WEBVTT - Gold Reasserts Lead Over Bitcoin as Top Hedge 0:00:02.759 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Easterned on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business app. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.560 or watch us live on YouTube. 0:00:24.239 --> 0:00:27.440 Bitcoin it gets your attention, folks. It is down another 0:00:27.480 --> 0:00:30.319 one point eight percent today, eighty six thousand dollars. The 0:00:30.440 --> 0:00:32.239 high just you know a month, month and a half 0:00:32.280 --> 0:00:34.600 ago is one hundred and twenty five thousand, so we 0:00:34.680 --> 0:00:38.599 got a north of a thirty percent drawdown in bigcoin. 0:00:39.240 --> 0:00:42.080 It's a commodity to me. I don't know more sellers 0:00:42.080 --> 0:00:45.000 and buyers. Let's chicka with Mike mcloughan. He covers this 0:00:45.000 --> 0:00:48.320 stuff because he's a commodity strategist for Bloomberg Intelligence. 0:00:48.720 --> 0:00:49.880 Mike, you've seen. 0:00:49.600 --> 0:00:52.920 Commodities trade up and down for decades. Here put this 0:00:53.000 --> 0:00:54.760 bitcoin moving context for us. 0:00:55.280 --> 0:00:57.480 Well, Paul, I like the way you started. It's a 0:00:57.520 --> 0:00:59.520 commodity to you, and I used to think that too. 0:00:59.560 --> 0:01:01.920 Now to me actually less of a commodity because in 0:01:01.960 --> 0:01:04.240 all commodities you have an underlying the basis, and you 0:01:04.280 --> 0:01:07.880 have supply and demand fundamentals and Bitcoin there's millions of 0:01:07.880 --> 0:01:10.440 competitors and there's no underlying to it, So I'm worried 0:01:10.480 --> 0:01:13.279 and doesn't have a practical value other than to trade 0:01:13.319 --> 0:01:14.720 and hold value at least gold. 0:01:14.760 --> 0:01:15.919 This looks pretty and things. 0:01:15.840 --> 0:01:18.319 So I'm afraid what's happening in bitcoins are seeing that 0:01:18.360 --> 0:01:21.720 overdue purge and those millions of cryptocurrencies that track nothing, 0:01:22.000 --> 0:01:24.480 it's pulling out Bitcoin. They're probably going to have to 0:01:24.480 --> 0:01:26.319 head towards zero. And the key question is what do 0:01:26.360 --> 0:01:27.920 we do for the end of the year. Can we 0:01:27.959 --> 0:01:30.760 recover from these levels? And I think it's unlikely we do, 0:01:30.880 --> 0:01:33.480 which means the whole system might be coming down into 0:01:33.720 --> 0:01:35.800 maybe a grinch is going to win Christmas. 0:01:35.920 --> 0:01:39.360 Wow, that's quite a call. Yeah, the whole system coming down. 0:01:39.400 --> 0:01:43.319 I mean, for now people are saying that there's we're 0:01:43.400 --> 0:01:46.039 shaping up to be the worst November for bitcoin since 0:01:46.080 --> 0:01:48.560 twenty twenty two, which was around the time that saying 0:01:48.680 --> 0:01:53.400 Bankmin Freed and his company, you know, basically fell apart. 0:01:54.040 --> 0:01:57.200 Talk a little bit about the Bitcoin ETFs and how 0:01:57.720 --> 0:02:01.280 demand and inflows into those probus drove a lot of 0:02:01.280 --> 0:02:05.120 the rally in spot baitcoin overall, and perhaps are removing 0:02:05.160 --> 0:02:06.640 a big source of support right now. 0:02:07.400 --> 0:02:10.440 Well, I'm glad you went there, Scarlett, because my primary 0:02:10.440 --> 0:02:13.160 goal the last few years one Bloomberg we launched a 0:02:13.160 --> 0:02:16.120 Bloomberg Galaxy crypto index. Idea was eventually for the whole 0:02:16.160 --> 0:02:19.079 space to be tracked by widely by ETFs, including that index, 0:02:19.280 --> 0:02:21.480 and once we got there, I figured and put in 0:02:21.480 --> 0:02:24.120 a plateau. Now we've gotten there, and I think it's plateau. 