1 00:00:00,120 --> 00:00:12,879 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is the Bloomberg 2 00:00:12,960 --> 00:00:17,000 Speaker 1: Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join 3 00:00:17,079 --> 00:00:21,000 Speaker 1: us each day for insight from the best in economics, finance, investment, 4 00:00:21,239 --> 00:00:24,840 Speaker 1: and international relations. You can also watch the show live 5 00:00:25,079 --> 00:00:29,400 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 6 00:00:29,560 --> 00:00:32,960 Speaker 1: see the show weekday mornings from seven to ten am 7 00:00:33,000 --> 00:00:37,000 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 8 00:00:37,040 --> 00:00:40,800 Speaker 1: to the podcast on Apple, Spotify, or anywhere else you listen, 9 00:00:41,080 --> 00:00:44,760 Speaker 1: and always I'm Bloomberg Radio, the Bloomberg Terminal, and the 10 00:00:44,760 --> 00:00:49,520 Speaker 1: Bloomberg Business App. Here's the right guy to talk about 11 00:00:49,520 --> 00:00:53,519 Speaker 1: the partial derivatives of the algebraic function, boy known as 12 00:00:53,600 --> 00:00:58,000 Speaker 1: American GDP. He majors in physics for mister Peck and 13 00:00:58,000 --> 00:01:01,880 Speaker 1: the crew at Morgan Stanley Portfolio Solutions Group. CEE IO 14 00:01:02,040 --> 00:01:05,479 Speaker 1: Jim Carren joins us. Right now, which of the alphabet 15 00:01:05,600 --> 00:01:10,120 Speaker 1: soup of the function matters? The consumption, investment, government, or NX. 16 00:01:11,360 --> 00:01:14,200 Speaker 2: Thank you, Tom. Well, Look, I think all of it matters, 17 00:01:14,240 --> 00:01:17,120 Speaker 2: but right now I think consumption probably matters the most 18 00:01:17,280 --> 00:01:22,160 Speaker 2: sev seventy percent of GDP. It's something that what we're 19 00:01:22,200 --> 00:01:25,280 Speaker 2: looking at today is really about the strength of the consumer. 20 00:01:25,480 --> 00:01:27,520 Speaker 2: The jobs data, all of that stuff is going to 21 00:01:27,560 --> 00:01:32,039 Speaker 2: matter quite a bit. That's been probably the most surprising 22 00:01:32,080 --> 00:01:35,240 Speaker 2: element of this period of time is that we've been 23 00:01:35,240 --> 00:01:38,679 Speaker 2: able to bring in point the inflation rates down, but 24 00:01:39,840 --> 00:01:42,240 Speaker 2: the jobs data is actually said relatively strong, which is 25 00:01:42,319 --> 00:01:44,080 Speaker 2: kept surprising the strong GDP numbers. 26 00:01:44,080 --> 00:01:46,559 Speaker 1: Does the yield space Paul's on the two year five 27 00:01:46,560 --> 00:01:52,080 Speaker 1: percent yield, does the yield space describe Ellen Zenner's economics? 28 00:01:53,200 --> 00:01:55,040 Speaker 1: You know, I think it does. 29 00:01:55,360 --> 00:01:57,920 Speaker 2: It's just really a question of, like, if we have 30 00:01:57,960 --> 00:02:01,440 Speaker 2: the two year yield flirting with five percent, that makes 31 00:02:01,520 --> 00:02:05,320 Speaker 2: sense in an environment where we believe the Fed may 32 00:02:05,640 --> 00:02:10,520 Speaker 2: only cut possibly one time this year, and that's really 33 00:02:10,720 --> 00:02:12,919 Speaker 2: indicative of the strength. And you know, we're going to 34 00:02:12,960 --> 00:02:16,120 Speaker 2: see what the first quarter GDP numbers come out to 35 00:02:16,160 --> 00:02:19,120 Speaker 2: look like in the next four minutes or so. But 36 00:02:19,280 --> 00:02:22,359 Speaker 2: what's also very important about that, though, is really tomorrow's 37 00:02:22,400 --> 00:02:25,480 Speaker 2: PCEE number, the inflation number, So good growth like two 38 00:02:25,520 --> 00:02:28,320 Speaker 2: and a half percent growth potentially, you know, as potential 39 00:02:28,320 --> 00:02:30,880 Speaker 2: growth or two point seven percent is what's expected on 40 00:02:30,960 --> 00:02:35,800 Speaker 2: the Bloomberg surveys for for PCE and you know, for 41 00:02:35,880 --> 00:02:40,480 Speaker 2: GDP it's two point five percent. If that growth number 42 00:02:40,520 --> 00:02:42,880 Speaker 2: is good, that's fine as long as inflation is low. 43 00:02:43,360 --> 00:02:46,440 Speaker 2: But if inflation turns out to be high with strong growth, 44 00:02:46,560 --> 00:02:48,320 Speaker 2: then the FED has a problem. The FED has no 45 00:02:48,440 --> 00:02:52,440 Speaker 2: problem with strong growth and low inflation, full employment, strong growth, 46 00:02:52,560 --> 00:02:54,959 Speaker 2: you know, stable prices, that's what the FED wants. 47 00:02:55,280 --> 00:02:56,880 Speaker 3: So what are the good folks in Morgan Stanley, the 48 00:02:56,880 --> 00:03:00,160 Speaker 3: investment management doing in terms of getting positioned here or 49 00:03:00,200 --> 00:03:03,160 Speaker 3: for FED that I guess we now the market's now 50 00:03:03,160 --> 00:03:05,160 Speaker 3: come to the conclusion, as you mentioned, they're not going 51 00:03:05,240 --> 00:03:06,639 Speaker 3: to be cutting as much here. 52 00:03:06,639 --> 00:03:07,120 Speaker 4: What do we do? 53 00:03:07,280 --> 00:03:07,520 Speaker 1: Yeah? 54 00:03:07,600 --> 00:03:10,800 Speaker 2: So so I think really, you know, the key element 55 00:03:10,880 --> 00:03:14,360 Speaker 2: here is when we manage multi ascid portfolios across fixed 56 00:03:14,360 --> 00:03:16,400 Speaker 2: income and equity, one of the things that we have 57 00:03:16,440 --> 00:03:19,880 Speaker 2: to think about is how do we how do we 58 00:03:20,000 --> 00:03:24,560 Speaker 2: use bonds to hedge equities. And one of the conclusions 59 00:03:24,600 --> 00:03:26,720 Speaker 2: that we've come up with is that you may not 60 00:03:26,880 --> 00:03:29,920 Speaker 2: want to be as long duration in periods of you know, 61 00:03:30,000 --> 00:03:32,440 Speaker 2: potential turmoil like the correction that we're seeing in the 62 00:03:32,440 --> 00:03:36,000 Speaker 2: markets today inequities as much as you had in the past. 63 00:03:36,000 --> 00:03:38,520 Speaker 2: And the reason is is that I think that you know, 64 00:03:38,560 --> 00:03:40,720 Speaker 2: the bull market and bonds, in my view, has ended 65 00:03:40,720 --> 00:03:43,040 Speaker 2: we're likely to go sideways and arrange and interest rates 66 00:03:43,080 --> 00:03:46,240 Speaker 2: for a long period of time, in which case having 67 00:03:46,360 --> 00:03:49,440 Speaker 2: extra long duration in your portfolios these days is probably 68 00:03:49,440 --> 00:03:50,640 Speaker 2: not the most. 69 00:03:50,400 --> 00:03:53,440 Speaker 1: Awesome numbers on that. I mean, I'm sure many bond 70 00:03:53,480 --> 00:03:56,880 Speaker 1: people short durations twenty years because they're all, yeah, now 71 00:03:57,160 --> 00:04:01,480 Speaker 1: give me a year statistic. It's that of this blowney duration. 72 00:04:01,760 --> 00:04:04,720 Speaker 2: Okay, yeah, now a good point, and it's good clarity 73 00:04:04,760 --> 00:04:08,040 Speaker 2: to add. So the aggregate index for the US is 74 00:04:08,040 --> 00:04:10,440 Speaker 2: about six and a half years of duration, so that's 75 00:04:10,480 --> 00:04:13,280 Speaker 2: generally what people think of as neutral duration. What I 76 00:04:13,320 --> 00:04:15,720 Speaker 2: would say is that you might want to be somewhat 77 00:04:15,760 --> 00:04:18,400 Speaker 2: underweight that and have maybe somewhere on the order of 78 00:04:18,440 --> 00:04:20,400 Speaker 2: like five to five and a half years of duration, 79 00:04:20,480 --> 00:04:23,760 Speaker 2: so just slightly lower than index duration, I think is 80 00:04:23,800 --> 00:04:27,800 Speaker 2: a more optimal hedge against the broad returns in your 81 00:04:27,960 --> 00:04:31,560 Speaker 2: fixed income inequity portfolios. Now that may be financial market 82 00:04:31,560 --> 00:04:35,920 Speaker 2: heresy to say go underweight duration and it reduces risk 83 00:04:36,080 --> 00:04:39,599 Speaker 2: because typically people think adding bonds and adding duration is 84 00:04:39,640 --> 00:04:42,480 Speaker 2: what reduces risk, and that's historically been true, but that's 85 00:04:42,520 --> 00:04:44,320 Speaker 2: been true in a bond bull market. 86 00:04:44,400 --> 00:04:52,520 Speaker 1: And we're ninety seconds away from a hugely anticipated GDP number. 