Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordert. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
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Speaker 2: Terminal and the Bloomberg Business App. Stephen Shark of the
Speaker 2: Short grew of writing Homer's Remains at Risk and cease
Speaker 2: Fire Prospects a week pointing to a prolonged geopolitical disruption
Speaker 2: to global flows, Stephen joins us now for more. Stephen,
Speaker 2: welcome to the program. Let's just run with the base
Speaker 2: case as presented by the President. Things can change, I
Speaker 2: know that, but let's run with two to three weeks.
Speaker 2: Where would this energy market be? Where will it be
Speaker 2: in two to three weeks?
Speaker 3: Absolutely so, with the rate we're going right now the
Speaker 3: way we've modeled it for the next actually three weeks,
Speaker 3: the current timeframe for the spot market right now is
Speaker 3: one hundred and three dollars at barrel. What was our
Speaker 3: top was our initial we'll call it our one stemit
Speaker 3: deviation envelope, and all of the simulations that we've run
Speaker 3: potential price pats. Now that we are well beyond that,
Speaker 3: what do we do we begin to look for that
Speaker 3: next And because of the volatile that's been introduced, we
Speaker 3: have extremely fat tails on the distributions of potential outcomes.
Speaker 3: Three weeks sense we could be looking at one hundred
Speaker 3: and thirty three dollars in oil. So John, what we're
Speaker 3: essentially looking at or doing is the United States. It's
Speaker 3: oil and the contract that we're following in this case
Speaker 3: nomics to WTI.
Speaker 4: That's been the cheapest barrel in the world.
Speaker 3: And now what's happened is the arbitrage is well established.
Speaker 3: So now you're having a tremendous amount of buying interest
Speaker 3: coming in from Asia, coming in from Europe, and hence
Speaker 3: we've been the cheapest barrel. But because of that buying in,
Speaker 3: just because you just can't get oil from Asian refiner
Speaker 3: from U typical sources, you're going to start bidding that
Speaker 3: oil higher. And that's what I think we're starting to
Speaker 3: see in the Gulf Coast is that US prices have
Speaker 3: been suppressed over the past four weeks, but that now
Speaker 3: it's starting to catch up to reality and therefore over
Speaker 3: the next three weeks, as this disruption continues, certainly the
Speaker 3: path is higher to our second tier envelope, which is,
Speaker 3: like I said, one hundred and thirty one hundred and
Speaker 3: thirty four dollars a hour.
Speaker 1: Is that high enough to cause demand destruction for people
Speaker 1: to pull back on their use of oil or their
Speaker 1: ability to get oil enough to get oil prices back
Speaker 1: lower in the near.
Speaker 3: Term based on recent observations and economic theory, noe, it's
Speaker 3: not there yet.
Speaker 4: We have to keep in mind that.
Speaker 3: Demand elasticities for guest line have changed tremendously. I'll give
Speaker 3: myself as an example. I drive plugging electric hydrid. I
Speaker 3: fill my car up about once every two to three months. Now,
Speaker 3: juxtapose this back to two thousand and eight when oil
Speaker 3: prices peaked that one hundred and forty nine dollars a barrow.
Speaker 3: I was filling my SUV up every single week. So
Speaker 3: that was an incredible pain point that has changed over
Speaker 3: the last fifteen years.
Speaker 4: So that part was that is.
Speaker 3: So what has happened is back then, if we adjust
Speaker 3: for inflation, three dollars and sixty cents at the pump,
Speaker 3: was that that that pressure point, that's that inflection point
Speaker 3: where demand started to fall off. We are higher because
Speaker 3: we've introduced more variables into the equation.
Speaker 4: So based on what we've seen recently, I e. We're
Speaker 4: still a.
Speaker 3: Dollar below a gallon where we were in twenty twenty two,
Speaker 3: and that did not destroy demand. So we'll look to
Speaker 3: see oil prices up of one hundred and fifty hundred
Speaker 3: and sixty dollars a level before I think we start
Speaker 3: to see the market correct and demand destruction kick in.
Speaker 5: Steven, are we done? You think what verbal intervention has
Speaker 5: its run its course?
Speaker 3: Well, are we doing verbal? So you're trying to draw
Speaker 3: on the market or try and do I don't think so.
Speaker 3: I mean, I think it's just something as an analyst,
Speaker 3: as a trade you just have to endure.
