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Speaker 2: One of the most red topics are stories on the
Speaker 2: Bloomberg terminal today has to do with Israel. The International
Speaker 2: Criminal Court issued an in rest warrant for Israeli Prime
Speaker 2: Minister Benjamin Netnyahu for alleged war crimes. Thatt's break that
Speaker 2: down with Dan Williams. He's a reporter for Bloomberg News.
Speaker 2: He is based in Jerusalem.
Speaker 3: Dan, give us his story here. What does this really mean?
Speaker 3: Because the headline kind of jumps out of you here.
Speaker 4: It is a dramatic development. We've now seen some thirteen
Speaker 4: and a half months of open warfare between Israel, Hamas
Speaker 4: and Israel and Hasbela and Lebanon and other Iranian backparties
Speaker 4: in the region that has now evolved into open law
Speaker 4: fare with this very important court issuing arrest warrants against
Speaker 4: the is Raeti Prime Minister benjaminter Now and the former
Speaker 4: Defense Minister Joaf Gallant. Those are arrest warrants that are
Speaker 4: actually binding on more than one hundred and twenty countries
Speaker 4: that are signatories to the treaty that underpins that court's conduct.
Speaker 4: Israel is not a signatory, neither is the United States.
Speaker 4: Israel had sought, however, to contest this request for the
Speaker 4: arrest warrants. That failed, as we discovered today, with the
Speaker 4: court saying it had rejected these raady motions and upheld
Speaker 4: and actually decided to issue those arrest warrants as sought
Speaker 4: by the Special Prosecutor.
Speaker 2: Has a United States made any statement on this matter,
Speaker 2: because the support for Israel a generally quite strong in
Speaker 2: the United States.
Speaker 4: Indeed, and throughout these proceedings, we're talking about several months
Speaker 4: of anticipation. I believe the Special Prosecutor formally filed his
Speaker 4: request for arrest warrants back in late May. The Biden
Speaker 4: minister stration said openly that it thought this was baseless.
Speaker 4: Israel has obviously been far more vociferous, calling this antisemitic,
Speaker 4: likening it to the infamous Dreyfus trial. I think both
Speaker 4: countries will be looking to what the next US administration,
Speaker 4: the Trump administration, will do, and significant parties in that
Speaker 4: administration are already saying that when the time comes, they
Speaker 4: will double down on their support for Israel. The question
Speaker 4: is what does that mean. Are they going to try
Speaker 4: to convince like minded countries in Western Europe to withdraw
Speaker 4: from the court or on an individual level, to state
Speaker 4: that they will not abide they will not honor these
Speaker 4: arrest warrants. As I said, it's dramatic development, and I
Speaker 4: think these Raelis will be strategizing very very intensely. Right now.
Speaker 2: Do we why historically have has Israel and the United
Speaker 2: States not been a party to this court?
Speaker 4: I think it comes down to a fear for their autonomy.
Speaker 4: Also the fact that, certainly since the War on Terror,
Speaker 4: the United States has been waging a time quite unilateral
Speaker 4: national security policies abroad, wars that did not always have
Speaker 4: international support. I think the argument is that this would
Speaker 4: effectively intrude on self determination, self defense, the sovereign rights
Speaker 4: of a country. And also they would argue that this
Speaker 4: court is designed to bring justice to countries where there's
Speaker 4: no working inside internal organic justice system. Now Israel says
Speaker 4: it's justicism works perfectly fine. It's had the support of
Speaker 4: some Western countries for that, but it seems that the
Speaker 4: ICC has decided not to find in favor of that
Speaker 4: point of view this time. So in effect, Israel or
Speaker 4: at least these two leaders will be treated like pariahs
Speaker 4: in many of the countries that are required to abide
Speaker 4: by it. It's a development that I think NETANIAO will
Speaker 4: find very very unwelcome.
Speaker 2: I can imagine, Dan, where is just to educate us?
Speaker 2: Where is the International Criminal Court?
Speaker 3: Where is it based?
Speaker 2: And are there are certain countries that have particular influence
Speaker 2: on this court?
Speaker 4: It's at Behague in the Netherlands. That's also where the
Speaker 4: International Court of Justices. That's a court with slightly different
Speaker 4: mandate and different jurisdiction. And again it's an extension of
Speaker 4: various treaties and conventions that arose, especially off to World
Speaker 4: War Two. The bulk of the world's countries are signatories.
