1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,000 Speaker 1: us live on YouTube. 6 00:00:27,080 --> 00:00:29,840 Speaker 2: It starts trying today with Amanda Lineum. She's at Black Rock. 7 00:00:30,400 --> 00:00:33,400 Speaker 2: As you look at the fixed income space, let's just 8 00:00:33,440 --> 00:00:35,440 Speaker 2: go there with the real yield. The real yield is 9 00:00:35,440 --> 00:00:38,599 Speaker 2: the inflation adjusted yield. There's different ways to measure it. 10 00:00:38,680 --> 00:00:40,680 Speaker 2: At the one I use is one point ninety two, 11 00:00:41,320 --> 00:00:44,400 Speaker 2: Well in over two percent. Why is the real yield 12 00:00:44,400 --> 00:00:46,240 Speaker 2: coming in? Is it a growth prediction? 13 00:00:46,400 --> 00:00:47,680 Speaker 3: Good morning, Thank you for having me. 14 00:00:47,760 --> 00:00:49,839 Speaker 4: I do think that's exactly a time a moderation and 15 00:00:49,880 --> 00:00:52,000 Speaker 4: growth outlook for the US, so that real. 16 00:00:52,000 --> 00:00:54,600 Speaker 3: Yield is coming in, and I think that makes sense. 17 00:00:54,600 --> 00:00:57,200 Speaker 4: When you listen to corporate earnings calls, even the ones 18 00:00:57,200 --> 00:01:00,000 Speaker 4: that have occurred over the past week, there's a significan 19 00:01:00,240 --> 00:01:03,040 Speaker 4: lack of visibility where these corporates can really see forward. 20 00:01:03,080 --> 00:01:06,800 Speaker 4: They're having a difficult time disentangling what is front loading. 21 00:01:06,480 --> 00:01:08,160 Speaker 3: Of demand, what is real demand. 22 00:01:08,480 --> 00:01:11,000 Speaker 4: Many of the consumer companies are expecting to be mitigating 23 00:01:11,080 --> 00:01:14,000 Speaker 4: teriffs for the next few quarters. But I think there's 24 00:01:14,040 --> 00:01:16,920 Speaker 4: a debate that is happening both internally and I would 25 00:01:16,959 --> 00:01:19,840 Speaker 4: say externally, where the market is saying, well, the hard 26 00:01:19,920 --> 00:01:22,160 Speaker 4: data hasn't yet caught down to the softer sentiment data, 27 00:01:22,200 --> 00:01:24,720 Speaker 4: so maybe it won't, maybe it won't, Maybe that moderation 28 00:01:24,760 --> 00:01:25,319 Speaker 4: won't happen. 29 00:01:25,560 --> 00:01:27,680 Speaker 3: We think that that's actually just a matter of time. 30 00:01:28,600 --> 00:01:31,199 Speaker 4: The hard data will actually catch down to the soft data, 31 00:01:31,560 --> 00:01:33,360 Speaker 4: but we shouldn't expect it to happen imminently. 32 00:01:33,880 --> 00:01:36,240 Speaker 5: I got the tenure treasure. We're back down to four 33 00:01:36,280 --> 00:01:37,559 Speaker 5: point one six percent. 34 00:01:37,720 --> 00:01:39,320 Speaker 2: Everything's coming in Holy Cow. 35 00:01:39,440 --> 00:01:41,440 Speaker 5: I mean, what do you think we end the year here? 36 00:01:41,720 --> 00:01:44,600 Speaker 4: Well, I think our two I would say more higher 37 00:01:44,640 --> 00:01:47,480 Speaker 4: conviction assumptions are for steeper curves and a rebuild of 38 00:01:47,560 --> 00:01:49,800 Speaker 4: term premia at the long end. And so really, when 39 00:01:49,800 --> 00:01:51,560 Speaker 4: you think about the long end, the drivers there are 40 00:01:51,640 --> 00:01:56,600 Speaker 4: budget deficits, concerned about the fiscal situation, possible increase in 41 00:01:56,600 --> 00:01:59,360 Speaker 4: inflation expectations over the long term. At the front end, 42 00:01:59,440 --> 00:02:01,840 Speaker 4: we actually think the FED has a more constrained reaction 43 00:02:01,920 --> 00:02:05,440 Speaker 4: function because inflation is just already above target and is 44 00:02:05,480 --> 00:02:08,399 Speaker 4: probably moving higher still, so we don't expect the FED 45 00:02:08,440 --> 00:02:10,800 Speaker 4: to be cutting preemptively. We expect that they will actually 46 00:02:10,800 --> 00:02:13,720 Speaker 4: need to see real deterioration in the labor market. Probably 47 00:02:13,760 --> 00:02:16,960 Speaker 4: not this Friday, but over time it's really going to 48 00:02:17,000 --> 00:02:19,639 Speaker 4: be that visible inflection in the hard data that will 49 00:02:19,680 --> 00:02:21,440 Speaker 4: allow the FED to cut. They may start with a 50 00:02:21,440 --> 00:02:23,960 Speaker 4: fifty basis point cut, right, that's not out of the question. 51 00:02:24,360 --> 00:02:25,280 Speaker 3: It's not out of the question. 52 00:02:25,360 --> 00:02:27,800 Speaker 4: But I think as it relates to the treasury market, 53 00:02:27,840 --> 00:02:30,079 Speaker 4: steeper curves a rebuilder of term premia at the long 54 00:02:30,200 --> 00:02:33,360 Speaker 4: end and actually kind of pushing back against market precing. 55 00:02:33,400 --> 00:02:35,720 Speaker 4: Although I will say market pricing really isn't reflecting a 56 00:02:35,760 --> 00:02:37,000 Speaker 4: full cut until July. 57 00:02:38,000 --> 00:02:41,080 Speaker 2: Amandoline is so intimidating folks when I have to have 58 00:02:41,120 --> 00:02:44,840 Speaker 2: a logarithmic chart up here just to come before I 59 00:02:44,919 --> 00:02:47,919 Speaker 2: go to her. So I did the Bloomberg Total Return 60 00:02:48,080 --> 00:02:52,040 Speaker 2: Corporate Index, and I think it's greatly unknown by people 61 00:02:52,800 --> 00:02:56,080 Speaker 2: that the bond hemorrhage that we had a number of 62 00:02:56,120 --> 00:03:00,240 Speaker 2: years ago, priced down, yield way up, has really been 63 00:03:00,280 --> 00:03:04,320 Speaker 2: a bond recovery. Here. What has led the recovery of 64 00:03:04,520 --> 00:03:06,000 Speaker 2: price up, yield down. 65 00:03:05,840 --> 00:03:09,160 Speaker 3: And bond So two things. One that's absolutely right. 66 00:03:09,200 --> 00:03:11,840 Speaker 4: And the higher risk free rate, the higher yield just 67 00:03:11,880 --> 00:03:15,480 Speaker 4: compounding over time and boosting those total returns has really helped. 68 00:03:15,560 --> 00:03:19,800 Speaker 4: That's been a big capture, and that staying invested, capturing yield. 69 00:03:20,360 --> 00:03:23,200 Speaker 2: She read the yield books, sitting on the home, so. 70 00:03:23,160 --> 00:03:26,160 Speaker 4: Staying invested, capturing that higher yield that has been compounding. 