1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,240 Speaker 1: us live on YouTube. 6 00:00:27,400 --> 00:00:31,800 Speaker 2: We speak with Claudia sam chief Economist, News Century Advisors. 7 00:00:31,960 --> 00:00:33,879 Speaker 2: Maybe we'll get her back here for Wednesday when we 8 00:00:33,920 --> 00:00:36,400 Speaker 2: get the actual reported government shutdown and all that's three 9 00:00:36,440 --> 00:00:41,320 Speaker 2: or four days delayed. There's been all sorts of responsible 10 00:00:41,640 --> 00:00:48,559 Speaker 2: and irresponsible writing thinking blathering on our new Chairman of 11 00:00:48,600 --> 00:00:52,120 Speaker 2: the Federal Reserve. The nominee is Kevin Worsh. At the 12 00:00:52,159 --> 00:00:57,520 Speaker 2: top of the responsible pile is Claudia sam Ace, academics 13 00:00:57,520 --> 00:01:02,440 Speaker 2: from Michigan, Real fed Credit bill, changing the dialogue of 14 00:01:02,520 --> 00:01:08,360 Speaker 2: recession in America. She has been careful and respectful about 15 00:01:08,760 --> 00:01:13,080 Speaker 2: discussing the pros the cons of this new chairman. Claudia 16 00:01:13,200 --> 00:01:16,959 Speaker 2: sim if we get a Chairman Worsh, what would you be? 17 00:01:17,120 --> 00:01:21,240 Speaker 2: You said, your advice to Chairman Worsh to get through 18 00:01:21,280 --> 00:01:22,480 Speaker 2: the first six months. 19 00:01:24,680 --> 00:01:27,480 Speaker 3: Unfortunately, I think Kevin Walsh may need to start with 20 00:01:27,600 --> 00:01:32,840 Speaker 3: an apology. He's been pretty tough on the staff and 21 00:01:32,880 --> 00:01:36,400 Speaker 3: on current FED officials. You know, it's maybe the campaign 22 00:01:36,440 --> 00:01:40,080 Speaker 3: to get the job. And I am wholeheartedly agree the 23 00:01:40,120 --> 00:01:42,560 Speaker 3: FED can always do better and has made mistakes in 24 00:01:42,600 --> 00:01:45,520 Speaker 3: the past, and there's ways to change the institution. But 25 00:01:45,640 --> 00:01:48,960 Speaker 3: he said some pretty fiery stuff about people whose help 26 00:01:49,000 --> 00:01:51,320 Speaker 3: he's going to need very soon, and I suspect he'll 27 00:01:51,320 --> 00:01:53,400 Speaker 3: come in and be like, hey, you know we were collegues, 28 00:01:53,440 --> 00:01:56,280 Speaker 3: ones for colleagues again, let's get to it, and I 29 00:01:56,320 --> 00:01:59,040 Speaker 3: think the page will turn and off we go if 30 00:01:59,160 --> 00:02:03,080 Speaker 3: some of his and pain promises of you know, breaking 31 00:02:03,120 --> 00:02:06,120 Speaker 3: heads and laying off a bunch of people. If that happens, 32 00:02:06,160 --> 00:02:08,440 Speaker 3: I think you'll have a pretty tough first six months. 33 00:02:08,800 --> 00:02:11,840 Speaker 3: So that's not my anticipation. But you know, the leadership 34 00:02:11,880 --> 00:02:15,120 Speaker 3: style changes, and Kevin worsh is trying to do something 35 00:02:15,200 --> 00:02:18,200 Speaker 3: really difficult. He has big ideas about how to change 36 00:02:18,240 --> 00:02:21,400 Speaker 3: the FED. Change is very hard at the FED. 37 00:02:21,680 --> 00:02:23,920 Speaker 4: I mean I know that from being inside the building. 38 00:02:24,040 --> 00:02:26,200 Speaker 4: So you know, good back to. 39 00:02:26,160 --> 00:02:27,160 Speaker 5: Him, Claudia. 40 00:02:27,280 --> 00:02:29,840 Speaker 6: We did not get the non pump payroll data today, 41 00:02:29,880 --> 00:02:32,280 Speaker 6: but we have gotten some data in the less couple 42 00:02:32,320 --> 00:02:35,239 Speaker 6: of days. Challenger job cuts high since two thousand and nine. 43 00:02:35,680 --> 00:02:38,440 Speaker 6: Initial job as claims came in a little higher than expected, 44 00:02:39,400 --> 00:02:42,079 Speaker 6: jolts openings fell to the LOWES level. So I think 45 00:02:42,080 --> 00:02:45,160 Speaker 6: since twenty twenty, what is your view of kind of 46 00:02:45,440 --> 00:02:46,720 Speaker 6: this labor market right now? 47 00:02:48,440 --> 00:02:49,400 Speaker 4: So, even with. 48 00:02:49,400 --> 00:02:52,680 Speaker 3: The data that we've gone this week, I agree with 49 00:02:52,720 --> 00:02:54,960 Speaker 3: the assessment we heard from the FED at their last 50 00:02:55,000 --> 00:02:58,320 Speaker 3: meeting that there are signs of stabilization, you know, the 51 00:02:58,360 --> 00:03:02,000 Speaker 3: downside risk employment look a little bit less now. I think, 52 00:03:02,000 --> 00:03:05,440 Speaker 3: you know, the data flow shows that this is still bumpy. 53 00:03:05,480 --> 00:03:07,840 Speaker 3: We are not out of the woods yet. I would 54 00:03:07,960 --> 00:03:10,800 Speaker 3: downplay the message from the Challenger data. 55 00:03:10,880 --> 00:03:11,560 Speaker 4: It absolutely is. 56 00:03:11,520 --> 00:03:13,920 Speaker 3: Important for every single person that's covering that data that 57 00:03:13,960 --> 00:03:16,520 Speaker 3: got a pink slip, but it's it doesn't give us 58 00:03:16,520 --> 00:03:19,800 Speaker 3: the flavor of like the whole set of businesses across 59 00:03:19,840 --> 00:03:23,000 Speaker 3: the country. Honestly, the DROLT data, the job openings and 60 00:03:23,080 --> 00:03:28,040 Speaker 3: labor turnover statistics that came out was much more upbeat. 61 00:03:28,120 --> 00:03:31,359 Speaker 3: And the layoff rate nationally is still very low. It's 62 00:03:31,400 --> 00:03:33,600 Speaker 3: like pre pandemic levels of low. 63 00:03:33,639 --> 00:03:34,200 Speaker 4: So I think on. 64 00:03:34,240 --> 00:03:39,760 Speaker 3: Layoffs, it's the pictures is okay, Actually it's actually pretty good. 65 00:03:40,240 --> 00:03:43,400 Speaker 3: It's the hiring rate that is still very low, and 66 00:03:43,800 --> 00:03:46,520 Speaker 3: that is a problem. Even if it's not recessionary. It 67 00:03:46,960 --> 00:03:50,200 Speaker 3: is a real drain and a gradual increase in say unemployment. 68 00:03:50,640 --> 00:03:54,840 Speaker 6: Is the low higher low fire phenomena. Is that okay 69 00:03:54,880 --> 00:03:58,080 Speaker 6: for this economy? Is that shockingly unusual? How do you 70 00:03:58,080 --> 00:03:58,600 Speaker 6: think about that? 71 00:03:59,720 --> 00:04:03,520 Speaker 3: So what we're seeing right now is very unusual. We 72 00:04:03,640 --> 00:04:06,720 Speaker 3: have a low hiring rate, which that happens from time 73 00:04:06,760 --> 00:04:09,640 Speaker 3: to time. What makes it so unusual is we have 74 00:04:09,680 --> 00:04:12,520 Speaker 3: an economy that is expanding it a pretty good clip. 75 00:04:13,080 --> 00:04:15,080 Speaker 3: You know, do GDP numbers may be a little on 76 00:04:15,120 --> 00:04:18,120 Speaker 3: the high side, but in genuc consumer spending is moving ahead, 77 00:04:18,160 --> 00:04:22,040 Speaker 3: business investment, capital expenditures are happening right like. This economy 78 00:04:22,080 --> 00:04:24,960 Speaker 3: is moving forward but not adding jobs. 79 00:04:25,720 --> 00:04:28,280 Speaker 4: And that is that is unusual. 80 00:04:28,520 --> 00:04:30,960 Speaker 3: And I think there are probably some reasons why that 81 00:04:31,040 --> 00:04:33,480 Speaker 3: might be happening right now, like a lot, but it's 82 00:04:33,600 --> 00:04:36,080 Speaker 3: this is not typical, and frankly, that makes it kind 83 00:04:36,080 --> 00:04:38,560 Speaker 3: of not It makes it hard to read, and I 84 00:04:38,600 --> 00:04:42,880 Speaker 3: don't think it's really sustainable. But it could go either way. 85 00:04:43,160 --> 00:04:46,120 Speaker 3: Hiring could pick up or activity could slack off. 86 00:04:46,279 --> 00:04:48,640 Speaker 2: Claudia, you know an undergraduate, You get there and you go, okay, 87 00:04:48,720 --> 00:04:51,400 Speaker 2: labor economics junior here this is going to be a breeze, 88 00:04:51,400 --> 00:04:53,960 Speaker 2: and then you get the textbooks like whoa, this has 89 00:04:54,000 --> 00:04:58,440 Speaker 2: got a little bit of ambiguity to it and sophistication. 90 00:04:59,160 --> 00:05:01,800 Speaker 2: The hiring di ynamic. We had one guest earlier this 91 00:05:01,839 --> 00:05:06,640 Speaker 2: week say, the lack the dearth of hiring models out 92 00:05:06,720 --> 00:05:11,200 Speaker 2: at a near eight percent unemployment rate, is our unemployment 93 00:05:11,279 --> 00:05:15,440 Speaker 2: rate worser than the four point x percent we were quoting? 