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Speaker 2: out from Whole Free Shirs. Really one of the most
Speaker 2: interesting economists out there, Stephanie Roth, and she brings truly
Speaker 2: prodigious mathematical abilities. You know, you remind me of Lordamesta
Speaker 2: retiring into Cleveland, fed. What does your mathiness do when
Speaker 2: you commit economics? What makes your economics study different because
Speaker 2: of your you know, Buck Dell and Columbia World Classic mathematics.
Speaker 1: I mean these days it's because there's so much seasonality
Speaker 1: problems in the data. That's been one of the most
Speaker 1: important show.
Speaker 3: So you agree.
Speaker 2: With with Anna along it at Bloomberg that there are
Speaker 2: data problems.
Speaker 1: Oh, there are data problems in a big way. I mean,
Speaker 1: look at core PC and Q four at average one
Speaker 1: point five percent, and in Q one and average four
Speaker 1: point two percent inflation, it was neither. We were running
Speaker 1: somewhere on two and a half to three percent. So
Speaker 1: there's just truly seasonality problems that are working the way through.
Speaker 1: When I think we learned that last week is the
Speaker 1: seasonality problems.
Speaker 2: And when you synthesize the math and the revisions leads
Speaker 2: you to a greater disinflation.
Speaker 1: Yes, and it leads me to believe that the FED
Speaker 1: can cut.
Speaker 4: Into actly does that?
Speaker 2: When you're a math major you do that? You don't
Speaker 2: say yes, Tom, You say yes, you stupid?
Speaker 5: So what's a favor? So steady? Is the FED behind
Speaker 5: a curve?
Speaker 6: Do you think should they have been cutting already given
Speaker 6: some of the real time data we see.
Speaker 1: I mean, I think could they have cut in July?
Speaker 5: Maybe?
Speaker 1: But the inflation data were bad in Q one. Understandably
Speaker 1: they want to be convinced, so September I don't think
Speaker 1: they're in a rush. September is perfectly fine. I think
Speaker 1: they probably need to be cutting this year, otherwise we
Speaker 1: might run into some problems similar to what we saw
Speaker 1: a couple of years ago with some of the regional banks.
Speaker 6: So I mean, if I look at the I mean,
Speaker 6: the interesting thing here for a lot of investors is
Speaker 6: it feels like that that data we got in first
Speaker 6: quarter ofut inflation that suggests that.
Speaker 5: Inflation was still around. Yeah, We've got a couple of
Speaker 5: prints after that that suggested maybe not.
Speaker 4: So.
Speaker 5: I guess it's understandable for the FED to be waiting.
Speaker 1: Yeah, it is. And I think, I mean Powell was
Speaker 1: one of the people who really believed in the season is.
Speaker 1: I think some of the other FOMC members need to
Speaker 1: be more convinced than perhaps even Powell. But the CORPORC
Speaker 1: number should be something like point one five in the
Speaker 1: next month, and the seasonals go the other way throughout
Speaker 1: the of the year. And Oer is a big one. Oer,
Speaker 1: we should see the big next step down in the
Speaker 1: month of June.
Speaker 2: We should explain to our audience it's Oer's.
Speaker 1: Real estate exactly, real estate CPI, real estate inflation.
Speaker 6: Okay, very good, And that's the thing for everybody who's
Speaker 6: trying to run an apartment in the city retail sales tomorrow.
Speaker 6: How's the consumer doing? What do you expect to see
Speaker 6: from retail sales tomorrow?
Speaker 1: Yeah, that'll be that's going to be a big one,
Speaker 1: because you know, the street is looking for sort of
Speaker 1: a modest gain, but if you look at some of
Speaker 1: the alternative data, looks like it could be running a
Speaker 1: little bit hotter. Some of the credit card data look
Speaker 1: a little bit stronger, like you might actually get a
Speaker 1: bit of a bounce back if you net out what
Speaker 1: we've seen for the bulk of this year, it's been
Speaker 1: a consumer that's spending but slower than what we saw
Speaker 1: last year, which is arguably a good thing. I mean,
Speaker 1: especially good spending was so strong last year it was
Speaker 1: kind of unsustainable.
Speaker 2: We'll give me a proportional analysis here. What's your forward
Speaker 2: view on real GDP the one everybody follows, but also
Speaker 2: nominal GDP, real GDP plus the inflation element. What are
Speaker 2: those two numbers forward?