87 00:04:52,600 --> 00:04:57,760 Speaker 1: Let's review this. The quarter ends twelve thirty one, and 88 00:04:58,160 --> 00:05:00,480 Speaker 1: they take a month to get it out. So now 89 00:05:00,480 --> 00:05:04,320 Speaker 1: the quarter ends three thirty one, March thirty first, and 90 00:05:04,360 --> 00:05:06,920 Speaker 1: get out your calendar. In four or five, six weeks along, 91 00:05:07,520 --> 00:05:10,520 Speaker 1: we get the first look at GDP and I thought 92 00:05:10,640 --> 00:05:14,640 Speaker 1: Veronica Clark was was good. Victoria Clark, it's city group 93 00:05:14,720 --> 00:05:18,320 Speaker 1: of saying recently, the first look, the second look, the 94 00:05:18,320 --> 00:05:21,920 Speaker 1: third look have been pretty smooth. You know, it hasn't 95 00:05:21,960 --> 00:05:24,680 Speaker 1: been adjustment. So I think there's even more weight here. 96 00:05:25,160 --> 00:05:29,120 Speaker 1: The Atlanta GDP number Paul two point seven percent, the 97 00:05:29,120 --> 00:05:31,680 Speaker 1: Bloomberg survey two point five percent. Yep. 98 00:05:32,160 --> 00:05:35,359 Speaker 3: So I mean this economy, the growth is slowed, but 99 00:05:35,480 --> 00:05:38,440 Speaker 3: this growth is still there. Inflation is coming down. Yes, 100 00:05:38,480 --> 00:05:41,440 Speaker 3: it's still sticky. But you put all that together well, 101 00:05:41,720 --> 00:05:44,000 Speaker 3: and as Jim was just mentioning, it kind of suggests 102 00:05:44,000 --> 00:05:47,000 Speaker 3: this FED doesn't have to and you know, get over. 103 00:05:46,839 --> 00:05:49,760 Speaker 1: At skis toime. I'm glad we got the GDP price index. 104 00:05:49,880 --> 00:05:53,480 Speaker 1: One point six percent was a prior and it explodes 105 00:05:53,600 --> 00:05:55,480 Speaker 1: up to a three percent number. Here we're going to 106 00:05:55,520 --> 00:06:00,839 Speaker 1: see in fifteen seconds there's also course PCEE price But 107 00:06:00,920 --> 00:06:03,440 Speaker 1: then don't confuse that with the inflation data that we 108 00:06:03,520 --> 00:06:06,480 Speaker 1: see tomorrow. Gets a little confusing. Jim Carron will explain 109 00:06:06,560 --> 00:06:10,479 Speaker 1: that if he stays around here, it's Bloomberg's surveillance. Here 110 00:06:10,560 --> 00:06:12,800 Speaker 1: is the data coming out. We get trade data first. 111 00:06:12,800 --> 00:06:16,000 Speaker 1: It's pretty much a little bit larger deficit. But I'm 112 00:06:16,040 --> 00:06:18,760 Speaker 1: not going to go we're wholesale inventories. I don't understand. 113 00:06:19,040 --> 00:06:22,000 Speaker 1: Claims is a terrible number? Are you kidding me? Two 114 00:06:22,080 --> 00:06:25,039 Speaker 1: hundred and seven thousand, and now we get the GDP 115 00:06:25,200 --> 00:06:29,720 Speaker 1: statistics and this will be market moving two point five 116 00:06:29,760 --> 00:06:34,280 Speaker 1: percent the survey. It comes in diminished Jim Carron one 117 00:06:34,320 --> 00:06:40,440 Speaker 1: point six percent, personal consumption lighter, GDP price index three 118 00:06:40,480 --> 00:06:45,839 Speaker 1: percent is three point one percent, and core PCEE price index, 119 00:06:46,680 --> 00:06:49,320 Speaker 1: I guess I'm gonna say explodes. Maybe that's too large, 120 00:06:49,320 --> 00:06:55,000 Speaker 1: three point four up to a three point seven percent statistic, 121 00:06:55,360 --> 00:06:58,760 Speaker 1: and the VIX launches here the two year yield of 122 00:06:58,920 --> 00:07:02,440 Speaker 1: four point ninety two percent. I think there's enough wow 123 00:07:02,560 --> 00:07:05,880 Speaker 1: here just in the headline numbers, where there's almost confusion 124 00:07:05,920 --> 00:07:07,880 Speaker 1: in the market. I think there is collosally in the market. 125 00:07:07,880 --> 00:07:09,920 Speaker 3: I'm seeing we're seeing the S and P futures weaken 126 00:07:09,960 --> 00:07:11,880 Speaker 3: a little bit here, down about one percent on the 127 00:07:11,960 --> 00:07:14,000 Speaker 3: S and P and just looking at the short term 128 00:07:14,040 --> 00:07:17,160 Speaker 3: of the yield curve to your treasures up one basis 129 00:07:17,160 --> 00:07:19,760 Speaker 3: point four point nine to four percent. But again the 130 00:07:19,920 --> 00:07:22,560 Speaker 3: GDP annualized the quarter on quarter, the kind of the 131 00:07:22,560 --> 00:07:25,800 Speaker 3: headline number, one point six percent growth there in the 132 00:07:25,800 --> 00:07:29,080 Speaker 3: first quarter consensus was two point five percent, as Thomas Minchek, 133 00:07:29,080 --> 00:07:32,640 Speaker 3: and I'll also highlight prior period was three point four percent. 134 00:07:32,680 --> 00:07:33,480 Speaker 4: So if you're looking for. 135 00:07:34,160 --> 00:07:38,600 Speaker 3: A deceleration in the economy now, this data certainly kind 136 00:07:38,600 --> 00:07:39,040 Speaker 3: of bears it. 137 00:07:39,160 --> 00:07:42,400 Speaker 1: Chris Antsy driving our coverage for Top Live and he says, 138 00:07:42,400 --> 00:07:45,000 Speaker 1: simply one point six percent growth rate is lower than 139 00:07:45,040 --> 00:07:48,280 Speaker 1: any of the fifty nine estimates of the Bloomberg Service, 140 00:07:48,320 --> 00:07:51,040 Speaker 1: of course except Jim Caron, he nailed it. But what 141 00:07:51,080 --> 00:07:55,080 Speaker 1: we've got is a deterroring market nasiaka Facebook. One point 142 00:07:55,560 --> 00:07:59,080 Speaker 1: three percent is well, I'm watching the two year yield 143 00:07:59,120 --> 00:08:01,160 Speaker 1: four point nine four. Yes, it's gone green. We got 144 00:08:01,200 --> 00:08:05,280 Speaker 1: a higher yield. They are four point ninety five percent. Yeah, 145 00:08:05,400 --> 00:08:08,040 Speaker 1: really starting to move like there was almost a thirty 146 00:08:08,080 --> 00:08:10,920 Speaker 1: second to lay there when the data came out, Paul. 147 00:08:11,160 --> 00:08:12,920 Speaker 3: I mean he was just trying to grasp it here, 148 00:08:12,960 --> 00:08:16,400 Speaker 3: but again is Bloomberg Live. We're just finding the reporting 149 00:08:16,720 --> 00:08:20,440 Speaker 3: Bloomberg Live. You know, really talking about a significant underperformance 150 00:08:20,440 --> 00:08:23,320 Speaker 3: there in the US economy finally starting to slow and 151 00:08:23,360 --> 00:08:24,080 Speaker 3: you think about. 152 00:08:23,840 --> 00:08:26,280 Speaker 4: The long and variable lags of the higher rates. 153 00:08:26,280 --> 00:08:28,640 Speaker 1: Maybe we were seeing it fascinating. We'll get to Jim 154 00:08:28,720 --> 00:08:31,320 Speaker 1: Karron here in a moment. Our economic indicators each and 155 00:08:31,360 --> 00:08:35,240 Speaker 1: every day, seven days a week, but particularly important days 156 00:08:35,320 --> 00:08:39,080 Speaker 1: like this brought to you by Commonwealth, supporting more than 157 00:08:39,120 --> 00:08:43,199 Speaker 1: two thousand independent financial advisors with the solutions they need 158 00:08:43,200 --> 00:08:46,720 Speaker 1: to grow a thriving business. Commonwealth Go where you grow. 159 00:08:46,840 --> 00:08:51,679 Speaker 1: Visit Commonwealth dot com to learn more. Jim Carren, the 160 00:08:51,800 --> 00:08:55,240 Speaker 1: numbers I think had enough shock factor. And you know 161 00:08:55,360 --> 00:08:57,640 Speaker 1: I've been doing this a few years. The markets didn't 162 00:08:57,640 --> 00:09:00,800 Speaker 1: move for thirty seconds, stunned. 163 00:09:01,679 --> 00:09:04,880 Speaker 2: Well, you know this is a big miss. And like 164 00:09:04,920 --> 00:09:07,920 Speaker 2: you said, you know many economists nobody really had this number. 165 00:09:07,920 --> 00:09:11,199 Speaker 2: I mean, this is Look. One of the big positives 166 00:09:11,200 --> 00:09:13,640 Speaker 2: to the first quarter was that there was a narrative 167 00:09:13,679 --> 00:09:16,640 Speaker 2: that we were just growing very, very strong, and this 168 00:09:16,720 --> 00:09:19,679 Speaker 2: is unwinding a lot of that narrative. So now this 169 00:09:19,760 --> 00:09:22,440 Speaker 2: is actually a very friendly number for the FED because 170 00:09:22,440 --> 00:09:25,680 Speaker 2: what the Fed has been saying is that we're going 171 00:09:25,720 --> 00:09:28,640 Speaker 2: to get this economic cooling and we don't have to 172 00:09:28,640 --> 00:09:31,800 Speaker 2: worry about potentially these inflation numbers that have been coming 173 00:09:31,800 --> 00:09:34,080 Speaker 2: out hotter than you know, hotter than expected, that it's 174 00:09:34,120 --> 00:09:36,679 Speaker 2: all going to correct itself. This is a major step 175 00:09:36,679 --> 00:09:37,440 Speaker 2: in the right direction. 176 00:09:37,880 --> 00:09:38,559 Speaker 4: It starts to. 177 00:09:38,520 --> 00:09:42,600 Speaker 2: Put June back on the table. Potentially, it puts June 178 00:09:42,679 --> 00:09:44,520 Speaker 2: back on the table. Now now we're not seeing that 179 00:09:44,600 --> 00:09:48,520 Speaker 2: right now in terms of the price action of treasuries. Now, 180 00:09:48,559 --> 00:09:50,920 Speaker 2: of course, everything's going to depend on is there a 181 00:09:51,080 --> 00:09:53,319 Speaker 2: vision to this. Was there some type of an anomaly. 