Speaker 4: It means they have standing to argue, to submit. It
Speaker 4: also requires them to enflse when warrants, when decisions such
Speaker 4: as has come down.
Speaker 2: All right, Dan, thank you so much for your reporting.
Speaker 2: We really appreciate that. Dan Williams, he's a reporter for
Speaker 2: Bloomberg News. He's based in Jerusalem. Again on the geopolitical front,
Speaker 2: just another major development, the International Criminal Court issues and
Speaker 2: arrest warrant for Israeli Prime Minister of Benjamin at Yaou
Speaker 2: for alleged war crimes, and we appreciate getting that on
Speaker 2: the ground reporting from Israeli.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 3: All right, offspring number four bought in video.
Speaker 2: He's down on his trade and he bought it from
Speaker 2: his brother who works in the financial services industry.
Speaker 3: So we were on a.
Speaker 2: Conference call yesterday heated talking about breaking down the quarter
Speaker 2: for in video.
Speaker 3: I thought the numbers were good.
Speaker 2: Let's talk to an expert man deep seeing senior technology
Speaker 2: analys from Bloomberg Intelligence.
Speaker 3: Mandy, what you think of it?
Speaker 2: The numbers came in, you know, a little bit better
Speaker 2: and expected guidance pretty solid, but again the whisper was
Speaker 2: probably a little bit higher.
Speaker 5: So yeah, and look, when you have a price for perfection,
Speaker 5: that Invidia is always you know, any slight miss in
Speaker 5: the networking side, which was the case here, or even
Speaker 5: a gross margin degradation, which they said we'll go up
Speaker 5: in the second half of next year. So it's really
Speaker 5: a transitory thing. We'll have an impact on the stock,
Speaker 5: and I think overall the demand side looks pretty solid.
Speaker 5: They said, they've Jensen called out there will be no
Speaker 5: Capex digestion until the data center spending hits a trillion dollars.
Speaker 6: That's huge.
Speaker 5: I mean, just think about you know how much runway
Speaker 5: he thinks without a pause. Now does the market believe it?
Speaker 5: Probably not, given what we heard at our conference yesterday
Speaker 5: is it's moving from training to inferencing, and on the
Speaker 5: inferencing side there is probably more. So if once you
Speaker 5: have a train model, you're deploying that model in co
Speaker 5: pilots or chat pots and it's basically a train model
Speaker 5: that's being used for answering queries and that's inferencing answering
Speaker 5: queries or you know, providing some productivity benefit. And that's
Speaker 5: where do you really need a high end in video chip?
Speaker 5: The answer is divided. Some people say for the older
Speaker 5: versions of in video chips, you could use that for inferencing,
Speaker 5: the latest one will continue to get used for training.
Speaker 5: And that's a plausible answer. But as we have learned,
Speaker 5: there is growing competition on the inferencing side from the
Speaker 5: likes of AMD, as well as startups like sam Bnova,
Speaker 5: Cerebras and all these companies are trying to get some
Speaker 5: portion of that pie.
Speaker 2: And folks, Ben Deep was referencing a conference he hosted
Speaker 2: yesterday and annaag Rana are other technology channels to Bloomberg Intelligence.
Speaker 2: It was a phenomenal conference. I mean, they had some
Speaker 2: just amazing speakers there. And the next time you get
Speaker 2: something in near your mail saying hey, come to a
Speaker 2: BI sponsored conference, get off your ear end and get
Speaker 2: to these conferences because some seriously smart people get together
Speaker 2: and you learn a lot. I did hosting a couple
Speaker 2: panels yesterday.
Speaker 6: Men Deep, So.
Speaker 2: When you listen to this the management team in Nvidia,
Speaker 2: where do they say, I mean, can they look a year,
Speaker 2: two years in advance, how do they think their business
Speaker 2: is going to develop?
Speaker 6: Yeah?
Speaker 5: I mean look the fact that they're saying growth margins
Speaker 5: will go down to around seventy one percent over the
Speaker 5: next two quarters, but readbound seventy one seventy one real smart, Yes, wow,
Speaker 5: and it's it's again terrific when you look at it
Speaker 5: from every angle. Is just the way expectations were priced
Speaker 5: for it's mid seventy percent. So the fact that they
Speaker 5: are going down to seventy one percent, but in Jensen's
Speaker 5: you know case, he called out those margins going back
Speaker 5: to seventy five percent. So it's really a ramp up
Speaker 5: of their new architecture Blackwell, which is causing the transitory
Speaker 5: gross margin degradation. But once they get that in full production,
Speaker 5: he expects gross margins to go back to seventy five percent.