71 00:03:26,400 --> 00:03:29,360 Speaker 4: What has been really more striking to me is if 72 00:03:29,360 --> 00:03:32,840 Speaker 4: you disentangle the corporate bond market into the subsets of quality, 73 00:03:33,280 --> 00:03:36,560 Speaker 4: high yield pockets of it have outperformed investment grade on 74 00:03:36,600 --> 00:03:38,720 Speaker 4: a total return basis year to date. And then, even 75 00:03:39,040 --> 00:03:42,119 Speaker 4: more interestingly, the triple C pocket of the high yeld 76 00:03:42,160 --> 00:03:44,480 Speaker 4: market has outperformed the S and P five hundred, the 77 00:03:44,560 --> 00:03:48,200 Speaker 4: NASTAQ one hundred, and the rustle and so the lowest 78 00:03:48,280 --> 00:03:51,120 Speaker 4: quality portion of the high yield market, despite all of 79 00:03:51,120 --> 00:03:53,760 Speaker 4: the growth concerns you mentioned at the top, has actually 80 00:03:53,760 --> 00:03:56,120 Speaker 4: been out performing the equity market on a total return 81 00:03:56,120 --> 00:03:59,840 Speaker 4: basis year to date, which I find to be really interesting. 82 00:04:00,120 --> 00:04:02,720 Speaker 5: So, I mean, should we still be thinking about taking 83 00:04:02,760 --> 00:04:03,520 Speaker 5: credit risk case? 84 00:04:03,600 --> 00:04:06,920 Speaker 3: Yes, so, I say selectively is the is the key point. 85 00:04:06,960 --> 00:04:08,920 Speaker 4: So if you are an investor that is constrained to 86 00:04:08,920 --> 00:04:11,000 Speaker 4: the investment grade market, right, you really can just buy 87 00:04:11,040 --> 00:04:11,920 Speaker 4: investment grade paper. 88 00:04:12,040 --> 00:04:13,200 Speaker 3: We like moving down into the. 89 00:04:13,120 --> 00:04:15,520 Speaker 4: Triple b's, that low end of the investment grade universe. 90 00:04:15,760 --> 00:04:17,920 Speaker 4: If you can more, if you're more unconstrained, you can 91 00:04:17,960 --> 00:04:20,120 Speaker 4: really go anywhere. We'd like dipping down into the high 92 00:04:20,240 --> 00:04:23,719 Speaker 4: end of high yield, that double B factor. What we 93 00:04:23,880 --> 00:04:26,040 Speaker 4: found is that you're actually not giving up that much 94 00:04:26,080 --> 00:04:28,360 Speaker 4: credit quality by dipping into the high end of high 95 00:04:28,400 --> 00:04:31,520 Speaker 4: yield versus triple be's. Those leverage metrics have actually converged. 96 00:04:31,640 --> 00:04:34,000 Speaker 2: What's I mean, can someone actually go out and do 97 00:04:34,040 --> 00:04:34,960 Speaker 2: that or they can't? 98 00:04:35,000 --> 00:04:35,400 Speaker 3: Yeah, they can. 99 00:04:35,560 --> 00:04:38,400 Speaker 4: So for example, the yield on the investment grade aggregate 100 00:04:38,400 --> 00:04:40,919 Speaker 4: index is above five percent at the moment, the yield 101 00:04:40,920 --> 00:04:43,320 Speaker 4: on the high yield index in aggregate is around seven 102 00:04:43,360 --> 00:04:44,120 Speaker 4: point eight percent. 103 00:04:44,560 --> 00:04:46,520 Speaker 3: So there's a there's still a meaningful. 104 00:04:46,080 --> 00:04:48,120 Speaker 4: Difference that you're picking up by kind of crossing into 105 00:04:48,160 --> 00:04:51,680 Speaker 4: high yield territory. Why is that important given the volatility 106 00:04:51,680 --> 00:04:54,440 Speaker 4: in the treasury market that you mentioned. Yes, we're we're 107 00:04:54,480 --> 00:04:57,000 Speaker 4: lower on yields yere to date in the treasury market, 108 00:04:57,000 --> 00:04:59,719 Speaker 4: but it's been volatile, as you know. Picking up that 109 00:04:59,800 --> 00:05:03,440 Speaker 4: in mental spread, staying invested letting that compound will boost 110 00:05:03,480 --> 00:05:06,680 Speaker 4: total returns over time. So we like dipping in selectively 111 00:05:06,760 --> 00:05:10,400 Speaker 4: into the lower quality pockets of the market. We would not, however, 112 00:05:10,480 --> 00:05:13,640 Speaker 4: importantly be chasing all the way down into the tail 113 00:05:13,720 --> 00:05:16,200 Speaker 4: of the market, into that triple C pocket. You really 114 00:05:16,240 --> 00:05:18,440 Speaker 4: need to go back to basics do real credit work. 115 00:05:18,760 --> 00:05:22,000 Speaker 4: This is a really challenging environment dynamically to invest. 116 00:05:22,160 --> 00:05:24,719 Speaker 5: Are there some industries that screen better for you guys 117 00:05:24,800 --> 00:05:25,160 Speaker 5: these days? 118 00:05:25,240 --> 00:05:29,600 Speaker 4: There are, so we've been favoring domestic focused services sectors, 119 00:05:29,600 --> 00:05:32,280 Speaker 4: so that could include things like insurance banks. Banks are 120 00:05:32,279 --> 00:05:33,919 Speaker 4: a massive part of the investment grade. 121 00:05:33,720 --> 00:05:37,320 Speaker 5: In deexity, and they issue like they release earnings on Tuesday, 122 00:05:37,360 --> 00:05:37,920 Speaker 5: they issue on. 123 00:05:37,839 --> 00:05:39,680 Speaker 4: Onesday and yes, and they tend to front load our 124 00:05:39,720 --> 00:05:43,040 Speaker 4: instruments earlier in the year. Historically that's the seasonal pattern. 125 00:05:43,560 --> 00:05:45,800 Speaker 4: The new issue market is wide open and investment grade. 126 00:05:45,800 --> 00:05:47,320 Speaker 3: I know, I know, you. 127 00:05:47,360 --> 00:05:49,520 Speaker 4: Know you've had conversations on the deck capital market side, 128 00:05:49,800 --> 00:05:51,720 Speaker 4: So we do actually like that. I would say parts 129 00:05:51,720 --> 00:05:55,720 Speaker 4: of even telecom right, the services based domestic based, right, 130 00:05:55,720 --> 00:05:59,599 Speaker 4: they're not importing goods across international waters and dealing with 131 00:05:59,640 --> 00:06:01,360 Speaker 4: ships and trade policy. The one thing you do have 132 00:06:01,440 --> 00:06:03,400 Speaker 4: to keep in mind, however, is that all of these 133 00:06:03,440 --> 00:06:05,680 Speaker 4: sectors would be impacted by a downturn and growth. 134 00:06:05,720 --> 00:06:09,920 Speaker 2: So a high yield ETF for retirees, they're going to 135 00:06:09,960 --> 00:06:14,440 Speaker 2: pop five six seven percent yield. Great, what's their price 136 00:06:14,560 --> 00:06:17,159 Speaker 2: risk right now? What would you say to well, yeah, 137 00:06:17,240 --> 00:06:18,280 Speaker 2: putting grammar. 