Speaker 4: And so this is why we look at the spread markets.
Speaker 3: So then the forward curve and any given market is
Speaker 3: your indication of where we're potentially going. And so when
Speaker 3: we see that, when we look at what is transpired
Speaker 3: now with the past.
Speaker 4: The week in wt I with the curve.
Speaker 3: That is an extreme bid or price increase on the
Speaker 3: front end of the curve for those prompt barrels, but
Speaker 3: that is now also starting to cascade down long from
Speaker 3: the curve. And then we look at a relationship between WTI,
Speaker 3: Dubai or you. For instance, we have oil production in
Speaker 3: West Texas delivered into Houston that is trading at a
Speaker 3: twelve dollars discount to the global price of oil, and
Speaker 3: that arbitr excuse me, and there's a backgradation along that,
Speaker 3: meaning that there's a strong bid for West Texas oil
Speaker 3: and hence why we're still bullish on this market. And
Speaker 3: so regardless, you could verbally, you could address in the
Speaker 3: market and say anything you want. The market is reality,
Speaker 3: and what the reality is telling us, it's that prices
Speaker 3: are here higher and they're going to be higher for longer,
Speaker 3: certainly over the next three weeks.
Speaker 5: Well, energy companies capitalized by actually reinvesting and expanding.
Speaker 3: Production eventually, but what we'll see now, and if you're
Speaker 3: looking at quarterly earnings, quarterly earnings for if you are
Speaker 3: a refiner, looked the great I mean, you have diesel
Speaker 3: fuel that's trading out one hundred and seventy dollars a
Speaker 3: barrel against one hundred dollars crude oil, or guess Liane
Speaker 3: trading out one hundred and thirty dollars a barrel against
Speaker 3: one hundred dollars oil. So the refinery margins are going
Speaker 3: to look extremely great coming through the first quarter. Now
Speaker 3: as we transition to this second quarter, as we've said
Speaker 3: that US prices are starting to catch up, so that
Speaker 3: is going to be a bigger hit now that that
Speaker 3: is what has been a boom from Golf Coast refineries,
Speaker 3: that wide margin between product.
Speaker 4: Prices and crude oil prices. That's catching up, and oil prices.
Speaker 3: Are catching up, and that's going to begin to squeeze margins,
Speaker 3: so we're going to see a lot of volatility. What
Speaker 3: was good for refiners last quarter is shaping up to
Speaker 3: be especially when demand is starting to pick up coming
Speaker 3: into the second quarter. So you've got the double wheremy
Speaker 3: of domestic oil prices catching up to the global price
Speaker 3: of oil at a time second quarter going into summer
Speaker 3: where demand for the output of the refinery is going
Speaker 3: to surge.
Speaker 2: Stephen, I don't just want to talk about price. I
Speaker 2: want to talk about shortages and outright shortages. This from
Speaker 2: the Australian Prime Minister. We mentioned his comment earlier on
Speaker 2: today over the coming weeks, if you can switch the
Speaker 2: catch in the train or bus or tramp to work,
Speaker 2: do so. The EU Commission suggesting people travel less across Europe.
Speaker 2: You can track, You've got visibility on the tankers that
Speaker 2: are arriving and won't be arriving. You can see the
Speaker 2: cushion that some of these countries have got the supply,
Speaker 2: they've got the inventories. How close are we to a
Speaker 2: shortage where these governments are actively tanning the people to
Speaker 2: stop doing things in the same way that they are
Speaker 2: in Asia at the moment.
Speaker 4: Yeah, absolutely so.
Speaker 3: Looking at the problem month, which has about three more weeks,
Speaker 3: that time frame that the President supposedly says we're going
Speaker 3: to be out of there or wrap this up. The
Speaker 3: market's highly skeptical, So I'll give it that three week
Speaker 3: time range where we'll start to see, certainly economies in
Speaker 3: the Far East, and now we're starting to see economies
Speaker 3: because that Atlantic basin spread is starting to tighten up,
Speaker 3: economies in Europe begin to seize. Up here in the
Speaker 3: United States, oil inventors are sitting.
Speaker 4: Out of three.
Speaker 3: We just got the weekly update yesterday sitting out of
Speaker 3: three year high. So there is oil here, but the
Speaker 3: problem is it's not where it.
Speaker 4: Needs to be.
Speaker 3: So even though we do have and the President might
Speaker 3: want to say buy American oil, that's great, but tanker
Speaker 3: logistics limitations, there's just a limit to how much stack.