Speaker 5: Now I do think again there will be more competition,
Speaker 5: but he clearly doesn't believe that to be the case.
Speaker 2: All Right, I mean, here are just some crazy numbers
Speaker 2: of folks. Just total revenue. Let's let's got really simple here.
Speaker 2: Revenue roughly calendar year twenty two, twenty seven billion of revenue.
Speaker 2: Calendar you're twenty four one hundred and twenty eight billion
Speaker 2: of revenue. Have you seen anything like this in technology?
Speaker 5: I mean, the closest thing that comes to mind is
Speaker 5: the buildout out of the Internet infrastructure back in nineteen
Speaker 5: ninety nine. I think Cisco had a similar ramp up
Speaker 5: on the networking side. But what's different is Innvidia clearly
Speaker 5: has the balance sheet as well as they are in
Speaker 5: more products than Cisco was. So Cisco was just providing
Speaker 5: the networking gear. Nvidia has a software line, they have
Speaker 5: a networking business and then their coreship business. So clearly
Speaker 5: Nvidia is going with the.
Speaker 2: Platform of a stupid income statement. They have fifty five
Speaker 2: percent net income margins, so and they have no capex
Speaker 2: to speak of two three four point so the free
Speaker 2: cash flow is just freakish. So what do they do
Speaker 2: with the cash?
Speaker 5: Well, right now they're doing some share buybacks, but acquisitions
Speaker 5: maybe on the table if the incoming Trump administration loses
Speaker 5: the regulation.
Speaker 3: So okay, let's go down that road there.
Speaker 2: What's the feeling in Silicon Valley in technology about that opportunity, Because, boy,
Speaker 2: your industry and particularly some of the bigger companies that
Speaker 2: you cover, the Amazons of the world, the Google's the world,
Speaker 2: they can't do anything these days. Is the expectation that
Speaker 2: might loosen up.
Speaker 5: Well, the overall m andy environment an ip environment may
Speaker 5: get better, but in terms of big tech, I doubt
Speaker 5: it's anything is changing on that front. Especially for the
Speaker 5: likes of Alphabet and Meta. Probably an Apple or an
Speaker 5: Nvidia may be able to do more acquisitions, but I
Speaker 5: think the companies that are in the crosshairs of you
Speaker 5: know what the incoming administration feels on the consumer side,
Speaker 5: I doubt they'll allow them to make any fur their acquisition.
Speaker 2: All right, man, thanks so much for coming in here,
Speaker 2: Man deep seeing senior technology analyst Bloomberg Intelligence through and
Speaker 2: a rag Randa through a great technology conference yesterday packed
Speaker 2: full of some really smart investors. Again, folks, the next
Speaker 2: time you get an invite in your Bloomberg inbox, jump
Speaker 2: on it because BI is sponsoring some really good investor conferences.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on Focar, playing Android OUTO
Speaker 1: with the Bloomberg Business app. Listen on demand wherever you
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Speaker 2: Let's get back to these markets again. We've kind of
Speaker 2: got red and green on the screen. The Nasdaq's off
Speaker 2: about one percent, but the SMP and NADAL are up slightly.
Speaker 2: Let's get a sense of where we go here as
Speaker 2: we wrap up this earning season. Maryon Bartel's chief investment
Speaker 2: strategist at Sanctuary Wealth. Here, Mariann, thanks so much for
Speaker 2: joining us here. Love to just step back, you know,
Speaker 2: maybe get a thirty thousand foot view from you on
Speaker 2: these markets. What are you talking to your clients about
Speaker 2: here today, because boy, a lot has changed in the
Speaker 2: last couple of weeks with elections and geopolitics and earnings
Speaker 2: and a lot of moving parts out there.
Speaker 7: Well, we just released our twenty twenty five year ahead
Speaker 7: forecast and the name of it, or the title of
Speaker 7: it is all that's new, that's old. Yes, we have AI,
Speaker 7: we have blockchain augmented technology, and we believe that this
Speaker 7: is really altering not just the US economy but the
Speaker 7: global economies. And we've likened this to similar periods from
Speaker 7: nineteen ninety five to two thousand, but also from twenty
Speaker 7: five to twenty nine, where we also had new technologies,
Speaker 7: although they don't feel like new technologies. You know, the automobile,
Speaker 7: the railroads, and markets did phenomenally well because economies grew.
