker 2: it's slow.
Speaker 4: That it's slow, and that you may in fact have
Speaker 4: a recession. The good news is that we don't have
Speaker 4: a lot of excess in this economy. If you look
Speaker 4: at residential investment as a percent of GDP, if you
Speaker 4: look at inventory to sales ratios, this isn't an economy
Speaker 4: that's dealing with a lot of excess. We don't have
Speaker 4: businesses that are over levered, banks that are sitting on
Speaker 4: piles of bad loans, and you see it.
Speaker 3: In the corporate bomb market.
Speaker 4: Corporate bomb market isn't worried about this economy as of
Speaker 4: yet at all. Instead, what you're seeing is weakness, slow down,
Speaker 4: which by the way, is what the Federal Reserve wanted.
Speaker 3: It's here. The challenge is.
Speaker 4: We've got a five and a quarter five and a
Speaker 4: half percent FED funds target, and yet the economy is
Speaker 4: slowing and inflation's in the comfort zone. So you're you've
Speaker 4: you know, it's not a perfect backdrop for equities over
Speaker 4: the next few months.
Speaker 5: You know, you say, go into quality, and I wonder
Speaker 5: how quality has changed given the fact that some of
Speaker 5: the companies that are minting money have gained so much
Speaker 5: value over the past twelve months that they're the ones
Speaker 5: and I'm thinking of Market Stanley, they're the ones that
Speaker 5: people are getting nervous about are you on board with
Speaker 5: that This idea that some of the high flyers I'm
Speaker 5: thinking of Nvidia and thinking of Microsoft maybe have gotten
Speaker 5: over their skis well.
Speaker 3: Perhaps a little, but that doesn't mean that it doesn't
Speaker 3: go on.
Speaker 4: You know, as the economy slows, investors are going to
Speaker 4: be looking for a spot for businesses that they think
Speaker 4: are going to continue to do okay in this environment.
Speaker 4: And so I think part of the challenge was our
Speaker 4: risk on call, which started last July was a great one,
Speaker 4: but really most of the broadening of the rally happened
Speaker 4: in a couple of months, right small mid twenty percent
Speaker 4: in two months November and December on expectations of rate cuts,
Speaker 4: and then it's been all concentrated.
Speaker 3: So the risk on rally should have been broader.
Speaker 4: Then when you get to a more defensive spot, you
Speaker 4: tend to get more higher qualities. So yeah, they are
Speaker 4: perhaps a little bit elevated, but I think that's where
Speaker 4: investors camp out in a slowdown that could persist.
Speaker 3: Ultimately, what ends up happening.
Speaker 4: Over the next couple of years is in a easing
Speaker 4: cycle with a normalization the yield curve, you should broaden out,
Speaker 4: But in the near term I think investors hunker down
Speaker 4: a bit and stay in those names.
Speaker 5: So you're still a fomo kind of guy, just with
Speaker 5: respect to Nvidia and Microsoft, not necessarily what the rest
Speaker 5: of the broadening at is that correct?
Speaker 4: Well, I'm a fomo kind of guy. Over the next
Speaker 4: three to five years. Absolutely. Again, you know, in the
Speaker 4: near term the headline might be it turns a little
Speaker 4: bit bearish from where we've been.
Speaker 3: I mean, we were full risk on since July.
Speaker 4: As things slow and we wait for easing, we get
Speaker 4: a little bit more defensive. But again, over the next
Speaker 4: three to five years, peak tightening, peak rates, peak inflation,
Speaker 4: favor stocks.
Speaker 5: Some of these words that people use, like becoming cautious
Speaker 5: or being more risk on, have different meanings depending on
Speaker 5: who the person is, and the idea of being cautious
Speaker 5: in the past has been going into long bonds, having
Speaker 5: more cash and going into say dividend place in the
Speaker 5: equity market, what's the new conservative position.
Speaker 4: Yeah, So the way we think about it, if you
Speaker 4: take a sixty forty portfolio, when we're more risk on
Speaker 4: that forty percent fixed income is going to be far
Speaker 4: more credit. Credit tends to do well, in more of
Speaker 4: a recovery risk on type of environment, we would increase
Speaker 4: exposure to longer duration bonds, quality bonds play Frank can
Speaker 4: get some very nice yields there these days, and I
Speaker 4: would be a little bit cautious about sitting out in
Speaker 4: money markets because those yields will ultimately.