0:02:24.200 --> 0:02:26.440 So basically we've gone from the geeks and the insiders 0:02:26.440 --> 0:02:28.520 who made a lot of money pushing it over to 0:02:28.680 --> 0:02:31.160 retail and the big picture people want to catch up 0:02:31.440 --> 0:02:33.919 and chase the performance, and they're finding out it's poor 0:02:33.960 --> 0:02:35.120 performance near a peak. 0:02:35.200 --> 0:02:36.160 They're piling on. 0:02:36.240 --> 0:02:39.160 The biggest ETFs. Ever, it's classic peak bubble. So if 0:02:39.200 --> 0:02:41.840 you want a bubble in all markets, it starts with cryptos. 0:02:41.880 --> 0:02:43.800 Maybe not equities, but it's as bad as it was 0:02:43.919 --> 0:02:47.080 for dot com bubble in nineteen ninety nine. 0:02:47.160 --> 0:02:49.560 Now the whole thing's going back downward, and by the 0:02:49.680 --> 0:02:50.920 end of the year should it recover. 0:02:51.080 --> 0:02:53.520 I look at it as we need to just purge 0:02:53.760 --> 0:02:55.960 millions of these things that track nothing, that are worth 0:02:55.960 --> 0:02:58.480 billions of dollars. One good example is number nine on 0:02:58.520 --> 0:03:02.919 the Bitcoin cryp pages. Dosee coin, it's worth twenty one 0:03:02.919 --> 0:03:04.560 billion dollars, attracts nothing. 0:03:04.600 --> 0:03:05.480 It was launch as a joke. 0:03:06.280 --> 0:03:06.560 Wow. 0:03:06.840 --> 0:03:10.080 So we had Eric baoutchunasan just earlier and he said 0:03:10.240 --> 0:03:12.880 most of the ETF buyers are still in it. They 0:03:12.919 --> 0:03:15.840 haven't sold about five or six percent of sold or 0:03:15.880 --> 0:03:17.240 seen outflows. 0:03:16.880 --> 0:03:17.600 Out of the ETF. 0:03:17.639 --> 0:03:19.960 So the ETF flows are kind of hanging in there 0:03:20.280 --> 0:03:21.040 at this point. 0:03:21.760 --> 0:03:22.960 So off to see, do we. 0:03:23.000 --> 0:03:24.120 Know who is selling? 0:03:24.160 --> 0:03:27.680 Mike, Yeah, well, certainly some of the OG's people have 0:03:27.720 --> 0:03:29.799 been along in for a long time. Once they heard 0:03:29.840 --> 0:03:31.639 that Trump was so involved, they wanted to get out. 0:03:31.800 --> 0:03:33.440 But Eric has on been on top of this. He 0:03:33.520 --> 0:03:35.600 nailed it very beginning with the launching the ETF. The 0:03:35.600 --> 0:03:38.720 problem is, I hear the average price for all ETFs, 0:03:38.800 --> 0:03:41.200 and since they've been launched for bitcoins around eighty nine thousand, 0:03:41.240 --> 0:03:41.920 we're below that. 0:03:42.120 --> 0:03:43.160 So we're getting below there. 0:03:43.160 --> 0:03:45.760 And also they've got double the vow till they what 0:03:45.800 --> 0:03:47.960 they left they left the stock market, they get better. 0:03:47.800 --> 0:03:50.760 Performance, they're getting worse. This is classic peak stuff. Paul. 0:03:50.800 --> 0:03:53.000 I'm worried that it's just gonna I'm worried about that 0:03:53.320 --> 0:03:55.680 Grinch effecting to the end of the year when everybody expects, oh, 0:03:55.800 --> 0:03:58.880 Santa Claus is gonna come, but Grinch takes all Grinch 0:03:58.880 --> 0:03:59.360 shows up. 0:03:59.440 --> 0:04:02.520 Okay, Mike, But the president and his family are very 0:04:02.560 --> 0:04:06.160 much invested in bitcoin, in the crypto industry at large. 0:04:06.200 --> 0:04:07.520 Is there not a Trump put here? 0:04:08.600 --> 0:04:10.240 Well, that's the key thing. What are they going to 0:04:10.240 --> 0:04:11.160 do to make a difference. 0:04:11.240 --> 0:04:14.080 Strategic Bitcoin Reserve though that was floated last year didn't 0:04:14.080 --> 0:04:16.960 work out. We have the President's sun coined for it 0:04:17.040 --> 0:04:18.760 to go much higher, and the future we might have 0:04:18.839 --> 0:04:21.360 laws against those kind of things because there's a vested interest. 0:04:21.560 --> 0:04:22.800 I don't know how it's going to work out, but 0:04:22.839 --> 0:04:25.120 it was that Fostian bargain. I'm worried about that just 0:04:25.200 --> 0:04:27.800 in bloting now. And the key question is what stops it? 0:04:27.839 --> 0:04:29.359 What are they going to do to make it change? 