94 00:05:18,240 --> 00:05:20,719 Speaker 3: Yeah, you know, it's one of there's a lot of 95 00:05:20,880 --> 00:05:23,120 Speaker 3: reasons why the unemployment rate can move around. I think 96 00:05:23,160 --> 00:05:26,160 Speaker 3: if you have the perspective of kind of bottoms up 97 00:05:26,160 --> 00:05:28,599 Speaker 3: on the labor market, A lot of it's demographic. The 98 00:05:28,680 --> 00:05:31,440 Speaker 3: population aging is one of the biggest pieces that means 99 00:05:31,480 --> 00:05:33,920 Speaker 3: that we should have lower unemployment rates right now. 100 00:05:34,279 --> 00:05:34,479 Speaker 1: Now. 101 00:05:34,480 --> 00:05:37,880 Speaker 3: It is a cottage industries, particularly within kind of the FED, 102 00:05:37,960 --> 00:05:41,200 Speaker 3: trying to figure out what's the unemployment rate that like 103 00:05:41,440 --> 00:05:44,800 Speaker 3: is so low that it like sets off inflation, or 104 00:05:45,320 --> 00:05:47,560 Speaker 3: is so high that it really is a sign that 105 00:05:47,600 --> 00:05:48,320 Speaker 3: the FED needs. 106 00:05:48,160 --> 00:05:50,080 Speaker 4: To step in and be aggressively cutting rates. 107 00:05:50,120 --> 00:05:53,080 Speaker 3: So and that's that's really tricky because again it's not 108 00:05:53,279 --> 00:05:57,040 Speaker 3: just like I said, with the jobless expansion, you when 109 00:05:57,080 --> 00:05:59,320 Speaker 3: you're really trying to get a sense of what's happening 110 00:05:59,320 --> 00:06:02,080 Speaker 3: in the economy. You got to take the unemployment rate 111 00:06:02,120 --> 00:06:03,680 Speaker 3: and then go look at activity. You got to take 112 00:06:03,720 --> 00:06:07,400 Speaker 3: the unemployment rate and go look at the demographics and 113 00:06:07,760 --> 00:06:11,600 Speaker 3: what's happening with labor supply. So it's there's a lot 114 00:06:11,600 --> 00:06:14,960 Speaker 3: of pieces that come together. So there's no one number 115 00:06:15,160 --> 00:06:15,880 Speaker 3: that we should. 116 00:06:15,680 --> 00:06:16,720 Speaker 4: Look for the unemployment rate. 117 00:06:16,880 --> 00:06:19,000 Speaker 3: What I've always said, and this, you know, this shows 118 00:06:19,000 --> 00:06:22,400 Speaker 3: with the dynamics, watch how it's moving. If the unemployment 119 00:06:22,440 --> 00:06:24,960 Speaker 3: rate starts rising and it gets going more quickly, then 120 00:06:25,000 --> 00:06:26,240 Speaker 3: we have a big problem. 121 00:06:26,839 --> 00:06:27,239 Speaker 5: Claudia. 122 00:06:27,279 --> 00:06:31,240 Speaker 6: President Trump really made good on his campaign pledge to 123 00:06:31,760 --> 00:06:36,240 Speaker 6: a stop immigration, increased deportations. What effect has that had 124 00:06:36,279 --> 00:06:39,679 Speaker 6: on the labor market. I haven't really seen it too much. 125 00:06:41,360 --> 00:06:43,840 Speaker 3: Well, we've been seeing it, and actually I think, you know, 126 00:06:43,839 --> 00:06:46,279 Speaker 3: with the job report being delayed, I think it's a 127 00:06:46,320 --> 00:06:50,360 Speaker 3: good time to kind of emotionally prepare people for next Wednesday. 128 00:06:50,640 --> 00:06:54,800 Speaker 3: We're going to get the annual revisions to the payrolls, 129 00:06:55,240 --> 00:06:58,200 Speaker 3: and there we know from some preliminary estimates they're going 130 00:06:58,279 --> 00:07:00,760 Speaker 3: to be downward and they're going to be big again, 131 00:07:01,040 --> 00:07:03,840 Speaker 3: starting actually back into the spring of twenty twenty four. 132 00:07:03,920 --> 00:07:06,400 Speaker 3: So it's not gonna fit nice through political narratives because 133 00:07:06,440 --> 00:07:08,640 Speaker 3: we go across administrations, like it takes a long time 134 00:07:08,640 --> 00:07:11,560 Speaker 3: to get all this data together, and we're gonna see 135 00:07:11,600 --> 00:07:15,440 Speaker 3: a lot of red because because payroll increases in places 136 00:07:15,480 --> 00:07:17,960 Speaker 3: we're low enough already that with the revisions, we expect 137 00:07:17,960 --> 00:07:21,680 Speaker 3: we're gonna flip more months to payroll gains and the 138 00:07:21,680 --> 00:07:25,520 Speaker 3: green to payroll decignely red and that will rattle people. 139 00:07:25,720 --> 00:07:29,200 Speaker 3: Even though this goes back to your question, we shouldn't 140 00:07:29,320 --> 00:07:33,080 Speaker 3: take the recession signed to it, like we really have 141 00:07:33,320 --> 00:07:36,560 Speaker 3: had a slowdown in the labor's supply and immigration is 142 00:07:36,600 --> 00:07:39,320 Speaker 3: an important piece of that, and that just means these 143 00:07:39,360 --> 00:07:41,360 Speaker 3: payroll numbers. 144 00:07:41,440 --> 00:07:44,440 Speaker 2: Okay, So at the Echos building, you got your unedible 145 00:07:44,480 --> 00:07:47,480 Speaker 2: coffee from Michelle Smith. We're sitting at the desk doctor 146 00:07:47,600 --> 00:07:50,720 Speaker 2: some and some wise guy goes, Okay, Claudia, how red 147 00:07:50,800 --> 00:07:53,600 Speaker 2: is red gonna be? Do you have a revision statistic 148 00:07:53,640 --> 00:07:56,440 Speaker 2: in your head? Oh? 149 00:07:56,560 --> 00:07:58,679 Speaker 4: I do, but I don't. I actually think in terms 150 00:07:58,680 --> 00:07:59,600 Speaker 4: of people watch. 151 00:08:00,360 --> 00:08:02,040 Speaker 5: Nobody's listening, So let's go no. 152 00:08:02,120 --> 00:08:05,640 Speaker 3: But we know that the preliminary estimate was going to 153 00:08:05,640 --> 00:08:09,160 Speaker 3: take something like sixty seventy thousand out a month over 154 00:08:09,200 --> 00:08:11,280 Speaker 3: the period from the spring of March twenty twenty four 155 00:08:11,320 --> 00:08:13,520 Speaker 3: to March twenty twenty five, and then after that we 156 00:08:13,600 --> 00:08:17,040 Speaker 3: may have some additional downward revisions. And frankly, I think 157 00:08:17,160 --> 00:08:20,400 Speaker 3: some of there's a potential even to get some surprise 158 00:08:20,560 --> 00:08:24,120 Speaker 3: on the latest numbers because the BLS, and they're in 159 00:08:24,200 --> 00:08:27,600 Speaker 3: their pledge to always do better with with their estimates. 160 00:08:27,160 --> 00:08:27,640 Speaker 2: Have this. 161 00:08:27,760 --> 00:08:32,319 Speaker 3: They will be unveiling their new birth death model and 162 00:08:33,000 --> 00:08:35,160 Speaker 3: it's probably going to have a little less lift. So 163 00:08:35,200 --> 00:08:39,240 Speaker 3: I think payrolls could be pretty unsettling. And again I 164 00:08:39,320 --> 00:08:41,360 Speaker 3: don't I think there's a lot going on, and keep 165 00:08:41,360 --> 00:08:43,480 Speaker 3: an eye on the unemployment, which I expect to say 166 00:08:43,600 --> 00:08:45,000 Speaker 3: flat and maybe even tick down. 167 00:08:45,160 --> 00:08:45,960 Speaker 2: She's seldom this. 168 00:08:46,240 --> 00:08:47,480 Speaker 5: Yeah, I mean that's great. 169 00:08:47,520 --> 00:08:50,600 Speaker 2: We don't have to promote anything. If doctor some sells 170 00:08:50,640 --> 00:08:53,240 Speaker 2: on Wednesday this Jobs Day, four minutes after the jobs 171 00:08:53,720 --> 00:08:57,000 Speaker 2: the Job's non report, Claudia, Sam, thank you, thank you, 172 00:08:57,120 --> 00:09:02,439 Speaker 2: thank you. Stay with us. More from Bloomberg Surveillance coming 173 00:09:02,520 --> 00:09:03,480 Speaker 2: up after this. 174 00:09:10,760 --> 00:09:14,320 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 175 00:09:14,400 --> 00:09:17,560 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 176 00:09:17,640 --> 00:09:21,280 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app or 177 00:09:21,440 --> 00:09:23,000 Speaker 1: watch us live on YouTube. 178 00:09:23,120 --> 00:09:26,240 Speaker 2: This is a joy Sean Simmons joys us right now. 179 00:09:26,280 --> 00:09:28,840 Speaker 2: I pretty strategies at ubs, but I want to talk 180 00:09:28,880 --> 00:09:31,600 Speaker 2: about and I remember this when Barok, I mean NYU 181 00:09:31,720 --> 00:09:34,400 Speaker 2: was rocking on Peter Karr and Bruno de Pierre and 182 00:09:34,440 --> 00:09:37,560 Speaker 2: all at KURRNT and Barok had the courage to come 183 00:09:37,600 --> 00:09:40,960 Speaker 2: out with a huge venerable finance program they had and 184 00:09:41,040 --> 00:09:44,880 Speaker 2: Dance Stefonica started the Quant program like twenty years ago 185 00:09:44,880 --> 00:09:48,120 Speaker 2: at Brooke. How did you survive the Quant program at Brooke? 186 00:09:48,240 --> 00:09:48,959 Speaker 2: It's a grind. 187 00:09:49,200 --> 00:09:53,240 Speaker 7: It was definitely challenging, set us up to, you know, 188 00:09:53,360 --> 00:09:55,480 Speaker 7: work very hard when we left bruth though. That's always 189 00:09:55,520 --> 00:09:57,640 Speaker 7: the feedback that I hear every Brook studio. 190 00:09:57,760 --> 00:09:59,960 Speaker 2: Apply it to this madness that you have to deal 191 00:09:59,960 --> 00:10:02,200 Speaker 2: with with every day at ubs? How do you how 192 00:10:02,200 --> 00:10:05,520 Speaker 2: do you deal with bitdog or or or anthropic? Is 193 00:10:05,559 --> 00:10:07,520 Speaker 2: that what happened yesterday? I don't know. I don't know 194 00:10:07,559 --> 00:10:12,199 Speaker 2: what clat is, But how do you apply quant academics 195 00:10:12,240 --> 00:10:13,640 Speaker 2: to this madness we're living? 