138 00:06:18,040 --> 00:06:19,880 Speaker 4: Right now, Actually, I would say the price risk in 139 00:06:19,960 --> 00:06:22,200 Speaker 4: high yield is less than the price risk and investment 140 00:06:22,240 --> 00:06:25,159 Speaker 4: grade because high yield tends to have shorter duration. So 141 00:06:25,200 --> 00:06:27,400 Speaker 4: if you do have that sell off in treasure yields 142 00:06:27,400 --> 00:06:30,600 Speaker 4: that we expect, that steeper curve, then you would have 143 00:06:30,720 --> 00:06:33,159 Speaker 4: less of a price impact and that shorter duration pocket 144 00:06:33,200 --> 00:06:35,760 Speaker 4: of the market relative to the investment grade portion. So 145 00:06:35,760 --> 00:06:38,160 Speaker 4: again that's why we like moving selectively down in quality. 146 00:06:38,279 --> 00:06:41,080 Speaker 2: Well, one year trailing, I'm looking to just a given 147 00:06:41,400 --> 00:06:46,920 Speaker 2: ETF for the superior sharp ratio nine point one percent return. 148 00:06:47,160 --> 00:06:50,600 Speaker 5: Yeah, and then nothing wrong with that, I'll tell you 149 00:06:50,680 --> 00:06:53,200 Speaker 5: right now. That's like doubles like my new Jersey municipal. 150 00:06:53,200 --> 00:06:55,599 Speaker 2: But that's almost as good as a triple leverage cash 151 00:06:55,680 --> 00:06:57,719 Speaker 2: fractly without the attended fees. 152 00:06:57,880 --> 00:07:01,239 Speaker 5: Exactly a red headline crossing the term here. Ukraine ready 153 00:07:01,279 --> 00:07:05,360 Speaker 5: to sign US Resources deal as early as Wednesday, we'll 154 00:07:05,360 --> 00:07:07,000 Speaker 5: have more reports coming up. 155 00:07:07,040 --> 00:07:07,559 Speaker 2: That's today. 156 00:07:07,560 --> 00:07:12,000 Speaker 5: We'll see how that goes. So, Amanda, what's the blackrock 157 00:07:12,080 --> 00:07:15,520 Speaker 5: hall in this economy here? As you think about credit research? 158 00:07:15,600 --> 00:07:18,880 Speaker 6: And are you guys thinking that this economy's got some 159 00:07:19,080 --> 00:07:19,680 Speaker 6: real head winds? 160 00:07:19,720 --> 00:07:19,920 Speaker 2: Here? 161 00:07:20,000 --> 00:07:22,880 Speaker 4: Two things I would say, a more challenging growth inflation mix, 162 00:07:23,000 --> 00:07:26,320 Speaker 4: unquestionably in the US, so lower growth, higher inflation. The 163 00:07:26,360 --> 00:07:29,000 Speaker 4: magnitude has yet to be determined, largely driven by what 164 00:07:29,120 --> 00:07:31,320 Speaker 4: is the off ramp for trade policy and what are 165 00:07:31,360 --> 00:07:34,080 Speaker 4: the positive offsets for example, tax cuts. We have to 166 00:07:34,080 --> 00:07:38,240 Speaker 4: consider the totality of the policy package, but absolutely expecting 167 00:07:38,280 --> 00:07:40,760 Speaker 4: more challenging growth inflation mix. I think the recovery and 168 00:07:40,880 --> 00:07:43,000 Speaker 4: risk assets that we've seen over the past few weeks 169 00:07:43,360 --> 00:07:45,880 Speaker 4: is more of a temporary reprieve. We don't think that 170 00:07:45,920 --> 00:07:48,000 Speaker 4: we're out of the woods quite yet. High yield spreads, 171 00:07:48,000 --> 00:07:51,400 Speaker 4: for example, have retraced over forty percent of the widening 172 00:07:51,440 --> 00:07:54,600 Speaker 4: since mid February. But we still don't really have substantial 173 00:07:54,600 --> 00:07:56,680 Speaker 4: trade deals locked in at this moment, so I think 174 00:07:56,800 --> 00:08:00,480 Speaker 4: we are expecting for periods of volatility. That will be 175 00:08:00,520 --> 00:08:03,480 Speaker 4: something important to monitor. I would say, importantly, though recession 176 00:08:03,520 --> 00:08:06,240 Speaker 4: is not our base case across the platform. So really 177 00:08:06,520 --> 00:08:08,640 Speaker 4: a slow down in growth is what we're expecting, not 178 00:08:09,280 --> 00:08:10,040 Speaker 4: a severe downturn. 179 00:08:10,200 --> 00:08:14,040 Speaker 2: What does Blackrock see that people are doing with their money. 180 00:08:14,600 --> 00:08:18,240 Speaker 4: I would say using periods of strength to reposition portfolios 181 00:08:18,280 --> 00:08:20,040 Speaker 4: in a more defensive way. 182 00:08:20,120 --> 00:08:22,679 Speaker 3: But it's not defensive just generic up and quality. 183 00:08:22,760 --> 00:08:26,440 Speaker 4: It's really underwriting what companies and sectors can navigate this 184 00:08:26,520 --> 00:08:30,400 Speaker 4: period of uncertainty. A lot of idiosyncratic credit work. What 185 00:08:30,480 --> 00:08:34,680 Speaker 4: are companies actually saying about the impact bracing for a 186 00:08:34,720 --> 00:08:38,720 Speaker 4: slow down in consumer spending, higher inflation again, not relying 187 00:08:38,760 --> 00:08:40,840 Speaker 4: on bonds to be the ballast in the portfolio. 188 00:08:40,960 --> 00:08:44,079 Speaker 2: So if that's a structural low yield price up yield down, 189 00:08:44,480 --> 00:08:46,720 Speaker 2: that means new issuance takes off. 190 00:08:46,640 --> 00:08:50,080 Speaker 4: Right, Well, I would say yields are lower on the year, 191 00:08:50,120 --> 00:08:53,600 Speaker 4: but still structurally high. I think the driver of corporate 192 00:08:53,880 --> 00:08:57,240 Speaker 4: issuance is going to be CFOs and treasures taking a 193 00:08:57,240 --> 00:09:00,680 Speaker 4: prudent approach and continuing to prefund year in advance. I 194 00:09:00,720 --> 00:09:03,600 Speaker 4: remember during the financial crisis some companies were shut out 195 00:09:03,640 --> 00:09:05,360 Speaker 4: of the market in two thousand and eight because they 196 00:09:05,360 --> 00:09:07,920 Speaker 4: waited too long to issue and they were forced to 197 00:09:07,960 --> 00:09:12,480 Speaker 4: repay bonds with cash on hand CP. So I do 198 00:09:12,559 --> 00:09:16,199 Speaker 4: think actually the driver of issuance is corporate behavior and 199 00:09:16,920 --> 00:09:19,400 Speaker 4: conservatisms commercial peope. 200 00:09:19,200 --> 00:09:22,560 Speaker 5: Yeah, I got you. I remember I remem the first 201 00:09:22,800 --> 00:09:25,960 Speaker 5: days of the pandemic. The cruise lines rushed into the 202 00:09:25,960 --> 00:09:28,280 Speaker 5: parking place and were selling dea. Boy were they smart 203 00:09:28,320 --> 00:09:30,040 Speaker 5: because they knew those ships are going to be tied 204 00:09:30,120 --> 00:09:33,320 Speaker 5: up for a while. Here us about credit quality? Do 205 00:09:33,400 --> 00:09:36,200 Speaker 5: we We've never It seems like a long time since 206 00:09:36,200 --> 00:09:38,959 Speaker 5: we've had to worry about credit quality. There's so much 207 00:09:38,960 --> 00:09:42,080 Speaker 5: stimulus money into the economy. Is credit quality some of 208 00:09:42,080 --> 00:09:42,720 Speaker 5: you guys think about. 