Speaker 1: Yeah, so we're looking for something around a two percent
Speaker 1: real GDP growth, which is kind of historical average. That's
Speaker 1: a normal trend, like solid solid, and then if you
Speaker 1: add a two point two percent something inflation like that,
Speaker 1: then you're looking at a four point two percent nominal
Speaker 1: GDP growth.
Speaker 2: Well, where's the gloom? I mean, all week in Sam
Speaker 2: row out with a spectacular six charts from the different
Speaker 2: street sources showing you know, I'm sorry it's a bull
Speaker 2: market because actually the economy is pretty good. Yeah, Stephanie,
Speaker 2: is that safe to say?
Speaker 5: Yeah?
Speaker 1: The economy is good and it's been an impressive rebalancing.
Speaker 1: We were coming from a place where inflation was running
Speaker 1: at nine percent and it's come come down back to
Speaker 1: something that's very close to what the Fed's looking at.
Speaker 1: And now we're looking at inflation to several decimal places.
Speaker 1: We were in a position where who fault, I mean,
Speaker 1: who cared what inflation was the second decimal when when
Speaker 1: you were seeingero point six percent month on month prints.
Speaker 1: But now that we're talking about something between point one
Speaker 1: and point no.
Speaker 2: But you can't in other times of distance in the
Speaker 2: early nineteen fifties, nobody was looking to three decimal points.
Speaker 2: That's a modern idiocy, that's fair, and.
Speaker 1: I mean there's so much FED communication and there's just
Speaker 1: all of that has changed a lot over the number
Speaker 1: of years. But now we're in an environment where it matters.
Speaker 2: Paul is at the Beach this week and study in
Speaker 2: central limit theorem exactly.
Speaker 5: Talk to us about this.
Speaker 6: You know the labor marketer, because I know the FEDS
Speaker 6: looking at the labor market and we're pushing up to
Speaker 6: four percent unemployment but still fully employed economy.
Speaker 5: How do you think about this US labor market?
Speaker 1: A lot of it has been driven by immigration, and
Speaker 1: by that I mean we were coming from a place
Speaker 1: where the labor market was really tight and we had
Speaker 1: a really strong influx of immigration, which is still ongoing,
Speaker 1: and that helped to rebalance the labor market or add
Speaker 1: a lot of supply where there wasn't really a supply.
Speaker 1: We don't have that as much as strong sort of
Speaker 1: domestic labor force growth, but now we got it from
Speaker 1: the outside. And these programs are ongoing until perhaps the
Speaker 1: next administration, and then it could change a bit.
Speaker 2: So on a non farm payrolls pick a number, what's
Speaker 2: the immigration plug there? Give give her audience scope and
Speaker 2: scale when people toss her around the phrase immigration. How
Speaker 2: much of that's in non farm payrolls?
Speaker 1: Sure, so when you think about the steady state of payrolls,
Speaker 1: gth forgetting about immigration, we're talking somewhere there's domestic growth
Speaker 1: of eighty five to one hundred thousand. That's without sort
Speaker 1: of strong immigration trends. Immigration trends roughly double that, double,
Speaker 1: roughly double that. So, for example, the Biden administration humanitarian
Speaker 1: parole programs, which is bringing in people from from Mexico
Speaker 1: and then Cuba, hating Nicaragua Venezuela, bringing in seventy five
Speaker 1: thousand people per month, and they're able to get a
Speaker 1: work visa within thirty days. So presumably if they're.
Speaker 2: Working, this is too important. You're telling me we got
Speaker 2: a run rate non farm payrolls of one hundred thousand
Speaker 2: a month, and you're willing to pop that up to
Speaker 2: one eighty or two hundred based on immigration in America.
Speaker 1: Yes, that's why this has been every balance.
Speaker 6: Now look at this, Torst and Slock, our good friend
Speaker 6: from Apollo just out with a note going to the
Speaker 6: same issue. The foreign born labor force has grown eleven
Speaker 6: percent since February twenty twenty, and the native born labor
Speaker 6: forces unchanged over the same period. So the growth in
Speaker 6: the labor force is entirely driven by immigration.
Speaker 1: Yeah, and by the way, that data might not even
Speaker 1: be fully capturing all the immigration because they're having trouble,
Speaker 1: especially in the household survey, which is what captures that,
Speaker 1: capturing all of that.
Speaker 2: Bob, can we slot Stephanie into your jobs day and
Speaker 2: just tell her people she can't be so mathy? Yes,
Speaker 2: that is emotional.
Speaker 5: This is great.
Speaker 2: You know, how do kids get so they love statistics?