0:04:29.480 --> 0:04:31.640 The bottom line is there's so many millions of these 0:04:31.640 --> 0:04:35.279 things that are just pine and sky speculative digital assets. 0:04:35.320 --> 0:04:37.320 They just need to purge and then we'll go back. 0:04:37.360 --> 0:04:40.320 And I'm afraid that means Bitcoin's first stop on this 0:04:40.400 --> 0:04:43.040 move is really towards fifty thousand. It's got to really 0:04:43.120 --> 0:04:44.960 end the year up on the year to show anything 0:04:45.240 --> 0:04:47.680 other than that, I'm afraid fifty thousand to the next 0:04:47.760 --> 0:04:50.280 key level, which means Domino's tumble, and the questions what 0:04:50.320 --> 0:04:51.920 can they do to make a difference, Maybe get the 0:04:51.960 --> 0:04:54.240 Fed the ease, which means more inflation, which means they're 0:04:54.240 --> 0:04:55.039 not going to get elected. 0:04:55.880 --> 0:04:59.359 Right, Well, all of that, the macro headwinds are the 0:04:59.400 --> 0:05:00.960 same as any other acid classic. 0:05:01.000 --> 0:05:01.920 Yes, in many ways. 0:05:02.040 --> 0:05:05.520 Mike mcgloan and Bloomberg Intelligence senior commodity strategists joining us 0:05:05.560 --> 0:05:06.240 on bitcoin. 0:05:07.040 --> 0:05:07.680 Stay with us. 0:05:07.839 --> 0:05:09.479 More from Bloomberg Intelligence coming. 0:05:09.360 --> 0:05:10.120 Up after this. 0:05:13.760 --> 0:05:17.440 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:05:17.520 --> 0:05:20.599 weekdays at ten am Eastern on Apple, Cocklay and Android 0:05:20.640 --> 0:05:23.920 Auto with the Bloomberg Business app. Listen on demand wherever 0:05:24.000 --> 0:05:27.479 you get your podcasts, or watch us live on YouTube. 0:05:27.880 --> 0:05:30.080 Let's talk to Sam Fazzelli because it's Monday, and that's 0:05:30.080 --> 0:05:32.320 what we do. We talk healthcare, and you want to 0:05:32.320 --> 0:05:35.760 talk healthcare. Talk to Sam Fazzelli. He's over there in London. 0:05:35.839 --> 0:05:37.760 I think I haven't checked at these badge I mean, 0:05:37.800 --> 0:05:39.960 who the heck knows what these people over there in London. 0:05:40.400 --> 0:05:42.600 But he's the best there is out there folks on 0:05:42.680 --> 0:05:44.760 global healthcare and we appreciate getting a few minutes of 0:05:44.760 --> 0:05:49.360 his time. Sim this obesity story is become the story 0:05:49.400 --> 0:05:51.760 for your world. I mean, it's almost like forget about 0:05:51.800 --> 0:05:54.080 some of these other issues you guys have been dealing with, 0:05:54.080 --> 0:05:57.400 what you know, other diseases and therapeutics and so on. 0:05:57.480 --> 0:06:00.400 It's all about obesie drugs. Talks about Novo Nordis start 0:06:00.440 --> 0:06:01.360 taking on engineer. 0:06:02.839 --> 0:06:08.120 Yeah, hi Paul, and just for the actuality, I'm in 0:06:08.160 --> 0:06:12.520 France at the minute, see told, but only another twelve 0:06:12.520 --> 0:06:17.160 hours now. Today's news from NOMA. Notice is not about OBCD. 0:06:17.200 --> 0:06:21.560 It's about a drug semaglutide in a pill form that 0:06:21.640 --> 0:06:26.000 they've tested in Alzheimer's disease. And the theory was, and 0:06:26.040 --> 0:06:29.240 there was some evidence that people who were taking the 0:06:29.320 --> 0:06:32.240 very first version of the GLP one brug so victosa 0:06:32.720 --> 0:06:37.039 or liro glue tide, they had a lower risk of 0:06:37.120 --> 0:06:41.440 developing Alzheimer's when you looked at historic or rect prospective 0:06:41.520 --> 0:06:44.120 data and there's animal models, et cetera. So they thought, 0:06:44.160 --> 0:06:47.279 but it's worth a trial and it didn't work out. 0:06:47.760 --> 0:06:51.280 They said that they're seeing some impacts in some biomarkers 0:06:51.320 --> 0:06:54.520 et cetera. And we'll find out next week what biomarkers. 