Speaker 3: Be coming down. On the equity side.
Speaker 4: When you're more cautious, you reduce some of your exposure
Speaker 4: to international and you move into factors like quality and
Speaker 4: low volatility, and you reduce a little bit of your
Speaker 4: small cap exposure and go more large cap. So it's
Speaker 4: not wholesale changes, it's protecting some of the gains you've
Speaker 4: had in the portfolio and adding some protection in the
Speaker 4: fixed income market to a portfolio.
Speaker 6: We had this debate yesterday about whether or not as
Speaker 6: an investor you can look through the noise of politics.
Speaker 6: Do you find potentially advantages ahead of November opportunities or
Speaker 6: do you think they're.
Speaker 3: Setbacks look through the noise of politics.
Speaker 4: If you look back historically and you look at volatility
Speaker 4: in markets, it doesn't come because of elections. So if
Speaker 4: you look at October and November of election years, the
Speaker 4: only years that you see a meaningful increase in volatility
Speaker 4: are two thousand and oh eight, and that was clearly
Speaker 4: for other reasons than what was going on in politics,
Speaker 4: And if we have time for it, I like to
Speaker 4: tell investors three points on politics. The first one is
Speaker 4: since nineteen fifty seven when the SMP went live, every
Speaker 4: president has had a positive return over their administration except
Speaker 4: w and Nixon because their terms ended in bad recessions
Speaker 4: or they left office in bad recessions. Number two, Trump's
Speaker 4: portfolio over Trump's term SMP was up sixty percent. Where's
Speaker 4: Biden right now? Sixty percent? So it didn't matter at all.
Speaker 4: And the third point I like to make is if
Speaker 4: politics matter so much, then how did Obama and Reagan
Speaker 4: both have two hundred percent advances in the.
Speaker 3: Market during their term? They both had great starting points.
Speaker 4: You know, I could become president in a recession when
Speaker 4: the Fed's helping out and probably get a two hundred.
Speaker 5: Are you running because I think that that's a Amory.
Speaker 3: Told me I have zero chance.
Speaker 2: So you could head to the convention in August and
Speaker 2: make a challenge if you want. I think some people
Speaker 2: might be thinking about that. There have been changes though
Speaker 2: over the last decade twenty sixteen. November sixteen, we were
Speaker 2: talking about investment in infrastructure, the Trump Trade.
Speaker 3: Twenty twenty.
Speaker 2: You saw what happened when we started to see signs
Speaker 2: of a blue sweep and the prospect of more fiscal
Speaker 2: stimulus coming down a pike. There have been changes, and
Speaker 2: we're starting to wonder whether there's going to be consequences
Speaker 2: for the bond market for two presidents, two leaders that
Speaker 2: don't seem to be willing to do anything about the
Speaker 2: deficit in a big way anytime soon.
Speaker 3: Yeah.
Speaker 4: Well, I mean with regards to the changes, you know,
Speaker 4: if we do go back to that twenty sixteen moment,
Speaker 4: it was the whole I think from a lot of
Speaker 4: voters that Trump could unlock growth, could unlock value, and
Speaker 4: you had very much the same market leadership you had
Speaker 4: on dur Obama. So we we didn't change the economic
Speaker 4: envo ironmen as a result of simply electing a new president.
Speaker 4: I mean, they basically get to get a couple of
Speaker 4: things done. They don't get to have their whole agenda
Speaker 4: play out. Now with regards to rates, I heard this
Speaker 4: a little bit a week or two ago. You would
Speaker 4: know better than me, but right there was a quick
Speaker 4: move up in the ten year treasury eight a handful
Speaker 4: of days ago, and people were asking me, is this
Speaker 4: the bond vigilantes or they finally here?
Speaker 3: There there's nothing in the bond.
Speaker 4: Market that suggests the bond vigilantes are here. This is
Speaker 4: a bond market that's been moving very much on nominal
Speaker 4: growth expectations and expectations for the Fed. If the bond
Speaker 4: vigilantes were here, the US dollar would not be as strong.