Speaker 2: How do we get back to when we were kids
Speaker 2: and you have to take statistics at gunpoint and you
Speaker 2: did it and nobody complained, You just took it.
Speaker 1: Yeah, that's fair. I mean, I think it's kind of fun.
Speaker 1: You learn a lot from just digging into the data.
Speaker 2: Foundational.
Speaker 1: Yeah, it totally is. I mean, especially these days where
Speaker 1: the data are just so funky. In the post cos I.
Speaker 2: See that the dining room table and start talking one
Speaker 2: over square out of tea and the kids they throw,
Speaker 2: you know, they throw vegetables serving. It's definitely right, Thank
Speaker 2: you so much. She is with the Wolf. Researcher Stephen
Speaker 2: Major has led letter lead on this. It a just
Speaker 2: be see vigilant about a lower rate regime where they
Speaker 2: just be c Hong Kong. Stephen Major, are we finally
Speaker 2: two the lower rate regime you've been predicting.
Speaker 7: We've had to be very patient, Tom it seems to
Speaker 7: be coming through, and I think the catalyst was obviously
Speaker 7: not predicted by anyone. It seems to be the elections.
Speaker 7: Maybe in France and Mexico. They have one thing in common.
Speaker 7: They both bring chaos and concerns on the fiscal front,
Speaker 7: and bonds don't like it in those countries, and that
Speaker 7: into the safe havens like treasuries and buds, and I
Speaker 7: think that's helping, and it's taking the focus a bit
Speaker 7: away from every data release in the US and every
Speaker 7: FED speaker.
Speaker 2: Do you, as a grizzled veteran, do you get any
Speaker 2: value from monitoring the credit default swap market or is
Speaker 2: it just too ill liquid where Steve Major stays looking
Speaker 2: at full faith and credit bond market data.
Speaker 7: Yeah, it might give us a clue on sentiment and direction,
Speaker 7: but no one's going to default here. So the French
Speaker 7: spreads moved a bit, but the more interesting one So
Speaker 7: the French CDs has moved, But the one that's more
Speaker 7: interesting is the comparison between buons and oats, say in
Speaker 7: the five year segment. So I think CDs gives us
Speaker 7: some sort of warning, but I don't think it's it's
Speaker 7: particularly liquid, and I think you get much more value
Speaker 7: looking at the proper government bonds and their asset swap spreads.
Speaker 6: So Stephen, you know, I'm kind of lazy enough to
Speaker 6: just say I think I'm just going to sit around
Speaker 6: in a US to your treasure and get four point
Speaker 6: seventy five percent. But you're the global head of fixed
Speaker 6: income at HSBC. Do you get anything more exciting for
Speaker 6: me than just the US Treasury?
Speaker 7: And I think you're wrong on the two years. You
Speaker 7: might want to go a bit longer. And the way
Speaker 7: I explain it to people is sort of simple opportunity cost.
Speaker 7: And to make it really simple, if you roll bills
Speaker 7: for one year, you can get five and a quarter
Speaker 7: to five and a half. But you see, if they're
Speaker 7: cutting rates, you won't get that in a year's time,
Speaker 7: So locking in for two years at four seventy ish
Speaker 7: seems like a good trade.
Speaker 4: Elsewhere globally, I think.
Speaker 7: You can find some some of the emerging markets looking
Speaker 7: quite interesting. India has been resilient in all of this
Speaker 7: this recent volatility, because when volatility goes up, spreads go out.
Speaker 4: That India is not really a spread market, it's on
Speaker 4: its own.
Speaker 7: So there's something to say there and I think in
Speaker 7: Europe there's there's still value to be had in government bonds,
Speaker 7: but you've got to keep away from the from the hotspots.
Speaker 4: So it's more like Spain, for example.
Speaker 7: It's attractive and and and again Germany is the one
Speaker 7: that wins in this situation. But you know, I know
Speaker 7: that four point seven doesn't sound very exciting, and you're
Speaker 7: looking for some more sex, drugs and rock and roll.
Speaker 7: But in the bond market, I'm afraid it's supposed to
Speaker 7: be boring exactly.
Speaker 5: How about credit risk?
Speaker 6: So if I want to take a little bit of
Speaker 6: credit risk, where do you see some opportunity out there?
Speaker 5: I know that you know a lot of folks are
Speaker 5: telling spreads are so tight.