0:06:55.320 --> 0:06:58.120 But the trial didn't work out. And the question here 0:06:58.240 --> 0:06:59.720 is was the theory wrong? 0:07:00.080 --> 0:07:00.200 Oh? 0:07:00.320 --> 0:07:02.520 Is the drug not good enough? Is it pill enough? 0:07:03.040 --> 0:07:05.600 We know the pill doesn't do as well in obesity 0:07:05.920 --> 0:07:08.560 as the injection. Should they have tested the injection? 0:07:09.840 --> 0:07:10.720 That's a good question. 0:07:10.800 --> 0:07:13.280 And you mentioned that the ingredient here that we're paying 0:07:13.280 --> 0:07:16.280 attention to is some maglitude, which I hope I'm pronouncing 0:07:16.320 --> 0:07:19.600 correctly there. Does that mean that this ingredient and Alzheimer's 0:07:19.600 --> 0:07:21.360 are just a no go from here on out? Or 0:07:21.760 --> 0:07:23.440 does there need to be more testing before we can 0:07:23.480 --> 0:07:24.040 determine that? 0:07:24.920 --> 0:07:26.680 Yeah, there needs to be more testing, But who's going 0:07:26.720 --> 0:07:30.440 to do that? I mean, having failed, now, who's going 0:07:30.480 --> 0:07:31.880 to put the money into test it? 0:07:31.960 --> 0:07:32.160 Now? 0:07:32.880 --> 0:07:37.400 Lily does have an Alzheimer's business in a completely different 0:07:37.520 --> 0:07:40.360 with different set of drugs, and they have a more 0:07:40.440 --> 0:07:45.320 punchy product once weekly with a relatively easily administered pen. 0:07:46.840 --> 0:07:48.480 That would be interested to see whether that. 0:07:48.440 --> 0:07:51.640 Helps and you know, so that you get more much 0:07:51.680 --> 0:07:54.000 more drug in the body, or maybe redesign it a bit. 0:07:54.120 --> 0:07:57.160 So it really does depend on how much appetite for 0:07:57.240 --> 0:08:00.200 risk these companies have and literally now with the just 0:08:01.040 --> 0:08:04.000 literally just over trillion dollar market cap, maybe they should 0:08:04.040 --> 0:08:06.840 give it a go. You know, it would be magic 0:08:06.880 --> 0:08:09.400 if this thing, It literally would be magic if this thing. 0:08:09.360 --> 0:08:11.280 Just helped so many different diseases. 0:08:12.080 --> 0:08:14.560 Same talk to us about just the market for dementia. 0:08:15.280 --> 0:08:17.640 Alzheimer's is one one part of it. I would think 0:08:17.680 --> 0:08:20.640 that's a it's a big market and be it. It's 0:08:20.680 --> 0:08:22.880 got to be a growing market with people living longer. 0:08:23.160 --> 0:08:25.080 How do you guys think about it and how do 0:08:25.120 --> 0:08:25.440 you play it? 0:08:25.440 --> 0:08:28.760 If you're an investor, Yeah, it's it's It is a 0:08:29.000 --> 0:08:33.160 significant societal issue number one. And you know, I think 0:08:33.200 --> 0:08:36.680 there are many, not many families who would say that 0:08:36.720 --> 0:08:39.080 they haven't experienced it. They have all the people in 0:08:39.120 --> 0:08:45.400 their in their extended family. So the market has humongous potential. 0:08:45.480 --> 0:08:48.360 But you need drugs that actually treat the disease. Remember, 0:08:48.360 --> 0:08:51.160 by the time you have Alzheimer's, I. 0:08:51.640 --> 0:08:55.439 Eat a full blown dementia of the Alzheimer's type or 0:08:55.480 --> 0:08:58.160 other types. It's a bit late. That means that a 0:08:58.200 --> 0:09:00.920 lot that's already happened. So you need to go early, 0:09:01.200 --> 0:09:04.600 and early it means long, expensive trials and Lily is 0:09:04.640 --> 0:09:07.760 doing that with their assets, So fingers crossed, we'll find 0:09:07.760 --> 0:09:09.360 out in the next two or three years where they're 0:09:09.360 --> 0:09:11.920 going early with these assets. Rush is doing it too. 0:09:12.360 --> 0:09:14.480 It would be a beneficial. 