209 00:09:42,880 --> 00:09:46,200 Speaker 4: Of course, I would say there is deterioration in credit quality. 210 00:09:46,240 --> 00:09:48,559 Speaker 4: It's just happening at the tails of the market amongst 211 00:09:48,559 --> 00:09:50,760 Speaker 4: the smaller issuers, so it's not impacting. 212 00:09:50,360 --> 00:09:51,240 Speaker 3: In the index level. 213 00:09:51,440 --> 00:09:53,880 Speaker 4: For example, there's a subset of this of the leverage 214 00:09:53,880 --> 00:09:57,200 Speaker 4: loan market where leverage is above seven times triple c's 215 00:09:57,240 --> 00:10:00,120 Speaker 4: and high yield interest coverage is already below one time, 216 00:10:00,160 --> 00:10:02,280 Speaker 4: so they actually can't cover their interest expense. 217 00:10:02,320 --> 00:10:04,280 Speaker 3: And importantly that they're doing well. 218 00:10:04,040 --> 00:10:08,000 Speaker 4: They're they're doing they're doing better, They're doing yes. But 219 00:10:08,040 --> 00:10:09,880 Speaker 4: I think the thing that I would be monitoring tom 220 00:10:10,000 --> 00:10:12,600 Speaker 4: given given just we're always monitoring risks. 221 00:10:13,200 --> 00:10:14,160 Speaker 3: That's before we've had. 222 00:10:14,040 --> 00:10:16,280 Speaker 4: Detiation in the hard data, right, do you have these 223 00:10:16,320 --> 00:10:19,480 Speaker 4: tails in the market that have that have already deteriorated, 224 00:10:19,520 --> 00:10:20,720 Speaker 4: but before we've seen. 225 00:10:20,520 --> 00:10:24,080 Speaker 3: The deterioration in the hard changed your world. 226 00:10:24,080 --> 00:10:27,680 Speaker 4: Significantly because it's allowed for risk transfer in markets in 227 00:10:27,720 --> 00:10:30,920 Speaker 4: a more seamless way. I would add portfolio trading and 228 00:10:31,000 --> 00:10:34,920 Speaker 4: algorithmic trading to that list as well. So actually, in 229 00:10:35,040 --> 00:10:37,600 Speaker 4: periods of disruption, the risk transfer in the corporate credit 230 00:10:37,640 --> 00:10:41,360 Speaker 4: market has become much more efficient, and we've seen that 231 00:10:41,440 --> 00:10:45,000 Speaker 4: actually investors can can move risk in ways that they 232 00:10:45,040 --> 00:10:47,280 Speaker 4: previously couldn't during the Financial crisis, for example. 233 00:10:47,320 --> 00:10:50,360 Speaker 3: So that's been a positive development in our views. The 234 00:10:50,840 --> 00:10:52,640 Speaker 3: liquidity is there, you don't. 235 00:10:52,400 --> 00:10:55,000 Speaker 2: See shadows of leverage or risk. 236 00:10:55,200 --> 00:10:58,800 Speaker 4: Well, the ETF product is more just a repackaging of 237 00:10:58,800 --> 00:11:01,120 Speaker 4: a fixed income instrument. If you're talking about if you're 238 00:11:01,120 --> 00:11:05,920 Speaker 4: talking if you're talking about leverage in parts of the market, 239 00:11:06,320 --> 00:11:08,480 Speaker 4: for example, there are highly levered companies. 240 00:11:09,120 --> 00:11:11,880 Speaker 3: Is that a systemic risk not an error? 241 00:11:11,960 --> 00:11:14,440 Speaker 2: I love busting your chops. Can you come every morning 242 00:11:14,480 --> 00:11:17,439 Speaker 2: at seven o'clock? It is a wonderful wake up. I'm 243 00:11:17,440 --> 00:11:21,720 Speaker 2: gonna Lightam, Thank you so much for Blackrock. Just absolutely hyperkinetic. 244 00:11:21,760 --> 00:11:24,240 Speaker 2: Unfixed income a huge value. 245 00:11:23,960 --> 00:11:33,079 Speaker 1: At you're listening to the Bloomberg Surveillance Podcast. Catch us 246 00:11:33,120 --> 00:11:36,480 Speaker 1: live weekday afternoons from seven to ten am Eastern Listen 247 00:11:36,520 --> 00:11:40,079 Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app, 248 00:11:40,280 --> 00:11:42,719 Speaker 1: or watch us live on YouTube looking. 249 00:11:42,440 --> 00:11:44,800 Speaker 2: And Fixing Him. This hour, we finished strong with Morgan 250 00:11:44,840 --> 00:11:47,440 Speaker 2: Stanley's Jim Karen, who joins us now to get us 251 00:11:47,480 --> 00:11:49,800 Speaker 2: to the top of the are geta Martin Adams on 252 00:11:49,840 --> 00:11:52,840 Speaker 2: this equity market. We'll do that at the eight o'clock 253 00:11:52,920 --> 00:11:56,559 Speaker 2: moment Wall Street time. Jim Karen, it's not too early 254 00:11:56,600 --> 00:11:59,199 Speaker 2: in this chaos to ask what are you going to 255 00:11:59,240 --> 00:12:03,199 Speaker 2: write Friday into the weekend. What within the Morgan Stanley 256 00:12:03,320 --> 00:12:06,120 Speaker 2: sphere of fixed income are you thinking about? 257 00:12:07,200 --> 00:12:09,800 Speaker 7: Well, it's all about jobs, because I think that's going. 258 00:12:09,679 --> 00:12:10,920 Speaker 2: To determine cery. 259 00:12:13,000 --> 00:12:16,040 Speaker 7: So our forecast, the economics team's forecast, I should say, 260 00:12:16,240 --> 00:12:18,880 Speaker 7: is one hundred and thirty five thousand jobs added, around 261 00:12:18,920 --> 00:12:21,640 Speaker 7: four point two percent unemployment rate. Look, that might not 262 00:12:21,920 --> 00:12:24,920 Speaker 7: sound like a dramatic change. We did recently get the 263 00:12:25,000 --> 00:12:27,760 Speaker 7: Jolts data. We are starting to see some softening in 264 00:12:27,800 --> 00:12:30,079 Speaker 7: the jobs data, but we're not seeing it collapse in 265 00:12:30,120 --> 00:12:34,280 Speaker 7: the jobs market. So going forward, it's really all about consumption. 