196 00:10:13,880 --> 00:10:16,000 Speaker 7: You know, shifting sands? We got to we have to 197 00:10:16,000 --> 00:10:18,400 Speaker 7: be creative on how we think about things. And uh, 198 00:10:18,720 --> 00:10:22,120 Speaker 7: you know, applied statistical processes to all of it. 199 00:10:22,640 --> 00:10:25,080 Speaker 6: Sean, I think for the you know, so for such 200 00:10:25,120 --> 00:10:27,240 Speaker 6: a long period of time, for so many years, tech 201 00:10:27,360 --> 00:10:30,960 Speaker 6: has led the equity markets, particularly in the US, less 202 00:10:30,960 --> 00:10:31,800 Speaker 6: so in Europe. 203 00:10:33,120 --> 00:10:34,240 Speaker 5: Is that still the case? 204 00:10:34,280 --> 00:10:37,559 Speaker 6: Do you think we've had such a rotation of software 205 00:10:37,559 --> 00:10:39,880 Speaker 6: and some other tech spaces over the last several weeks here? 206 00:10:39,920 --> 00:10:40,640 Speaker 5: How do you think about that? 207 00:10:40,760 --> 00:10:43,600 Speaker 7: Yeah, it's been interesting, and we talked about this last time, 208 00:10:43,600 --> 00:10:46,440 Speaker 7: but going into this year, we were I moved tech 209 00:10:46,480 --> 00:10:49,960 Speaker 7: into neutral for our full year outlook. Okay, part of 210 00:10:49,960 --> 00:10:53,520 Speaker 7: that thesis was, you know, just general increase competition between 211 00:10:53,640 --> 00:10:57,199 Speaker 7: the different companies in the cohort, as well as kind 212 00:10:57,240 --> 00:11:00,679 Speaker 7: of technical rotations within the space overall. So it wasn't 213 00:11:00,800 --> 00:11:04,559 Speaker 7: just a general text going to lift rising tides, right, 214 00:11:06,200 --> 00:11:09,480 Speaker 7: that is what's seemingly playing out right now. We still 215 00:11:09,520 --> 00:11:11,800 Speaker 7: hold it as a neutral in our view for the year. 216 00:11:12,640 --> 00:11:15,280 Speaker 7: So I do think there's going to be some opportunity 217 00:11:15,400 --> 00:11:18,319 Speaker 7: opportunities with in tech, but it's not necessarily going to 218 00:11:18,320 --> 00:11:20,720 Speaker 7: be the stalwart driver of the overall market. 219 00:11:21,000 --> 00:11:23,680 Speaker 6: So we saw a rotation a lot of folks will say, 220 00:11:23,760 --> 00:11:26,360 Speaker 6: kind of beginning early November, we saw rotation from some 221 00:11:26,440 --> 00:11:28,520 Speaker 6: of the tech to some other areas of the market, 222 00:11:28,640 --> 00:11:32,240 Speaker 6: some maybe some more value oriented sectors industrials and consumer 223 00:11:32,280 --> 00:11:34,040 Speaker 6: stables and maybe even small and mid caps. 224 00:11:34,840 --> 00:11:36,439 Speaker 5: Is that a thing for twenty six? 225 00:11:36,559 --> 00:11:38,600 Speaker 7: You know, I think I would push back on that 226 00:11:38,640 --> 00:11:41,880 Speaker 7: a bit. You know, we again this idea of breath. 227 00:11:41,960 --> 00:11:44,079 Speaker 7: What we had coming into this year was kind of 228 00:11:44,120 --> 00:11:46,760 Speaker 7: a more and more consensus idea of breadth within the 229 00:11:46,800 --> 00:11:49,240 Speaker 7: market as a whole. But we really saw that being 230 00:11:49,320 --> 00:11:54,200 Speaker 7: led by IWN, by small caps, by speculative growth. So 231 00:11:54,280 --> 00:11:58,160 Speaker 7: it wasn't necessarily pure value or the quality group that 232 00:11:58,200 --> 00:12:01,560 Speaker 7: we had expected this year. You know, I think the 233 00:12:01,600 --> 00:12:04,360 Speaker 7: market got a bit ahead of its skis. From that perspective, 234 00:12:04,880 --> 00:12:07,560 Speaker 7: we are kind of now starting to see that quality rotation. 235 00:12:07,640 --> 00:12:11,400 Speaker 7: Quality improved yesterday. Value has clearly done very well, and 236 00:12:11,440 --> 00:12:13,040 Speaker 7: we're seeing that speculative side come in. 237 00:12:13,200 --> 00:12:15,560 Speaker 2: Sean Seimers as we continue. We welcome all of you 238 00:12:15,640 --> 00:12:20,120 Speaker 2: across the nation. Is good football that weekend? So Duke 239 00:12:20,240 --> 00:12:21,680 Speaker 2: unc when is it Saturday? 240 00:12:21,800 --> 00:12:24,320 Speaker 5: Saturday? Are you going to I had a lot of 241 00:12:24,320 --> 00:12:26,720 Speaker 5: offers to go, but no, it's okay. 242 00:12:26,960 --> 00:12:28,719 Speaker 6: It might be you know, they're thinking about closing down 243 00:12:28,760 --> 00:12:31,680 Speaker 6: the Dean Dome and moving the basketball court somewhere different 244 00:12:31,720 --> 00:12:32,280 Speaker 6: than chopoil. 245 00:12:32,640 --> 00:12:34,040 Speaker 5: Big issue in chap oil. 246 00:12:34,400 --> 00:12:36,800 Speaker 2: Well, we'll discuss it. Come look for that, folks in 247 00:12:36,840 --> 00:12:39,480 Speaker 2: the nine o'clock hour this morning. We welcome all of 248 00:12:39,520 --> 00:12:42,400 Speaker 2: you on YouTube and of course subscribe to Bloomberg Podcast 249 00:12:42,559 --> 00:12:48,360 Speaker 2: program announcement Bloomberg finally coalescing all of our video platform together. 250 00:12:48,760 --> 00:12:52,000 Speaker 2: Look at that at the hub at Bloomberg dot com. 251 00:12:52,040 --> 00:12:56,840 Speaker 2: Sean you mentioned value. Okay, nobody out there, including Alexis Christopherus, 252 00:12:56,920 --> 00:13:01,040 Speaker 2: knows that John Deere has popped a twenty two point 253 00:13:01,120 --> 00:13:04,640 Speaker 2: nine percent per year return for the last ten years. 254 00:13:04,840 --> 00:13:08,560 Speaker 2: Have we been a sleep that boring? As Gartman would say, 255 00:13:08,600 --> 00:13:12,119 Speaker 2: things that fall on your feet are doing Apple like returns. 256 00:13:12,880 --> 00:13:15,160 Speaker 7: I think there is part of that lack of awareness, 257 00:13:15,640 --> 00:13:17,920 Speaker 7: and that's part of the thesis from Breadth right. If 258 00:13:17,960 --> 00:13:20,800 Speaker 7: we don't have these kind of highlight tech names driving 259 00:13:20,800 --> 00:13:23,520 Speaker 7: the overall market, and we are starting to see some 260 00:13:23,679 --> 00:13:27,520 Speaker 7: improvement for those names from a fundamental standpoint, that's going 261 00:13:27,520 --> 00:13:29,840 Speaker 7: to lead to some more improvement. We have a neutral 262 00:13:29,840 --> 00:13:33,280 Speaker 7: positive on materials industrials for that. I think there is 263 00:13:33,320 --> 00:13:35,319 Speaker 7: a bit of the bleed of just the overall AI 264 00:13:35,440 --> 00:13:38,800 Speaker 7: narrative in some of these spaces, you know, utilities under 265 00:13:38,800 --> 00:13:41,960 Speaker 7: performance right now is something that we would flag there 266 00:13:41,960 --> 00:13:43,680 Speaker 7: where we think that is a bit of the AI 267 00:13:44,040 --> 00:13:46,800 Speaker 7: kind of exposure that utilities have. In that general thought, 268 00:13:46,920 --> 00:13:49,960 Speaker 7: even though those fundamentals still appear quite attractive. 269 00:13:50,640 --> 00:13:52,960 Speaker 6: We're I guess, a little more than halfway through earnings 270 00:13:53,080 --> 00:13:55,360 Speaker 6: season here, almost sixty percent of the way through the 271 00:13:55,440 --> 00:13:59,079 Speaker 6: S and P five hundred, some pretty solid earnings this quarter, 272 00:13:59,200 --> 00:14:00,200 Speaker 6: which support. 273 00:13:59,880 --> 00:14:02,199 Speaker 5: What we saw in twenty twenty five. Is it enough 274 00:14:02,240 --> 00:14:03,560 Speaker 5: to support this market going forward? 275 00:14:04,200 --> 00:14:05,120 Speaker 2: I think so. 276 00:14:05,240 --> 00:14:07,760 Speaker 7: I think one of the interesting things from a performance 277 00:14:07,760 --> 00:14:10,160 Speaker 7: perspective on the back of reporting, there's kind of two 278 00:14:10,240 --> 00:14:14,000 Speaker 7: key areas that I'm watching right now. One, falling margins 279 00:14:14,080 --> 00:14:16,040 Speaker 7: or those margins that have been hurt have been the 280 00:14:16,360 --> 00:14:19,200 Speaker 7: kind of pocket of results that are getting most penalized, 281 00:14:19,840 --> 00:14:22,400 Speaker 7: so that kind of supports the overall quality idea through 282 00:14:22,440 --> 00:14:26,200 Speaker 7: this year. The second is, you know, aside from consumer 283 00:14:26,320 --> 00:14:31,720 Speaker 7: staples and industrials and one other, the median stock in 284 00:14:31,800 --> 00:14:35,120 Speaker 7: all of these sectors is outperforming the aggregate or the 285 00:14:35,400 --> 00:14:38,760 Speaker 7: you know, the whole average, which is pretty interesting, and 286 00:14:38,800 --> 00:14:41,640 Speaker 7: again that earning's breadth idea. 287 00:14:41,880 --> 00:14:44,480 Speaker 6: What's screening well for you guys these days, is are 288 00:14:44,560 --> 00:14:47,800 Speaker 6: certain industry sectors there a certain factor out there that 289 00:14:47,840 --> 00:14:48,800 Speaker 6: you guys are focusing on. 290 00:14:48,960 --> 00:14:50,920 Speaker 7: Yeah, I mean, I mean it sounds like a broken record. 