Speaker 3: As it is.
Speaker 4: So no, it doesn't seem as if the bond market
Speaker 4: views this as a problem. And I've been saying for
Speaker 4: a long time, John, I don't think that this is
Speaker 4: going to be a problem. My clients think it's the
Speaker 4: biggest problem we have. The US debt level job is
Speaker 4: to provide therapy. Well, I've been doing this for twenty
Speaker 4: five years, and the debts increase by seven times, five
Speaker 4: trillion to thirty five trillion, and yet rates are at
Speaker 4: four percent and the dollars strong. So you know, it's
Speaker 4: the Alfredy Newman what me worry at this point?
Speaker 2: Right?
Speaker 3: I mean it's it's we're a very wealthy country.
Speaker 4: Total household network, there's one hundred and fifty trillion in
Speaker 4: this country compared to thirty five trillion in debt.
Speaker 3: So I'm not overly concerned about this. Bran.
Speaker 2: It's going to see it, Bran Levitt IV Invesco. It's
Speaker 2: the latest Congresswoman Mikey Sheryl of New Jersey becoming the
Speaker 2: ninth House Democrat to call on President Biden to drop
Speaker 2: out of the race. Bidon's campaign working to restore confidence
Speaker 2: in his candidacy and bolster support from progressive leaders around
Speaker 2: the country. Joining us now, please to say is the
Speaker 2: Democratic Congressman Jonathan Jackson of Illinois. Congressman, thank you for
Speaker 2: being with Bloomberg Surveillance this morning. I just want to
Speaker 2: share a quote of yours with our audience, which I
Speaker 2: think is going to imply where you stand. I think
Speaker 2: he's up to the grueling of the presidential campaign season.
Speaker 2: A question I would have for you, Congressman, I think
Speaker 2: is a question that a lot of people in this
Speaker 2: country have too. It's not just about the four months
Speaker 2: ahead of us, it's the four years after that. What
Speaker 2: gives you the impression that he can handle not just
Speaker 2: the campaign for the next four months, but the four
Speaker 2: and a half years of governing. Kate still need today well.
Speaker 7: I think he's got a great team around him. I
Speaker 7: think his agenda is clear. His focus has been very precise.
Speaker 7: When I think of what the alternatives that we are
Speaker 7: confronting at the moment, it's about direction, it's about character.
Speaker 7: President Biden has been very robust on the campaign trail
Speaker 7: in the last week since that debate, if you will,
Speaker 7: and so I'm very excited for him. I think that
Speaker 7: he's got a very strong number two and Vice President
Speaker 7: Kamala Harris, and he was able to share with us
Speaker 7: as the CBC members on a private zoom call. He
Speaker 7: was able to take our questions, and so I'm very excited.
Speaker 7: I'm very confident that he can go forward and will go.
Speaker 7: So we'll go for in a very robust manner.
Speaker 6: If you think he has a strong number two, and
Speaker 6: he's eighty one years old, and the polls continuously show
Speaker 6: not just post to debate, this has been an issue
Speaker 6: with the electorate for over a year that they just
Speaker 6: think he is too old to continue. Why not promote
Speaker 6: the number two?
Speaker 7: I think he has been promoting Vice President Harris, and
Speaker 7: so we don't know what the future holds, but I
Speaker 7: would tell you this that they've been out on the campaign.
Speaker 7: This has been a scandal free administration. He's been very focused.
Speaker 7: If you look at what the alternative is on the chaos,
Speaker 7: the confusion, the calamity, if you will. I think the
Speaker 7: press has not put it in the proper lights. If
Speaker 7: you think at a person that's been convicted by jury
Speaker 7: of their peers of sexual assault, you usually get a
Speaker 7: handle on your name being called a sexual offender former president,
Speaker 7: but no, they've given him a pass on that. So
Speaker 7: character is on the battle, and I think the African
Speaker 7: American community is very clear at what's at stake. We've
Speaker 7: gone in the wrong direction with the United States Supreme Court,
Speaker 7: if you will. We've had one hundred and sixteen justices
Speaker 7: in American history, roughly twelve thousand, five hundred and ten
Speaker 7: representatives in the House of Representatives. We've had forty six presidents.