Speaker 7: So we believe we're in this extraordinary, you know, growth
Speaker 7: cycle being led by right now in Vidia, which we
Speaker 7: talked about. They're really altering the next generation of technology.
Speaker 7: So we have our forecast for the SMP for next
Speaker 7: year at seventy two hundred to seventy four hundred.
Speaker 3: Wow and yees.
Speaker 7: That means another twenty percent. But when we went back
Speaker 7: and analyzed the nineties, from ninety five to two thousand,
Speaker 7: we had markets up twenty percent or higher five years
Speaker 7: in a row. Now, in ninety seven and ninety eight
Speaker 7: we had bear market corrections within the year because we
Speaker 7: had a tie back crisis, We had a rush of
Speaker 7: default in the long term capital, a little bit of
Speaker 7: a financial crisis, but those markets still rallied strongly by
Speaker 7: the end of the year, and we think we're in
Speaker 7: a very similar position.
Speaker 2: Talk to us about earnings. What did you take away
Speaker 2: from this earning cycle. We're just wrapping up with some
Speaker 2: retailers this week. What is your view of earnings out
Speaker 2: there again? To get to that, you know, any kind
Speaker 2: of S ANDP handle with a seven in front of it,
Speaker 2: you have to be pretty bullish, I would think on earnings.
Speaker 8: I am.
Speaker 7: I think there's a lot to do with earnings. Markets
Speaker 7: really need earnings to grow, and we see the economy
Speaker 7: growing next year, especially since we've already had a seventy
Speaker 7: five basis point cut by the Fed. Now they may
Speaker 7: slow the pace, but they're more in an easing cycle,
Speaker 7: which we think is going to be very bullish considering
Speaker 7: the economy is growing around three percent and we're at
Speaker 7: full employment. The consumer has money to spend. Household network
Speaker 7: is at a record high. When we look at disposable income,
Speaker 7: there's enough disposable income for the consumer to spend, and
Speaker 7: as you know in your viewers know, the consumer really
Speaker 7: is the main driver of our economy. So we do
Speaker 7: think the cycle is being led by technology. This year
Speaker 7: it's been really all about Semis. We think that narrative
Speaker 7: is shifting a little bit more now to software. Not
Speaker 7: that we're negative on semis, but we think the pace
Speaker 7: of their ascent can slow down, and now we see
Speaker 7: a cycle of software growing as we go into twenty
Speaker 7: twenty five. Another positive for earnings is the steeple yield
Speaker 7: curve for banks, and we also like the capital markets.
Speaker 7: Those are important ingredients to keep an economy going. I
Speaker 7: always say the banks are the heartbeat of the economy
Speaker 7: and the private markets, the private credit markets are flesh
Speaker 7: with liquidity to provide to companies. So we're very optimistic
Speaker 7: and we see also profit margins growing, so we think
Speaker 7: we're really in that goldilocks environment.
Speaker 2: Well, I think I may be calling the top in
Speaker 2: the tech market because my youngest offspring just bought some
Speaker 2: invidious and that's got to be the top. So if
Speaker 2: I wanted to diversify Marianna and try to find some
Speaker 2: value out there, where do I go?
Speaker 7: So we think the best if you're looking for value,
Speaker 7: we do think the best value is in the financials,
Speaker 7: particularly in the banks and also the capital markets. You know,
Speaker 7: energy is good value, but we don't really see crude
Speaker 7: oil firming up. We think crew going into twenty twenty
Speaker 7: five is going to be either range or too slightly down.
Speaker 7: Especially with the Trump administration, there's concern that we'll add
Speaker 7: to supply, and if you add to supply in a
Speaker 7: weaker demand environment which we're in, particularly because of China,
Speaker 7: we think that, you know, energy is really not the
Speaker 7: place to be for twenty twenty five, at least for value.
Speaker 7: So the values really I think best in financials. Which
Speaker 7: really shocking is you know, healthcare and staples, which are
Speaker 7: really called your defensive part of your market, are really
Speaker 7: falling off a cliff in terms of relative performance, we
Speaker 7: really don't even see any value in there. So best
Speaker 7: place for value would be the financials.
Speaker 2: Marian, how about outside the US do you guys allocate
Speaker 2: any many outside of the US markets?