266 00:12:34,880 --> 00:12:39,160 Speaker 7: How does the consumer handle potentially higher prices with tariffs 267 00:12:39,240 --> 00:12:40,120 Speaker 7: and everything else. 268 00:12:40,280 --> 00:12:43,679 Speaker 2: But we got a negative zero point two percent Q 269 00:12:43,800 --> 00:12:47,920 Speaker 2: one GDP survey here at eight thirty coming up in 270 00:12:48,000 --> 00:12:50,800 Speaker 2: fifty minutes. That's pretty moldy, isn't it. 271 00:12:51,679 --> 00:12:54,640 Speaker 7: Yeah, And you know, Tom, I think the risk is 272 00:12:54,679 --> 00:12:57,520 Speaker 7: that the number could even be weaker. So there's a 273 00:12:57,559 --> 00:13:00,119 Speaker 7: lot of adjustments that really took place as of yesterday 274 00:13:00,160 --> 00:13:02,240 Speaker 7: just because of the trade data that came in. You know, 275 00:13:02,280 --> 00:13:06,040 Speaker 7: the deficit came in at record levels, so that forced 276 00:13:06,040 --> 00:13:09,800 Speaker 7: all the Wall Street analysts to reduce or downgrade their 277 00:13:09,840 --> 00:13:13,560 Speaker 7: GDP estimates for today. And essentially, what we have to 278 00:13:13,600 --> 00:13:16,800 Speaker 7: understand is that a lot of this is coming from imports, 279 00:13:16,880 --> 00:13:20,679 Speaker 7: meaning that companies have pulled forward purchases, so their imports 280 00:13:20,679 --> 00:13:24,480 Speaker 7: have actually gone up. When you have high imports versus exports, 281 00:13:24,600 --> 00:13:27,800 Speaker 7: that actually subtracts. That's a negative that what we call 282 00:13:28,240 --> 00:13:32,080 Speaker 7: the net number is actually subtracting from GDP. But there's 283 00:13:32,120 --> 00:13:35,800 Speaker 7: a problem, Tom. The problem is that what's also not 284 00:13:35,920 --> 00:13:38,920 Speaker 7: being calculated is that these things should balance out. Not 285 00:13:38,960 --> 00:13:42,120 Speaker 7: only if you have really big imports, you should then 286 00:13:42,240 --> 00:13:45,640 Speaker 7: start to see inventory build, and you should also start 287 00:13:45,679 --> 00:13:48,920 Speaker 7: to see spending and consumption on those imports that's not 288 00:13:49,080 --> 00:13:51,560 Speaker 7: yet coming into the equation yet. There's a quirk in 289 00:13:51,600 --> 00:13:54,040 Speaker 7: the timing here, so it's almost like you're going to 290 00:13:54,080 --> 00:13:56,360 Speaker 7: get negative aspects, but you're going to miss some of 291 00:13:56,400 --> 00:13:58,640 Speaker 7: the positive and that's what's giving it a big negative number. 292 00:13:58,679 --> 00:14:00,880 Speaker 2: When now Paul I go to this is between a 293 00:14:00,960 --> 00:14:05,800 Speaker 2: Dalton with fidelity years ago domestic final sales. Okay, that's 294 00:14:05,920 --> 00:14:09,079 Speaker 2: where I go sort of in tear its inside statistics. 295 00:14:09,120 --> 00:14:11,360 Speaker 2: I'll try to find that number. I'm not as good 296 00:14:11,360 --> 00:14:14,559 Speaker 2: as my key. Takes me a while, she's got it, 297 00:14:14,640 --> 00:14:16,280 Speaker 2: like three seconds takes me out. 298 00:14:16,840 --> 00:14:19,640 Speaker 6: Hey, Jim, you've seen the stock market bounce back a 299 00:14:19,640 --> 00:14:21,880 Speaker 6: little bit off that initial sell off on the tariff worries. 300 00:14:22,320 --> 00:14:24,720 Speaker 5: We haven't seen the dollar bounce back at all. Why 301 00:14:24,760 --> 00:14:27,160 Speaker 5: are people so sour on the dollar these days? 302 00:14:27,920 --> 00:14:28,200 Speaker 2: Yeah? 303 00:14:28,280 --> 00:14:30,400 Speaker 7: You know, in my view is that the dollar is 304 00:14:30,440 --> 00:14:33,000 Speaker 7: going to weaken, but it's not because of safe haven 305 00:14:33,040 --> 00:14:35,080 Speaker 7: status or anything like that. I mean, I listened to 306 00:14:35,080 --> 00:14:38,680 Speaker 7: George and Coves earlier, my former colleague and friend, and 307 00:14:38,720 --> 00:14:41,040 Speaker 7: I think he's right about this. Look, the first thing 308 00:14:41,040 --> 00:14:42,800 Speaker 7: that we have to understand is, if you go back 309 00:14:42,840 --> 00:14:46,640 Speaker 7: to twenty ten post financial crisis, there was an onslaught 310 00:14:46,680 --> 00:14:50,120 Speaker 7: of investment that came in from foreigners into the US markets, 311 00:14:50,120 --> 00:14:52,880 Speaker 7: which means you have to buy the dollar. If you 312 00:14:52,920 --> 00:14:56,000 Speaker 7: look at the Fed's Broad Dollar Trade Weighted Index, a 313 00:14:56,120 --> 00:14:58,560 Speaker 7: very good index and measure to look at the dollar, 314 00:14:59,080 --> 00:15:03,480 Speaker 7: that index shows a dollar appreciation since twenty tens to 315 00:15:03,520 --> 00:15:05,920 Speaker 7: the end of twenty twenty four of about forty percent, 316 00:15:06,560 --> 00:15:09,480 Speaker 7: which means that the dollar is very expensive and people 317 00:15:09,480 --> 00:15:13,640 Speaker 7: are overweight. Foreigners are overweight US assets. What we're seeing 318 00:15:13,720 --> 00:15:17,480 Speaker 7: right now is a rebalancing. We're not seeing a sale, 319 00:15:17,560 --> 00:15:20,240 Speaker 7: a liquidation of dollars, a loss of faith, a loss 320 00:15:20,240 --> 00:15:23,080 Speaker 7: of confidence, None of that is really taking place. What 321 00:15:23,120 --> 00:15:25,920 Speaker 7: you're seeing is people who are overweight US assets. Now 322 00:15:25,960 --> 00:15:28,640 Speaker 7: we have tariffs and what have you, and US assets 323 00:15:28,640 --> 00:15:32,480 Speaker 7: equities are kind of moving sideways. People are repatriating, and 324 00:15:32,560 --> 00:15:35,000 Speaker 7: what that means is that the dollar is going to weaken, 325 00:15:35,160 --> 00:15:38,240 Speaker 7: but from very expensive levels. And I think that's an 326 00:15:38,280 --> 00:15:42,560 Speaker 7: important caveat to actually make this in this whole story here. 327 00:15:42,920 --> 00:15:44,600 Speaker 7: So you know, look, I do think the dollar is 328 00:15:44,640 --> 00:15:49,160 Speaker 7: going to weaken, but I don't think that it's costs 329 00:15:49,200 --> 00:15:51,440 Speaker 7: for alarm. I think we have to put this into context. 330 00:15:52,960 --> 00:15:57,400 Speaker 5: So again, Jim, so real quick here, what's the number 331 00:15:57,760 --> 00:16:02,920 Speaker 5: one issue you're talking with clients these days at Mortgage Daneling. 