182 00:09:53,640 --> 00:09:55,160 Speaker 2: We've got to go through the numbers, we have to 183 00:09:55,160 --> 00:09:58,960 Speaker 2: go through the math of this whole thing. But effectively, 184 00:09:59,440 --> 00:10:02,440 Speaker 2: a slow like this is going to bring down some 185 00:10:02,559 --> 00:10:04,959 Speaker 2: of the inflation angst that's been in the markets. 186 00:10:05,160 --> 00:10:06,800 Speaker 4: Yeah, I mean, I think it's really interesting. 187 00:10:06,840 --> 00:10:09,120 Speaker 3: I'm looking at the WRP function to see how that's 188 00:10:09,160 --> 00:10:12,920 Speaker 3: going to start reflecting any changes in the market's expectations 189 00:10:13,120 --> 00:10:13,680 Speaker 3: for the FED. 190 00:10:13,720 --> 00:10:15,480 Speaker 4: And you're right, it seemed like the. 191 00:10:15,360 --> 00:10:18,040 Speaker 3: Market we started the year with six cuts. Potentially we 192 00:10:18,160 --> 00:10:21,360 Speaker 3: got down to boy two or even fewer than two, 193 00:10:21,480 --> 00:10:24,320 Speaker 3: just as recently as yesterday, and maybe this will cause 194 00:10:24,360 --> 00:10:27,360 Speaker 3: the FED to maybe think about being a little more dubbish. 195 00:10:27,559 --> 00:10:29,400 Speaker 2: And there's one other thing that I really want to 196 00:10:29,400 --> 00:10:31,720 Speaker 2: bring these I think it's very, very important, is that 197 00:10:31,880 --> 00:10:36,160 Speaker 2: earnings expectations are highly linked to GDP growth. So I 198 00:10:36,200 --> 00:10:37,880 Speaker 2: know we're talking about the bond market a lot, let's 199 00:10:37,880 --> 00:10:39,800 Speaker 2: talk about the equity market just for a second here. 200 00:10:40,320 --> 00:10:43,360 Speaker 2: If earnings growth is slower in the first quarter, that's 201 00:10:43,360 --> 00:10:45,600 Speaker 2: going to change a lot of people's full year earnings 202 00:10:45,720 --> 00:10:50,200 Speaker 2: estimates for twenty twenty four and potentially even going forward. 203 00:10:50,240 --> 00:10:54,200 Speaker 2: So the equity markets are actually responding more strongly on 204 00:10:54,280 --> 00:10:57,960 Speaker 2: this because it's basically making many analysts take down some 205 00:10:58,000 --> 00:10:59,560 Speaker 2: of their robust earnings expectation. 206 00:11:00,000 --> 00:11:01,680 Speaker 1: We've got eight ways to go here, but let me 207 00:11:01,760 --> 00:11:05,960 Speaker 1: go to what I learned in school. You know the textbooks. Yeah, 208 00:11:06,120 --> 00:11:09,000 Speaker 1: you have physics envy, which is why Karen's here. And 209 00:11:09,040 --> 00:11:11,040 Speaker 1: the answer is, you got to hang your hat on 210 00:11:11,040 --> 00:11:14,000 Speaker 1: one thing, and to me, it's a ten year inflation 211 00:11:14,120 --> 00:11:17,360 Speaker 1: adjust yield and forget about the math. And let's not 212 00:11:17,400 --> 00:11:20,000 Speaker 1: impress people with a log And I'll semi log basis, 213 00:11:20,200 --> 00:11:22,840 Speaker 1: I'm getting out to a real stress point at two 214 00:11:22,880 --> 00:11:24,040 Speaker 1: point twenty six percent. 215 00:11:24,480 --> 00:11:27,400 Speaker 2: Yeah, the real yields are certainly moving higher and into 216 00:11:27,440 --> 00:11:30,960 Speaker 2: the point where this has historically demarked a bit of 217 00:11:30,960 --> 00:11:34,440 Speaker 2: a slowing of economic activity. But none of this is 218 00:11:34,480 --> 00:11:38,600 Speaker 2: happening in synchronicity to the extent that one of the 219 00:11:38,600 --> 00:11:40,360 Speaker 2: things that we're also seeing is the price is paid 220 00:11:40,360 --> 00:11:43,680 Speaker 2: components and the pricing components of the internals of the 221 00:11:43,679 --> 00:11:48,200 Speaker 2: GDP number are actually causing the bond market a little 222 00:11:48,200 --> 00:11:50,320 Speaker 2: bit of angst here. So on one hand, we have 223 00:11:50,360 --> 00:11:52,480 Speaker 2: a weak headline print. On the other hand, we have 224 00:11:52,559 --> 00:11:56,960 Speaker 2: some inflation and pricing pressures. So in theory, inflation is 225 00:11:56,960 --> 00:12:00,680 Speaker 2: a lagging indicator, so inflation should fall on these things. 226 00:12:00,720 --> 00:12:02,880 Speaker 2: But unless there's something that's just going, well. 227 00:12:02,800 --> 00:12:04,960 Speaker 1: What's Ellen's saying? Stop? I mean, you got a team 228 00:12:04,960 --> 00:12:08,360 Speaker 1: of fourteen people. Karen's there with two interns. Well they're 229 00:12:08,360 --> 00:12:11,480 Speaker 1: from Voden, but Ellen Xander's got like twenty five people. 230 00:12:11,520 --> 00:12:15,280 Speaker 1: What do they say about the disinflation vector in Morgan Stanley? 231 00:12:15,400 --> 00:12:18,280 Speaker 2: Yeah, so look, I mean, it's, as Ellen likes to 232 00:12:18,280 --> 00:12:21,080 Speaker 2: put it, it's going to be a slow, bumpy path lower. 233 00:12:21,160 --> 00:12:24,720 Speaker 2: So you know inflation is likely to come down. It's 234 00:12:24,760 --> 00:12:26,640 Speaker 2: just a question of does it come down in a 235 00:12:26,679 --> 00:12:29,760 Speaker 2: linear fashion where people are comfortable with the pace but 236 00:12:29,800 --> 00:12:33,960 Speaker 2: the trajectory. Nobody's really disagreeing with the direction of inflation. 237 00:12:34,120 --> 00:12:34,720 Speaker 1: Everybody is. 238 00:12:34,880 --> 00:12:37,600 Speaker 2: Most people agree that it's coming down. It's just a 239 00:12:37,679 --> 00:12:40,200 Speaker 2: question of is it coming down fast enough for the 240 00:12:40,200 --> 00:12:44,000 Speaker 2: FED to start their rate cutting cycle? And that's the debate. 241 00:12:44,080 --> 00:12:46,880 Speaker 2: So what Ellen pushed out in terms of her FED 242 00:12:46,920 --> 00:12:49,960 Speaker 2: forecast was from June to July that the first rate 243 00:12:50,000 --> 00:12:53,200 Speaker 2: cut would start to come in July. And I don't 244 00:12:53,200 --> 00:12:57,520 Speaker 2: think that this number might not change that in many ways. 245 00:12:57,640 --> 00:13:00,719 Speaker 1: Okay, is there an inertial force here right now? Are 246 00:13:00,720 --> 00:13:02,520 Speaker 1: we getting at where there's enough yields? We're on a 247 00:13:02,880 --> 00:13:05,199 Speaker 1: truly on a physics basis. I make jokes about it, 248 00:13:05,640 --> 00:13:09,200 Speaker 1: but seriously, are we getting a weight towards an inertial 249 00:13:09,320 --> 00:13:12,040 Speaker 1: force of higher yields? Yeah? 250 00:13:12,120 --> 00:13:15,160 Speaker 2: So, I think as you were saying earlier, you know, 251 00:13:15,200 --> 00:13:19,400 Speaker 2: many people came into this year overweight fixed income, long duration, 252 00:13:19,920 --> 00:13:22,200 Speaker 2: and this has been correcting. 253 00:13:22,280 --> 00:13:22,600 Speaker 1: Now. 254 00:13:22,880 --> 00:13:26,320 Speaker 2: The positives around this is that at this backup and yield, 255 00:13:26,520 --> 00:13:29,480 Speaker 2: if you're looking at a multi ASSEID portfolio, you can 256 00:13:29,520 --> 00:13:32,400 Speaker 2: start to think about owning US treasuries, You can think 257 00:13:32,440 --> 00:13:35,679 Speaker 2: about owning bonds, high quality bonds now as a reasonable 258 00:13:35,720 --> 00:13:38,400 Speaker 2: hedge against your equity, and you can actually potentially get 259 00:13:38,400 --> 00:13:39,760 Speaker 2: some return from these levels. 260 00:13:39,800 --> 00:13:42,480 Speaker 1: Sweet's gonna get us five percent to your you'd you 261 00:13:42,600 --> 00:13:45,480 Speaker 1: a cup of coffee out on YouTube live chat James 262 00:13:45,480 --> 00:13:50,200 Speaker 1: with a real smart insight stagflation. Jamie Diamond nails it, yep. 263 00:13:50,360 --> 00:13:52,280 Speaker 1: I mean that's really what we're talking about. I mean, 264 00:13:52,520 --> 00:13:54,520 Speaker 1: you know you mentioned David Weston. He's going to be 265 00:13:54,520 --> 00:13:56,600 Speaker 1: with Professor Summers and Larry's going to pick it up 266 00:13:56,640 --> 00:13:58,600 Speaker 1: and go here we are. But I mean that's what 267 00:13:58,640 --> 00:14:01,719 Speaker 1: the research paper's paul to look like. Jim Careen, one 268 00:14:01,720 --> 00:14:03,760 Speaker 1: more question. We're gonna go to doctor Wong and we're 269 00:14:03,760 --> 00:14:06,560 Speaker 1: gonna bring Jim Karen back after doctor Wong. 270 00:14:06,640 --> 00:14:08,640 Speaker 3: Hey, Jim, I'm looking at the two year just today 271 00:14:08,720 --> 00:14:10,640 Speaker 3: up six basis points, as Tom said, for four point 272 00:14:10,720 --> 00:14:14,600 Speaker 3: nine to nine percent, and you've mentioned fixing them as 273 00:14:14,600 --> 00:14:16,959 Speaker 3: a hedge for equities that did not work in twenty 274 00:14:16,960 --> 00:14:20,000 Speaker 3: twenty two, that sixty to forty portfolio did not work 275 00:14:20,040 --> 00:14:23,760 Speaker 3: for anybody. Is that still something you guys think about? 