Speaker 7: You know, in terms of asset allocation when you look
Speaker 7: at asset allocation models over a very long term period,
Speaker 7: diversifying internationally does work. But our thesis going into twenty
Speaker 7: twenty five, if we are correct that we're in this
Speaker 7: new technological advance, most of the technologies being developed here
Speaker 7: in the United States, and that means you have to
Speaker 7: own the companies here in the United States. So we
Speaker 7: see capital flows continuing to come to the United States.
Speaker 7: So although markets we think can go up outside of
Speaker 7: the United States, we think the leader of the pack
Speaker 7: will remain in the United States. Now it may be
Speaker 7: choppy back and forth, you know, up down, updown, but
Speaker 7: by the end of the year, we still think the
Speaker 7: US will do well. And then you have to consider
Speaker 7: the US dollar, and we see the US dollar as
Speaker 7: either being stable too strong. So when you invest overseas,
Speaker 7: if the dollar strengthens, you lose part of your return.
Speaker 7: So for you know, twenty twenty five, we have an
Speaker 7: overweight to the US.
Speaker 3: All right, Mary, and thank you so much. We appreciate that.
Speaker 2: Marion Bartel's she's a chief investment strategist for Sanctuary Wealth.
Speaker 2: Joining us from New York via some zoom.
Speaker 1: Here, you're listening to the Bloomberg Intelligence Podcast. Catch us
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Speaker 6: All right, Alexe on Pauls.
Speaker 2: When you're live here in our Bloomberg Interactive Broker studio
Speaker 2: or streaming live on YouTube as well as to check
Speaker 2: us out of Bloomberg, go over to YouTube dot com
Speaker 2: and search Bloomberg Podcast. All right, Bitcoin, I'm calling it
Speaker 2: out for Tom Keen. I'm calling out from Matt Miller.
Speaker 2: Up one point eight percent ninety six thousand, two hundred.
Speaker 2: I mean, we are right on that one hundred thousand
Speaker 2: dollars level. Let's break down what's happening. Let's see what
Speaker 2: could be behind some of this stuff. Michael Reagan, he's
Speaker 2: a crypto team leader. Yes, we have a team of
Speaker 2: reporters covering crypto at Bloomberg, which means you need a
Speaker 2: team leader to manage these folks, and that's Michael Reagan.
Speaker 2: He drew the short stroll. He joins us here on
Speaker 2: at Bloomberg Interactive Broker Studio. At the election, I'm just
Speaker 2: gonna swag it here, it was about sixty thousand. Here
Speaker 2: we are pushing up against one hundred thousand.
Speaker 3: What accounts for that delta?
Speaker 9: Yeah, you know the expression I keep hearing over and
Speaker 9: over again, Paul's paradigm shift. You know, we went from
Speaker 9: sort of the near death of the entire industry with
Speaker 9: FTX and all the dominoes that fell after it a
Speaker 9: few years ago. Biden followed up the administration. Biden administration
Speaker 9: followed up with a really fierce crackdown on the industry.
Speaker 6: Now what Trump.
Speaker 9: Has signaled as a complete one eighty, you know, instead
Speaker 9: of this you know, highly regulated, very intense scrutiny on
Speaker 9: the industry, he's talking about, you know, replacing Gary Gensler
Speaker 9: with a crypto lover and just you know, really being
Speaker 9: friendly to the to the broader industry of digital assets.
Speaker 9: But the real for bitcoin specifically, it's this promise that
Speaker 9: Trump made in July at a bitcoin conference to create
Speaker 9: what he called a strategic bitcoin stockpile. So, you know,
Speaker 9: think of the strategic petroleum reserve. You know, we've had
Speaker 9: strategic wheat reserves in the past.
Speaker 6: You know.
Speaker 9: The thinking of him and Synthonia Loomis, his ally and
Speaker 9: the Senate, the senator from Wyoming, is that if you
Speaker 9: not only Trump. First of all, the government owns about
Speaker 9: two hundred and change bitcoin from various criminal ASCID forfeitures.
Speaker 6: That's why I know that.
Speaker 9: Okay, So that's sort of the what Trump has hinted
Speaker 9: would be the basis for this reserve. Senator Loomis wants
Speaker 9: to go even further and have the government by one million,
Speaker 9: nothing short of one million bitcoins. We're talking about one
Speaker 9: hundred billioncoins are out there for you.
Speaker 6: That's about five percent meaning the total amount. Yeah, so.