291 00:14:50,920 --> 00:14:54,640 Speaker 7: We're still focused on that quality area. You know, we 292 00:14:54,680 --> 00:14:57,720 Speaker 7: want to be away from kind of more speculative growers. 293 00:14:58,760 --> 00:15:01,840 Speaker 7: We want to be looking at equal weight in disease, 294 00:15:02,560 --> 00:15:06,160 Speaker 7: especially kind of those larger cap And I would say 295 00:15:06,200 --> 00:15:08,440 Speaker 7: just kind of overall, you know, we do have a 296 00:15:08,480 --> 00:15:11,800 Speaker 7: bias towards industrials versus kind of the overall consumer landscape. 297 00:15:11,840 --> 00:15:12,520 Speaker 2: Can I go NERD? 298 00:15:12,800 --> 00:15:13,600 Speaker 5: Yeah, definitely. 299 00:15:13,640 --> 00:15:17,320 Speaker 2: Okay, Now seeing telab would talk about tail distributions and 300 00:15:18,000 --> 00:15:21,280 Speaker 2: and the rest of it. What is the shadow out 301 00:15:21,320 --> 00:15:23,800 Speaker 2: there you see? Is it a margin build up? Is 302 00:15:23,840 --> 00:15:26,600 Speaker 2: it a leverage build up? Is if you look at 303 00:15:27,000 --> 00:15:31,040 Speaker 2: all the sleepiness of a Gaussian belt curve distribution and 304 00:15:31,080 --> 00:15:34,600 Speaker 2: you and I know that's not reality when you look 305 00:15:34,640 --> 00:15:38,160 Speaker 2: at the quant reality. What's your number one worry right now? 306 00:15:39,040 --> 00:15:41,480 Speaker 7: I you know, there's a lot of discussion at the 307 00:15:41,560 --> 00:15:44,320 Speaker 7: end of last year about the cockroaches in high yield. 308 00:15:45,000 --> 00:15:49,280 Speaker 7: I'm not the credit strategist, but I know Matt Mish 309 00:15:49,320 --> 00:15:51,320 Speaker 7: has put out some great work in that front. 310 00:15:51,400 --> 00:15:53,280 Speaker 2: He's got a little experience, it's got a. 311 00:15:53,280 --> 00:15:56,800 Speaker 7: Little experience, and I would you know, I would lean 312 00:15:56,880 --> 00:15:59,920 Speaker 7: that direction. One of my key models kind of uses 313 00:16:00,480 --> 00:16:03,880 Speaker 7: high yield spreads as an input. That has been a 314 00:16:04,000 --> 00:16:06,720 Speaker 7: very positive sport for the equities markets over the past 315 00:16:06,960 --> 00:16:09,040 Speaker 7: few years and always kind of when we see that 316 00:16:09,160 --> 00:16:10,960 Speaker 7: rattle that that normally. 317 00:16:11,200 --> 00:16:14,640 Speaker 2: So how do you handle the fact is our four 318 00:16:14,680 --> 00:16:18,920 Speaker 2: ohe case are grossly non diversified compared to any sense 319 00:16:18,960 --> 00:16:20,720 Speaker 2: of a recent nineteen seventy four. 320 00:16:21,360 --> 00:16:24,280 Speaker 7: Yeah, I think there's kind of two sides to that. 321 00:16:24,360 --> 00:16:28,240 Speaker 7: One is that has been very supportive of equity valuations 322 00:16:28,680 --> 00:16:31,000 Speaker 7: over the past number of years, right kind of price 323 00:16:31,040 --> 00:16:35,160 Speaker 7: ins and discriminate flows just into equity buckets and equity 324 00:16:35,160 --> 00:16:38,960 Speaker 7: indices has been supportive of, you know, higher valuations over 325 00:16:39,000 --> 00:16:42,200 Speaker 7: the past couple of years. From the other side, you know, 326 00:16:42,360 --> 00:16:46,200 Speaker 7: that's if you have options, you can always take a 327 00:16:46,200 --> 00:16:48,000 Speaker 7: look at them. If not, you know, always talk to 328 00:16:48,040 --> 00:16:48,960 Speaker 7: a financial advisor. 329 00:16:49,760 --> 00:16:51,920 Speaker 5: Valuation a couple of ways to look at it. You 330 00:16:51,920 --> 00:16:52,600 Speaker 5: just look at the SMP. 331 00:16:52,920 --> 00:16:56,080 Speaker 6: You could argue that it's expensive you strip out some 332 00:16:56,120 --> 00:16:58,160 Speaker 6: of the big camp names, maybe less So. 333 00:16:58,160 --> 00:16:59,960 Speaker 5: How do you guys think about just the market valuation. 334 00:17:00,160 --> 00:17:03,000 Speaker 7: I'll say we do break out kind of the tech 335 00:17:03,000 --> 00:17:05,600 Speaker 7: plus code, where from the rest of the S and 336 00:17:05,600 --> 00:17:10,080 Speaker 7: B five hundred it still does appear a bit expensive. However, 337 00:17:10,119 --> 00:17:12,879 Speaker 7: you know, when we're talking about those pricing discriment flows, 338 00:17:12,920 --> 00:17:17,040 Speaker 7: when you have this constant bid to equities overall, that's 339 00:17:17,119 --> 00:17:19,919 Speaker 7: going to drive a higher evaluation. So it really is 340 00:17:19,960 --> 00:17:23,880 Speaker 7: going to become a flows dynamic supportive of margins. If 341 00:17:23,880 --> 00:17:26,160 Speaker 7: we can see the consensus margin growth over the next 342 00:17:26,200 --> 00:17:27,200 Speaker 7: couple of years, should. 343 00:17:27,000 --> 00:17:29,000 Speaker 2: We get them in trouble with ubs complainants? Oh yeah, 344 00:17:29,040 --> 00:17:32,119 Speaker 2: it's Friday. Let's do that. Sean Simons with the Union 345 00:17:32,160 --> 00:17:35,160 Speaker 2: Bank of Switzerland. The best research I know on bitcoin 346 00:17:35,280 --> 00:17:39,000 Speaker 2: is a bank of International Settlements in Geneva. Sean Simon's 347 00:17:39,040 --> 00:17:42,160 Speaker 2: on bitcoin. You're young enough this weekend, Alexis. Come on. 348 00:17:42,320 --> 00:17:45,320 Speaker 2: Sean's going to be in a bar somewhere downtown where 349 00:17:45,359 --> 00:17:48,000 Speaker 2: I never go, and fourteen kids are going to lean 350 00:17:48,040 --> 00:17:50,840 Speaker 2: forward and say, hey, brain, o bitcoin, what do you 351 00:17:50,920 --> 00:17:51,439 Speaker 2: think go. 352 00:17:51,960 --> 00:17:53,480 Speaker 7: I'm a pass fan. I'm gonna be sitting on my 353 00:17:53,520 --> 00:17:57,440 Speaker 7: couch on Sunday. I want to be very clear about that. Yeah, 354 00:17:58,000 --> 00:17:59,880 Speaker 7: you know, one of the things when we see risk 355 00:18:00,520 --> 00:18:02,320 Speaker 7: and you can talk about Bitcoin, you can talk about 356 00:18:02,359 --> 00:18:04,040 Speaker 7: what silver has done, you can talk about any of 357 00:18:04,080 --> 00:18:08,719 Speaker 7: the speculative growers where retail participation has been. You know, 358 00:18:08,960 --> 00:18:12,199 Speaker 7: there is a fear right when when your personal value 359 00:18:12,240 --> 00:18:15,239 Speaker 7: has moved that lower. You know, if we see a 360 00:18:15,440 --> 00:18:20,520 Speaker 7: reduced retail bid into equities, that is a low dynamic 361 00:18:20,560 --> 00:18:22,399 Speaker 7: that has been kind of a stalwart in the market 362 00:18:22,400 --> 00:18:24,679 Speaker 7: over the past number of years, and that could be 363 00:18:24,720 --> 00:18:27,600 Speaker 7: a shift. You know, if there's not that by the 364 00:18:27,640 --> 00:18:32,040 Speaker 7: dip mentality from retail institutions having to sell or reposition 365 00:18:32,640 --> 00:18:35,600 Speaker 7: causes some of the large moves that we've seen and 366 00:18:35,800 --> 00:18:37,159 Speaker 7: kind of have used to not seeing. 367 00:18:37,240 --> 00:18:39,480 Speaker 2: And there's the key phrase, folks having to sell. Selz 368 00:18:39,520 --> 00:18:43,040 Speaker 2: Simon's thank you so much equity where in quantit ubs 369 00:18:44,800 --> 00:18:49,000 Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this. 370 00:18:56,240 --> 00:18:59,800 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 371 00:19:00,160 --> 00:19:03,440 Speaker 1: day afternoons from seven to ten am Eastern Listen on Apple, 372 00:19:03,480 --> 00:19:06,800 Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or 373 00:19:06,960 --> 00:19:08,680 Speaker 1: watch us live on YouTube. 374 00:19:09,000 --> 00:19:11,359 Speaker 2: It is a perfect time to talk to the gentle 375 00:19:11,440 --> 00:19:15,440 Speaker 2: lady from Texas Danielle di Martino Booth is definitive feeder 376 00:19:15,480 --> 00:19:19,400 Speaker 2: Reserve Bank Texas, working for President Fisher years ago over 377 00:19:19,480 --> 00:19:23,120 Speaker 2: their academics out of the different universities of Texas, She's 378 00:19:23,240 --> 00:19:26,440 Speaker 2: always taken a different tact and I wanted to get 379 00:19:26,480 --> 00:19:30,399 Speaker 2: her on for one simple reason. Danielle, how will Chairman 380 00:19:30,520 --> 00:19:36,280 Speaker 2: worsh be greeted by the presidents not only Boston, Chicago, 381 00:19:36,680 --> 00:19:41,600 Speaker 2: New York, but the fractious crew of Kansas City and Dallas. 