Speaker 7: But this non elected group of people, the citizen of
Speaker 7: the United States Supreme Court, is able to dictate law.
Speaker 7: I think we need to look at some sort of
Speaker 7: judicial reform in the future. That the power that they
Speaker 7: have and the corruption that they've displayed is unprecedented. So
Speaker 7: the Supreme Court is on the ballot for this election season.
Speaker 7: As well, and I would trust President Joe Biden and
Speaker 7: Vice President Harris to make that decision and recommendation before
Speaker 7: the American people Congress.
Speaker 6: And I want to share you some new data we
Speaker 6: got this morning from the Cook Political Report. They said
Speaker 6: that Trump's currently is forty seven to forty four percent lead,
Speaker 6: the most dramatic shift they've seen in this race. And
Speaker 6: David Walserman, an analyst there, said, quote, Trump's current numbers
Speaker 6: among Black and Latino voters are incompatible with any plausible
Speaker 6: Democratic victory scenario. What does Joe Biden need to do
Speaker 6: to really shore up the black and Latino communities.
Speaker 7: Well, I think he has to continue to stay in
Speaker 7: front of the community and also share with him all
Speaker 7: the things that he's done and what's to be promised
Speaker 7: in the future. We know on the Sunday before the
Speaker 7: Tuesday election, most Democratic candidates find their way to the
Speaker 7: African American Church. There are some more games that the
Speaker 7: African American Church certainly deserves in the African American community.
Speaker 7: If you think about what President Biden has done, one
Speaker 7: thing that's huge, and there have been many things, is
Speaker 7: that this is the first time an African American woman
Speaker 7: was even considered to go onto the nation's highest court
Speaker 7: in Katanji. Brown and her opinions and her decisions, her
Speaker 7: character is very important for us to have there. What
Speaker 7: he's done on trying to put people on the judiciary
Speaker 7: has been very outstanding. We're now seeing the erosion of
Speaker 7: African American wealth. We're looking at going towards twenty fifty
Speaker 7: where there'll be zero African American wealth. That's also being
Speaker 7: projected that we can talk about peace and security in
Speaker 7: Ukraine and Israel and Gaza and Taiwan and talk about
Speaker 7: rebuilding plans. We can talk about rebuilding urban America. Those
Speaker 7: persons that have had the history of being the descendants
Speaker 7: of Americans, that have been enslaved, that have faced redlining,
Speaker 7: that have faced all the worst of America, that have
Speaker 7: been truly American since the founding of this nation, have
Speaker 7: not had an economic plan that has been sustained and
Speaker 7: that has been implemented. Our cities don't have to look
Speaker 7: this drab, in this dire. We can also pick up
Speaker 7: people in America, and once we do so, we will
Speaker 7: expand the market. I believe in America. I believe there's
Speaker 7: a lot more potential when we saw the past of
Speaker 7: segregated athletic fields once they were transformed into a level
Speaker 7: playing field. Now we're proud of the NBA, proud of
Speaker 7: Major League Baseball, proud of all of these other endeavors.
Speaker 7: We can do that same with our economy when people
Speaker 7: have equal access to capital. That has to be a
Speaker 7: major focus of the Biden administration. What are they going
Speaker 7: to be the financial institutions created to have long term
Speaker 7: sustainable growth and inclusivity in the American economy. That's a promise,
Speaker 7: as a commitment that should be made to the African
Speaker 7: American community. It'd be good for America, it'd be good
Speaker 7: for the world.
Speaker 5: Congressman, I want to go back to what you were
Speaker 5: talking about at the outset, where you were saying that
Speaker 5: it's character on the ballot is who you are going
Speaker 5: to elect as just a person a candidate, and you're
Speaker 5: talking about Donald Trump. There are a number of polls
Speaker 5: that have shown that Kamala Harris or many other candidates
Speaker 5: would do better than Joe Biden across from the ballot,
Speaker 5: across from Donald Trump. Why are you still supporting Joe
Speaker 5: Biden if you think that he has a lesser chance
Speaker 5: than other potential Democratic contenders to win in an election
Speaker 5: that you're framing is quite important.