Speaker 7: You've got to get defensive, and we're shortening in terms
Speaker 7: of spread duration. And what that means in plain English
Speaker 7: is will we'll we'll go to the front end. We
Speaker 7: can take some sort of more defensive trades. Some of
Speaker 7: those haven't done very well recently because it tends to
Speaker 7: push you into banks, and banks don't like some of
Speaker 7: the stuff going on. So high yield is okay at
Speaker 7: the front end, but you get your duration from the
Speaker 7: right place.
Speaker 4: The treasury market.
Speaker 2: Steve Major, how do we flip from our focus and
Speaker 2: short duration and move out to the belly of the
Speaker 2: curve and even out farther. What is the exercise of
Speaker 2: the process where mere mortals decide to have the confidence
Speaker 2: to buy longer?
Speaker 7: Yeah, I mean, I have to say, hand on hard
Speaker 7: it's very difficult to give a strong guarantee about buying
Speaker 7: ten years or longer in terms of the term premium.
Speaker 7: So that's part of the problem because you know what
Speaker 7: the scenarios are around the election, A lot of the known.
Speaker 7: At least if you're buying the twos to the fives,
Speaker 7: you should be okay, because the yield to maturity there
Speaker 7: is really driven by the policy rate and the expectations
Speaker 7: for that policy rate in the near term. Now that
Speaker 7: there's not much that either candidate's going to do to
Speaker 7: effect where PAG funds is going to be in one
Speaker 7: year's time, they might have an impact in five to
Speaker 7: ten years time, and that's why it starts to spill
Speaker 7: into the term premium. I think there's already a fair
Speaker 7: bit of term premium there. I mean, everyone on the call,
Speaker 7: everyone is listening to this nose. There's a lot of
Speaker 7: debt right everyone knows what the likely policies are going
Speaker 7: to be either candidate, so it's not like it was
Speaker 7: in twenty sixteen.
Speaker 2: Steve, it's time now, and you know we got to
Speaker 2: do this. It's time for obligatory soccer talk. I'm looking
Speaker 2: at Italy and they snuck bag it was a mountain
Speaker 2: Negroes Albania in England snuck by Serbia. But I'm looking
Speaker 2: at that. There's some like real games coming up, like Netherlands, Austria, France,
Speaker 2: Poland Lake. Some of these brackets are interesting. Does England
Speaker 2: have the easiest brackets since time began?
Speaker 7: No, there's no, there's no easy games. And I think
Speaker 7: that the first challenge is get out of your group.
Speaker 7: And you know in tournament football or tournament sports even
Speaker 7: you have to play your way into the tournament. This
Speaker 7: thing is for four weeks or so long, so it's
Speaker 7: best not to start too well.
Speaker 4: I would have thought.
Speaker 7: That Germany and Spain would be worried about how well
Speaker 7: they play, I mean, save your best game to the final.
Speaker 7: And I think England England did a good job of
Speaker 7: starting in a very average way, like Toenham.
Speaker 2: Very good, Steve Major, thank you so much. The Totenham
Speaker 2: strategy to football. Let's be average and.
Speaker 5: So this is what this is the Euros.
Speaker 2: I can't keep up.
Speaker 5: I can't keep up, I mean, but I will pay
Speaker 5: attention because I do like them. In the country we
Speaker 5: have we've internewed.
Speaker 2: If we have interview notes, okay, like Anthony Cascenzi talk
Speaker 2: about his damn Pool and Steph mad Island, Steve Major,
Speaker 2: you have to talk about west Ham football or whatever
Speaker 2: your England's doing. We should, says thank you, Steve Major,
Speaker 2: thank you so much. Will they just be seen. We
Speaker 2: need to dive into this and we're going to get
Speaker 2: him on many times here as we dive into the summer.
Speaker 2: David Rosenberg owns the study of inflation. He was literally
Speaker 2: iconic at Merrill Lynch and Parsing inflation. Frankly, folks, he
Speaker 2: invented it. He did it before anybody, and it's good
Speaker 2: to have him on when he's right, which is we've
Speaker 2: got a new disinflationary tendency. How extensive David Rosenberg, can
Speaker 2: our disinflation be.
Speaker 3: Well? I think that the disinflation momentum, which has restored
Speaker 3: itself after some of the earlier distortions, it's going to
Speaker 3: surprise a lot of the what I call inflation phobes.
Speaker 3: I think we're going to finish the year very close
Speaker 3: to two percent on headline inflation, and the way I'm
Speaker 3: seeing the agriates apply act demand curves behaving, I think
Speaker 3: we're going to get down towards one and a half
Speaker 3: percent by the end of next year.
Speaker 2: Wow.