276 00:14:23,840 --> 00:14:25,600 Speaker 3: Is that still something we should keep in our toolbox. 277 00:14:25,840 --> 00:14:26,320 Speaker 1: Yeah, you know. 278 00:14:26,480 --> 00:14:28,560 Speaker 2: I mean we have to think about how we use 279 00:14:28,600 --> 00:14:31,720 Speaker 2: bonds to hedge. And in the in the idea was 280 00:14:31,720 --> 00:14:34,520 Speaker 2: that you could passively buy fixed income and it would 281 00:14:34,520 --> 00:14:36,840 Speaker 2: just represent a great hedge. And this is one of 282 00:14:36,840 --> 00:14:40,440 Speaker 2: the reasons why I think you should hold less fixed 283 00:14:40,480 --> 00:14:43,760 Speaker 2: income exposure in terms of duration to hedge against your 284 00:14:44,320 --> 00:14:47,600 Speaker 2: hedge against your equity portfolio. So to have slightly less 285 00:14:47,600 --> 00:14:48,760 Speaker 2: like you know, I was saying six and a half 286 00:14:48,840 --> 00:14:51,800 Speaker 2: years of duration is the is the index average, that's 287 00:14:52,040 --> 00:14:54,080 Speaker 2: you know, that's what's considered neutral. I'm saying you should 288 00:14:54,160 --> 00:14:56,920 Speaker 2: have maybe five or five and a half years of duration. 289 00:14:57,320 --> 00:14:59,520 Speaker 2: So I do think we need to think differently about this. 290 00:15:00,480 --> 00:15:02,960 Speaker 2: We have to remember that for forty years from nineteen 291 00:15:03,000 --> 00:15:04,720 Speaker 2: eighty one to twenty twenty one, bonds are in a 292 00:15:04,760 --> 00:15:08,000 Speaker 2: bull market. Today I think they're largely going to move sideways. 293 00:15:08,400 --> 00:15:10,120 Speaker 2: So you're expected returns from the coupon. 294 00:15:10,200 --> 00:15:10,800 Speaker 4: How to fix it up? 295 00:15:11,000 --> 00:15:12,760 Speaker 1: Him, let's finish up with you so you can go 296 00:15:12,840 --> 00:15:16,480 Speaker 1: back and publish what part of the yield curve will 297 00:15:16,520 --> 00:15:20,840 Speaker 1: be most affected by sub two percent GDP, so. 298 00:15:21,120 --> 00:15:24,040 Speaker 2: You know, look in theory, what it should be is 299 00:15:24,560 --> 00:15:27,560 Speaker 2: the ten year yield. So in theory, the curve should 300 00:15:27,600 --> 00:15:30,720 Speaker 2: start to flatten down because if you have a weaker 301 00:15:30,760 --> 00:15:33,040 Speaker 2: growth economy and it shows that you're going into a 302 00:15:33,080 --> 00:15:36,760 Speaker 2: slow period and a slow patch, longer duration actually will 303 00:15:36,800 --> 00:15:40,760 Speaker 2: be a reasonable hedge in that particular environment. So the 304 00:15:40,760 --> 00:15:43,200 Speaker 2: front end right now, and I think the bond market 305 00:15:43,240 --> 00:15:45,720 Speaker 2: is looking at one thing, that's the consumer side, that's 306 00:15:45,720 --> 00:15:48,520 Speaker 2: the price aside. The equity market is looking at the 307 00:15:48,520 --> 00:15:51,000 Speaker 2: whole picture, and it's looking at that one point six 308 00:15:51,080 --> 00:15:54,040 Speaker 2: versus the two point five, and I think that is 309 00:15:54,160 --> 00:15:58,160 Speaker 2: the I think that's the mismatch right now in the market. 310 00:15:58,200 --> 00:16:00,880 Speaker 2: So right now we have bonds on returns in equity 311 00:16:00,880 --> 00:16:05,200 Speaker 2: returns highly correlated. That's dangerous. High correlation is dangerous. So 312 00:16:05,280 --> 00:16:07,360 Speaker 2: there's no place to hide, right So if you bought 313 00:16:07,400 --> 00:16:10,520 Speaker 2: bonds to hedge this number, you lost at least right 314 00:16:10,560 --> 00:16:13,160 Speaker 2: now at this point. But like Anna was saying, I 315 00:16:13,200 --> 00:16:15,360 Speaker 2: do think that some of this bond sell off will 316 00:16:15,400 --> 00:16:18,560 Speaker 2: start to get reversed once it gets digest. Yes, it's 317 00:16:18,600 --> 00:16:20,400 Speaker 2: you know, imports are very important component. 318 00:16:20,400 --> 00:16:22,160 Speaker 1: Well, all, I got to make some news here today. 319 00:16:22,520 --> 00:16:24,120 Speaker 1: I mean, there's no quret. We got to make some 320 00:16:24,200 --> 00:16:27,040 Speaker 1: News Ian Lingoenn, and we're sorry, we can't get Ian 321 00:16:27,120 --> 00:16:29,400 Speaker 1: Lingen in from BEMO. He's got to go into a 322 00:16:29,440 --> 00:16:33,320 Speaker 1: Bank of Montreal at conference call. But Ian Lingen has said, 323 00:16:33,400 --> 00:16:37,080 Speaker 1: at some point the ten year goes price up, yield down. 324 00:16:37,600 --> 00:16:40,880 Speaker 1: Is this the moment where we finally get a catalyst 325 00:16:40,960 --> 00:16:44,440 Speaker 1: for a lower ten year yield that, just as one example, 326 00:16:44,480 --> 00:16:47,120 Speaker 1: brings mortgage relief across America. 327 00:16:47,520 --> 00:16:49,680 Speaker 2: So in my opinion, the answer is yes. I do 328 00:16:49,760 --> 00:16:52,000 Speaker 2: think that you know, four to seventy five and the 329 00:16:52,080 --> 00:16:54,000 Speaker 2: ten year yield. I know we're kind of close to 330 00:16:54,000 --> 00:16:56,320 Speaker 2: that right now. So let's call us let's say that 331 00:16:56,360 --> 00:16:58,840 Speaker 2: we're let's say that we're just about there. I think 332 00:16:58,880 --> 00:17:00,880 Speaker 2: that's a reasonable line in the sand to draw, and 333 00:17:00,920 --> 00:17:02,720 Speaker 2: it's it's a place where I would start to take 334 00:17:03,000 --> 00:17:03,920 Speaker 2: some bond risk. 335 00:17:04,040 --> 00:17:05,879 Speaker 1: Paul rounded up four digits. I know you want to 336 00:17:05,960 --> 00:17:08,919 Speaker 1: jump in and rounded up Paul four digits five percent 337 00:17:09,040 --> 00:17:09,880 Speaker 1: in a two year yield. 338 00:17:10,000 --> 00:17:11,679 Speaker 3: Exactly right, Hey, Jim, as you go back to your 339 00:17:11,720 --> 00:17:14,440 Speaker 3: offices at Morgan Stanley Investment Management, you sit down with 340 00:17:14,480 --> 00:17:17,000 Speaker 3: your pms this morning, are you guys going to change 341 00:17:17,000 --> 00:17:20,360 Speaker 3: anything in your portfolios? Change your outBut change your allocations. 342 00:17:21,160 --> 00:17:23,320 Speaker 3: So about it maybe a world that maybe stagflation is 343 00:17:23,359 --> 00:17:24,200 Speaker 3: something we have to think about it. 344 00:17:24,240 --> 00:17:26,000 Speaker 2: Well, I don't know. I mean, I think it's a 345 00:17:26,040 --> 00:17:28,359 Speaker 2: little early to call for stackflation. But you know, so 346 00:17:28,880 --> 00:17:31,560 Speaker 2: we've moved more towards a neutral posture at this point. 347 00:17:32,240 --> 00:17:35,359 Speaker 2: So we've taken our equity from overweight to underweight end 348 00:17:35,359 --> 00:17:38,679 Speaker 2: of the first quarter. But I think in bonds we 349 00:17:38,720 --> 00:17:40,280 Speaker 2: are going to start to take our duration up a 350 00:17:40,280 --> 00:17:43,080 Speaker 2: little bit higher because these yields are appetizing, so that 351 00:17:43,080 --> 00:17:44,760 Speaker 2: that's likely the next move for us. 352 00:17:46,200 --> 00:17:47,960 Speaker 1: Go ahead, Paul. Now this is one more question to 353 00:17:48,040 --> 00:17:52,120 Speaker 1: Karen Jerseys having a tantrum. It's take your daughter to work? 354 00:17:52,160 --> 00:17:53,520 Speaker 1: Did you bring any kids in? Now? 355 00:17:53,840 --> 00:17:54,160 Speaker 4: My kids? 356 00:17:55,840 --> 00:17:57,959 Speaker 1: I got afterthought today? I go you want to come 357 00:17:57,960 --> 00:18:00,439 Speaker 1: into work with dad? She's looking at I mean, like, 358 00:18:00,680 --> 00:18:02,679 Speaker 1: you know, is it that? Or go to Eli's on 359 00:18:02,760 --> 00:18:06,240 Speaker 1: Madison Avenue and chat on twenty five dollars at cheeseburgers? Exactly? 360 00:18:06,440 --> 00:18:08,359 Speaker 1: You know? I mean, what you know what you're gonna do? 361 00:18:08,600 --> 00:18:10,800 Speaker 1: Elayne's waiting, Paul, get a question real quick. 