1
00:00:02,400 --> 00:00:12,800
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:12,280 --> 00:00:16,080
Speaker 2: Single dust idea, and the theme today was very simple.

3
00:00:16,600 --> 00:00:20,639
Speaker 2: I was stunned by the quietude of the weekend. The

4
00:00:20,680 --> 00:00:23,320
Speaker 2: bears just humble, there's no other way to put it.

5
00:00:23,720 --> 00:00:27,360
Speaker 2: And I'm sure they'll have their day again and the

6
00:00:27,400 --> 00:00:31,040
Speaker 2: bulls and I just wonder where the exuberance is. And

7
00:00:31,080 --> 00:00:34,800
Speaker 2: it's wrapped around the actual emotion of the stock market,

8
00:00:34,840 --> 00:00:37,239
Speaker 2: and culturally, maybe the way we buy bonds now and

9
00:00:37,280 --> 00:00:40,559
Speaker 2: buy stocks has changed so much. Airic ballchunas today was

10
00:00:40,600 --> 00:00:44,159
Speaker 2: definitive on ets. The most stunning thing Eric said to us.

11
00:00:44,680 --> 00:00:49,520
Speaker 2: I asked them and the traditional mutual funds, they're doing

12
00:00:49,560 --> 00:00:51,400
Speaker 2: okay in bonds, but they saw and I don't have

13
00:00:51,440 --> 00:00:53,680
Speaker 2: a number in my head right now, but they have

14
00:00:53,800 --> 00:00:58,240
Speaker 2: a massive outflow in the equity markets of the traditional

15
00:00:58,360 --> 00:01:00,160
Speaker 2: mutual funds, and of course, so much of that I

16
00:01:00,160 --> 00:01:02,640
Speaker 2: assume is going to eatf So there's a there's a

17
00:01:02,640 --> 00:01:04,839
Speaker 2: whole new chemistry to what we do. I mean, there's

18
00:01:04,920 --> 00:01:07,880
Speaker 2: just no other way to mention it. And with the

19
00:01:07,920 --> 00:01:10,840
Speaker 2: stunning stock market lift that we saw Friday afternoon to

20
00:01:10,920 --> 00:01:14,600
Speaker 2: Dow forty thousand, with ed Yard Denny's note over the

21
00:01:14,680 --> 00:01:19,319
Speaker 2: weekend where he models out now sixty thousand, a seven

22
00:01:19,440 --> 00:01:23,000
Speaker 2: percent return out to two thousand and thirty and just

23
00:01:23,080 --> 00:01:27,720
Speaker 2: the quality of this bull market is so odd. Our

24
00:01:27,760 --> 00:01:31,960
Speaker 2: team put together in a collective set of conversations over

25
00:01:32,280 --> 00:01:35,880
Speaker 2: the weekend, and here is George Saravellis. He works for

26
00:01:36,000 --> 00:01:39,399
Speaker 2: David Focus Landel and Peter Hooper and the cur at

27
00:01:39,440 --> 00:01:42,640
Speaker 2: Deutsche Bank out of London. He rates brilliant short notes

28
00:01:43,360 --> 00:01:45,880
Speaker 2: with their conviction, and a lot of the conviction as

29
00:01:45,880 --> 00:01:49,000
Speaker 2: goes to his colleague Allen Ruskin as well, is the

30
00:01:49,040 --> 00:01:54,680
Speaker 2: correlation of the foreign exchange signals that we see with equities,

31
00:01:54,960 --> 00:01:58,920
Speaker 2: bonds and commodities. Here's George Sarahvellis of Deutsche Bank on

32
00:01:59,040 --> 00:02:00,520
Speaker 2: the dollar stocks.

33
00:02:01,160 --> 00:02:06,640
Speaker 3: So our theme is low ball persisting in an environment

34
00:02:06,680 --> 00:02:11,760
Speaker 3: of low volatility. Carry tends to do quite well, so

35
00:02:12,040 --> 00:02:14,920
Speaker 3: in effects you should see more of the same. But

36
00:02:15,160 --> 00:02:17,680
Speaker 3: I think a crucial point is the dollar is a

37
00:02:17,720 --> 00:02:20,639
Speaker 3: high yielding currency, and if you think about the start

38
00:02:20,680 --> 00:02:23,600
Speaker 3: of the year, so many people made the argument that

39
00:02:23,720 --> 00:02:26,920
Speaker 3: if equities go up, the dollar should weaken, and the

40
00:02:27,000 --> 00:02:30,520
Speaker 3: dollar strong despite equities at record highs, and that's because

41
00:02:30,520 --> 00:02:33,359
Speaker 3: it's part of the carry trade. So we're positive on

42
00:02:33,400 --> 00:02:35,680
Speaker 3: the dollar, and we're positive on carry as well.

43
00:02:35,960 --> 00:02:38,840
Speaker 2: I'm going to editorialize here and say what I watch

44
00:02:38,960 --> 00:02:43,160
Speaker 2: is nominal GDP. I thought Michael McKee was brilliant today

45
00:02:43,560 --> 00:02:46,919
Speaker 2: after his conversation with Raphaield Bostic of Atlanta, the FED

46
00:02:47,000 --> 00:02:50,160
Speaker 2: President of Atlanta here and just you know, you take

47
00:02:50,200 --> 00:02:53,200
Speaker 2: Atlanta GDP now and it's coming down as it does

48
00:02:53,639 --> 00:02:57,000
Speaker 2: across excuse me, as it good as across in ninety days.