Speaker 6: So, David, what what drives that inflation down? Because if
Speaker 6: you talk to the you know, the folks on the street,
Speaker 6: they're saying, boy, my supermarket in the gas station.
Speaker 5: I'm just not seeing it. What's going to be taking
Speaker 5: us down that route?
Speaker 3: Well, I think the problem is that people tend to
Speaker 3: conflate prices with inflation, and inflation is not the price level,
Speaker 3: it's the call it the year of year percent change
Speaker 3: in the price level. I mean, look at Paul Vulker
Speaker 3: in the Hall of Fame of Central Bankers for being
Speaker 3: the greatest inflation dragon slayer of all time. But you know,
Speaker 3: nobody calls him the CPI dragon slayer. Prices never went
Speaker 3: down under Vulgar. In fact, the CPI in a seven
Speaker 3: year tenure one up forty percent. What he's renowned for
Speaker 3: was taking the inflation rate down from fourteen percent down
Speaker 3: to four percent. So, yes, prices are high undeniably, but
Speaker 3: the rate of change is dissipating. We had a couple
Speaker 3: of earl yeer quirks. Let's face it, a lot of
Speaker 3: it was auto insurance in response to the lag run
Speaker 3: up and claims that seems to have run us. Course,
Speaker 3: you know if the rental measures are taking their time subsiding,
Speaker 3: but we know that that steering us in the face.
Speaker 3: You know, my analysis is just strictly top down. It's
Speaker 3: really looking at where's the output gap today? And then
Speaker 3: what's your forecast on how the agurate demand and accords
Speaker 3: offers are moving.
Speaker 2: But then, David, what is this FED going to do?
Speaker 2: You are a great student of the history of our
Speaker 2: central bank, and there's this absolute delusion. I see that
Speaker 2: the FED can get out front. Don't they by definition
Speaker 2: have to be dramatically exposed and weight weight weight for
Speaker 2: the Rosenberg disinflation.
Speaker 3: Well, I don't think that they have to wait weight weight.
Speaker 3: I think that the FED is still somewhat shamed for
Speaker 3: having missed nine percent inflation in the summer of twenty
Speaker 3: twenty two and leaning so hard on transitory although eighteen
Speaker 3: months in real time doesn't sound transitory, but in the
Speaker 3: overall annals of economic history, eighteen months is still pretty transitory.
Speaker 3: But they still seem to be fighting for their credibility,
Speaker 3: and you know when they talk about that they need
Speaker 3: more confidence, just saying that they need more months or
Speaker 3: many more months of the disinflation trend that we dominated
Speaker 3: most of last year. So I think that part of
Speaker 3: it is basically the horrible memory of what happened in
Speaker 3: twenty twenty one twenty twenty two and blowing the call.
Speaker 3: And that's one of the reasons I think that they're
Speaker 3: going to be deliberately slow to start cutting interest rates,
Speaker 3: but I think when they do, they're going to be
Speaker 3: pretty significant.
Speaker 6: Are they deliberately slow, David, or are they are ready
Speaker 6: behind the curve in terms of not cutting rates.
Speaker 3: Well, look, the yield curves told them they've been behind
Speaker 3: the curve for at least a year. I think that
Speaker 3: you know what got in the way last year was
Speaker 3: the boost taggrit demand from the fiscal stimulus. So many
Speaker 3: people thought the deficit was going to expand twenty five
Speaker 3: percent in a year when the unemployment rate was self
Speaker 3: of four percent. So you know, I think that was
Speaker 3: part of it was the fiscal stimulus, and I think
Speaker 3: nobody at the FED was expecting that every penny and
Speaker 3: then some of the excess savings file was going to
Speaker 3: be used to stimulate, you know, consumer expenditures. But that
Speaker 3: did happen all in the rearview mirror. So I think
Speaker 3: that you know that are they behind the curve? I
Speaker 3: think they're behind the curve. I think that people will
Speaker 3: be surprised at how soft the demand side of the economy,
Speaker 3: well as it was in the first quarter, but going forward.
Speaker 3: But also I think that the confidence the FED knees
Speaker 3: on the inflation front is going to come. I think
Speaker 3: they'll be cutting by the September meeting David Rosenberg.
Speaker 2: With this Rosenberg Research in Toronto, we continue Paul Kruman,
Speaker 2: the laureate publishing in the recent hours, and he agrees
Speaker 2: with Rosenberg headline X shelter two point one percent core
Speaker 2: inflation X shelter sub two percent one point nine percent.