Speaker 9: You know, a big question mark, a big event risk
Speaker 9: looming over this market if that bill does not sort
Speaker 9: of gain more support. So far, she's the only sponsor
Speaker 9: of it. There is quite a bit of skepticism that
Speaker 9: she'll be able to get that passed, but the market
Speaker 9: is thinking there's a good chance of that, and not
Speaker 9: only that that other governments will have.
Speaker 6: To follow suit.
Speaker 9: You know, if if the US suddenly is treating bitcoin
Speaker 9: like a major reserve asset, you know other governments will
Speaker 9: likely be inspired her to do the same. So that's
Speaker 9: kind of the backdrop for this just parabolic rally to
Speaker 9: the upside that we've seen.
Speaker 2: Because right now it sounds a little bit like they
Speaker 2: would like to think about bitcoin the way we currently
Speaker 2: think about gold, where we have gold sitting at Fort Knox.
Speaker 9: That that's exactly right, and what the Loomis Bill would
Speaker 9: do would be sell.
Speaker 6: Off some of that.
Speaker 9: The FED doesn't own physical gold, they owned certificates that
Speaker 9: represent gold held in Fort Knox by the Treasury. Her
Speaker 9: bill would require the Fed to start selling gold to
Speaker 9: buy bitcoin. Wow, just sort of replace it as a
Speaker 9: reserve asset. Now, obviously, you know you think about telegraphing
Speaker 9: to the market one hundred billion buy at today's prices,
Speaker 9: I mean Skuy's limit on the price.
Speaker 6: That that's the thinking at least.
Speaker 2: Because it's I mean, is what I know about bitcoin
Speaker 2: I learned from Mike mcgloane, A fixed, if not declining
Speaker 2: supply and presumably ever more right cases.
Speaker 9: Yeah, every four years, every four years, the or so
Speaker 9: the amount that's mine.
Speaker 6: That's the new supply.
Speaker 9: It gets cut in half, so that that proposed government
Speaker 9: buy would actually overwhelm the amount.
Speaker 6: That's mind all right.
Speaker 2: Another thing that Trump's transition team is discussing the creation
Speaker 2: of a White House post dedicated to digital asset policy.
Speaker 6: Yeah that's yesterday. Yeah. Yeah.
Speaker 9: It's still sort of a lot of questions about what
Speaker 9: exactly that would mean. But the idea is, you know,
Speaker 9: give the crypto industry sort of a representative in the
Speaker 9: White House to manage what they want to do with
Speaker 9: regulations and that sort of thing. Again, just another sign
Speaker 9: of this sort of one hundred and eighty degree paradigm
Speaker 9: shift in how the government will think about crypto and bitcoin,
Speaker 9: especially under a Trump presidency, compared to the very tough
Speaker 9: crackdown that we saw under President Biden. So a real
Speaker 9: dramatic yes change that.
Speaker 2: So I'm asking myself, how do we get to sixty thousand,
Speaker 2: one hundred thousand? That sounds like the reason that sounds
Speaker 2: like three. It feels like Elon musk Is kind of
Speaker 2: has his fingerprints on.
Speaker 6: Some of this.
Speaker 9: Yeah, yeah, I mean he's a crypto officionado for for sure.
Speaker 9: You know, we name the Department of Government Efficiencies is
Speaker 9: just named after a meme coin. But I would throw
Speaker 9: in Michael Sailor and micro strategy is another really important
Speaker 9: element here. You know, he's tapping capital markets for forty
Speaker 9: two billion, telling the world what he's gonna do with it,
Speaker 9: just buy more bitcoin, and his stock is even outperforming
Speaker 9: bitcoin itself by tremendous amounts.
Speaker 6: So it's it's really an interesting time to watch all
Speaker 6: this unfold.
Speaker 3: All right, folks.
Speaker 2: I mean, we have twenty four hundred reporters around the
Speaker 2: world of Bloomberg News. Many of them, some of our
Speaker 2: best are have been and continue to be dedicated to
Speaker 2: this whole crypto market and reporting on the crypto market.
Speaker 2: And you know, at least I know how serious Bloomberg
Speaker 2: News is about cryptos. And when they appoint Michael Reagan
Speaker 2: to be a team leader because he's been doing this
Speaker 2: stuff a long time, he knows good journalism, and he's
Speaker 2: put Michael Reagan on top of this team, that means
Speaker 2: we're serious about a coverage of crypto.
Speaker 6: So we'll stay on top of this stuff.