Speaker 7: Well, I would say it this way. You're talking to
Speaker 7: someone that's in elected office, and anyone that's been in
Speaker 7: this position before, you understand critics come after doers, and
Speaker 7: so we don't look at all the opinion polls. Opinion
Speaker 7: polls would tell us we're wrong. Opinion polls would tell
Speaker 7: us that we shouldn't, we can't win, and we've overcome
Speaker 7: many of those obstacles. We're in the position now of
Speaker 7: molding and shaping opinion. And that's where I stand on
Speaker 7: the side of I appreciate those that have dissented. I
Speaker 7: disagree with them. I think it's healthy that we have debates.
Speaker 7: I would have liked to have seen a more rigorous
Speaker 7: primary debate schedule that gives other persons the opportunity to
Speaker 7: get on the stage. But here we are. We're about
Speaker 7: four weeks away from the Democratic Convention, and I think
Speaker 7: these different opinions and party persons that may disagree, I
Speaker 7: disagree with them, but I respect their opinion. I think
Speaker 7: in the end, it all comes together. And so I
Speaker 7: don't want someone to be crowned the next president. If
Speaker 7: someone has a dissenting voice. I want them to be
Speaker 7: heard at the convention. Let's keep it open, let's keep
Speaker 7: the conversation robust, and let's take our case to the
Speaker 7: American people. This ultimately is decided not by the donors,
Speaker 7: but by a radical proposition, and that is that every
Speaker 7: person has a vote, and it counts on election day.
Speaker 7: One person, one vote. And so this is where the
Speaker 7: bigg in their class and the working class all have
Speaker 7: one voice, one vote on election ding. So I follow opinion.
Speaker 7: Now it's time for us to shift opinion, not simply
Speaker 7: follow what the opinion polls are seeing.
Speaker 2: A Congressman, I wish we had more time, because we've
Speaker 2: got plenty of follow ups to that particular last comment, Congressman,
Speaker 2: thank you. Congressman Jonathan Jackson of Illinois joining us from Washington, DC,
Speaker 2: Drew Pettit writing this sentiment around stocks with high exposure
Speaker 2: to AI is the most elevated it has been since
Speaker 2: twenty nineteen. We advocate taking some gains in AI high
Speaker 2: flyers and redistributing more broadly across the themes value chain.
Speaker 2: Drew joins us now for more dre It's wonderfully have
Speaker 2: you with us on the program. Lots of people talking
Speaker 2: about your note in the last twenty four hours. I
Speaker 2: think we have to draw a distinction, as you have done,
Speaker 2: between the AI and enablers and perhaps the AI adopters.
Speaker 2: Can you help us work through your framework for thinking
Speaker 2: about equacies at the moment.
Speaker 1: Yeah, well, thanks for having me on this morning.
Speaker 8: So when we think of AI, we think of it
Speaker 8: in three pieces. The enablers, so the semiconductors, the picks
Speaker 8: and shovels. We get that that's the trade that's really working.
Speaker 8: The creators, so the software sided thing things. After you
Speaker 8: have the hardware, you have to teach it to do
Speaker 8: something and package that in a product. And then I
Speaker 8: think the last category it's the users. So you call
Speaker 8: them the adopters, we called users. Those are the companies
Speaker 8: that are going to take those tools and either integrate
Speaker 8: it into their products to make it better or in
Speaker 8: their background processes to make their companies more efficient. So
Speaker 8: I think that whole value chain eventually benefits. But the
Speaker 8: market is just trading the enablers right now.
Speaker 5: In part true because it's very hard to see where
Speaker 5: the money is and we haven't seen it in the
Speaker 5: earnings for some of the end users. So why is
Speaker 5: this the right time in your view to make that shift.
Speaker 8: You've just had that almost parabolic move in some of
Speaker 8: these high flyers, like you see that with Nvidia, TSMC
Speaker 8: overnight is up another two percent. So a lot of
Speaker 8: these names, with how aggressive they have moved, portfolio managers
Speaker 8: are overweight. So we're not saying dump these names because
Speaker 8: to your point earlier, yeah, there's some career risks there
Speaker 8: if you're not in them, but if you're overweight, use
Speaker 8: that to fund the next leg.