Speaker 2: What does the stock market do, David Rosenberg given a disinflation?
Speaker 2: I understand there's ambiguity there. Which way does it tilt?
Speaker 3: Well, you know, Tom, when you're asking me about the
Speaker 3: stock market today, you've also just asked me about what's
Speaker 3: in Vidia going to do. It's the it's it's the okay,
Speaker 3: in Vidia, you know, Microsoft, Apple. You know, you could
Speaker 3: argue that when investors are pricing in for Nvidia, which
Speaker 3: is a long term, accelerating growth profile, has nothing to
Speaker 3: do with the contours of the business cycle. But I mean,
Speaker 3: come on, we have three stocks that account for twenty
Speaker 3: percent of the S and P five hundred and half.
Speaker 3: The stock market is actually languishing below the fifty day
Speaker 3: moving average, and look at what the small caps are doing,
Speaker 3: and you look at the the widening divergences in the
Speaker 3: stock market. It's really quite quite impressive. But we're just
Speaker 3: just looking at Nasdaq and the SMP five hundred. I
Speaker 3: guess that it has nothing to do with anything that
Speaker 3: basically you may be in Nvidia will just be jacking
Speaker 3: the bean stalk, right, and it is impervious to the
Speaker 3: business cycle. But that you know, if you're talking to
Speaker 3: me about what megacap tech stocks would do in a
Speaker 3: disinflation environment and in a lower rate environment, well, considering
Speaker 3: that they're the longest duration stocks in the stock market
Speaker 3: and they have to command the biggest market share, maybe
Speaker 3: the major averages, maybe outside the Dow because they don't
Speaker 3: have those constituents continue to go up, but it's not
Speaker 3: giving you any sort of real economics. Six Okay, that's.
Speaker 2: Well, what's important? Rosenberg harkens back to the concentration of
Speaker 2: the Canadian stock market, Yeah, which used to be Canadian Pacific, Toronto,
Speaker 2: Dominion Bank, and Molson Golden. Peter lloydge as my stockbroker
Speaker 2: years ago, and he said Molson Golden is one of
Speaker 2: the big three of equities in.
Speaker 5: Can Absolutely, I'm right there with them on that, no problem.
Speaker 6: So David, you know, how do we think about, you know,
Speaker 6: the earnings power of some of these of the S
Speaker 6: and P five hundred here. Seems like the earnings have
Speaker 6: been pretty solid. I mean, I'm not sure what that's
Speaker 6: telling us about this this economy here.
Speaker 3: Well, you know, everybody says it's an earning's driven market,
Speaker 3: but what are earnings up over the past year? Six percent?
Speaker 4: Right?
Speaker 3: And the S and P five foundered is up more
Speaker 3: like thirty percent. So you know, if we had the
Speaker 3: stock market of six percent, earnings of six percent, I'd
Speaker 3: say one hundred percent earning's driven market. But it's been principally,
Speaker 3: principally a multiple driven market, and that's just a sign
Speaker 3: of what animal spirits, momentum, psychology, sentiment, these are important
Speaker 3: things that go into the stock market. But I would
Speaker 3: say that earnings have been okay. They certainly don't justify
Speaker 3: the level of the market price that we have right now.
Speaker 3: But of course, when you have the major mega growth
Speaker 3: tech stocks pricing in a future of five years of
Speaker 3: huge double digit growth, and in fact that with Nvidia
Speaker 3: or like triple digit, well you're going to get this
Speaker 3: market action. But you know, last October the Ford multiple
Speaker 3: was even lofty then it was sitting at eighteen. Today
Speaker 3: it's twenty one three point multiple expansion, and that's without
Speaker 3: the benefit of the FED doing anything. So a lot
Speaker 3: of this is just basically classic John Mayner Kane's animal
Speaker 3: spirits and a tremendous level of confidence over the future.
Speaker 3: But to tell me in the here and now that
Speaker 3: this is earning's driven, it really it's been one part
Speaker 3: earnings and it's been five part multiple expansion.
Speaker 6: So were those big tech Magnificent seven or however many
Speaker 6: names are in that group today, are they should we
Speaker 6: be getting at should investors be getting out of them,
Speaker 6: lightening up on them, hedging them.