362 00:18:10,840 --> 00:18:12,520 Speaker 4: What do you think this the Fed's gonna do? Looking 363 00:18:12,560 --> 00:18:13,440 Speaker 4: at this data today? 364 00:18:14,000 --> 00:18:17,520 Speaker 2: So I still think it's Powell's remarks from from from 365 00:18:17,560 --> 00:18:20,320 Speaker 2: a week ago still hold. I think he's still waiting 366 00:18:20,320 --> 00:18:22,320 Speaker 2: to see more confidence. We still have to see those 367 00:18:22,320 --> 00:18:25,320 Speaker 2: inflation numbers come out softer consistently. 368 00:18:25,400 --> 00:18:28,080 Speaker 1: Yep. Yeah, this has been great. I really look forward 369 00:18:28,119 --> 00:18:30,960 Speaker 1: to to talk about triangulation. I'm gonna blame Steve Roach 370 00:18:31,000 --> 00:18:33,679 Speaker 1: for this. Maybe there's somebody else. They fight like cats 371 00:18:33,680 --> 00:18:37,000 Speaker 1: and dogs at Morgan Stanley. They've got my greatest respect. 372 00:18:37,200 --> 00:18:40,920 Speaker 1: The next meeting of Karen Zettner and Mike Wilson, that's 373 00:18:40,920 --> 00:18:41,359 Speaker 1: gonna be it. 374 00:18:41,480 --> 00:18:43,400 Speaker 4: It's gonna be We should have a remote broadcast. 375 00:18:43,400 --> 00:18:45,359 Speaker 1: We should we should do a live broadcast. It's like 376 00:18:45,400 --> 00:18:48,040 Speaker 1: the NFL draft. We'll have to see Jim. Karen, thank 377 00:18:48,080 --> 00:18:51,320 Speaker 1: you so much, particularly for coming in today. Greatly appreciate 378 00:18:51,359 --> 00:19:05,800 Speaker 1: that perfect person, perfect time. Constant Hunter joins us, working 379 00:19:05,800 --> 00:19:10,040 Speaker 1: with Julia cornetto at micropolicy perspectives. Constant, I want to 380 00:19:10,080 --> 00:19:12,320 Speaker 1: go to the eye. I want to go to the 381 00:19:12,359 --> 00:19:17,480 Speaker 1: business spirit. Given sub two percent GDP with an inflation impulse, 382 00:19:17,840 --> 00:19:21,320 Speaker 1: I have a ten year real yield back to two 383 00:19:21,440 --> 00:19:25,240 Speaker 1: thousand and nine levels where it pretty much sustain two 384 00:19:25,280 --> 00:19:28,760 Speaker 1: thousand and four to the crisis, and then two thousand 385 00:19:28,800 --> 00:19:33,359 Speaker 1: and nine. Does the higher inflation adjusted yield does that 386 00:19:33,480 --> 00:19:36,360 Speaker 1: begin to impinge now on American business? 387 00:19:37,920 --> 00:19:40,959 Speaker 5: Well, that is the question Tom, and I think it 388 00:19:41,080 --> 00:19:44,160 Speaker 5: has been impinging on American business right. When we look 389 00:19:44,200 --> 00:19:48,080 Speaker 5: at financial conditions for those who can access the capital markets, 390 00:19:48,320 --> 00:19:51,040 Speaker 5: financial conditions look fairly accommodated. 391 00:19:51,160 --> 00:19:51,280 Speaker 3: Right. 392 00:19:51,320 --> 00:19:54,280 Speaker 5: We have higher equity markets, people are going to the 393 00:19:54,960 --> 00:19:57,960 Speaker 5: bond market and issuing debt. When you look at financial 394 00:19:58,000 --> 00:20:01,000 Speaker 5: conditions for households. When you look at financial conditions for 395 00:20:01,080 --> 00:20:04,760 Speaker 5: small and medium sized businesses, they are tighter. However, with 396 00:20:04,880 --> 00:20:08,760 Speaker 5: that said, we are still seeing record new business formations. 397 00:20:08,800 --> 00:20:11,439 Speaker 5: So there is something happening under the hood of this 398 00:20:11,560 --> 00:20:15,439 Speaker 5: economy that is different than previous cycles. And as we know, 399 00:20:15,600 --> 00:20:20,640 Speaker 5: history rhymes, it doesn't repeat very good constant. 400 00:20:20,960 --> 00:20:23,760 Speaker 3: Obviously, the market was looking for if you look at consensus, 401 00:20:23,840 --> 00:20:26,760 Speaker 3: was looking for a slow down in GDP in this quarter, 402 00:20:27,080 --> 00:20:30,880 Speaker 3: but not this slow Does that change your thoughts about 403 00:20:31,680 --> 00:20:34,600 Speaker 3: I don't know what the Fed will do, what investors 404 00:20:34,640 --> 00:20:39,080 Speaker 3: should do, what you guys should do their macro policy perspectives. 405 00:20:39,880 --> 00:20:42,240 Speaker 5: Yeah, Well, as you can imagine, our Bloomberg Chat has 406 00:20:42,240 --> 00:20:46,040 Speaker 5: been very active this morning with amongst ourselves and with 407 00:20:46,119 --> 00:20:49,719 Speaker 5: our clients. Right. So the view, of course is this 408 00:20:49,800 --> 00:20:52,240 Speaker 5: makes it a more difficult calculus for the FED, and 409 00:20:52,359 --> 00:20:57,200 Speaker 5: certainly that higher inflation number gives a clause. I will say, though, 410 00:20:57,280 --> 00:20:59,520 Speaker 5: if you think about so there's two things, then they're 411 00:21:00,000 --> 00:21:03,880 Speaker 5: necessarily congruent things because we're at a time when we're 412 00:21:03,880 --> 00:21:08,120 Speaker 5: in an inflection point, and inflection points data gets very funky, right, 413 00:21:08,160 --> 00:21:10,240 Speaker 5: and we've been pointing that out with some of the 414 00:21:10,280 --> 00:21:13,080 Speaker 5: contradictions that we see within the labor market data, both 415 00:21:13,119 --> 00:21:15,880 Speaker 5: the official data and some of the webscraping that we're 416 00:21:15,880 --> 00:21:19,520 Speaker 5: doing with regard to company intentions to hire and fire right. 417 00:21:19,560 --> 00:21:22,160 Speaker 5: And so what we have here is we have stronger 418 00:21:22,240 --> 00:21:25,719 Speaker 5: services consumption, which quite honestly, I think economists have been 419 00:21:25,720 --> 00:21:29,879 Speaker 5: waiting for that outside services consumption for several quarters, and 420 00:21:29,960 --> 00:21:32,960 Speaker 5: goods consumption just persisted in being strong. Finally, we have 421 00:21:33,000 --> 00:21:37,600 Speaker 5: the decline in goods consumption. That means that in all likelihood, 422 00:21:37,760 --> 00:21:42,119 Speaker 5: this low to negative pricing we're seeing in goods will continue. 423 00:21:42,359 --> 00:21:44,880 Speaker 5: That will give some relief to overall CPI. 424 00:21:46,880 --> 00:21:51,000 Speaker 1: I'm sorry, I want to talk Constance about the bigger picture. 425 00:21:51,680 --> 00:21:54,080 Speaker 1: The mail and Paul gets all the you know, Lisa 426 00:21:54,080 --> 00:21:56,800 Speaker 1: gets the love notes constant I get hate mail, and 427 00:21:56,840 --> 00:22:00,480 Speaker 1: the hate mail I get is simple. You guys are nuts. 428 00:22:00,840 --> 00:22:03,480 Speaker 1: Most of us feel like it's a recession and we're 429 00:22:03,520 --> 00:22:06,880 Speaker 1: getting crushed by inflation. If we have a run rate 430 00:22:07,000 --> 00:22:12,840 Speaker 1: sub two percent GDP and the fancy people are living large, 431 00:22:13,080 --> 00:22:18,280 Speaker 1: what portion of America now is in recession with an 432 00:22:18,359 --> 00:22:22,000 Speaker 1: elevated inflation, right, it's got to be what half the country? 433 00:22:23,320 --> 00:22:25,600 Speaker 5: Well, that's an excellent question, and I have to delve 434 00:22:25,640 --> 00:22:28,960 Speaker 5: into the numbers to give an exact give an exact figure. 435 00:22:29,000 --> 00:22:30,880 Speaker 5: But you bring up a very good point. And as 436 00:22:30,920 --> 00:22:33,840 Speaker 5: you know, every time we get the CPI numbers, I 437 00:22:33,960 --> 00:22:38,480 Speaker 5: do a table that shows the annualized pace of individual 438 00:22:38,520 --> 00:22:42,840 Speaker 5: components since February twenty twenty. And while yes, the month 439 00:22:42,880 --> 00:22:44,679 Speaker 5: of a month pace seems to be doing better, and 440 00:22:44,720 --> 00:22:46,720 Speaker 5: the year of a year piece pace is doing better 441 00:22:46,760 --> 00:22:49,760 Speaker 5: than the height, what people are anchoring to with is 442 00:22:49,800 --> 00:22:53,359 Speaker 5: that cumulative increase they have to pay, and they can't 443 00:22:53,400 --> 00:22:56,440 Speaker 5: get out of paying things like, for example, like vehicle insurance. 