Speaker 4: Can sate that.
Speaker 3: So while here in the US, as we said, oil
Speaker 3: prices or excuse me, oil supplies are fat three year highs,
Speaker 3: they're really being the seaze up and that's why we're
Speaker 3: starting to see the Brent mark it or WTI now
Speaker 3: outperforming Brent at this point because European buyers refineries are
Speaker 3: coming out of their once they come out of the
Speaker 3: refined maintenance season, they're going to be buying a lot
Speaker 3: more oil, a lot more US oil, but there is
Speaker 3: a limit to how much. So we are two to
Speaker 3: three weeks away from a shortage that we're already seeing
Speaker 3: that that's going to grow.
Speaker 4: Exponentially over the next couple of weeks. Stay with us.
Speaker 2: More Bloomberg surveillance coming up after this. So here's the
Speaker 2: laces this morning. The President's stirring investor anxiety, pledging more
Speaker 2: aggressive action in a round without concrete steps to reopen
Speaker 2: the stradit for Merz at Mills of Raymond James, writing,
Speaker 2: the clear desire of the US and a round to
Speaker 2: wind down the wall will need to be reconciled within
Speaker 2: the very narrow diplomatic pathway it joins US. Now for
Speaker 2: more ed, welcome to the program. Can you describe to
Speaker 2: us in a way you've described it to clients for
Speaker 2: the next two to three weeks might look.
Speaker 6: Like, Yeah, John, I think that there's going to be
Speaker 6: an intensity of the operations. I think there is a
Speaker 6: higher probability of a ground operation.
Speaker 4: I think that the market is prepared for.
Speaker 6: At Raymond James, we've been highlighting to clients that it
Speaker 6: will take a while for things to return to normal
Speaker 6: once the straits of Hormoz has reopened. Our energy team
Speaker 6: has been doing a considerable amount of work on that.
Speaker 6: And I do think that there has been an expectation
Speaker 6: in this market that things were going to go faster,
Speaker 6: quicker and cleaner. That expected, and we have been telling
Speaker 6: folks some cynicism here has been warranted, and the cynicism
Speaker 6: has actually been the thing that has played out consistently
Speaker 6: over this last month.
Speaker 5: And when you say ground operation, do you mean to
Speaker 5: open up the straight of Hormoves for normal traffic or
Speaker 5: do you mean for military boots on the ground to
Speaker 5: go seize the uranium.
Speaker 6: I think, Amory, that's to be determined. I do think
Speaker 6: that there is a history of President Trump. Once he
Speaker 6: has built up a military capability, he uses that military capability.
Speaker 6: So when we see how many troops have been positioned
Speaker 6: in the area, I do think that there is an
Speaker 6: obvious desire to reopen the straits of her moves. But
Speaker 6: President Trump last night did talk about that as something
Speaker 6: more natural than kinetic. There has been these conversations about
Speaker 6: the potential operations to seize uranium. To me, that's probably
Speaker 6: the higher probability. I don't know exactly how robust that
Speaker 6: is going to be. I think some of that is
Speaker 6: to be determined, but very clearly Emory here, President Trump
Speaker 6: is building up pressure and was telling even the kind
Speaker 6: of Iranians last night they have a choice still here
Speaker 6: that the operations can get much more intense and less
Speaker 6: they negotiate.
Speaker 5: And why give this speech last night? It felt like
Speaker 5: the tone of this speech was trying to get the
Speaker 5: American people on board that maybe it should have been
Speaker 5: given the first week or two of the operation.
Speaker 6: Yeah, Emory, That's what we were discussing internally here at
Speaker 6: Raymond James, because I think there was a hope and
Speaker 6: an expectation that a speech a month into this was
Speaker 6: a speech to wrap it up. The tone of the
Speaker 6: speech was the first real rationalization directly from President Trump
Speaker 6: speaking to the American people of exactly why and almost
Speaker 6: preparing the American people for what comes next. When you
Speaker 6: have all of those comparisons to the lengths of other wars,
Speaker 6: it is somewhat ominous. We are hopeful that this is
Speaker 6: two to three weeks from now, but there's no guarantees.
Speaker 6: I think that there was a hope that it was
Speaker 6: only going to be kind of less than a month
Speaker 6: when this started a month ago. Now we're already extending
Speaker 6: those timelines. So making that pitch to the American people
Speaker 6: because things are probably going to escalate before they de
Speaker 6: escalate is kind of my biggest takeaway from that speech.