Speaker 3: I would That's what I would recommend. But you know,
Speaker 3: we're talking about tremendous emotions that always screw up the
Speaker 3: stock market, which is fear and greed and everybody always
Speaker 3: thinking they can get out of the I'm a big fan,
Speaker 3: not just some diversification. Well that's been thrown out of
Speaker 3: the in the waste paper basket. But I've been saying
Speaker 3: that what is wrong with me balancing the portfolio? But
Speaker 3: I'm finding that so many investors now I've fallen fallen
Speaker 3: in love with their stocks. My motto is fall in
Speaker 3: love with your partner, not your portfolio.
Speaker 2: Oh listen there, doctor David, giving us some some some
Speaker 2: advice there. Thank you so much, David. I got one
Speaker 2: final question, mister Trudeau at G seven looked as lost
Speaker 2: as all the rest of them. What's the political calendar
Speaker 2: in your Canada? When is there an election to determine
Speaker 2: the path of a beleaguered Canada.
Speaker 3: Well, October of next year is the election date for Canada.
Speaker 3: And right now the polls are showing that the Conservatives
Speaker 3: are going to win a landslide majority. Every poll is
Speaker 3: saying the same thing. So answer to that, I will
Speaker 3: have a new prime minister just over a year from now.
Speaker 2: Maybe Justin Trudeau can become GM of the Montreal Canadians.
Speaker 5: I'll thank them.
Speaker 2: David Rosenberg, thank you so much with the Rosenberg research.
Speaker 2: Always good to speak to, but particularly when disinflation clicks
Speaker 2: in massive email shoes in Atlanta, they're like, are you
Speaker 2: kidding me? Where are the newspapers? Have them do it
Speaker 2: from the deep South? Your front pages with Lisa Matals. Lisa,
Speaker 2: you were a miss go oh thank you?
Speaker 8: All right, So you heard about how weight loss drugs. Right,
Speaker 8: there's a problem.
Speaker 9: Food companies are worried, has everyone you know up in arms,
Speaker 9: But clothing retailers are actually saying it's helping sales because
Speaker 9: more slimmer Americans they need to buy new clothes. Right,
Speaker 9: they have these new sizes and you have to buy
Speaker 9: new clothes. This was in the Wall Street Journal. You
Speaker 9: got to check it out. And they don't just want
Speaker 9: a regular wardrobe. They want, you know, body hugging shapes.
Speaker 9: They want sexy clothing to show off their new size.
Speaker 9: The brands are doing it. They're replacing zippers with adjustable corsets.
Speaker 9: They're adding more sheer looks to some of the looks
Speaker 9: that they have, So it's it's a shift.
Speaker 5: That these were This is a real story in a
Speaker 5: Wall Street journal. Yes, I can't.
Speaker 8: They're seeking this ship because they needed the boost the clothing.
Speaker 2: John Farrell was way out front on this. I mean
Speaker 2: he was, I'm like, what are you talking about? Where
Speaker 2: are we two years from now with a zempic with
Speaker 2: a lily product?
Speaker 5: Where are we?
Speaker 2: It's like nine hundred towers a year.
Speaker 9: It's a lot because it depends on if you're insurance,
Speaker 9: because some do, some don't.
Speaker 8: But it's just expanding in so many different ways.
Speaker 9: I mean, all these studies showing how it helps with
Speaker 9: this and helps with that.
Speaker 8: There's now maybe one for pets.
Speaker 5: I mean, it's it works. You know, I've seen it firsthand.
Speaker 5: It works.
Speaker 6: Okay, it's a thing I'm not you know, I've I
Speaker 6: was poop pulling it all. But it is they you know,
Speaker 6: my experience is there's no.
Speaker 5: Appetite, right, you know.
Speaker 8: But that's the thing. So you lose all this weight,
Speaker 8: so you have a whole new wardrobe.
Speaker 1: You gotta star.
Speaker 2: Lose your body keep functioning.
Speaker 8: It does, but you wind up losing protein drinks.
Speaker 5: Yes, you gotta be.
Speaker 8: That's the only problem.
Speaker 5: You want to be exercising.
Speaker 6: You got to be doing the least mantao crazy in
Speaker 6: the basement exercise.
Speaker 5: Thing is that arms are legs today. What are we doing?
Speaker 8: Today's upper body things?
Speaker 5: Today's up fighting the way good minds upper body too.
Speaker 2: Here, let me pick up this glass of tang Next,
Speaker 2: here we go Apple.
Speaker 9: This was actually an interesting article from Mark German over
Speaker 9: in the Terminal always taking it slow with the new
Speaker 9: artificial intelligence offerings that it said it was rolling out.
Speaker 8: It's going to stretch into twenty twenty five. You have
Speaker 8: the company.