0:09:14.280 --> 0:09:16.560 Right, I mean, the test with the pill form of 0:09:16.600 --> 0:09:19.520 ozambic was definitely a lottery ticket. If it worked, great, 0:09:19.520 --> 0:09:21.880 If not, we're back to the drawing board. Are there 0:09:21.920 --> 0:09:26.000 any effective treatments right now against dementia or Alzheimer's? 0:09:27.080 --> 0:09:29.720 Well, by effective, I mean it's tough to say, but 0:09:29.880 --> 0:09:33.440 there are drugs that lower this thing that is viewed 0:09:33.480 --> 0:09:38.079 as a critical part of the Alzheimer's disease, which amyloid 0:09:38.120 --> 0:09:42.160 plaques in your brain. If they do lower it. Lily's 0:09:42.160 --> 0:09:45.360 got that drug, Biogen's got an equivalent drug. Rushi is 0:09:45.360 --> 0:09:50.480 trying a similar approach. And you do slow down the degeneration. 0:09:50.840 --> 0:09:53.120 You don't stop it, you slow it down. So what 0:09:53.160 --> 0:09:56.240 we really want is to stop people getting to that degeneration. 0:09:56.520 --> 0:10:00.920 Try and get them before they have full grown Alzheimer's 0:10:01.200 --> 0:10:04.440 or dementia, so that's called mild cognitive impairment. Try and 0:10:04.480 --> 0:10:07.280 slow that down to give them another ten, twelve, twenty 0:10:07.360 --> 0:10:09.720 years of dignified life. 0:10:10.800 --> 0:10:13.360 So where do you think we are on a time 0:10:13.400 --> 0:10:16.960 frame for something like that same is that measured in 0:10:17.000 --> 0:10:18.760 a couple of years or more than that. 0:10:19.720 --> 0:10:23.839 Well, so Lily is literally trying that and we'll find 0:10:23.840 --> 0:10:27.280 out whether and they have the better rug in this space, 0:10:27.320 --> 0:10:31.040 so we'll find out whether in the next two or 0:10:31.040 --> 0:10:33.520 three years. They remember, these things are trials that need 0:10:33.559 --> 0:10:37.679 to be run until you start seeing a difference. They 0:10:37.760 --> 0:10:40.960 get that to that point, and of course then society 0:10:40.960 --> 0:10:42.600 has to decide, well, how were we going to pay for this? 0:10:43.320 --> 0:10:46.720 How many people? Because there's a large market, right, how 0:10:46.720 --> 0:10:49.640 many people are we going to want to treat with 0:10:49.760 --> 0:10:51.959 the prices of these drugs whatever they are, even if 0:10:51.960 --> 0:10:54.720 it's ten thousand dollars a year, right, and they are 0:10:54.840 --> 0:10:57.319 on their way to becoming worse, and we want to 0:10:57.360 --> 0:11:00.960 slow that down. You have ten million people. This could 0:11:01.000 --> 0:11:04.680 be similar in terms of value to the obesity market, 0:11:05.720 --> 0:11:08.360 but you need the drug to do that. So let's 0:11:08.440 --> 0:11:10.760 let's wait and see. And RASH has got a new 0:11:10.800 --> 0:11:12.280 way of trying to do it, and they're going to 0:11:12.280 --> 0:11:14.680 go again and also to phase three to test that out. 0:11:14.760 --> 0:11:16.480 All right, Sam, thanks so much for joining us. Always 0:11:16.480 --> 0:11:18.520 appreciate getting a few minutes of your time. Sam Pazzelli, 0:11:18.559 --> 0:11:21.640 director of Research for Global Industry and senior pharmaceuticals analysts 0:11:21.679 --> 0:11:22.680 Bloomberg Intelligence. 0:11:23.160 --> 0:11:26.079 Stay with us. More from Bloomberg Intelligence coming up after this. 0:11:30.360 --> 0:11:34.079 You're listening to the Bloomberg Intelligence podcast. Catch us Live 0:11:34.160 --> 0:11:37.240 weekdays at ten am Eastern on Apple, Coarplay and Android 0:11:37.240 --> 0:11:40.560 Auto with the Bloomberg Business app. Listen on demand wherever 0:11:40.640 --> 0:11:44.160 you get your podcasts, or watch us live on YouTube. 0:11:44.880 --> 0:11:45.280 Scarlett. 0:11:45.320 --> 0:11:47.760 One of the I think the questions we get, or 0:11:47.920 --> 0:11:50.440 maybe discussion points we have over the last month or 0:11:50.480 --> 0:11:52.800 so month and a half has been is this a bubble? 