332 00:16:04,360 --> 00:16:07,280 Speaker 7: So what does it mean when the dollar starts to 333 00:16:07,320 --> 00:16:09,160 Speaker 7: weaken like this right? What does it mean when it 334 00:16:09,200 --> 00:16:11,800 Speaker 7: starts to sell off from very expensive levels? It means 335 00:16:11,800 --> 00:16:15,520 Speaker 7: that bond yields have to make the adjustment so effectively, 336 00:16:15,560 --> 00:16:17,920 Speaker 7: what it tells us is that longer term bond yields 337 00:16:17,920 --> 00:16:20,320 Speaker 7: will not go down as much as what we had 338 00:16:20,360 --> 00:16:23,680 Speaker 7: previously seen over the last fifteen years. So a lot 339 00:16:23,720 --> 00:16:25,640 Speaker 7: of the relationships that we look at, like oh, the 340 00:16:25,640 --> 00:16:28,160 Speaker 7: equity market's down, how come bond yields aren't down more? 341 00:16:28,640 --> 00:16:31,440 Speaker 7: Or why isn't the bond market supporting the equity market 342 00:16:31,480 --> 00:16:34,840 Speaker 7: as much? It's because this rebalancing is taking place. So 343 00:16:34,880 --> 00:16:37,280 Speaker 7: what we're telling clients is that when you start to 344 00:16:37,320 --> 00:16:42,000 Speaker 7: construct a portfolio of fixed income, inequities and alternatives and 345 00:16:42,040 --> 00:16:45,000 Speaker 7: you put everything together, essentially, we have to understand that 346 00:16:45,080 --> 00:16:49,280 Speaker 7: bonds will not hedge your equity risk like they did 347 00:16:49,320 --> 00:16:51,840 Speaker 7: in the past. At least not longer duration bonds. So 348 00:16:51,880 --> 00:16:54,920 Speaker 7: we're telling clients is at shorter duration bonds front end 349 00:16:54,920 --> 00:16:57,520 Speaker 7: bonds to your yields around three sixty five. I mean, 350 00:16:57,800 --> 00:16:59,880 Speaker 7: you know that's being controlled by FED and fed pal 351 00:17:00,360 --> 00:17:04,040 Speaker 7: and expectations. Shorter term bonds are actually the longer term 352 00:17:04,040 --> 00:17:05,760 Speaker 7: bonds are going to be a little bit more risky. 353 00:17:05,880 --> 00:17:07,560 Speaker 7: And we see a yal Curbstee. 354 00:17:07,560 --> 00:17:09,680 Speaker 2: Jim too shorter visit got to do it longer next time. 355 00:17:09,760 --> 00:17:12,480 Speaker 2: Mister Karen is with the Morgan Stanley. Thank you so much. 356 00:17:12,640 --> 00:17:16,520 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 357 00:17:16,560 --> 00:17:19,959 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 358 00:17:20,000 --> 00:17:22,960 Speaker 1: with the Bloomberg Business App. You can also listen live 359 00:17:23,000 --> 00:17:26,600 Speaker 1: on Amazon Alexa from our flagship New York station, Just 360 00:17:26,640 --> 00:17:29,200 Speaker 1: say Alexa Play Bloomberg eleven thirty. 361 00:17:29,359 --> 00:17:33,399 Speaker 2: George Conkalfus joins us head of US Macro Strategy MUFG 362 00:17:33,560 --> 00:17:37,879 Speaker 2: Securities Americas as well. I love this where we have 363 00:17:37,920 --> 00:17:41,280 Speaker 2: Amandoline and men Jim Karen scheduled and you're with us. 364 00:17:41,960 --> 00:17:45,800 Speaker 2: Is everybody on the same page in your worlders? Within 365 00:17:45,880 --> 00:17:49,399 Speaker 2: the daily grind of the fixed income industry, is there 366 00:17:49,440 --> 00:17:51,040 Speaker 2: a lot of debate out there. 367 00:17:50,880 --> 00:17:54,320 Speaker 8: There is and you mentioned earlier there's this version everywhere, 368 00:17:54,680 --> 00:17:59,000 Speaker 8: this version around economic forecast views, and it's obviously leads 369 00:17:59,000 --> 00:18:00,439 Speaker 8: to some volatility every so often. 370 00:18:01,600 --> 00:18:05,320 Speaker 5: So George, actually, first, Lisa, George is a Rutgers grad. 371 00:18:05,480 --> 00:18:08,560 Speaker 5: I mean, you guys are everywhere on the global street 372 00:18:08,800 --> 00:18:11,760 Speaker 5: rugs to the State University of New Jersey. 373 00:18:11,920 --> 00:18:12,560 Speaker 7: George, what are. 374 00:18:12,480 --> 00:18:13,080 Speaker 2: We doing here? 375 00:18:13,160 --> 00:18:15,399 Speaker 6: I mean, I've got so much uncertainty out there in 376 00:18:15,400 --> 00:18:18,640 Speaker 6: the marketplace. I've got equity markets really don't know which 377 00:18:18,640 --> 00:18:21,280 Speaker 6: way to go, I've got the dollar on for sale. 378 00:18:22,320 --> 00:18:26,000 Speaker 6: Where are you suggesting your clients really focus these days? 379 00:18:26,000 --> 00:18:29,479 Speaker 6: Because this level of uncertainty it seems like it's going 380 00:18:29,520 --> 00:18:30,280 Speaker 6: to be here for a while. 381 00:18:30,760 --> 00:18:34,480 Speaker 8: Absolutely, And look and we we tailor more towards institutional investors, 382 00:18:34,520 --> 00:18:37,680 Speaker 8: and we're obviously, uh, you know, facing facing these large 383 00:18:37,720 --> 00:18:40,960 Speaker 8: investors and the and the concerns for it kind of 384 00:18:41,040 --> 00:18:43,640 Speaker 8: naturally forces people to kind of de risk and really 385 00:18:43,640 --> 00:18:46,920 Speaker 8: get defensive. And we have been advocating for a long 386 00:18:46,960 --> 00:18:49,320 Speaker 8: time buying the dips in the two year I know 387 00:18:49,359 --> 00:18:52,600 Speaker 8: it sounds boring, but it's it's been like a really 388 00:18:53,080 --> 00:18:56,199 Speaker 8: simple trade that's worth because I do think that we 389 00:18:56,240 --> 00:18:59,840 Speaker 8: are differentiating amongst fixed income high quality in many ways, 390 00:19:00,280 --> 00:19:02,800 Speaker 8: Like you know, in Amanda's last segment which I heard, 391 00:19:02,800 --> 00:19:06,199 Speaker 8: which she did great, this kind of barbelled approach that 392 00:19:06,240 --> 00:19:08,639 Speaker 8: you could like in an odd way, high yield has 393 00:19:08,680 --> 00:19:12,399 Speaker 8: become better quality over time in terms of rating. It's 394 00:19:12,520 --> 00:19:16,640 Speaker 8: shorter duration and you know less, it's less volatile. 395 00:19:16,680 --> 00:19:19,080 Speaker 2: But you know, there's always that point where you don't 396 00:19:19,119 --> 00:19:20,480 Speaker 2: know about the macro. 397 00:19:20,560 --> 00:19:23,400 Speaker 8: If we enter an inflection point, all bets are off, 398 00:19:23,440 --> 00:19:24,960 Speaker 8: credit does become problematic. 399 00:19:25,600 --> 00:19:28,399 Speaker 5: So are you guys, are you guys focusing on do 400 00:19:28,400 --> 00:19:30,640 Speaker 5: you guys think the recession is that in your scenario? 401 00:19:31,560 --> 00:19:34,000 Speaker 8: I mean the other thing is we're all debating are 402 00:19:34,040 --> 00:19:36,560 Speaker 8: we accelerating to kind of get into this downturn and 403 00:19:36,560 --> 00:19:40,879 Speaker 8: then pop back out? I mean, a recession usually obviously 404 00:19:40,880 --> 00:19:43,320 Speaker 8: has negative connotations, and people are always concerned about that. 405 00:19:43,359 --> 00:19:45,520 Speaker 8: It might linger if it's just kind of like a 406 00:19:45,560 --> 00:19:48,680 Speaker 8: technical recession because we're seeing all these oscillations within these 407 00:19:48,760 --> 00:19:50,879 Speaker 8: large segments of the economy. 