Speaker 1: Emmory, This to me is the key pointed that this
Speaker 1: was essentially preparing the American people for whatever is to
Speaker 1: come next. Do you have a sense of what that
Speaker 1: could look like and how much it will come in
Speaker 1: concert with United Arab Emirates, with Saudi Arabia, with other alliances.
Speaker 6: Yeah, we're seeing kind of more of those alliances that
Speaker 6: take place. We're looking at the fact that AARAN in
Speaker 6: their initial response, probably kind of drew the region more
Speaker 6: together than split it. One of the key questions that
Speaker 6: we've been asking has been how long does the United
Speaker 6: States and Israel stay together? Because there is a big concern,
Speaker 6: especially in the national security community that I talk to,
Speaker 6: about whether or not the endgame for the United States
Speaker 6: and the endgame for Israel are going to be aligned,
Speaker 6: especially if this goes much longer than mid April here
Speaker 6: and politically you do want to have those alliances, but
Speaker 6: usually those alliances happened before an attack. Build those cases,
Speaker 6: get the American people on board. As we've seen gas prices,
Speaker 6: as we've seen inflation, as we've seen other impacts of this,
Speaker 6: As we see a market reaction to that, the American
Speaker 6: people are going to put more and more pressure on
Speaker 6: members of Congress in on this administration to wrap this
Speaker 6: up sooner rather than later.
Speaker 2: And let's just stay on international relations. There's a very
Speaker 2: strange dynamic to the addressed by the President yesterday, and
Speaker 2: it's as follows. For a long long time this country,
Speaker 2: successive governments have wanted to keep the likes of China
Speaker 2: out of these regions, keep them well away, contain any
Speaker 2: international ambition they might have. And now we're almost in
Speaker 2: fighting the men to help solve a problem. Do we
Speaker 2: really want the Chinese military in the straight offormers No.
Speaker 6: And when we've talked to some of the national security
Speaker 6: advisors and kind of China contacts that we have, there
Speaker 6: is almost zero expectation that a Chinese military will be involved.
Speaker 6: But you do have the fact that Trump and she
Speaker 6: will ultimately meet here over the next month and a half.
Speaker 6: And Trump always pulls things together, and to the extent
Speaker 6: that there are things that he is going to be
Speaker 6: asking China for, China is going to be asking us for,
Speaker 6: kind of adding in, hey, this is more of your
Speaker 6: problem than my problem. Is really the subcontext of everything
Speaker 6: that he's saying with this tracer for moves, it's like, yeah,
Speaker 6: it's a big issue, but maybe Chinese is more, Maybe
Speaker 6: NATO members outside of the United States needs more, maybe
Speaker 6: France needs is more. In particular, come in protect that
Speaker 6: it is not just our problem. I think this here
Speaker 6: is a reflection John over the fact that he does
Speaker 6: feel as if everyone has been willing to rally to
Speaker 6: his side on what he sees as an existential threat
Speaker 6: to the United States into the world.
Speaker 2: Stay with us more Bloomberg Surveillance coming up after this.
Speaker 2: Equities lower following back to back gains with the presidents
Speaker 2: turning up the pressure on a run once again. Sarah
Speaker 2: Hunt of Valpied saxon Words, writing, higher energy prices post
Speaker 2: a real challenge to both earnings and the consumer. But
Speaker 2: given the multiple compression and equity markets, valuations aren't becoming attractive.
Speaker 2: Sarah joins us now for more, Sarah, good morning, Good morning.
Speaker 2: Start with earnings. Is the outlook for earning solid or
Speaker 2: analysts just really really slow.
Speaker 7: I think that there is a problem with earnings that
Speaker 7: is going to come through from energy, and it looked
Speaker 7: like if we were going to get some sort of
Speaker 7: a change over the last couple of days, maybe that
Speaker 7: would be okay. I'm starting to think as that weill
Speaker 7: back curve starts to move higher. I don't see how
Speaker 7: earnings are going up for twenty twenty six. I think
Speaker 7: that there to be some sort of a balance, and
Speaker 7: I don't know where that balance is yet, but I
Speaker 7: think that we are getting a little over our skis
Speaker 7: on the arning.