0:11:52.880 --> 0:11:55.560 Is this an AI bubble? And I don't know, but 0:11:55.600 --> 0:11:58.400 I mean the people are spos after this fact, after 0:11:58.440 --> 0:12:00.839 the fact exactly right. So, but somebody wo's supposed to 0:12:00.880 --> 0:12:03.520 talk about it like present tenses. Michael Casper, Senior US 0:12:03.559 --> 0:12:06.480 Equity Strategies for Bloomberg Intelligence. So, Michael, I know you're 0:12:06.480 --> 0:12:09.760 having these conversations with your clients here. What are you 0:12:09.800 --> 0:12:11.920 saying bubble, no bubble as it relates to AI. 0:12:12.160 --> 0:12:14.160 Yeah, I'm pretty much all the signposts for a bubble 0:12:14.200 --> 0:12:18.040 that we have identified so far are pointing towards no bubble. Right, 0:12:18.120 --> 0:12:21.200 So if you look at the valuation picture of say 0:12:21.240 --> 0:12:23.520 the MAG seven. So the hottest stocks today versus the 0:12:23.559 --> 0:12:26.400 hottest stocks in two thousand, we're talking they're trading out 0:12:26.440 --> 0:12:30.920 about half the multiple, Microsoft, Cisco, in Telendell, the four Horsemen, 0:12:30.920 --> 0:12:32.760 and the Internet bubble we're trading at back at the 0:12:32.800 --> 0:12:35.280 top of two thousand, and in fact, the MAG seven's 0:12:35.320 --> 0:12:38.400 multiple has come down since twenty twenty one, so they're 0:12:38.440 --> 0:12:41.280 growing into their multiple. And you've obviously got a ton 0:12:41.280 --> 0:12:45.360 of fundamental support here. Earning's running well faster than normal 0:12:45.400 --> 0:12:47.680 at the end of these multi periods, so it's really 0:12:47.720 --> 0:12:49.480 pointing towards no bubble at the moment. 0:12:49.800 --> 0:12:51.880 Okay, that might be the case for the Mag seven, 0:12:51.880 --> 0:12:54.360 for the companies at the heart of the whole AI revolution, 0:12:54.480 --> 0:12:55.800 but what about the ones that are kind of on 0:12:55.840 --> 0:12:59.200 the periphery, on the side, and the profitless tech companies 0:12:59.200 --> 0:13:01.360 that we talk about that are getting wrapped up in everything. 0:13:01.440 --> 0:13:03.920 Yeah, so it's actually interesting to bring up profitless tech. 0:13:04.679 --> 0:13:07.920 My colleague and Bibredherty, she does thematics for us. She 0:13:08.000 --> 0:13:10.720 has a Thematics AI universe, and we've actually scanned that 0:13:10.960 --> 0:13:14.800 entire universe. And we're talking large caps, small caps, microcaps, 0:13:15.280 --> 0:13:17.920 there's three companies in there that are unprofitable in the 0:13:18.120 --> 0:13:22.880 entire AI universe of you nearly fifty companies, So there's 0:13:22.960 --> 0:13:25.800 really not a lot of unprofitability, especially within the core 0:13:25.840 --> 0:13:29.040 AI themes. And and that's another just feather in the 0:13:29.040 --> 0:13:30.400 cap for this not being a bubble. 0:13:31.400 --> 0:13:34.880 How about the big tech companies using debt to fund 0:13:34.920 --> 0:13:37.080 a lot of Does that get raise the. 0:13:37.240 --> 0:13:37.839 Radar at all? 0:13:38.120 --> 0:13:41.560 Yeah, so it's interesting that they might start dipping into 0:13:41.559 --> 0:13:42.240 debt markets. 0:13:42.240 --> 0:13:43.120 That was something that I. 0:13:43.160 --> 0:13:46.240 Read this morning on the terminal actually, but so far, 0:13:46.320 --> 0:13:48.680 if you look at leverage ratios, right, so total debt 0:13:48.880 --> 0:13:52.520 to market cap or total debt to EBITDA, those are 0:13:52.520 --> 0:13:55.360 actually significantly lower than where they were in two thousand, 0:13:55.440 --> 0:13:59.720 and we've frankly been delevering pretty consistently throughout the post 0:13:59.800 --> 0:14:03.319 grade financial crisis period. So leverage is actually below norms 0:14:03.360 --> 0:14:04.880 for the s and P five hundred for the Russell 0:14:04.880 --> 0:14:07.960 two thousands, it's pretty much closer to norms. So I'm 0:14:07.960 --> 0:14:11.000 not that worried about debt financing yet, right, So there's 0:14:11.040 --> 0:14:13.480 plenty of room for companies to take on debt here. 0:14:13.760 --> 0:14:16.240 Why are investors still so worried them? Why Are they 0:14:16.320 --> 0:14:18.280 convinced that this is not sustainable? 