382 00:19:43,320 --> 00:19:45,080 Speaker 8: Well, first of all, thank you for having me on 383 00:19:45,119 --> 00:19:48,320 Speaker 8: this morning, Tom, And that's a really good question. We 384 00:19:48,440 --> 00:19:52,320 Speaker 8: have seen a much more hawkish tilt come out of 385 00:19:52,359 --> 00:19:57,320 Speaker 8: the Central Bank district presidents. Lori Logan Bloomberg did a 386 00:19:57,359 --> 00:19:59,560 Speaker 8: great feature on her recently. She's kind of got her 387 00:19:59,560 --> 00:20:02,000 Speaker 8: own mark. It's deest that I started in Dallas. She 388 00:20:02,160 --> 00:20:04,000 Speaker 8: keeps that up and running and she has some very 389 00:20:04,040 --> 00:20:07,240 Speaker 8: definitive ideas about the balance sheet. I think she would 390 00:20:07,240 --> 00:20:11,399 Speaker 8: be of the same mind as a future chairsh We 391 00:20:11,440 --> 00:20:14,119 Speaker 8: need to shrink that balance r right. I think that 392 00:20:14,160 --> 00:20:16,920 Speaker 8: most districts presidents would concur with that. 393 00:20:17,600 --> 00:20:20,360 Speaker 4: The trick will be execution, Tom, you know. 394 00:20:20,400 --> 00:20:22,359 Speaker 2: It's going to be execution. But folks, this is great 395 00:20:22,400 --> 00:20:24,560 Speaker 2: because you know, Paul, we get people on from London. 396 00:20:24,720 --> 00:20:27,520 Speaker 2: Bank of England comes out five to four vote and 397 00:20:27,560 --> 00:20:31,040 Speaker 2: everybody's like, well, well, well, Daniel Di Martino Booth is 398 00:20:31,040 --> 00:20:33,800 Speaker 2: not well, well well, Daniel, are we going to see 399 00:20:33,840 --> 00:20:37,520 Speaker 2: five to four votes? Like the Supreme Court with Chairman. 400 00:20:37,240 --> 00:20:41,880 Speaker 8: Warsh It's entirely feasible. And again it's going to depend 401 00:20:41,960 --> 00:20:44,399 Speaker 8: on where he wants to go with the balance sheet. 402 00:20:44,520 --> 00:20:47,879 Speaker 8: But you know, I'll be keen to listen to Christopher Waller, 403 00:20:47,920 --> 00:20:51,360 Speaker 8: he's speaking on Monday. I think he should be doing 404 00:20:51,359 --> 00:20:53,920 Speaker 8: a victory lab given some of the alternative labor market 405 00:20:54,000 --> 00:20:56,719 Speaker 8: data that we've had over the last few days, and 406 00:20:57,920 --> 00:21:00,600 Speaker 8: I think that there'll be initial concurrence that the Fed 407 00:21:00,680 --> 00:21:03,640 Speaker 8: needs to play catch up and do an unusually large 408 00:21:03,960 --> 00:21:07,600 Speaker 8: rate cut, maybe go fifty bases points in June. 409 00:21:07,760 --> 00:21:10,680 Speaker 2: Oh, listen to you. Wait, wait, that's the first we've 410 00:21:10,720 --> 00:21:12,960 Speaker 2: heard of this. Come on, we've got a chicken, wings 411 00:21:12,960 --> 00:21:15,000 Speaker 2: of blue cheese here getting ready for the Super Bowl. 412 00:21:15,200 --> 00:21:18,080 Speaker 2: Are you modeling, Danielle, a fifty beep. 413 00:21:17,960 --> 00:21:19,840 Speaker 5: Cut in June? 414 00:21:19,920 --> 00:21:22,800 Speaker 8: Oh, certainly, I am. And you saw yesterday when financial 415 00:21:22,840 --> 00:21:27,560 Speaker 8: conditions and volatility became really acute that the work function 416 00:21:27,640 --> 00:21:29,399 Speaker 8: on the terminal showed you that we'd gotten all the 417 00:21:29,440 --> 00:21:32,520 Speaker 8: way up to twenty seven percent probability of a March 418 00:21:32,720 --> 00:21:35,640 Speaker 8: rate cut. So a lot's going to depend on non 419 00:21:35,680 --> 00:21:40,679 Speaker 8: farm payrolls Wednesday and CPI next Friday. A lot's going 420 00:21:40,720 --> 00:21:43,600 Speaker 8: to depend on the upcoming data that we've got coming out. 421 00:21:43,640 --> 00:21:46,320 Speaker 8: We've also got a second non farm payroll report before 422 00:21:46,359 --> 00:21:48,720 Speaker 8: the Fed meets again March eighteenth. 423 00:21:48,760 --> 00:21:50,400 Speaker 5: And add a little bit of extra. 424 00:21:50,160 --> 00:21:52,160 Speaker 4: Spice to your chicken wings. 425 00:21:52,760 --> 00:21:55,840 Speaker 8: How she still has a sixty nine percent probability that 426 00:21:56,119 --> 00:22:00,400 Speaker 8: Powell's going to leave after his chair term ends in May, 427 00:22:00,800 --> 00:22:02,680 Speaker 8: but that the flip side is that there's a thirty 428 00:22:02,680 --> 00:22:05,359 Speaker 8: one percent chance that he'll stay. We don't know, and 429 00:22:05,440 --> 00:22:08,920 Speaker 8: Powell does not have a scheduled speech until that March. 430 00:22:09,040 --> 00:22:12,080 Speaker 6: Fmc danielle again, Today was supposed to be jobs Day, 431 00:22:12,240 --> 00:22:15,520 Speaker 6: but it's not. But we yesterday we got Challenger job 432 00:22:15,560 --> 00:22:18,280 Speaker 6: cuts largest since I think two thousand and nine, we 433 00:22:18,359 --> 00:22:20,760 Speaker 6: got initial jobs claims came in higher than expected. 434 00:22:21,520 --> 00:22:23,480 Speaker 5: Do you read anything to that data, because. 435 00:22:23,280 --> 00:22:25,600 Speaker 6: That would suggest that maybe this labor market perhaps is 436 00:22:25,600 --> 00:22:26,600 Speaker 6: even weaker than we think. 437 00:22:28,400 --> 00:22:31,119 Speaker 8: I think that there are definite warning signs there was 438 00:22:31,160 --> 00:22:34,200 Speaker 8: a lot of nay saying yesterday that it was concentrated 439 00:22:34,240 --> 00:22:36,640 Speaker 8: in three companies, But even if you netit those three 440 00:22:36,640 --> 00:22:39,280 Speaker 8: companies out of the Challenger data, we still had a 441 00:22:39,359 --> 00:22:42,960 Speaker 8: higher number than we had last January, on top of 442 00:22:43,000 --> 00:22:47,040 Speaker 8: the lowest January for hiring in data to two thousand 443 00:22:47,080 --> 00:22:49,600 Speaker 8: and nine. And if you look at the not statistically 444 00:22:49,640 --> 00:22:53,800 Speaker 8: adjusted initial claims that hopefully weed out a lot of 445 00:22:53,800 --> 00:22:57,120 Speaker 8: the weather effect, they were also up appreciably on the week. 446 00:22:57,200 --> 00:23:00,240 Speaker 8: So we'll see continuing pop up in the following week 447 00:23:00,600 --> 00:23:02,439 Speaker 8: and let's see what the survey week. 448 00:23:02,320 --> 00:23:03,800 Speaker 5: Holds to come. 449 00:23:03,800 --> 00:23:07,840 Speaker 8: But companies are definitely more aggressive with the earnings calls. 450 00:23:08,119 --> 00:23:09,920 Speaker 8: You know, if they feel like they're going to miss 451 00:23:09,920 --> 00:23:12,560 Speaker 8: in any aspect of that earnings calls, boy they're going 452 00:23:12,600 --> 00:23:14,919 Speaker 8: to have a layoff announcement that accompanies it. 453 00:23:15,600 --> 00:23:18,680 Speaker 6: Interesting, does mister Walsh how does he think about the data? 454 00:23:18,720 --> 00:23:20,440 Speaker 6: Do you think, I mean one of the concerns that 455 00:23:20,480 --> 00:23:22,640 Speaker 6: you've voiced and many others in voice that that way 456 00:23:22,720 --> 00:23:25,240 Speaker 6: this fed is, yes, it's data dependent, but the data 457 00:23:25,240 --> 00:23:28,719 Speaker 6: that it's dependent upon is really old and backwards looking. 458 00:23:28,960 --> 00:23:31,359 Speaker 6: Is mister Warsh does he have a different view about that? 459 00:23:32,320 --> 00:23:32,520 Speaker 2: Well? 460 00:23:32,520 --> 00:23:34,439 Speaker 8: We have to remember that when mister Walsh came on 461 00:23:34,920 --> 00:23:37,240 Speaker 8: initially as a governor, he was the youngest governor in 462 00:23:37,280 --> 00:23:40,359 Speaker 8: the history of the FED. So he remains something of 463 00:23:40,880 --> 00:23:44,600 Speaker 8: a younger, certainly a young chair compared to what we've 464 00:23:44,600 --> 00:23:45,520 Speaker 8: grown accustomed to. 465 00:23:46,040 --> 00:23:48,160 Speaker 4: I say this because he's. 466 00:23:47,960 --> 00:23:50,280 Speaker 8: Going to be more open to alternative data sets, and 467 00:23:50,320 --> 00:23:52,399 Speaker 8: the same way that Christopher Waller has been more open 468 00:23:52,600 --> 00:23:55,399 Speaker 8: to alternative data sets. He's going to pay attention to 469 00:23:55,400 --> 00:24:00,119 Speaker 8: the private core in payrolls, which nets out education and healthcare, 470 00:24:00,280 --> 00:24:03,080 Speaker 8: to see what the real underlying momentum is in the 471 00:24:03,200 --> 00:24:07,280 Speaker 8: labor market when you net out those recession proof industries that, 472 00:24:07,359 --> 00:24:10,720 Speaker 8: by the way, completely carried ADP yesterday. Had it not 473 00:24:10,840 --> 00:24:13,680 Speaker 8: been for that, we'd have had a negative, a much 474 00:24:13,720 --> 00:24:16,359 Speaker 8: deeper print. Sorry on Tuesday, Yeah. 475 00:24:16,160 --> 00:24:18,000 Speaker 2: We'll have to see on that. We'll get to Wednesday. 