408 00:19:50,680 --> 00:19:53,200 Speaker 5: People might look through it, okay, And many. 409 00:19:53,040 --> 00:19:54,840 Speaker 8: Investors that I talked to are like saying, well, you 410 00:19:54,840 --> 00:19:56,400 Speaker 8: know what, it's going to be a blip, So why 411 00:19:56,400 --> 00:19:57,640 Speaker 8: should I get defensive. 412 00:19:57,920 --> 00:20:00,760 Speaker 2: You for the forever have been just one wonderful about 413 00:20:00,760 --> 00:20:03,840 Speaker 2: the foreign appetite for full faith in credit US paper. 414 00:20:04,240 --> 00:20:07,440 Speaker 2: I should point out, folks, m UFG is a is 415 00:20:07,480 --> 00:20:12,520 Speaker 2: a wonderful Japanese entity. What do you see of the 416 00:20:12,680 --> 00:20:15,360 Speaker 2: confidence to buy full faith in credit? Yeah? 417 00:20:15,400 --> 00:20:20,439 Speaker 8: Look, so this has been for years now, especially in 418 00:20:20,480 --> 00:20:23,480 Speaker 8: the higher rate environment. It's become much more tactical. You 419 00:20:23,520 --> 00:20:26,240 Speaker 8: have to remember a lot of these investors overseas have 420 00:20:26,280 --> 00:20:29,560 Speaker 8: been legacy holders for decades and they and then they 421 00:20:29,640 --> 00:20:31,240 Speaker 8: naturally roll over. 422 00:20:31,840 --> 00:20:33,440 Speaker 2: The question is are they adding right? 423 00:20:33,480 --> 00:20:35,680 Speaker 8: And it's and what you see in the public data 424 00:20:35,720 --> 00:20:39,200 Speaker 8: and what you kind of can witness, they're much more traders. 425 00:20:39,200 --> 00:20:41,520 Speaker 8: They're they're more tactically moving things in and out. They're 426 00:20:41,560 --> 00:20:43,120 Speaker 8: actively trading flow. 427 00:20:43,240 --> 00:20:45,080 Speaker 2: We got to stop the show, folks. This is really 428 00:20:45,080 --> 00:20:48,879 Speaker 2: really important. There's a viajillion dollars of full faith in 429 00:20:48,920 --> 00:20:55,440 Speaker 2: credit US overseas. It's like a lead brick. It's staying there, right. Debatable. 430 00:20:56,600 --> 00:20:57,360 Speaker 2: I do think that. 431 00:20:57,520 --> 00:21:00,520 Speaker 8: Look, you can't square the circle if we're trying to 432 00:21:00,520 --> 00:21:03,840 Speaker 8: fix our trade deficit, but we're running large budget deficits. 433 00:21:04,359 --> 00:21:06,159 Speaker 8: Either US savings have to go up a lot and 434 00:21:06,160 --> 00:21:08,639 Speaker 8: you have to force US investors to buy all the treasuries. 435 00:21:09,080 --> 00:21:11,600 Speaker 8: I mean, it has to kind of even tell you that. 436 00:21:11,720 --> 00:21:14,600 Speaker 2: I remember when that was actually the case. But what's 437 00:21:14,640 --> 00:21:18,119 Speaker 2: important here is if they or if if she sees 438 00:21:18,160 --> 00:21:21,920 Speaker 2: them walk away, this is them by definition, price down, 439 00:21:22,040 --> 00:21:22,840 Speaker 2: yield higher. 440 00:21:23,640 --> 00:21:26,720 Speaker 8: Look, I think we're not losing the support of the 441 00:21:26,760 --> 00:21:30,840 Speaker 8: foreign investor. And I know we get into these moments 442 00:21:30,880 --> 00:21:35,280 Speaker 8: where we're scared about dedollarization, We're worried about the perceptions 443 00:21:35,320 --> 00:21:38,040 Speaker 8: about how people are viewing policies out of the US. 444 00:21:39,040 --> 00:21:42,399 Speaker 8: There's still still the biggest reserve currency. It's what you know, 445 00:21:42,480 --> 00:21:44,840 Speaker 8: what anchors all these central banks around the world, is 446 00:21:44,880 --> 00:21:46,920 Speaker 8: still the dollar. Even though it's been coming down over 447 00:21:46,920 --> 00:21:49,040 Speaker 8: the last fifteen twenty years, it's not a new phenomenon. 448 00:21:49,720 --> 00:21:52,560 Speaker 8: So you just don't abandon it overnight. You can't just 449 00:21:52,600 --> 00:21:54,800 Speaker 8: like walk away from holdings of treasuries and dollars. 450 00:21:54,840 --> 00:21:57,280 Speaker 2: There's a lot of hysteria Paul about this. You know, 451 00:21:57,359 --> 00:21:59,560 Speaker 2: I try to stay cool day one day, Japan or 452 00:21:59,680 --> 00:22:02,919 Speaker 2: China gonna walk away, and I are they going to go? 453 00:22:03,359 --> 00:22:04,119 Speaker 2: Where are they going to go? 454 00:22:04,200 --> 00:22:06,919 Speaker 5: That's my point, and that's what people tell me. All Right, 455 00:22:06,960 --> 00:22:09,679 Speaker 5: George is with n u f G. That stands for 456 00:22:09,760 --> 00:22:15,480 Speaker 5: Mitsubishi UFJ Financial Group, a major Japanese financial The most 457 00:22:15,520 --> 00:22:20,120 Speaker 5: headquarters is a duke in turn exactly now they're headquarters 458 00:22:20,119 --> 00:22:22,320 Speaker 5: in Tokyo. How do the folks in Japan view the 459 00:22:22,440 --> 00:22:24,840 Speaker 5: US market these days? I mean, I'm sure you have. 460 00:22:25,560 --> 00:22:27,480 Speaker 5: You do talk to your clients, you do talk to 461 00:22:27,520 --> 00:22:29,879 Speaker 5: your traveled to Japan a lot and you travel to 462 00:22:30,119 --> 00:22:32,000 Speaker 5: How are they viewing the US these days? 463 00:22:32,640 --> 00:22:36,560 Speaker 8: I think that there there's a view that the medium 464 00:22:36,640 --> 00:22:39,760 Speaker 8: term is still a great place to invest in the US. 465 00:22:40,520 --> 00:22:43,040 Speaker 8: It's more about perhaps we got over our skis on 466 00:22:43,080 --> 00:22:47,960 Speaker 8: the US exceptionalism and unheedged because it's just easy to 467 00:22:48,000 --> 00:22:50,800 Speaker 8: be long US everything, and now it's more about being 468 00:22:50,800 --> 00:22:51,440 Speaker 8: more selective. 469 00:22:52,080 --> 00:22:54,080 Speaker 2: Let me ask you the question that we asked Samandliin 470 00:22:54,160 --> 00:22:56,439 Speaker 2: in the list. Probably ask Jim Careen that when he 471 00:22:56,480 --> 00:22:59,080 Speaker 2: comes up here as well as we celebrate the coupon, 472 00:23:00,000 --> 00:23:02,840 Speaker 2: how would ETFs changed George congals life? 473 00:23:04,240 --> 00:23:06,440 Speaker 8: Well, I mean, I think if anything, it broadened out, 474 00:23:06,560 --> 00:23:10,080 Speaker 8: like the ability to express views massively, Yes, without doubt. 