Speaker 1: It will come.
Speaker 8: Markets don't stay on the same theme forever, and in
Speaker 8: some cases, I think the implied expectations with these enabler
Speaker 8: stock prices moving very far, very fast, get really hard
Speaker 8: to meet and exceed going forward.
Speaker 5: You know, it's fascinating to me, Drew, because on the
Speaker 5: surface your call sounded quite verish. Actually, the idea of
Speaker 5: it's time to liquidate some of the positions is time
Speaker 5: to take profits. It screams as okay, I get out
Speaker 5: of Nvidia, and then you start listening to what you're
Speaker 5: actually saying, and it's actually incredibly bullish, is that we
Speaker 5: haven't valued high enough some of the AI and you
Speaker 5: could get better gains in other names that haven't made
Speaker 5: parabolic moves. How do you sort of reconcile that at
Speaker 5: a time when people are concerned about valuation, when people
Speaker 5: are concerned about a weakening growth picture, And frankly, there
Speaker 5: is that kind of uncertainty of whether we're actually seeing
Speaker 5: the profitability in some of these companies.
Speaker 8: So to me, again, we're focusing on larger cap, already
Speaker 8: profitable stocks. But I hate to say this, but I
Speaker 8: don't really care about traditional valuation metrics. Don't talk to
Speaker 8: me about a fifty pe stock that's in the early
Speaker 8: innings of a new growth phase. What we do is
Speaker 8: we look at the market price today, make some assumptions
Speaker 8: about the discount rate and what the terminal value should
Speaker 8: be for the company, and we try to figure out
Speaker 8: what kind of growth rate do I need in the
Speaker 8: next five years to justify the stock.
Speaker 1: And some of these stocks do.
Speaker 8: Have expectations, like cell side consensus expectations that tell me
Speaker 8: they can meet what the market's pricing in. So that's
Speaker 8: why we don't think AI is a bubble yet. Yes,
Speaker 8: it's getting extended. Yes, price moves make you answy. Yes,
Speaker 8: some of the options data makes you a little nervous,
Speaker 8: But really there is a growth and fundamental story here.
Speaker 1: That's why it's not a bubble, at least not yet.
Speaker 6: At least not yet. What would take us there, then, Drew.
Speaker 8: If you really don't see increased beats and raises from
Speaker 8: a lot of the AI pure plays, I think Number one,
Speaker 8: you have to recognize when stocks move this fast, it's
Speaker 8: more than just good earnings.
Speaker 1: You need to change future expectations as well.
Speaker 8: And then if prices keep moving this way without fundamentals
Speaker 8: following that, that's the concern. That's what really got us
Speaker 8: in the tech bubble. I think that's the big difference
Speaker 8: from then to today, Drew.
Speaker 2: I think we're all interested in just how clients received
Speaker 2: this call yesterday, just trying to engage sentiment. Did they
Speaker 2: push back, did they engage with it? What was it
Speaker 2: like yesterday?
Speaker 8: I was actually a little bit surprised that there wasn't
Speaker 8: more pushback. I think a lot of people actually we're
Speaker 8: on the flip side, like I am getting nervous. I
Speaker 8: am worried that we are pricing in too much. So
Speaker 8: it was actually relatively well received, But on the flip side,
Speaker 8: I'm not sure.
Speaker 1: People are ready to hedge.
Speaker 8: Again, that's not our base case, but we always have
Speaker 8: to recognize when we could be wrong because markets make
Speaker 8: a lot of smart people look silly over time, and
Speaker 8: people weren't ready to consider the hedge or the complete.
Speaker 1: Other side of the tree.
Speaker 8: So there's still a lot of AI balls out there,
Speaker 8: but they're cautious bulls.
Speaker 2: Trey, I appreciate the update.
Speaker 3: Ready to do.
Speaker 2: Thanks for making time for us this morning, Drew Pettit
Speaker 2: there of City. This is the Bloomberg Surveillance Podcast, bringing
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