Speaker 9: It won't be available for developers to try out until
Speaker 9: later this summer. When it does launch in the fall,
Speaker 9: it's going to come as a preview and some users
Speaker 9: might even have to join this weightless But what Markerman
Speaker 9: is saying is that there are benefits this kind of
Speaker 9: staggered approach. He's saying that it prevents like choke points
Speaker 9: with staffing, but it also gives them more time to
Speaker 9: train AI models for other languages, So there's different benefits there.
Speaker 8: There's a thought process behind the mast.
Speaker 2: All my radars up.
Speaker 6: Well, I'll tell you what Apple is Mark Emer's reporting.
Speaker 6: This is kind of what they do. They don't seem
Speaker 6: to feel they need to rush to be first, a
Speaker 6: little like we'll be second, third, or fourth.
Speaker 5: But when we come in right, it's gonna look awesome. Okay, okay,
Speaker 5: now I need this money this.
Speaker 2: Weekend on my phone, I Google has given me AI
Speaker 2: now and I doutifully went in to try to figureut
Speaker 2: how to get rid of it, and you can't. They're
Speaker 2: forcing me to take some kind of AI and my
Speaker 2: search function that I really don't want.
Speaker 8: Did you try it? You didn't even try it.
Speaker 2: I just it's just too much noise. It's just too
Speaker 2: you know, I mean, it's it's all my radars up.
Speaker 5: Yeah, we'll see, we'll say, Apple.
Speaker 2: Do people want this? I mean, make Siri, I get
Speaker 2: the phone.
Speaker 5: Do you want?
Speaker 2: I go no, and I move on. Really how many
Speaker 2: people are like that?
Speaker 5: Very few?
Speaker 9: I think, But I think it's the fact if you
Speaker 9: could say, hey, Siri, can you return this shirt that
Speaker 9: I bought last week? And Siri can pull up the email,
Speaker 9: find it, send the email automatically to return it, so
Speaker 9: that you, I mean, it does the word.
Speaker 5: If it can do that to solve me, I'm sold.
Speaker 9: It makes my life easier. Okay, wells Fargo, this is interesting.
Speaker 9: They're losing millions of dollars a month. It had this
Speaker 9: fancy rent credit card that it came out with about
Speaker 9: two years ago.
Speaker 8: It launched it with bill Technologies.
Speaker 9: So the perk wise is that users can pay for
Speaker 9: rent without incurring fees from their landlords, while also earning
Speaker 9: reward points. But the thing is it kind of backfired
Speaker 9: because their executives thought that people would kind of get
Speaker 9: into debt and they can make some revenue if people
Speaker 9: just charge.
Speaker 8: Their rent on it.
Speaker 9: But people didn't do that, and so they didn't make
Speaker 9: any money on it. They're losing actually ten million every
Speaker 9: month according to the journal.
Speaker 2: I read every word of the article. It's all accurate.
Speaker 2: I have lived it, and it is a disaster.
Speaker 5: It is.
Speaker 2: It's been a disaster for months. There's actually, as I
Speaker 2: mentioned later in the articles, some security issues where people
Speaker 2: got into my accounts and there's many, many other people,
Speaker 2: not just me. But it's been an It's a perfect
Speaker 2: example of a conservative Belton Suspender's company going we need
Speaker 2: to be cool and digital, let's just do it right,
Speaker 2: and it rarely works out. I thought it would really.
Speaker 5: Wanting your credit card debt every single month. Do not
Speaker 5: let it ride. That's within it. That's that's what the
Speaker 5: advice was for the offspring, and I think they're following it.
Speaker 2: Yeah, do you have one more?
Speaker 1: I do?
Speaker 8: Okay more parents.
Speaker 9: Speaking of debt, they're taking on debt to pay for
Speaker 9: their Disney vacation. Prices are soaring. This is a survey
Speaker 9: from lending Tree. Forty five percent have gone into debt
Speaker 9: for the trip. That's up from thirty percent twenty twenty two.
Speaker 9: How much debt about two thousand dollars, they're saying on average,
Speaker 9: So they're charging up just to give their family that experience.
Speaker 9: And they say they did. They said they don't regret it,
Speaker 9: No regrets. About sixty percent said they don't regret it.
Speaker 2: It say, travels fascinating. I guess every seat's taken. But
Speaker 2: prices are lower, you know, end of the summer. Well
Speaker 2: see Lisa Matteo, Thank you so much the newspapers. This
Speaker 2: is a Bloomberg Surveillance podcast bringing you the best in economics, finance, investment,
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