0:14:18.440 --> 0:14:20.840 Yeah, I think it's a bit of a paranoia. 0:14:20.960 --> 0:14:21.120 Right. 0:14:21.160 --> 0:14:24.680 We've gone up very far, very fast, and we did 0:14:24.720 --> 0:14:27.600 look out at some previous melt ups, So we're talking 0:14:27.600 --> 0:14:30.360 in the end of the Great the lead up to 0:14:30.400 --> 0:14:33.280 the Great Depression cycle, the Internet bubble, those are the 0:14:33.320 --> 0:14:36.360 classic melt ups. Our returns have been pretty fast, but 0:14:36.360 --> 0:14:37.800 they're still falling well short of that. 0:14:37.840 --> 0:14:38.320 So I think. 0:14:38.200 --> 0:14:40.560 Investors are a little bit worried that the returns have 0:14:40.600 --> 0:14:43.800 been so violent and so quick, and that's adding to 0:14:43.840 --> 0:14:45.560 a little bit of worry. And of course worry is 0:14:45.600 --> 0:14:48.440 a good thing, right, So bubbles usually happen when nobody's 0:14:48.440 --> 0:14:50.920 worried about them. I like to think about two thousand 0:14:50.960 --> 0:14:53.200 and people always talk about, Yeah, my taxi driver was 0:14:53.240 --> 0:14:56.480 telling me about some Internet stock. We're just really not 0:14:56.520 --> 0:14:58.520 having that right now. There's still plenty of worry in 0:14:58.560 --> 0:14:59.840 the system, and that's a good thing. 0:15:00.080 --> 0:15:04.400 Orble market earnings pretty much done with the third quarter here, 0:15:04.560 --> 0:15:06.240 Are they enough to support this marketplace? 0:15:06.280 --> 0:15:06.640 Do you think? 0:15:06.760 --> 0:15:08.960 Yeah? I think earnings were phenomenal. 0:15:09.000 --> 0:15:09.080 Right. 0:15:09.120 --> 0:15:11.320 There were some obviously bumps in the road on a 0:15:11.360 --> 0:15:15.000 company by company basis, but again we pretty much doubled 0:15:15.040 --> 0:15:18.040 the pace of what consensus expectations were. If you look 0:15:18.040 --> 0:15:20.840 at twenty twenty six expectations, those are holding pretty firm. 0:15:20.840 --> 0:15:23.800 We're looking at about thirteen percent earnings growth for the 0:15:23.840 --> 0:15:27.720 year ahead, again comparing that to previous bubbles. Even that's 0:15:27.760 --> 0:15:29.880 significantly higher than what we saw at the end. You know, 0:15:29.920 --> 0:15:33.800 bubbles are driven by FOMO, not fundamentals, And certainly consensus 0:15:33.840 --> 0:15:36.160 expectations are strong, and they're actually even strengthening in the 0:15:36.200 --> 0:15:38.600 Russell two thousand, which has been an unloved group for 0:15:38.680 --> 0:15:41.880 quite some time. So things on the fundamental side looking 0:15:41.880 --> 0:15:42.760 pretty decent here. 0:15:43.160 --> 0:15:44.520 What about on the technical side. 0:15:44.520 --> 0:15:46.120 I keep reading about how the S and P five 0:15:46.200 --> 0:15:48.800 hundred is still below it's fifty day moving average, it's 0:15:48.840 --> 0:15:51.400 short term trend line, and it briefly fell below the 0:15:51.440 --> 0:15:53.480 one hundred day moving average on Thursday. 