444 00:22:56,440 --> 00:23:00,359 Speaker 5: It's not easy to substitute homeowners insurance, not easy repstute 445 00:23:01,240 --> 00:23:03,680 Speaker 5: and these really do take a bite. Now, with that said, 446 00:23:03,880 --> 00:23:06,280 Speaker 5: on vehicle insurance it looks like that was a one off. 447 00:23:06,400 --> 00:23:10,840 Speaker 5: Three state regulators California, New York, and New Jersey allowed 448 00:23:11,240 --> 00:23:15,639 Speaker 5: insurers to increase the vehicle insurance price, so that looks 449 00:23:15,640 --> 00:23:15,960 Speaker 5: like it was. 450 00:23:15,920 --> 00:23:16,320 Speaker 1: A one up. 451 00:23:16,320 --> 00:23:19,879 Speaker 5: But still the mood is that that it's hard to 452 00:23:19,920 --> 00:23:22,800 Speaker 5: control where price increases are coming from, and they're continue 453 00:23:22,840 --> 00:23:24,760 Speaker 5: to be rolling surprises. 454 00:23:24,200 --> 00:23:27,639 Speaker 1: Bluebrig surveillance. We always go to anecdotal evidence joining us 455 00:23:27,680 --> 00:23:30,879 Speaker 1: now Paul Sweeney with a hate mail from New Jersey. 456 00:23:30,920 --> 00:23:32,600 Speaker 1: How bad is the insurance story? 457 00:23:32,640 --> 00:23:33,239 Speaker 4: It's it is. 458 00:23:33,320 --> 00:23:35,959 Speaker 3: I mean, it's it's crazy here, but that's just you know, 459 00:23:36,240 --> 00:23:38,680 Speaker 3: one of the many costs of living in. 460 00:23:38,760 --> 00:23:41,679 Speaker 1: These are fixed costs. These are not like variable costs. 461 00:23:41,720 --> 00:23:44,400 Speaker 1: I mean, it's like Hamburg very quickly, or a data check. 462 00:23:44,440 --> 00:23:48,240 Speaker 1: Markets deteriorate SPX and negative one point three percent NASDAC 463 00:23:48,320 --> 00:23:51,879 Speaker 1: negative one point seven percent. VIX is actually pretty quiescent, 464 00:23:52,160 --> 00:23:55,600 Speaker 1: still under seventeen sixteen point eight six and that ten 465 00:23:55,680 --> 00:23:59,560 Speaker 1: year real yield sum it all up up six massive 466 00:23:59,560 --> 00:24:03,119 Speaker 1: basis points two point two nine percent. That takes us 467 00:24:03,160 --> 00:24:05,720 Speaker 1: back to two thousand and nine and even back to 468 00:24:05,720 --> 00:24:06,399 Speaker 1: two thousand and. 469 00:24:06,440 --> 00:24:10,000 Speaker 3: Six, and Tom red headline across the Bloomberg Terminal traders 470 00:24:10,080 --> 00:24:15,040 Speaker 3: push back timing a first rate FED rate cut to December. Constance, 471 00:24:15,119 --> 00:24:17,200 Speaker 3: do you even maybe take it a little bit further 472 00:24:17,280 --> 00:24:20,280 Speaker 3: and think about is this a FED even contemplating a 473 00:24:20,359 --> 00:24:20,920 Speaker 3: rate hike? 474 00:24:21,040 --> 00:24:22,560 Speaker 4: Is that something is possible. 475 00:24:23,320 --> 00:24:25,719 Speaker 5: I don't think we're ready for a rate hike because one, 476 00:24:26,000 --> 00:24:28,520 Speaker 5: you know, cocomminant with this weaker growth is going to 477 00:24:28,560 --> 00:24:31,840 Speaker 5: be weaker jobs data. So we push back the first 478 00:24:31,920 --> 00:24:34,720 Speaker 5: rate cut to September. But I really think there's a 479 00:24:34,800 --> 00:24:37,199 Speaker 5: case for we get up to five percent on the 480 00:24:37,240 --> 00:24:38,720 Speaker 5: ten year before this is all over. 481 00:24:39,880 --> 00:24:41,840 Speaker 3: Interesting, All right, Constant, thank you so much for joining 482 00:24:41,920 --> 00:24:46,040 Speaker 3: us Constants on our senior advisor macro policy perspective. 483 00:24:50,920 --> 00:24:54,560 Speaker 1: John Stolfus of OpCo. John, how do I stay in 484 00:24:54,680 --> 00:24:56,159 Speaker 1: markets on days like this? 485 00:24:57,280 --> 00:24:59,600 Speaker 6: Well, thanks for having me on the on the show. 486 00:25:00,280 --> 00:25:02,480 Speaker 6: I've gotta say this. I think the question, you know 487 00:25:02,560 --> 00:25:06,040 Speaker 6: that traders ask right away is that should I go 488 00:25:06,160 --> 00:25:09,200 Speaker 6: or should I stay? You know, like the old hit song. 489 00:25:10,080 --> 00:25:14,479 Speaker 6: And there's a pants passing fancy potential here, capricious nature 490 00:25:14,840 --> 00:25:19,000 Speaker 6: of the fast reaction. But for investors who are investing 491 00:25:19,119 --> 00:25:22,760 Speaker 6: for it anywhere from two, three, five, seven years forward, 492 00:25:22,840 --> 00:25:26,879 Speaker 6: you know, out it's a quick moment to pause and 493 00:25:27,000 --> 00:25:30,000 Speaker 6: ponder check out the babies that are getting chucked out 494 00:25:30,080 --> 00:25:35,520 Speaker 6: with the bath water, whether it's it's in technology, industrials, 495 00:25:35,560 --> 00:25:41,439 Speaker 6: consumer discretionary, and a host of other cyclical stocks. In particular, 496 00:25:41,840 --> 00:25:45,160 Speaker 6: we'd have to think is worth checking the opportunity that's 497 00:25:45,200 --> 00:25:48,760 Speaker 6: available because the trend we believe is our friend, and 498 00:25:48,800 --> 00:25:51,359 Speaker 6: the trend is led by the FED, which is acted 499 00:25:51,440 --> 00:25:55,720 Speaker 6: incredibly responsible this FED fund hike cycle reflecting what we 500 00:25:55,840 --> 00:26:01,159 Speaker 6: call the Ben Bernanke a legacy. 501 00:26:01,480 --> 00:26:03,840 Speaker 1: John comes on the market's negative six hundred and he 502 00:26:03,880 --> 00:26:06,480 Speaker 1: lifts it down a negative five eighty. He's a force. 503 00:26:07,640 --> 00:26:10,280 Speaker 3: Hey John, John, what do you think you know, some 504 00:26:10,320 --> 00:26:12,399 Speaker 3: of the reporting coming out and some of the words 505 00:26:12,440 --> 00:26:14,440 Speaker 3: coming off of Wall Street this morning is maybe calling 506 00:26:14,440 --> 00:26:17,320 Speaker 3: into question whether the FED will cut at all in 507 00:26:17,359 --> 00:26:18,760 Speaker 3: twenty four. How do you think the Fed's going to 508 00:26:18,800 --> 00:26:20,600 Speaker 3: look at some of this data and then of course 509 00:26:20,600 --> 00:26:22,400 Speaker 3: the important PC data tomorrow. 510 00:26:23,080 --> 00:26:25,240 Speaker 6: I think we'll have to see what happens with that 511 00:26:25,400 --> 00:26:28,199 Speaker 6: data tomorrow. I think when Mike McKee was talking, he 512 00:26:28,320 --> 00:26:31,600 Speaker 6: really hit some some important spots to consider there. But 513 00:26:31,920 --> 00:26:34,760 Speaker 6: what I would say is there is effectively, you know, 514 00:26:34,800 --> 00:26:37,560 Speaker 6: we came into this year when a lot of people 515 00:26:37,600 --> 00:26:40,520 Speaker 6: were expecting. I think it went from it was it 516 00:26:40,560 --> 00:26:45,320 Speaker 6: was five to seven up to eleven. People thought the 517 00:26:45,359 --> 00:26:48,639 Speaker 6: economy was falling apart. Apparently we looked at it. We 518 00:26:48,680 --> 00:26:51,440 Speaker 6: thought the FED was going to cut likely too, which 519 00:26:51,560 --> 00:26:55,920 Speaker 6: rubbed up against the FEDS three sort of intimated costs 520 00:26:55,960 --> 00:26:57,560 Speaker 6: that they were talking about early on. 521 00:26:57,880 --> 00:26:58,680 Speaker 1: And I think there's. 522 00:26:58,480 --> 00:27:01,360 Speaker 6: Still they still had at who knows what where we're 523 00:27:01,359 --> 00:27:05,520 Speaker 6: headed in terms of the near term commentary, But we've 524 00:27:05,560 --> 00:27:08,400 Speaker 6: got to say we think the economy, you know, as 525 00:27:08,520 --> 00:27:13,360 Speaker 6: was mentioned earlier, the consumer is good business, remarkably resilient. 526 00:27:13,640 --> 00:27:16,119 Speaker 6: You know, we're still early in the earning season, but 527 00:27:16,240 --> 00:27:17,159 Speaker 6: some some things that. 528 00:27:17,280 --> 00:27:20,840 Speaker 1: Goes okay, to make the observation that money market funds 529 00:27:20,840 --> 00:27:23,760 Speaker 1: are going to become more comfortable here, sweety's on the 530 00:27:23,840 --> 00:27:27,879 Speaker 1: five point zero two percent two your yield, that's going 531 00:27:27,960 --> 00:27:30,480 Speaker 1: to be comfortable here, and you're going to tell me 532 00:27:30,520 --> 00:27:32,960 Speaker 1: you how it. Share buybacks are going to click in 533 00:27:33,440 --> 00:27:36,520 Speaker 1: our shared buybacks to the rescue of the market. 534 00:27:37,359 --> 00:27:39,960 Speaker 6: I don't think it's just shared buybacks, I would I 535 00:27:39,960 --> 00:27:42,199 Speaker 6: would think it really has to do with with the 536 00:27:42,240 --> 00:27:46,280 Speaker 6: fact that earnings and revenue, particularly earnings growth has been 537 00:27:46,800 --> 00:27:51,879 Speaker 6: significantly resilient, and revenue growth hasn't really you know, on 538 00:27:51,960 --> 00:27:56,960 Speaker 6: an idiosyncratic basis, that can surely disappoint, but overall it 539 00:27:57,080 --> 00:28:01,800 Speaker 6: shows a resilience that is main tamed, which likely tells 540 00:28:01,840 --> 00:28:06,200 Speaker 6: us corporations are better and naturally so after fifteen years 541 00:28:06,200 --> 00:28:12,359 Speaker 6: of SESSI crises at navigating tougher environments and with with AI, 542 00:28:12,640 --> 00:28:15,639 Speaker 6: just where AI is today, not where it's going to 543 00:28:15,720 --> 00:28:18,440 Speaker 6: be in the future. This is this is like what's 544 00:28:18,480 --> 00:28:19,600 Speaker 6: going on I. 545 00:28:19,880 --> 00:28:23,480 Speaker 1: E Io Paul Stulfus's crater in the market negative six 546 00:28:23,640 --> 00:28:27,720 Speaker 1: twenty on the doubts. 