476 00:24:18,000 --> 00:24:19,800 Speaker 2: We'll see when you got a slot for you for 477 00:24:19,880 --> 00:24:22,760 Speaker 2: the Jobs Day and Wednesday. Daniel Di Martino Booth writing 478 00:24:22,800 --> 00:24:25,080 Speaker 2: up a storm. Thank you, Thank you so much for that. 479 00:24:27,080 --> 00:24:31,280 Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this. 480 00:24:38,520 --> 00:24:42,120 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 481 00:24:42,200 --> 00:24:45,320 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 482 00:24:45,440 --> 00:24:49,080 Speaker 1: Applecarplay and Android Atto with the Bloomberg Business app, or 483 00:24:49,240 --> 00:24:50,720 Speaker 1: watch us live on YouTube. 484 00:24:51,040 --> 00:24:54,200 Speaker 2: It's Jobs Day, but it's not. We decided to keep 485 00:24:54,280 --> 00:24:57,560 Speaker 2: our stellar lineup of Jobs Day on a regular Friday. 486 00:24:57,600 --> 00:25:00,679 Speaker 2: Oldrag Pria miserback here on Wednesday. I believe when we 487 00:25:00,720 --> 00:25:03,360 Speaker 2: get the work. She's with JP Morgan, who we're thrilled 488 00:25:03,400 --> 00:25:08,840 Speaker 2: she joined us this morning. Holistic question to Ferole's Weekly 489 00:25:08,960 --> 00:25:14,680 Speaker 2: Prospects tonight at seven pm, is this a wash affected market? 490 00:25:15,000 --> 00:25:17,800 Speaker 2: From where you sit in the turret at JP Morgan? 491 00:25:18,440 --> 00:25:21,760 Speaker 9: Great question because we've only heard about the wash nomination 492 00:25:21,920 --> 00:25:24,360 Speaker 9: just a week ago and the market's been extremely volatile. 493 00:25:24,800 --> 00:25:24,960 Speaker 10: You know. 494 00:25:25,040 --> 00:25:27,360 Speaker 9: I think there was some knee jerk reaction. I mean, 495 00:25:27,359 --> 00:25:30,400 Speaker 9: he's highly qualified, but it is a committee he's going 496 00:25:30,480 --> 00:25:32,879 Speaker 9: to he's been very critical about FED policy for the 497 00:25:32,960 --> 00:25:36,040 Speaker 9: last fifteen years. He's going to have to build consensus. 498 00:25:36,320 --> 00:25:39,640 Speaker 9: So did we change portfolio positioning because of Wash? 499 00:25:39,760 --> 00:25:44,119 Speaker 11: No, we are going to the data rush affected market. 500 00:25:44,520 --> 00:25:47,400 Speaker 2: I think that is it's a world turned upside down. 501 00:25:47,240 --> 00:25:48,520 Speaker 11: For a lot of people, right. 502 00:25:48,560 --> 00:25:51,080 Speaker 9: I think the market, at least on Friday looked at 503 00:25:51,119 --> 00:25:53,360 Speaker 9: the front end and said, oh, Wash might be more 504 00:25:53,400 --> 00:25:55,600 Speaker 9: open to cutting rates because he's in the supply side 505 00:25:55,640 --> 00:25:58,800 Speaker 9: pickup in productivity. The long end got a little nervous, 506 00:25:58,920 --> 00:26:01,679 Speaker 9: and that I would only pushed back against. I know 507 00:26:01,720 --> 00:26:04,479 Speaker 9: he's been critical of the balance sheet expansion and QE 508 00:26:04,480 --> 00:26:06,679 Speaker 9: by the Fed, but a lot of that QI is 509 00:26:06,720 --> 00:26:08,920 Speaker 9: to provide reserves to the banking system and the FED 510 00:26:09,040 --> 00:26:09,760 Speaker 9: understands it. 511 00:26:10,160 --> 00:26:12,240 Speaker 11: I think when if Wash comes in, he's. 512 00:26:12,080 --> 00:26:15,159 Speaker 9: Going to look at the analysis and actually not be 513 00:26:15,200 --> 00:26:17,000 Speaker 9: able to cut the balance sheet. I don't think he 514 00:26:17,080 --> 00:26:19,360 Speaker 9: has votes on the committee. So if the market got 515 00:26:19,359 --> 00:26:22,320 Speaker 9: nervous about the unwind of the FED balance sheet, I 516 00:26:22,320 --> 00:26:25,040 Speaker 9: think that we can fade. There are other issues this week. 517 00:26:25,119 --> 00:26:27,520 Speaker 9: Is the AI capex too much, which last year everyone 518 00:26:27,560 --> 00:26:29,840 Speaker 9: wanted AI capex and now they're saying this might be 519 00:26:29,880 --> 00:26:32,400 Speaker 9: too much of a good thing. And then is their 520 00:26:32,400 --> 00:26:34,439 Speaker 9: displacement in the software sector. 521 00:26:34,480 --> 00:26:37,480 Speaker 11: So I think the fears have morphed. We've dealt with 522 00:26:37,560 --> 00:26:38,080 Speaker 11: a lot this. 523 00:26:38,160 --> 00:26:41,640 Speaker 6: Year, and just in the equity markets concerned about the capex. 524 00:26:41,680 --> 00:26:44,080 Speaker 6: As you mentioned, we had Rob Schiffman in yesterday. He 525 00:26:44,080 --> 00:26:46,840 Speaker 6: covers the TMT space off from a credit perspective. For 526 00:26:47,000 --> 00:26:50,960 Speaker 6: Bloomberg Intelligence. He says, the bond market's fine with this capex, 527 00:26:51,000 --> 00:26:54,040 Speaker 6: and the bond market's taken all the paper that's coming 528 00:26:54,080 --> 00:26:56,680 Speaker 6: at that spreads remain tight on all these deals. So 529 00:26:56,720 --> 00:26:59,680 Speaker 6: the bond markets saying we're okay with this capex, but 530 00:26:59,720 --> 00:27:01,359 Speaker 6: the markets not so sure. 531 00:27:01,560 --> 00:27:03,800 Speaker 9: Right, So I think a lot will depend if it's 532 00:27:03,800 --> 00:27:06,480 Speaker 9: six hundred and fifty billion, how much is financed in 533 00:27:06,520 --> 00:27:07,240 Speaker 9: the bond market. 534 00:27:07,440 --> 00:27:08,560 Speaker 11: We saw this with Oracle. 535 00:27:08,960 --> 00:27:11,359 Speaker 9: They actually came in with much lower than that fifty 536 00:27:11,359 --> 00:27:14,480 Speaker 9: billion number, and the books were very well subscribed. But 537 00:27:14,560 --> 00:27:17,400 Speaker 9: I'm glad you talk about with credit spreads are looking 538 00:27:17,480 --> 00:27:20,440 Speaker 9: at fundamentals. The fundamentals of the companies that are doing 539 00:27:20,480 --> 00:27:24,240 Speaker 9: the AI capex are very solid, all those software companies 540 00:27:24,240 --> 00:27:27,520 Speaker 9: which were all the news this week. You look at 541 00:27:27,520 --> 00:27:30,840 Speaker 9: the high level of subscriptions, high margins. But I think 542 00:27:30,840 --> 00:27:34,920 Speaker 9: the question is how much of displacemental versus disruption is 543 00:27:34,960 --> 00:27:37,520 Speaker 9: going to happen with AI. What are their earnings? But 544 00:27:37,600 --> 00:27:41,040 Speaker 9: I think we look at fundamentals of earnings, of leverage ratio, 545 00:27:41,400 --> 00:27:44,200 Speaker 9: and I think that's why these spreads are where they are. 546 00:27:44,440 --> 00:27:47,160 Speaker 9: And I think yesterday showed you that fixed income does 547 00:27:47,280 --> 00:27:50,679 Speaker 9: provide you that ballas to portfolios, and that's why you 548 00:27:50,760 --> 00:27:53,399 Speaker 9: saw rates fall. And so actually, if I want to 549 00:27:53,440 --> 00:27:56,520 Speaker 9: be somewhere which is safer, maybe the bonds of those 550 00:27:56,560 --> 00:27:58,480 Speaker 9: companies might be the safe place. 551 00:27:58,640 --> 00:28:01,600 Speaker 2: Oh, listeners selling bands, She's she's taking a kool aid 552 00:28:01,640 --> 00:28:04,359 Speaker 2: from Bob Michael. There's no question about a priam miser. 553 00:28:04,480 --> 00:28:06,800 Speaker 2: JP Morgan with us the great lineup this morning, and 554 00:28:06,800 --> 00:28:09,919 Speaker 2: we welcome all you ninety nine to one FM snack 555 00:28:10,040 --> 00:28:13,040 Speaker 2: bound Nathan Hager getting ready for the Super Bowl. Good morning, 556 00:28:13,119 --> 00:28:16,600 Speaker 2: ninety to nine FM. If you can focus this morning 557 00:28:16,880 --> 00:28:19,720 Speaker 2: in Bloomberg eleven three zero A, New York, across the nation, 558 00:28:20,000 --> 00:28:23,680 Speaker 2: major major shout out, Serious XM Channel one twenty one 559 00:28:24,000 --> 00:28:27,720 Speaker 2: across Canada and across all of America. We really appreciate 560 00:28:27,800 --> 00:28:30,560 Speaker 2: your support this morning. Let's get back to full faith 561 00:28:30,600 --> 00:28:33,240 Speaker 2: and credit. Priam isra right now. The first thing I 562 00:28:33,280 --> 00:28:35,480 Speaker 2: did this morning, I walked in because you told me 563 00:28:35,520 --> 00:28:38,680 Speaker 2: one day a stupid look at the five years compared 564 00:28:38,720 --> 00:28:42,960 Speaker 2: to the thirty year bond. It's buttressed up against resistance. 565 00:28:43,320 --> 00:28:47,760 Speaker 2: Translated in the question what happens if these spreads break 566 00:28:47,920 --> 00:28:50,520 Speaker 2: out to new steepness? What is that signal? 567 00:28:51,040 --> 00:28:54,440 Speaker 11: The spreads are the credit spreads or the curve the curve? 568 00:28:54,520 --> 00:28:57,240 Speaker 11: Excuse me, So the curve does steep in down. 569 00:28:57,040 --> 00:28:58,400 Speaker 2: You're just going to see minus. 570 00:28:59,240 --> 00:29:02,640 Speaker 9: There a lot of spreads we spend all day looking at. 571 00:29:03,040 --> 00:29:06,560 Speaker 9: If the yield curve steepens a lot, I think you 572 00:29:06,600 --> 00:29:09,560 Speaker 9: should pay attention to that because that's telling you that 573 00:29:09,640 --> 00:29:11,960 Speaker 9: the economy might be slower or weaker. 