Speaker 2: But again, you know, looking at the bitcoin up twenty
Speaker 2: three hundred bucks here today, just under ninety seven thousand
Speaker 2: dollars per token. A lot of folks out there make
Speaker 2: it some big bets on crypto. Again, my youngest who
Speaker 2: bought some Nvidia, just recently talked me about buying bitcoin.
Speaker 2: I said, not with any of the money I've contributed
Speaker 2: to your account. If you want to go out and
Speaker 2: spend some of your money, go ahead. So that's how
Speaker 2: we think about Here.
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Speaker 10: Alex Steel here alongside Paul Sweeney. This is Bloomberg Intelligence Radio.
Speaker 10: We are broadcasting to live from our Renactive Broker Studio Interactive.
Speaker 10: I don't know what word I said, but Interactive Broker
Speaker 10: Studio works right here in midtown Manhattan.
Speaker 3: So NI video was.
Speaker 10: Being billed as like the market mover for the rest
Speaker 10: of the year, that it was more important than the Fed,
Speaker 10: it was more important than any jobs data or inflation.
Speaker 10: But now it's over. So now what David khod Love
Speaker 10: founder's CEO and chief investment strategist at Mainstay Capital Management.
Speaker 10: I joined now, So David, what now?
Speaker 6: Like?
Speaker 10: Now?
Speaker 11: Are you focused on what now after?
Speaker 8: In na video that many have said might be more
Speaker 8: important to the markets than the Fed. But we do
Speaker 8: have PCE coming up at the end of the month
Speaker 8: PEC for October, and then we'll get CPI and another
Speaker 8: round of data here in early December. And I think,
Speaker 8: you know, for the FED, as far as the FED
Speaker 8: is concerned, they're kind of between a rock and a
Speaker 8: hard place. They have, you know, since September when we
Speaker 8: were looking at more than two hundred basis points and
Speaker 8: cuts by this time next year, we've had Unemployment has improved,
Speaker 8: it has gotten lower, Growth is stronger, Inflation has crept
Speaker 8: up a little bit. On the flip side of that,
Speaker 8: if we look at personal bankruptcies, we look at auto delinquencies,
Speaker 8: on auto loans, credit card debt, those are all at
Speaker 8: multi year decade highs. So there's cracks in the economy.
Speaker 8: There's things to be concerned about. But in terms of
Speaker 8: some of the other factors that the FED looks at,
Speaker 8: I think it's I think there's a lean towards not
Speaker 8: not cutting in December, and the markets won't like that. So,
Speaker 8: you know, I think we're in for some volatility. We've
Speaker 8: had a great twenty twenty two and twenty three, and
Speaker 8: I think we're in for some volatility in twenty I'm sorry,
Speaker 8: twenty three and twenty four, and in for some volatility
Speaker 8: in twenty five.
Speaker 2: David, it was two weeks ago yesterday that we all
Speaker 2: woke up to a new president. We now know that
Speaker 2: we have a Republican controlled Senate and House. Did that
Speaker 2: change your outlook or the way you approach markets or
Speaker 2: maybe how you allocate assets here?
Speaker 8: Yeah, you know, we always say and we educate our clients,
Speaker 8: and the thing that we try to make sure is
Speaker 8: that clients or in investors in general, there's a tendency
Speaker 8: to go to cash in an election year because they want
Speaker 8: to wait and see what happens in election and inevitably,
Speaker 8: election years turned out to be very good on average.
Speaker 8: This one the best election year since nineteen thirty six.
Speaker 8: But what we do want to do is look through
Speaker 8: to what we have for Congress and the executive branch
Speaker 8: and what that means as tactical asset allocators and the
Speaker 8: big wild card for next year is tariffs and what
Speaker 8: that mean in terms of a trade war. We know
Speaker 8: what that brought in in twenty sixteen in President Trump's
Speaker 8: first term.
Speaker 11: So there is some concern.
Speaker 8: That with tariffs that's also going to be problematic for inflation.
Speaker 8: How much of what was campaign rhetoric versus how much
Speaker 8: of it will go into effect.
Speaker 11: They seem pretty serious about it.
Speaker 8: Howard Lutnak, who was named Commerce Secretary, he's almost self
Speaker 8: proclaimed tariffs are so I think there's going to be
Speaker 8: a run at it. What that results in terms of
Speaker 8: trade wars, the industry that effects versus others, that'll be very.
Speaker 11: Important for market participants.
Speaker 10: When you mentioned there was going to be more volatility,
Speaker 10: what assets do you think will have the most volatility?