Speaker 2: Makes the question if I should begin excited about multiple
Speaker 2: compression with that in mind.
Speaker 7: I think, you know, it's amazing you write something a
Speaker 7: day ago and the next day it's already different, which
Speaker 7: is why you know there's a lot of whiplash going
Speaker 7: on on the narratives. I think that there was. You
Speaker 7: could see how much the market was anticipating some sort
Speaker 7: of an off ramp. It looked like there might be
Speaker 7: some sort of discussions that might get to something. The
Speaker 7: fact that we're back in this place a day later
Speaker 7: tells you that this is going to be at least
Speaker 7: for the next foreseeable whatever future that is twenty four
Speaker 7: to forty eight hours, you are going to have more issues.
Speaker 7: To your point about trying to get back to normal,
Speaker 7: I think that because there was normal illustraight of horror moves,
Speaker 7: it was okay that the Red Sea wasn't back to normal.
Speaker 7: I think there's going to be a huge push to
Speaker 7: get anything back as soon as you get it open.
Speaker 7: But when that's going to be we don't know. The
Speaker 7: longer that takes the higher energy prices are that's going
Speaker 7: to feed through the earnings and people are not going
Speaker 7: to like that. So yes, I think that that definitely
Speaker 7: that tempers my usiasm for valuation compression because I don't
Speaker 7: think that you're going to get a solution as quickly
Speaker 7: as we thought just a day ago.
Speaker 1: So when I hear you talking, I'm like, oh, yeah,
Speaker 1: this is the reason why I'm nervous. And then when
Speaker 1: I read your commentary, you see opportunities out there, I think,
Speaker 1: what am I thinking about? I just obviously need to
Speaker 1: go take a walk. So how do you get the
Speaker 1: conviction to decide to buy given the level of uncertainty?
Speaker 4: Have there really been.
Speaker 1: Enough selloffs in specific sectors or names to justify taking
Speaker 1: that risk.
Speaker 7: I think that that's I think that's sort of the key.
Speaker 7: And I loved Jim zelter on earlier this morning because
Speaker 7: he was like, take a step back, look, zoom out,
Speaker 7: because it's also a timing question. Right over time, we
Speaker 7: know that market problems eventually get resolved. Am I looking
Speaker 7: at a five year window, at two year window a
Speaker 7: six month window? In a six month window, I can
Speaker 7: see a lot of volatility, and I would not be
Speaker 7: as sanguine on a six month basis as I would
Speaker 7: be on a longer term basis. Is there going to
Speaker 7: be more volatility this year?
Speaker 3: Yes?
Speaker 7: Do people are still thinking that we end the year
Speaker 7: either higher than we are today or a flat to
Speaker 7: where we started. That's really going to depend on the
Speaker 7: next on the developments over the next couple of months.
Speaker 7: And I think that a month ago this was let's
Speaker 7: see how long it takes. Well, we're into a period
Speaker 7: of time now where that compression and just the traffic
Speaker 7: jam of getting through there is going to be a
Speaker 7: problem and is going to keep energy levels high, and
Speaker 7: that's going to be hard for growth. I don't see
Speaker 7: how that doesn't impact earning.
Speaker 4: So taking a.
Speaker 1: Step back, I took a walk and I'm thinking, well,
Speaker 1: what has structurally changed if you take a look at
Speaker 1: a three to five year horizon, And what a lot
Speaker 1: of people keep saying is maybe not the equity story,
Speaker 1: not the AI story, but does the bond market story
Speaker 1: change given suddenly the renewed need for fiscal the renewed
Speaker 1: need to sort of support from a debt financing perspective,
Speaker 1: A lot of social initiatives that are only getting more current.
Speaker 7: Well, that turns into a much longer, deeper discussion about
Speaker 7: what is the point at which the government cannot keep
Speaker 7: throwing money at things? And at some point you would
Speaker 7: think that there is a point at which bonds start
Speaker 7: to get higher priced because everyone's worried about the fiscal
Speaker 7: Every time I think that's to happen, it seems to
Speaker 7: back off. So I don't know what that point is, right,
Speaker 7: but it's true there should be a point. Maybe that's
Speaker 7: why gold is sitting at forty five hundred dollars, because
Speaker 7: people are going at some point every currency has a
Speaker 7: problem because every government is too indebted. I don't know
Speaker 7: what that point is, though, and that point keeps moving.