547 00:28:26,320 --> 00:28:28,960 Speaker 3: Fault, John, I know you guys took your year in 548 00:28:29,040 --> 00:28:31,119 Speaker 3: price target up to I guess fifty five hundred on 549 00:28:31,200 --> 00:28:34,560 Speaker 3: the S and P. What's kind of the driver? Is 550 00:28:34,560 --> 00:28:38,520 Speaker 3: that an earnings driven market? Is that a FED driven market? 551 00:28:38,600 --> 00:28:40,040 Speaker 4: How do you what are the drivers? 552 00:28:40,400 --> 00:28:43,360 Speaker 6: Combination of the two. It's a combination of the FED. 553 00:28:43,760 --> 00:28:47,720 Speaker 6: It's earnings driven. It has to do with innovation, and 554 00:28:48,040 --> 00:28:52,280 Speaker 6: it's as we saw the rally from the late October 555 00:28:52,320 --> 00:28:56,760 Speaker 6: of last year broadening to the other sectors, expectations that 556 00:28:56,760 --> 00:29:00,760 Speaker 6: that innovation will feed into other sacs. There is other 557 00:29:00,880 --> 00:29:06,440 Speaker 6: than technology and consumer discretionary and industrials, and within that 558 00:29:06,440 --> 00:29:09,400 Speaker 6: that kind of of a feature. The nice thing is 559 00:29:09,440 --> 00:29:14,440 Speaker 6: you have several things playing. It's not it's a fundamentally 560 00:29:14,920 --> 00:29:19,720 Speaker 6: better story towards a normalization where bond issuers pay for 561 00:29:19,760 --> 00:29:23,560 Speaker 6: the privilege of borrowing money, bond buyers get something in return. 562 00:29:24,040 --> 00:29:27,280 Speaker 6: It hurts the It hurts the fast fast crowd, you know, 563 00:29:27,400 --> 00:29:30,720 Speaker 6: because they like to be highly leveraged, and they will protest. 564 00:29:31,200 --> 00:29:34,840 Speaker 6: The FEDS are luted to cut rates drastically, and I 565 00:29:34,920 --> 00:29:38,240 Speaker 6: think Powell does not want to. He certainly doesn't want 566 00:29:38,280 --> 00:29:40,840 Speaker 6: to be Arthur Burns that he doesn't want to have 567 00:29:41,000 --> 00:29:44,200 Speaker 6: to become Paul Valker again. You know, I've been doing this. 568 00:29:44,560 --> 00:29:47,480 Speaker 6: I came in and during the period where Vulker was 569 00:29:47,520 --> 00:29:50,600 Speaker 6: beginning his second term, and so I've lived with the 570 00:29:50,640 --> 00:29:53,960 Speaker 6: Fed through fifteen years of green span, and green span 571 00:29:54,120 --> 00:30:01,240 Speaker 6: was almost a science. He was listing with inflation that 572 00:30:01,320 --> 00:30:01,719 Speaker 6: was sticky. 573 00:30:01,880 --> 00:30:06,080 Speaker 1: We're almost a negative seven hundred doubt. Go away, sulface 574 00:30:06,600 --> 00:30:09,080 Speaker 1: with us some op goo. We really look forward to 575 00:30:09,120 --> 00:30:13,040 Speaker 1: his research report from Oppenheimer and Company. He has been 576 00:30:13,120 --> 00:30:18,480 Speaker 1: in this market. He has enjoyed a multi year bull market. 577 00:30:28,760 --> 00:30:30,920 Speaker 1: You're taking to look at the front pages and because 578 00:30:30,960 --> 00:30:34,840 Speaker 1: children are in the building, they're appropriate stories today. Lisa, 579 00:30:34,840 --> 00:30:35,640 Speaker 1: what are you got all right? 580 00:30:35,720 --> 00:30:37,959 Speaker 7: Yes, we're keeping a PG for the kids today. Okay, 581 00:30:38,040 --> 00:30:41,160 Speaker 7: So we've heard a lot about a lot of workers 582 00:30:41,200 --> 00:30:43,240 Speaker 7: being afraid that AI is going to take over their jobs. 583 00:30:43,280 --> 00:30:45,720 Speaker 7: That's that's a big thing. But we had one IT 584 00:30:46,040 --> 00:30:48,720 Speaker 7: company who's telling the Financial Times that technology could do 585 00:30:48,840 --> 00:30:50,880 Speaker 7: away with call centers. You have a lot of the 586 00:30:50,880 --> 00:30:54,200 Speaker 7: call centers. This is the head of Tata Consultancy Services 587 00:30:54,400 --> 00:30:58,000 Speaker 7: said AI is rest and yeah, they definitely know, especially 588 00:30:58,080 --> 00:31:01,080 Speaker 7: over in India, quote minimal needs need for call centers 589 00:31:01,080 --> 00:31:03,800 Speaker 7: as soon as this year, as soon as a year. 590 00:31:04,080 --> 00:31:05,520 Speaker 7: And so it's going to show that it's going to 591 00:31:05,560 --> 00:31:07,080 Speaker 7: have a bad cut across Asia. 592 00:31:07,720 --> 00:31:10,800 Speaker 1: But you know how they show you the chat chat 593 00:31:11,320 --> 00:31:13,280 Speaker 1: and there's no person on the other end. It's just 594 00:31:13,320 --> 00:31:18,040 Speaker 1: a computer algorithm. It doesn't work. That's my sophisticated analysis 595 00:31:17,840 --> 00:31:18,600 Speaker 1: that frusctrating. 596 00:31:18,600 --> 00:31:22,320 Speaker 7: You're sitting there like representative, like I just want to talk. 597 00:31:22,120 --> 00:31:22,880 Speaker 5: To a person. 598 00:31:23,400 --> 00:31:24,720 Speaker 1: Why is this going to work? 599 00:31:25,320 --> 00:31:27,680 Speaker 7: Well, they're saying that what's going to happen is that 600 00:31:27,720 --> 00:31:29,680 Speaker 7: the chatbots are going to be able to analyze the 601 00:31:29,680 --> 00:31:32,520 Speaker 7: customer's transaction history and do much of the work that 602 00:31:32,520 --> 00:31:34,480 Speaker 7: are done by those call center. So they're saying they're 603 00:31:34,480 --> 00:31:34,760 Speaker 7: not going. 604 00:31:34,680 --> 00:31:37,000 Speaker 1: To run it. I need I need some new tang 605 00:31:37,160 --> 00:31:40,080 Speaker 1: zero right now. I love sending a message into our 606 00:31:40,120 --> 00:31:44,120 Speaker 1: control room telling Michael the lazy puke sleeping right now 607 00:31:44,360 --> 00:31:46,680 Speaker 1: because it's take your children to work week, Go get 608 00:31:46,680 --> 00:31:49,960 Speaker 1: me a coffee in a ten zero zero. It's about 609 00:31:49,960 --> 00:31:52,160 Speaker 1: time we put these kids to work. What that's next? 610 00:31:52,960 --> 00:31:55,080 Speaker 7: So we're talking about kids, we're talking about girls. 611 00:31:55,120 --> 00:31:55,560 Speaker 4: I love this. 612 00:31:55,680 --> 00:31:58,440 Speaker 7: It's a girl power story. So all right here we go. Okay, 613 00:31:58,600 --> 00:32:01,480 Speaker 7: the Queen's Park Ladies. It's an under twelve soccer team 614 00:32:01,480 --> 00:32:05,560 Speaker 7: in England. They are undefeated. They're playing in a boys 615 00:32:05,600 --> 00:32:08,400 Speaker 7: soccer league. Okay, so they're kicking butt. They're hoping to 616 00:32:08,440 --> 00:32:11,040 Speaker 7: inspire younger girls to get into the sport. They've won 617 00:32:11,080 --> 00:32:14,520 Speaker 7: all twenty two matches and at first the boys were laughing, 618 00:32:14,560 --> 00:32:16,280 Speaker 7: you know when they saw these girls come out. And 619 00:32:16,960 --> 00:32:20,160 Speaker 7: who's got the laws behind us? 620 00:32:20,720 --> 00:32:24,920 Speaker 1: Mohammed el Arian. I have told you we're not having 621 00:32:24,960 --> 00:32:27,400 Speaker 1: a beverage in London. Me and John Pharaoh and doctor 622 00:32:27,400 --> 00:32:30,160 Speaker 1: el Arian and we're you know, the two of us. 623 00:32:30,360 --> 00:32:32,120 Speaker 1: We're trying to get him to pick up the tab 624 00:32:32,560 --> 00:32:34,840 Speaker 1: and we're saying, doctor, he did pretty well in the 625 00:32:34,840 --> 00:32:37,960 Speaker 1: investment business, folks, And we said, Mohammad, would you just 626 00:32:38,120 --> 00:32:43,080 Speaker 1: buy QPR And he's he's trying, he's trying to decide 627 00:32:43,560 --> 00:32:46,400 Speaker 1: should he buy QPR, which is in the Champions League, 628 00:32:46,680 --> 00:32:49,080 Speaker 1: or should he go big yeah, like to leave you know, 629 00:32:49,160 --> 00:32:52,840 Speaker 1: by Arsenal or whatever. But the QPR ladies are getting 630 00:32:52,840 --> 00:32:53,160 Speaker 1: it done. 631 00:32:53,320 --> 00:32:55,040 Speaker 4: They are yeah, under twelve very much. 632 00:32:55,160 --> 00:32:57,560 Speaker 7: Yeah, good morning, yeah. 633 00:32:57,640 --> 00:32:58,000 Speaker 1: Yeah. 634 00:32:58,040 --> 00:32:59,720 Speaker 7: And the reason they did is because when they first 635 00:32:59,720 --> 00:33:03,040 Speaker 7: start years ago, there weren't there wasn't a girl's league, 636 00:33:03,440 --> 00:33:04,960 Speaker 7: so they didn't have the competition. So that's why they 637 00:33:05,000 --> 00:33:07,200 Speaker 7: joined the boys. They didn't have a girls It was 638 00:33:07,240 --> 00:33:09,600 Speaker 7: about six years ago when the clubs started. Yeah, and 639 00:33:09,640 --> 00:33:11,200 Speaker 7: they didn't have a girl's lea back then. 640 00:33:11,320 --> 00:33:13,440 Speaker 4: So well, girls sports here, I mean, you know your 641 00:33:13,520 --> 00:33:14,400 Speaker 4: daughter is huge. 642 00:33:14,720 --> 00:33:17,320 Speaker 7: Yeah, girl sports here are really big. I know when 643 00:33:17,320 --> 00:33:19,920 Speaker 7: I was younger, I was an athlete. I played with 644 00:33:19,920 --> 00:33:21,120 Speaker 7: the boys on the basketball team. 645 00:33:21,160 --> 00:33:24,440 Speaker 4: Did you they didn't have middle school the star stuff stuff? 