Speaker 10: What do you're looking at, say, politics, as you mentioned,
Speaker 10: you also talked about potentially skipping a cut in December.
Speaker 10: Where do we see the most action?
Speaker 8: Well, we're seeing a lot of volatility in bonds we
Speaker 8: already have this year. Interestingly enough, is the Fed cut
Speaker 8: the first time they've now cut seventy five basis points.
Speaker 11: During that timeframe, both the.
Speaker 8: Ten year and thirty year have gone up about seventy
Speaker 8: five basis points, which is that counterintuitive reaction function. So
Speaker 8: we've seen really a lot of volatility in the bond market,
Speaker 8: but we'll see we think we'll see increased volatility in
Speaker 8: the stock market because even though the election is behind us,
Speaker 8: now that uncertainty is behind us, we have the uncertainty
Speaker 8: over tariffs and just how aggressive some of these moves
Speaker 8: will be. Even when we talk about eliminating or significantly
Speaker 8: reducing government agencies, what that would mean to unemployment. So
Speaker 8: there's just a lot of new factors to look at
Speaker 8: in terms of overall investment strategy that will be driving
Speaker 8: volatility into both bonds and stocks. We don't think about
Speaker 8: volatility a lot for bonds, but we've seen a great
Speaker 8: deal if we look at the move index, which is
Speaker 8: like the VICS for stocks, bonds have been quite volatile,
Speaker 8: they'll continue to be, and we think we'll see more
Speaker 8: volatility in the stock market.
Speaker 2: So we started off David by just chatting about in Nvidia.
Speaker 2: I thought the numbers were pretty solid, but of course
Speaker 2: the expectations were just massive.
Speaker 11: Here.
Speaker 2: What did you learn, if anything, last night from Nvidia's
Speaker 2: results that maybe change or affirm.
Speaker 3: Your kind of your thoughts on technology.
Speaker 11: Well, first of all.
Speaker 8: You know, Navidia is if you talk about a company
Speaker 8: that has a very wide mode around it because of
Speaker 8: Generative AI and their place in that, it's it's Navidia.
Speaker 8: They beat top line and bottom line should have been
Speaker 8: a good report, you know. But the problem is investors
Speaker 8: have become accustomed to these blowout numbers, just blowout numbers
Speaker 8: for Navidia that they've had in past quarters. So it's
Speaker 8: a little bit of a let down on the size
Speaker 8: of the beat.
Speaker 11: The stocks sold off.
Speaker 8: Uh and and UH after I was trading pre market
Speaker 8: was down and it's it's come back a little bit.
Speaker 8: But the bottom line is Navidia still has a long
Speaker 8: run way.
Speaker 11: Ahead of it.
Speaker 10: Uh.
Speaker 8: And the you know, their new gener A chip is
Speaker 8: is doing well, and I think that it still makes
Speaker 8: sense as part of a portfolio.
Speaker 10: What about bitcoin? Are you on the bitcoin bold train here?
Speaker 8: Yeah? The you know the interesting thing about bitcoin is, uh,
Speaker 8: those that have been bearish on bitcoin, fake internet money,
Speaker 8: it'll eventually go to zero pons scheme whatever.
Speaker 11: They've been humbled, right, they've been humbled.
Speaker 8: Bitcoin is as we've said, it's here to stay. It
Speaker 8: may be an asset class all and of itself, but
Speaker 8: just looking at what's happened here since the election, the
Speaker 8: talk of a strategic bitcoin reserve. You had a segment
Speaker 8: earlier on the show about it. You know, these are
Speaker 8: President Trump wants to call himself the bitcoin president.
Speaker 11: So we're seeing, we're seeing the.
Speaker 8: Asset or the asset class of justin bitcoin by itself,
Speaker 8: not the other coins, is rising on that speculation. And
Speaker 8: we look at it like gold, really if it's digital gold.
Speaker 8: Gold doesn't have a price to earnings ratio. It doesn't
Speaker 8: have a dividend yield. Bitcoin does neither. There is more
Speaker 8: gold that can be mined bitcoin. There's a fixed amount.
Speaker 2: Right David, Thank you so much for joining us. Always
Speaker 2: appreciate getting a few minutes of your time, David Coudlah.
Speaker 2: He's a founder, chief executive officer, and chief investment OFFSTA.
Speaker 2: I guess I make Simon the boss at Mainstay Capital Management.
Speaker 11: Appreciate that.
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