49
00:02:57,960 --> 00:03:00,600
Speaker 2: But you know, say you're three percent GDP two point

50
00:03:00,680 --> 00:03:03,040
Speaker 2: eight percent GDP, I don't know what it is, and

51
00:03:03,080 --> 00:03:05,560
Speaker 2: you fold on that the inflation component, you got a

52
00:03:05,600 --> 00:03:09,359
Speaker 2: nominal GDP about four percent, and dare I say it

53
00:03:09,400 --> 00:03:12,640
Speaker 2: could be above five percent? And that's the animal spirit

54
00:03:12,840 --> 00:03:17,200
Speaker 2: driving America into the brilliant work of Rafael Bostic at

55
00:03:17,200 --> 00:03:21,120
Speaker 2: the end of that interview. Do you disaggregate America into

56
00:03:21,120 --> 00:03:24,840
Speaker 2: the haves and the have nots? Or do you aggregate

57
00:03:24,880 --> 00:03:28,200
Speaker 2: America into one piece? That's a raging debate that will

58
00:03:28,240 --> 00:03:32,160
Speaker 2: be one of our key themes through twenty twenty four.

59
00:03:32,800 --> 00:03:37,160
Speaker 2: Tracy mcwillan is with Wells Fargo, and it's really quite

60
00:03:37,200 --> 00:03:42,160
Speaker 2: good on asset allocation, about making choices of what to do,

61
00:03:42,840 --> 00:03:46,320
Speaker 2: and just as importantly, what not to do in stocks

62
00:03:46,360 --> 00:03:48,040
Speaker 2: and bonds. Let's listen, we.

63
00:03:48,160 --> 00:03:53,960
Speaker 1: Are seeing these rises in the market supported by higher earnings,

64
00:03:54,000 --> 00:03:58,560
Speaker 1: and a lot of a lot of policy has contributed

65
00:03:58,680 --> 00:04:02,160
Speaker 1: to these highers dot com market prices this time, So

66
00:04:02,160 --> 00:04:07,520
Speaker 1: there's some fundamental justification behind some of the rises that

67
00:04:07,600 --> 00:04:10,920
Speaker 1: we've seen. However, there are pockets of the market that

68
00:04:10,960 --> 00:04:14,240
Speaker 1: are probably getting a little over priced. You know, communication

69
00:04:14,440 --> 00:04:18,080
Speaker 1: services has done really well this year, information technology has

70
00:04:18,080 --> 00:04:21,680
Speaker 1: done really well. Those are areas where we'd be trimming

71
00:04:22,279 --> 00:04:26,839
Speaker 1: and putting that cash into short term fixed income and

72
00:04:27,120 --> 00:04:28,360
Speaker 1: just waiting for a.

73
00:04:28,320 --> 00:04:31,080
Speaker 2: Better operation, for that big correction to come in. Yeah,

74
00:04:31,120 --> 00:04:33,719
Speaker 2: that's the point. I was to make a joke there, trimming.

75
00:04:34,080 --> 00:04:37,000
Speaker 2: Trimming is the new phrase, or sell, you know, I

76
00:04:37,040 --> 00:04:38,800
Speaker 2: just don't know why, you know, we would like to

77
00:04:38,880 --> 00:04:41,920
Speaker 2: sell this or buy. That is how we used to talk,

78
00:04:42,000 --> 00:04:45,160
Speaker 2: and now we've got this whole jargon of asset allocation.

79
00:04:45,440 --> 00:04:48,680
Speaker 2: But really the elephant in the room is Paul has

80
00:04:48,720 --> 00:04:52,039
Speaker 2: been brilliant on Paul Sweeney. Is the need for a

81
00:04:52,120 --> 00:04:54,720
Speaker 2: correction or what is the new correction? I don't buy

82
00:04:54,760 --> 00:04:59,680
Speaker 2: the idea that we have prospered our way out of

83
00:04:59,800 --> 00:05:03,480
Speaker 2: an normal correction on the SPX. I'm going to frame

84
00:05:03,520 --> 00:05:08,240
Speaker 2: that as a ten percent correction, an eighteen percent bear market.

85
00:05:08,400 --> 00:05:12,320
Speaker 2: Some would say twenty percent down bear market. And the

86
00:05:12,440 --> 00:05:15,159
Speaker 2: real understanding that every once in a while things fall

87
00:05:15,200 --> 00:05:18,960
Speaker 2: apart and you reset down thirty five percent. We don't

88
00:05:18,960 --> 00:05:21,520
Speaker 2: have to look back too far for two or three

89
00:05:21,920 --> 00:05:25,000
Speaker 2: once in a lifetime events like that. But the answer is,

90
00:05:25,000 --> 00:05:29,440
Speaker 2: we haven't seen that, and I just I find the

91
00:05:29,480 --> 00:05:36,040
Speaker 2: bull market lassitude now is mostly about that fear that

92
00:05:36,200 --> 00:05:38,400
Speaker 2: is evaporated. Yeah, we'll have a little spike up to

93
00:05:38,440 --> 00:05:40,600
Speaker 2: twenty five or thirty in the Vicks, but we haven't

94
00:05:41,279 --> 00:05:45,000
Speaker 2: had that real fear set in. That'll be one of

95
00:05:45,000 --> 00:05:47,039
Speaker 2: our themes here as we move PCE at the end

96
00:05:47,080 --> 00:05:51,040
Speaker 2: of the month and onto the June twelfth FED meeting.

97
00:05:51,120 --> 00:05:54,600
Speaker 2: Lots of economic data, lots of discussions on the market.

98
00:05:54,640 --> 00:05:59,919
Speaker 2: We're on Apple, CarPlay, Android, on YouTube, search Bloomberg Podcasts,

99
00:06:00,080 --> 00:06:04,000
Speaker 2: Subscribe to Bloomberg Podcasts. This is single best.

100
00:06:04,200 --> 00:06:12,440
Speaker 3: Thank you, MHM.