646 00:33:24,920 --> 00:33:28,240 Speaker 1: How many D one schools are going to recruit your daughter? 647 00:33:28,640 --> 00:33:34,400 Speaker 7: She was like, you D two, D three, Okay, d one, 648 00:33:34,440 --> 00:33:37,280 Speaker 7: It is tough. D one is tough, but it's and 649 00:33:37,320 --> 00:33:39,360 Speaker 7: it's a big workload with the school and the D 650 00:33:39,440 --> 00:33:39,880 Speaker 7: one's got. 651 00:33:40,000 --> 00:33:42,600 Speaker 1: She had a ball the other night which landed in 652 00:33:42,680 --> 00:33:43,320 Speaker 1: stet Nives. 653 00:33:44,200 --> 00:33:45,640 Speaker 7: She did another home where she did. 654 00:33:45,840 --> 00:33:47,520 Speaker 4: Okay, I'm telling you, girl power. 655 00:33:47,640 --> 00:33:47,880 Speaker 3: Love it. 656 00:33:47,920 --> 00:33:48,400 Speaker 1: Girl power. 657 00:33:49,200 --> 00:33:51,400 Speaker 7: So, since we're talking about kids, and new report says 658 00:33:51,520 --> 00:33:54,719 Speaker 7: US birth rates actually fell last year to the lowest 659 00:33:54,760 --> 00:33:55,360 Speaker 7: level in more. 660 00:33:55,280 --> 00:33:56,240 Speaker 4: Than forty years. 661 00:33:56,280 --> 00:33:59,240 Speaker 7: So this is from the US National Center of hell Statistics. 662 00:33:59,400 --> 00:34:03,760 Speaker 7: It fell two three point five nine million, not just 663 00:34:03,800 --> 00:34:06,520 Speaker 7: the US birth rates and other countries worldwide. And we 664 00:34:06,560 --> 00:34:09,080 Speaker 7: all know why. The experts are saying, you know, paid 665 00:34:09,080 --> 00:34:12,160 Speaker 7: family skywriting and healthcare, childcare costs, it's all the same. 666 00:34:12,840 --> 00:34:17,000 Speaker 7: But peek were shifted to women in their thirties and forties. 667 00:34:17,040 --> 00:34:19,960 Speaker 7: Those rates declined in twenty twenty three from the year earlier. 668 00:34:20,200 --> 00:34:22,960 Speaker 4: So my four offspring, that's an you. 669 00:34:22,960 --> 00:34:23,920 Speaker 1: Are a rare case. 670 00:34:24,320 --> 00:34:27,840 Speaker 7: Okay, it's not having four children anywhere. 671 00:34:28,040 --> 00:34:30,279 Speaker 1: I think it's the one thing, the one thing I 672 00:34:30,360 --> 00:34:33,160 Speaker 1: learned in the pandemic, other than listening to the medical pros. 673 00:34:33,239 --> 00:34:36,520 Speaker 1: Thank you all the people that saved us at MODERNA 674 00:34:36,560 --> 00:34:39,320 Speaker 1: and Pfizer is as well. The number one thing I 675 00:34:39,440 --> 00:34:43,960 Speaker 1: learned is we lived all the evidence that our childcare 676 00:34:44,000 --> 00:34:47,720 Speaker 1: system is broken. We all lived it. Everyone. 677 00:34:47,960 --> 00:34:49,160 Speaker 4: Yeah, the childcare is Cristy. 678 00:34:49,160 --> 00:34:51,839 Speaker 3: I mean Matt Miller during this time came back from 679 00:34:51,960 --> 00:34:54,920 Speaker 3: Germany where they have paid childcare and it's just and 680 00:34:55,000 --> 00:34:55,560 Speaker 3: his wife. 681 00:34:55,560 --> 00:34:58,879 Speaker 4: Has just shocked that that we don't have that here 682 00:34:58,880 --> 00:35:00,680 Speaker 4: in the US. She said, wait, this is the United States. 683 00:35:00,719 --> 00:35:02,920 Speaker 3: You guys don't have paid healthcare so you can go 684 00:35:02,960 --> 00:35:04,200 Speaker 3: to work and do all that kind of stuff. 685 00:35:04,239 --> 00:35:07,040 Speaker 4: And then during the pandemic, of course it became that 686 00:35:07,120 --> 00:35:07,600 Speaker 4: much more. 687 00:35:07,800 --> 00:35:10,120 Speaker 1: Yeah, are you dunners or one more? 688 00:35:10,200 --> 00:35:11,719 Speaker 7: No, this one's for you now. I know you like 689 00:35:11,760 --> 00:35:14,600 Speaker 7: your doc Martin's Tom, but this is a new thing 690 00:35:14,640 --> 00:35:15,520 Speaker 7: you may have to switch to. 691 00:35:15,640 --> 00:35:15,920 Speaker 4: Okay. 692 00:35:16,320 --> 00:35:19,120 Speaker 7: It is a snowfer or a sneffer. 693 00:35:19,320 --> 00:35:20,360 Speaker 1: I saw this. Okay. 694 00:35:20,440 --> 00:35:23,280 Speaker 7: It is a cross between a sneaker and a loafer. 695 00:35:23,800 --> 00:35:26,000 Speaker 7: All right, So New Balance is coming out with it. 696 00:35:26,000 --> 00:35:28,080 Speaker 7: It's in August. It's kind of it looks like it 697 00:35:28,520 --> 00:35:31,839 Speaker 7: has a great out mesh, but it has no laces. 698 00:35:32,000 --> 00:35:34,680 Speaker 7: So they're hoping that this is different from you know, 699 00:35:34,719 --> 00:35:36,799 Speaker 7: the slip on shoes, different from that. This is more 700 00:35:36,960 --> 00:35:38,799 Speaker 7: high end, so they're hoping, Yeah, I'm going to go 701 00:35:38,840 --> 00:35:39,560 Speaker 7: to the executive. 702 00:35:40,480 --> 00:35:42,600 Speaker 3: Here's here's where I got really disappointed. One of my 703 00:35:42,680 --> 00:35:47,040 Speaker 3: all time favorite people, why look up to David west. 704 00:35:47,440 --> 00:35:49,400 Speaker 4: Always stressed to the nines. 705 00:35:49,840 --> 00:35:52,680 Speaker 3: He is now with his wonderfully tailored suits coming in. 706 00:35:52,920 --> 00:35:54,560 Speaker 4: I mean he's a player, he is. 707 00:35:54,800 --> 00:35:58,560 Speaker 3: He is wearing these kind of sneak things with wear suits. 708 00:35:58,600 --> 00:36:01,719 Speaker 3: And if David Weston can go casual, Michael McKee, the 709 00:36:01,760 --> 00:36:02,440 Speaker 3: world's coming to it. 710 00:36:02,680 --> 00:36:04,080 Speaker 4: Michael McKee again, another one. 711 00:36:04,440 --> 00:36:07,319 Speaker 1: I'm rebelling. I'm just not going, you know, in the 712 00:36:07,320 --> 00:36:09,719 Speaker 1: hallway at the front door, where missus Keane says, shut 713 00:36:09,800 --> 00:36:13,240 Speaker 1: up and throw this out. She has my last pair 714 00:36:13,400 --> 00:36:16,640 Speaker 1: of decent Bowers skates like they're not They're just below 715 00:36:16,760 --> 00:36:19,600 Speaker 1: like what the NHL people wear. And I think they're going, 716 00:36:20,440 --> 00:36:23,360 Speaker 1: I'm not putting those on again. I don't think so. 717 00:36:23,760 --> 00:36:27,680 Speaker 1: But you can get me in old fart sneakers without laces. 718 00:36:28,040 --> 00:36:31,560 Speaker 1: I apoloze this. Yeah, you know, I may have to 719 00:36:31,640 --> 00:36:34,520 Speaker 1: hire somebody. Michael Rainier, do you want to come over 720 00:36:34,560 --> 00:36:37,359 Speaker 1: and tie my shoelaces? It be It'll be great. 721 00:36:37,719 --> 00:36:39,600 Speaker 7: You have to tie the laces, just slip them on. 722 00:36:40,840 --> 00:36:44,040 Speaker 1: This is a Bloomberg Surveillance podcast, bringing you the best 723 00:36:44,080 --> 00:36:48,840 Speaker 1: in economics, finance, investment, and international relations. You can also 724 00:36:48,920 --> 00:36:52,960 Speaker 1: watch the show live on YouTube. Visit the Bloomberg Podcast 725 00:36:53,080 --> 00:36:57,120 Speaker 1: channel on YouTube to see the show weekday mornings from 726 00:36:57,160 --> 00:37:00,400 Speaker 1: seven to ten am Eastern from our global headquarters in 727 00:37:00,520 --> 00:37:04,200 Speaker 1: New York City. Subscribe to the podcast on Apple, Spotify, 728 00:37:04,560 --> 00:37:08,080 Speaker 1: or anywhere else you listen, and always on Bloomberg Radio, 729 00:37:08,280 --> 00:37:11,480 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app.