574 00:29:12,200 --> 00:29:14,640 Speaker 11: We may be transitioning from a low. 575 00:29:14,440 --> 00:29:17,680 Speaker 9: Fire low higher to a high fire low higher. 576 00:29:17,720 --> 00:29:19,920 Speaker 11: And I think without payrolls it's really hard. 577 00:29:19,920 --> 00:29:22,280 Speaker 9: But we did see some data this week that made 578 00:29:22,280 --> 00:29:24,960 Speaker 9: the market a little nervous about the job market. I mean, 579 00:29:24,960 --> 00:29:28,160 Speaker 9: we know there's low hiring. If the firing starts to 580 00:29:28,200 --> 00:29:30,239 Speaker 9: pick up, then the FED is cutting a lot more 581 00:29:30,280 --> 00:29:32,440 Speaker 9: than what is priced. And we're currently only pricing in 582 00:29:32,480 --> 00:29:35,920 Speaker 9: two rate cuts this year, so that front end. If 583 00:29:35,960 --> 00:29:39,680 Speaker 9: the curve steepens, because the front end rates fall, that's 584 00:29:39,720 --> 00:29:42,480 Speaker 9: a sign that the job market is much weaker. 585 00:29:42,560 --> 00:29:43,280 Speaker 11: The FED will. 586 00:29:43,160 --> 00:29:46,320 Speaker 9: Absolutely respond, but I would get more nervous about the economy. 587 00:29:46,400 --> 00:29:48,280 Speaker 2: Well, that's what we're doing. We're just sitting around waiting 588 00:29:48,280 --> 00:29:50,400 Speaker 2: for the labor economy to decide what to do. 589 00:29:50,560 --> 00:29:52,240 Speaker 6: Yeah, and I don't know I mean, there are some 590 00:29:52,440 --> 00:29:55,120 Speaker 6: concerns out there, but boy, the headline numbers still look 591 00:29:55,200 --> 00:29:55,800 Speaker 6: pretty decent. 592 00:29:55,840 --> 00:29:58,160 Speaker 5: Here in the fix the comes space here, I see 593 00:29:58,200 --> 00:29:58,520 Speaker 5: a lot. 594 00:29:58,440 --> 00:30:00,920 Speaker 6: Of green on my screen here in year to performance here, 595 00:30:01,000 --> 00:30:03,560 Speaker 6: following up a strong twenty twenty five. 596 00:30:03,880 --> 00:30:06,440 Speaker 5: Where is value in the credits? How much credit risk 597 00:30:06,520 --> 00:30:06,760 Speaker 5: are you. 598 00:30:06,800 --> 00:30:09,560 Speaker 6: Taking versus just sitting on a two year ten year 599 00:30:09,600 --> 00:30:10,120 Speaker 6: treasury bill. 600 00:30:10,400 --> 00:30:12,560 Speaker 9: So we are taking credit risks because we think the 601 00:30:12,600 --> 00:30:15,400 Speaker 9: economy to your earlier point, there's a lot of cross currents, 602 00:30:15,400 --> 00:30:18,719 Speaker 9: there's always risks, but the economy looks to be in 603 00:30:18,720 --> 00:30:21,320 Speaker 9: a strong position. You look at private sector balance sheets, 604 00:30:21,360 --> 00:30:24,520 Speaker 9: whether it's the consumer side or the corporate side, the 605 00:30:24,600 --> 00:30:28,960 Speaker 9: fundamentals are very strong, and so we like credit risks, diversified, 606 00:30:29,040 --> 00:30:31,800 Speaker 9: high quality. We haven't really gone down to the triple 607 00:30:31,880 --> 00:30:34,200 Speaker 9: C part of the market. Spreads are so tight that 608 00:30:34,240 --> 00:30:37,240 Speaker 9: they're not giving you cushion for if things get worse. 609 00:30:37,480 --> 00:30:40,320 Speaker 9: But I think you know, whether it's investment, great corporate, 610 00:30:40,480 --> 00:30:44,560 Speaker 9: even high quality, high yield is very attractive in our mind, 611 00:30:44,640 --> 00:30:47,400 Speaker 9: double be even some single bee staying away from loans 612 00:30:47,440 --> 00:30:51,200 Speaker 9: given the software exposure. But you know, whether it's securitized credit, 613 00:30:51,400 --> 00:30:54,360 Speaker 9: mortgage spreads. We love that a year ago they've tightened 614 00:30:54,360 --> 00:30:56,560 Speaker 9: a lot. We're not going underweight, but we're not adding 615 00:30:56,560 --> 00:30:58,680 Speaker 9: to mortgages here securitized credit. 616 00:30:58,720 --> 00:30:59,480 Speaker 11: So I think you. 617 00:30:59,440 --> 00:31:03,600 Speaker 9: Shouldn't some diversified, high quality credit. Just buy some treasuries 618 00:31:03,640 --> 00:31:06,240 Speaker 9: as well as a hedge. If the economy is closed. 619 00:31:05,920 --> 00:31:08,280 Speaker 2: Down, unfair, it's off your remit. But I'll go there 620 00:31:08,320 --> 00:31:10,880 Speaker 2: because you're just so damn good at this. The basic 621 00:31:10,960 --> 00:31:15,240 Speaker 2: idea of everyone is oracle did X billions dollars of paper? 622 00:31:15,880 --> 00:31:19,600 Speaker 2: What do you presume after the first, the second, the 623 00:31:19,720 --> 00:31:23,640 Speaker 2: third company puts out billions of dollars of paper? Is 624 00:31:23,680 --> 00:31:26,080 Speaker 2: the market there to pick it up? Or does it 625 00:31:26,160 --> 00:31:28,080 Speaker 2: sit on buy Michael's desk. 626 00:31:29,240 --> 00:31:32,400 Speaker 9: So I think a lot depends on spreads. So if 627 00:31:32,400 --> 00:31:35,120 Speaker 9: there's a lot of supply, we expect spreads to widen, 628 00:31:35,240 --> 00:31:38,400 Speaker 9: and then it might be contractive, you know, given the 629 00:31:38,440 --> 00:31:41,800 Speaker 9: demand and the books the demand in So I think 630 00:31:41,880 --> 00:31:44,640 Speaker 9: we're talking ten to fifteen basis points. But I would 631 00:31:44,720 --> 00:31:47,280 Speaker 9: watch for what are they spending the money on? Are 632 00:31:47,320 --> 00:31:49,280 Speaker 9: they spending it on productive users? I mean, these are 633 00:31:49,280 --> 00:31:51,240 Speaker 9: the big questions. We're going to grapple it with oliar 634 00:31:51,560 --> 00:31:53,680 Speaker 9: and what is the use case you know, is it. 635 00:31:54,640 --> 00:31:56,680 Speaker 9: Are we still waiting for that use case or are 636 00:31:56,720 --> 00:31:59,880 Speaker 9: these companies putting money in and the rest of corporate 637 00:32:00,000 --> 00:32:03,200 Speaker 9: America is using it. I think that's if that happens, 638 00:32:03,480 --> 00:32:05,760 Speaker 9: I don't think you'll see much widening in spreads. 639 00:32:06,200 --> 00:32:07,520 Speaker 11: But I'm hoping that all. 640 00:32:07,440 --> 00:32:10,400 Speaker 9: These CEOs are listening to the discipline of the market, 641 00:32:10,480 --> 00:32:12,240 Speaker 9: so you have to be careful about how you fund 642 00:32:12,640 --> 00:32:17,360 Speaker 9: and where you invest this money. Patriots, I'm a Pats fan, 643 00:32:18,360 --> 00:32:19,480 Speaker 9: but I would. 644 00:32:19,200 --> 00:32:20,880 Speaker 2: Say that apologize here for that. 645 00:32:21,480 --> 00:32:24,320 Speaker 9: They're both great teams. I'll be watching that along with 646 00:32:24,360 --> 00:32:25,520 Speaker 9: the Japanese election, but. 647 00:32:26,520 --> 00:32:28,560 Speaker 2: Hopefully, oh you are kind of halftime. You're not going 648 00:32:28,600 --> 00:32:30,000 Speaker 2: to watch bad but now you're going to look at 649 00:32:30,040 --> 00:32:30,959 Speaker 2: the Japanese election. 650 00:32:31,200 --> 00:32:33,560 Speaker 11: I will be well. Fortunately it's a different time zone, 651 00:32:33,560 --> 00:32:34,040 Speaker 11: so it will. 652 00:32:33,920 --> 00:32:36,280 Speaker 9: Be a long day, but it should be fun and 653 00:32:36,320 --> 00:32:37,680 Speaker 9: hopefully nothing else happens. 654 00:32:37,800 --> 00:32:40,240 Speaker 2: Pre Miser, thank you, thank you so much on this job. 655 00:32:40,320 --> 00:32:44,880 Speaker 2: Say pre miser with us with JP Morgan Asset Management. 656 00:32:46,800 --> 00:32:51,000 Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this. 657 00:32:58,240 --> 00:33:01,840 Speaker 1: You're listening to the bloombergs Lens podcast. Catch us live 658 00:33:01,880 --> 00:33:05,080 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 659 00:33:05,120 --> 00:33:08,800 Speaker 1: Applecarplay and Android Atto with the Bloomberg Business app, or 660 00:33:08,960 --> 00:33:10,400 Speaker 1: watch us live on YouTube. 661 00:33:10,600 --> 00:33:15,120 Speaker 2: Boose favorites Alexis Christophers Here, we're very heavy on artificial intelligence. Today. 662 00:33:15,400 --> 00:33:19,640 Speaker 2: We've covered blue cheese, We've covered chicken wings. Now best 663 00:33:19,720 --> 00:33:25,160 Speaker 2: for wings high heat, the ninja FOOTI air fryer, Alexis 664 00:33:25,240 --> 00:33:27,680 Speaker 2: Christopher says it. Let's to talk about. 665 00:33:27,440 --> 00:33:28,400 Speaker 11: This hard to beat that? 666 00:33:28,520 --> 00:33:30,560 Speaker 10: Now, how do you follow the air friar story? 667 00:33:30,960 --> 00:33:31,840 Speaker 5: I think you do it with this. 668 00:33:31,960 --> 00:33:34,600 Speaker 10: The Washington Post has a story today about the most 669 00:33:34,680 --> 00:33:37,280 Speaker 10: dangerous sport at the Winter Olympics. 