Speaker 5: So why do you think the market is so fixated
Speaker 5: on Trump's truths and just not looking at what he's doing.
Speaker 5: Just this week again, another US aircraft carrier and two
Speaker 5: destroyers were sent again to the region.
Speaker 4: The troop build.
Speaker 5: Up is consistent and it's getting higher.
Speaker 3: You know.
Speaker 7: I don't know if people think that that is a
Speaker 7: strategic move, if that is an actual move, if that
Speaker 7: is a syops move, I don't know. And I think
Speaker 7: that the problem with dealing with a situation like this,
Speaker 7: that's so fluid, and everybody has something to say, and
Speaker 7: everybody has an agenda. It makes it really difficult to
Speaker 7: parse out what's actually going to happen. You know, maybe
Speaker 7: we could just be looking threatening. Maybe we're actually going
Speaker 7: to go and put boots on the ground. People said no,
Speaker 7: then they said yes, and they said no. I don't
Speaker 7: know what the answer is, but I think that trying
Speaker 7: to parse out what's happening from what people are saying
Speaker 7: is increasingly difficult. The market is obviously not necessarily buying
Speaker 7: that to the extent that it was in the beginning.
Speaker 4: So where do you hide?
Speaker 7: The term hide is such a tough one because when
Speaker 7: you're managing money, you have to be managing money, right.
Speaker 7: But I think this goes back to where we were
Speaker 7: sort of positioned into the beginning of the year, which
Speaker 7: is the balance sheets, cashle all those things really matter.
Speaker 7: All of the money that is being spent by the
Speaker 7: mag seven has made the mag seven less attractive than
Speaker 7: it was. I think that was a place where people spend.
Speaker 4: A lot of time.
Speaker 7: There was a lot of money in there. Some of
Speaker 7: that's come out because people are worried about that spend.
Speaker 7: There's still a lot of companies that have good cash flow,
Speaker 7: decent balance sheets, and are doing business that will continue
Speaker 7: to do it. I think growth is going to slow.
Speaker 7: It just makes it more tricky.
Speaker 2: And Video has done nothing half a months. Microsoft was
Speaker 2: down pretty hard in the month of March. Alphabet down
Speaker 2: to you mess it down by double digits. What's going
Speaker 2: on with those names?
Speaker 7: I think the big concern is they're all spending a
Speaker 7: lot of money. They're all spending a lot of money,
Speaker 7: and we're trying to figure out what the returns on
Speaker 7: that money are going to be right now, since they're
Speaker 7: all running into it. It was fine for Nvidia for
Speaker 7: a while, then people get worried about it. If you
Speaker 7: start to see anybody pull back on Capex, that's going
Speaker 7: to give that whole sector a scare because everybody who's
Speaker 7: spending a lot of money is now borrowing.
Speaker 2: Do you think we're close to that moment learning that release.
Speaker 7: I think we're closer than we were. I think we're
Speaker 7: much closer than we were because you start to see
Speaker 7: the electricity issues with data centers too. Right, Maine just
Speaker 7: said no data centers for two years. We want to
Speaker 7: see what happens.
Speaker 2: There is a.
Speaker 7: Conflict now between energy and data centers that there wasn't
Speaker 7: before that this is just exacerbating. I mean, it was
Speaker 7: there before, but it wasn't in the headlines in the
Speaker 7: same way before. And now you're starting to see that,
Speaker 7: and I think that that could kick something like that off,
Speaker 7: and I think that could be problematic.
Speaker 1: Is that the reason why people don't see necessarily big
Speaker 1: tech being the obvious leader out of this potential rut
Speaker 1: that we see in the equity market?
Speaker 7: I think so. But on the other hand, I will
Speaker 7: take the counter argument and also say they are in
Speaker 7: the best position to weather this in the end. So
Speaker 7: even if they do pull back CAPEX, even if they do,
Speaker 7: even if people start to get really worried about that,
Speaker 7: they're still generating a lot of cash. They're going to
Speaker 7: generate a lot of cash. So to the extent that
Speaker 7: those multiples have compressed a little bit, that probably makes
Speaker 7: that part more attractive because you don't know enough about
Speaker 7: what's going to happen with some of the other sectors
Speaker 7: that are pulled back, like software, although I definitely think
Speaker 7: that's going to be an and and not an or
Speaker 7: for AI.
Speaker 2: This is the Bloomberg Surveillance Podcast bringing you the best
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