0:15:53.840 --> 0:15:55.840 And because we are not going to get. 0:15:55.760 --> 0:15:59.680 Any fundamental data on the economy until after the FMC 0:15:59.760 --> 0:16:02.280 just earning season is over, there aren't a whole lot 0:16:02.320 --> 0:16:05.960 of catalysts from here on out until maybe next year. 0:16:06.360 --> 0:16:09.680 Yeah, So one catalyst I'm looking at pretty intently is 0:16:09.680 --> 0:16:11.480 going to be the holiday spend. Right, Like if that 0:16:11.480 --> 0:16:14.040 comes in a little bit better than we expect. That 0:16:14.040 --> 0:16:16.480 could be another catalyst for stocks. But certainly you mentioned 0:16:16.520 --> 0:16:19.560 the FOMC decision. I think a lot of this pullback 0:16:19.640 --> 0:16:23.000 has to do with Powells hawkish comments about two weeks ago. 0:16:23.920 --> 0:16:26.400 You know, people just expecting a little more on the 0:16:26.440 --> 0:16:28.160 rate cut side than what we're. 0:16:28.040 --> 0:16:28.600 Going to get. 0:16:28.760 --> 0:16:31.320 And again, this just looks like a textbook pullback. 0:16:31.400 --> 0:16:34.200 Right We're down what maybe four or five percent from 0:16:34.240 --> 0:16:35.800 all time highs on the S and P five hundred 0:16:35.880 --> 0:16:39.280 on the rustle. It's approaching correction territory, but still nothing 0:16:39.400 --> 0:16:41.880 really going as far as a bubble bursting. 0:16:42.640 --> 0:16:45.760 Are you looking at bitcoin and crypto at all insofar 0:16:45.840 --> 0:16:49.840 as whether it's influencing equities or whether equities are influencing bitcoin, 0:16:49.880 --> 0:16:53.680 because there's a lot of talk about the linkage between 0:16:53.880 --> 0:16:55.200 tech stocks and bitcoin. 0:16:55.360 --> 0:16:58.200 Yeah, I think bitcoin is a good gauge of risk tolerance. 0:16:58.240 --> 0:17:01.120 I don't know about necessarily a fun mental linkage between 0:17:01.160 --> 0:17:03.000 bitcoin and stocks outside of. 0:17:03.000 --> 0:17:05.280 Maybe you know the AI names those leading the corners. 0:17:05.840 --> 0:17:09.359 I think, you know, stocks are the dog that wags 0:17:09.400 --> 0:17:11.600 the tail, right, and crypto is the tail here. 0:17:12.760 --> 0:17:14.960 But I think crypto is really kind of showing. 0:17:14.680 --> 0:17:17.000 Where the concerns lie in the equity markets and the 0:17:17.080 --> 0:17:19.720 risk is in the equity markets. And again that seems 0:17:19.720 --> 0:17:21.680 to be more with the Fed. What is the Fed 0:17:21.760 --> 0:17:25.520 going to do? Obviously Fed raycuts would be good for bitcoin. 0:17:25.560 --> 0:17:29.040 Everybody thinks it's it's pretty stable. So I think that's 0:17:29.080 --> 0:17:31.400 really showing where the pressure points are for stocks. 0:17:31.800 --> 0:17:34.800 All right, Mike, appreciate it as always. Michael Casper, Bloomberg 0:17:34.800 --> 0:17:39.040 Intelligence Senior US equity research strategist, giving us lots on 0:17:39.240 --> 0:17:42.359 these markets. Here, Ai bubble, you know something, so we'll 0:17:42.400 --> 0:17:44.160 keep an eye on the market. Is certainly trading higher 0:17:44.160 --> 0:17:45.800 today with the S and pup one point four percent, 0:17:45.840 --> 0:17:48.240 in the NASDAK up two point three percent. 0:17:48.800 --> 0:17:51.720 Stay with us. More from Bloomberg Intelligence coming up after this. 0:17:55.960 --> 0:17:59.640 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:18:00.119 --> 0:18:02.800 he's at ten am. He'sterned on Apple Coarcklay and Android 0:18:02.840 --> 0:18:06.119 Auto with the Bloomberg Business app. Listen on demand wherever 0:18:06.200 --> 0:18:09.720 you get your podcasts, or watch us live on YouTube. 0:18:10.440 --> 0:18:12.760 All right, let's go switch gears a little bit. 0:18:12.960 --> 0:18:13.760 President Trump. 0:18:13.800 --> 0:18:16.080 When he came into office, he was wildly considered to 0:18:16.080 --> 0:18:19.520 be a deregulatory president. Will allow a lot of industries 0:18:19.520 --> 0:18:23.919 maybe to consolidate. One of those industries is the broadcasting industry, 0:18:23.960 --> 0:18:26.240 the radio and TV business. But he was out with 0:18:26.240 --> 0:18:31.240 a tweet recently saying he maybe doesn't support that anymore, 0:18:31.320 --> 0:18:32.840 and that was a big u turn for a lot 0:18:32.880 --> 0:18:35.560