670 00:33:37,360 --> 00:33:38,600 Speaker 2: I saw this thing, So what. 671 00:33:38,560 --> 00:33:39,880 Speaker 10: Do you think it might be? 672 00:33:39,960 --> 00:33:40,560 Speaker 2: I was wrong. 673 00:33:40,840 --> 00:33:42,880 Speaker 10: Yeah, it's not what we think because you think it's 674 00:33:42,880 --> 00:33:46,120 Speaker 10: the loge going down this ice track at ninety miles 675 00:33:46,120 --> 00:33:48,880 Speaker 10: an hour on a skinny little you know, sled, or 676 00:33:48,920 --> 00:33:50,920 Speaker 10: maybe it's the skeleton because you're doing that but just 677 00:33:50,960 --> 00:33:53,560 Speaker 10: face down. No, it's not. The Number one most injury 678 00:33:53,560 --> 00:33:57,680 Speaker 10: prone event is ski big air. So this debut the 679 00:33:57,800 --> 00:34:01,240 Speaker 10: last Olympics. They hit a ramp and then perform high 680 00:34:01,280 --> 00:34:05,280 Speaker 10: flying acrobatics. Nearly thirty percent of athletes who do it 681 00:34:05,480 --> 00:34:05,960 Speaker 10: get hurt. 682 00:34:06,080 --> 00:34:09,279 Speaker 6: YEP, I mean these guys are insane much how much 683 00:34:09,320 --> 00:34:10,600 Speaker 6: air they get, It's crazy. 684 00:34:10,880 --> 00:34:12,960 Speaker 5: The tricks they put up there are just incredible. 685 00:34:13,040 --> 00:34:14,880 Speaker 10: Yeah, and Lindsay Vaughn, by the way, we know she 686 00:34:14,920 --> 00:34:17,000 Speaker 10: has that torn acl she's still going to ski because 687 00:34:17,000 --> 00:34:17,479 Speaker 10: she's a beast. 688 00:34:17,560 --> 00:34:20,400 Speaker 6: I saw her workout video yesterday where she's lifting serious 689 00:34:20,440 --> 00:34:22,440 Speaker 6: weight with her knees and stuff. 690 00:34:22,480 --> 00:34:24,879 Speaker 5: So I mean, don't mess with Lindsay. No, she's tough. 691 00:34:24,920 --> 00:34:27,080 Speaker 10: Also, by the way, Team USA can make history at 692 00:34:27,080 --> 00:34:29,560 Speaker 10: these Italian Games. We won ten goals back in two 693 00:34:29,600 --> 00:34:32,480 Speaker 10: thousand and two at the Salt Lay Games. We are 694 00:34:32,560 --> 00:34:36,120 Speaker 10: we are favorite to what take home twelve golds maybe sixteen, 695 00:34:36,120 --> 00:34:37,560 Speaker 10: which would be the all time record. 696 00:34:37,719 --> 00:34:37,959 Speaker 2: Wow. 697 00:34:38,040 --> 00:34:39,839 Speaker 5: All right, I'm excited for these games. 698 00:34:39,880 --> 00:34:40,759 Speaker 10: Opening ceremonies to. 699 00:34:41,840 --> 00:34:45,839 Speaker 2: The opening ceremonies are like one like Sweeney gets off 700 00:34:45,920 --> 00:34:48,520 Speaker 2: the show with Scarlette to watch. 701 00:34:48,480 --> 00:34:50,520 Speaker 5: Sure absolutely, you know you, Paul? 702 00:34:51,000 --> 00:34:51,319 Speaker 2: All right. 703 00:34:51,400 --> 00:34:53,799 Speaker 10: There's an exclusive in the Financial Times this morning, the 704 00:34:53,880 --> 00:34:57,600 Speaker 10: prediction market calshi. We knew it was coming, seeking approval 705 00:34:57,640 --> 00:35:02,360 Speaker 10: to offer margin trades, so you know, I don't know. 706 00:35:02,480 --> 00:35:05,000 Speaker 10: I mean it started out you could bet on the oscars, yep, 707 00:35:05,200 --> 00:35:07,680 Speaker 10: you know, you could bet on other little things. 708 00:35:07,920 --> 00:35:11,000 Speaker 6: Like what's going to sports now that's a big issue, big. 709 00:35:10,800 --> 00:35:14,280 Speaker 10: Issue, and now financial markets. So they're looking to attract 710 00:35:14,280 --> 00:35:16,920 Speaker 10: institutional investors with this. Apparently they met with the Commodity 711 00:35:16,960 --> 00:35:19,560 Speaker 10: Futures Trading Commission. Don't know if they're going to win approval. 712 00:35:20,200 --> 00:35:23,560 Speaker 2: Probably, Well, we got a weekly thing going with Brian 713 00:35:23,640 --> 00:35:27,920 Speaker 2: Eggers Bloomberg Intelligence. Yeah, seriously, for Eggers is encyclopedic on this. 714 00:35:28,440 --> 00:35:29,799 Speaker 2: You know, if we can figure it out with his. 715 00:35:29,840 --> 00:35:33,640 Speaker 6: People, yau got it's impacting the sports even talk to me, 716 00:35:33,719 --> 00:35:34,319 Speaker 6: he's so big. 717 00:35:34,440 --> 00:35:35,320 Speaker 5: Yeah, exactly. 718 00:35:35,440 --> 00:35:37,760 Speaker 10: And now you can you can just bet on the teeniest, 719 00:35:37,800 --> 00:35:39,040 Speaker 10: tiniest thing within. 720 00:35:38,840 --> 00:35:41,319 Speaker 6: A game now that they're starting to regulate that, like 721 00:35:41,360 --> 00:35:43,080 Speaker 6: well he missed this free. 722 00:35:42,880 --> 00:35:44,799 Speaker 2: Throw really in the Super Bowl. 723 00:35:45,160 --> 00:35:48,520 Speaker 6: So now they're not they're getting into that because people 724 00:35:48,520 --> 00:35:51,520 Speaker 6: were actually gaming that situation, like a player would say, oh, 725 00:35:51,560 --> 00:35:52,840 Speaker 6: I see there's a bet for me to miss his 726 00:35:52,880 --> 00:35:53,239 Speaker 6: free throw. 727 00:35:53,280 --> 00:35:55,799 Speaker 5: I'll make the free throw exactly. 728 00:35:55,360 --> 00:35:57,080 Speaker 6: And so they're trying to get away from those in 729 00:35:57,280 --> 00:35:58,439 Speaker 6: game type things. 730 00:35:58,480 --> 00:36:01,120 Speaker 2: So like the betting last night Duke BC, it was 731 00:36:01,160 --> 00:36:03,919 Speaker 2: like his BC to come back and it was in med. Yeah. 732 00:36:04,160 --> 00:36:06,920 Speaker 10: Now it's a tangled web. And so these prediction markets. Now, 733 00:36:06,960 --> 00:36:08,719 Speaker 10: of course, a new way to gamble on the Super Bowl. 734 00:36:08,719 --> 00:36:12,080 Speaker 10: I read this on the terminal Traders on Calshi and Polymarket, 735 00:36:12,120 --> 00:36:14,160 Speaker 10: which is its biggest rival, have swapped more than eight 736 00:36:14,239 --> 00:36:17,040 Speaker 10: hundred million dollars worth of contracts tied to the Super 737 00:36:17,040 --> 00:36:20,480 Speaker 10: Bowl so far. All right, let's see, let's go to 738 00:36:20,520 --> 00:36:23,040 Speaker 10: Hollywood Reporter. They've got this one, and I hope it 739 00:36:23,040 --> 00:36:26,160 Speaker 10: comes true. Can New York stop ticket scalpers from gouging 740 00:36:26,239 --> 00:36:27,080 Speaker 10: concert goers? 741 00:36:27,480 --> 00:36:27,640 Speaker 2: Oh? 742 00:36:27,719 --> 00:36:28,720 Speaker 10: Please make this happen. 743 00:36:28,800 --> 00:36:29,680 Speaker 5: It's so hard to do. 744 00:36:29,880 --> 00:36:31,920 Speaker 10: A New York State centeror today is going to introduce 745 00:36:32,000 --> 00:36:35,560 Speaker 10: legislation that, if passed, would place a cap preventing scalpers 746 00:36:35,560 --> 00:36:38,120 Speaker 10: from reselling tickets for more than their face value. 747 00:36:38,160 --> 00:36:38,640 Speaker 5: How about that? 748 00:36:39,120 --> 00:36:42,680 Speaker 10: So California did a similar thing yesterday. Believe it or not, 749 00:36:42,840 --> 00:36:45,080 Speaker 10: Maine is the only state in the US that has 750 00:36:45,160 --> 00:36:46,840 Speaker 10: managed to implement price caps. 751 00:36:46,640 --> 00:36:48,600 Speaker 5: Okay on ticket resales. 752 00:36:49,160 --> 00:36:53,319 Speaker 6: Yeah, I mean Live Nation owns Ticketmaster, so they they 753 00:36:53,480 --> 00:36:56,640 Speaker 6: betray Muster somehow. Yeah, I was right involved in that deal. 754 00:36:57,280 --> 00:37:01,440 Speaker 6: But it's a surprisingly tofficult to do. With all the 755 00:37:01,480 --> 00:37:05,960 Speaker 6: electronic gadgetry out there, it's tough to really control who 756 00:37:05,960 --> 00:37:07,600 Speaker 6: gets the tickets now they've been trying. 757 00:37:07,719 --> 00:37:10,600 Speaker 10: It's crazy, and critics have said that these resale caps 758 00:37:11,000 --> 00:37:13,040 Speaker 10: stand in the way of a free market, but a 759 00:37:13,080 --> 00:37:15,840 Speaker 10: lot of other people say, listen, this is not property, 760 00:37:16,080 --> 00:37:18,480 Speaker 10: this is our access into a venue, and you know 761 00:37:18,520 --> 00:37:20,799 Speaker 10: we should be able to pay mere value. 762 00:37:21,080 --> 00:37:23,360 Speaker 2: Very good. We love to see Alexis Christopher say you 763 00:37:23,360 --> 00:37:24,480 Speaker 2: so much as the newspapers. 764 00:37:24,640 --> 00:37:29,440 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 765 00:37:29,560 --> 00:37:33,840 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 766 00:37:34,000 --> 00:37:37,200 Speaker 1: seven to ten am Easter and on Bloomberg dot Com, 767 00:37:37,360 --> 00:37:41,160 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 768 00:37:41,480 --> 00:37:44,600 Speaker 1: You can also watch us live every weekday on YouTube 769 00:37:44,880 --> 00:37:46,880 Speaker 1: and always on the Bloomberg terminal.