475 00:23:10,080 --> 00:23:12,320 Speaker 8: And it's an efficient vehicle and there's a lot of 476 00:23:12,480 --> 00:23:16,960 Speaker 8: things that go along with it. But within it. You know, 477 00:23:17,040 --> 00:23:20,359 Speaker 8: there's been a lot of just automation technology. It's really 478 00:23:20,359 --> 00:23:24,320 Speaker 8: made fixed income even more more transparent, and it's you know, 479 00:23:24,359 --> 00:23:26,520 Speaker 8: for times it was very opaque being in a fixed 480 00:23:26,560 --> 00:23:27,880 Speaker 8: income and you have to do. 481 00:23:27,840 --> 00:23:28,320 Speaker 2: A lot of work. 482 00:23:28,359 --> 00:23:29,600 Speaker 8: And you still have to do a lot of that 483 00:23:29,680 --> 00:23:31,960 Speaker 8: sort of due diligence and credit work. But I think 484 00:23:32,000 --> 00:23:34,560 Speaker 8: it's kind of you know, democratized fixed income. 485 00:23:34,600 --> 00:23:36,919 Speaker 2: I mean, Paul would sit there with a Budweiser can 486 00:23:37,640 --> 00:23:41,040 Speaker 2: and it can and you have the stand I mean, 487 00:23:41,280 --> 00:23:43,439 Speaker 2: and you have the the and you have the standard 488 00:23:43,480 --> 00:23:46,280 Speaker 2: and Forest Blue Book open because you know, besides immunities, 489 00:23:46,280 --> 00:23:48,400 Speaker 2: you want to take a look at a Boise Cascade 490 00:23:49,280 --> 00:23:51,560 Speaker 2: ten year piece. Those days are gone. I mean, you 491 00:23:51,720 --> 00:23:54,560 Speaker 2: just buy the Boise Cascade ETF or whatever. 492 00:23:54,640 --> 00:23:54,840 Speaker 5: Now. 493 00:23:55,200 --> 00:23:56,760 Speaker 2: Yeah, So what are you doing. 494 00:23:56,640 --> 00:23:58,880 Speaker 5: On the credit side, George, I mean in credit risk? 495 00:24:00,000 --> 00:24:00,280 Speaker 2: How much? 496 00:24:00,280 --> 00:24:00,719 Speaker 5: So interesting? 497 00:24:01,280 --> 00:24:01,760 Speaker 2: I am? 498 00:24:01,840 --> 00:24:06,399 Speaker 8: I am again more cautious by design around that. 499 00:24:06,480 --> 00:24:08,640 Speaker 2: We think that we are heading into a slowdown. 500 00:24:08,240 --> 00:24:10,480 Speaker 8: And the tariff news and the shock that we just 501 00:24:10,480 --> 00:24:14,360 Speaker 8: went through just exacerbated that. And look, the weaker credits 502 00:24:14,480 --> 00:24:18,080 Speaker 8: have been exposed and I do think that there is 503 00:24:18,119 --> 00:24:20,720 Speaker 8: going to be credit risks start the surface in the 504 00:24:20,760 --> 00:24:22,560 Speaker 8: second half of the year, it's going to be you know, 505 00:24:22,560 --> 00:24:25,000 Speaker 8: even if we try to pivot and the economy avoids 506 00:24:25,000 --> 00:24:27,800 Speaker 8: like a full blown recession, I think the damage is done. 507 00:24:28,320 --> 00:24:30,879 Speaker 2: Fabulous, George, thank you so much. Sure and calls with 508 00:24:31,080 --> 00:24:32,280 Speaker 2: this what Mitsubishi. 509 00:24:36,000 --> 00:24:41,119 Speaker 5: Yeah. 510 00:24:41,160 --> 00:24:45,080 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 511 00:24:45,119 --> 00:24:48,400 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 512 00:24:48,520 --> 00:24:51,359 Speaker 1: with the Bloomberg Business app. You can also watch us 513 00:24:51,400 --> 00:24:55,240 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal. 514 00:24:55,320 --> 00:24:57,480 Speaker 2: This is a really important conversation we're going to have 515 00:24:57,600 --> 00:25:00,840 Speaker 2: right now because it's something that that Paul and I 516 00:25:01,000 --> 00:25:05,000 Speaker 2: we just simply don't do enough on, which is loans, 517 00:25:05,600 --> 00:25:10,959 Speaker 2: high yield things with a coupon that stays there, sophisticated stuff. 518 00:25:10,960 --> 00:25:14,000 Speaker 2: He comes out of Pimco after tour duty at Harvard 519 00:25:14,000 --> 00:25:18,040 Speaker 2: and wandered over to Chicago to look at a lot 520 00:25:18,080 --> 00:25:20,480 Speaker 2: of math. There, a lot of microeconomics, which helps out 521 00:25:20,480 --> 00:25:24,280 Speaker 2: Senda Burne. Jones's right now and he's with Beach Point. 522 00:25:24,520 --> 00:25:27,119 Speaker 2: We have to describe that. Scott Klein, What's beach Point? 523 00:25:28,200 --> 00:25:30,919 Speaker 9: Beach My Capital is an acid manager based out of 524 00:25:31,280 --> 00:25:34,760 Speaker 9: Santa Monica, California. 525 00:25:35,440 --> 00:25:37,359 Speaker 2: Someone there to fill the coffee cups for you. 526 00:25:38,400 --> 00:25:39,960 Speaker 9: Well, you guys should be proud. It seems like you're 527 00:25:39,960 --> 00:25:42,560 Speaker 9: doing weather right out here these days. So it's very 528 00:25:42,600 --> 00:25:43,959 Speaker 9: nice to be here, and thanks for having me. 529 00:25:44,040 --> 00:25:46,120 Speaker 2: Actually, yesterday I said on the deck and said, oh 530 00:25:46,119 --> 00:25:48,439 Speaker 2: my god, it's like California is for one hundred and 531 00:25:48,440 --> 00:25:52,760 Speaker 2: sixty days of the of the year. Just we don't 532 00:25:52,800 --> 00:25:56,040 Speaker 2: do enough on this. Explain to our audience what a 533 00:25:56,280 --> 00:25:57,720 Speaker 2: loan is in your world. 534 00:25:57,760 --> 00:26:00,520 Speaker 9: It sounds like a mortgage is no, So I mean, 535 00:26:00,520 --> 00:26:04,480 Speaker 9: we're talking mostly about senior bank loans in the form 536 00:26:04,640 --> 00:26:08,040 Speaker 9: of lending to different companies in both the public and 537 00:26:08,119 --> 00:26:12,240 Speaker 9: private corporate credit markets, but all forms of credit really 538 00:26:12,520 --> 00:26:15,280 Speaker 9: in beach point traffics across all of these asset classes, 539 00:26:15,280 --> 00:26:19,439 Speaker 9: but primarily in credit and primarily in leveraged credit. And 540 00:26:19,520 --> 00:26:23,080 Speaker 9: so a loan is an instrument that sits at the 541 00:26:23,080 --> 00:26:26,639 Speaker 9: top of a company's capital structure. It's usually comes with 542 00:26:26,840 --> 00:26:31,600 Speaker 9: some form of security and collateral that that backstops you 543 00:26:31,640 --> 00:26:33,880 Speaker 9: know us as lenders, and it comes with some form 544 00:26:33,920 --> 00:26:37,199 Speaker 9: of protections. And so it's something in this environment with 545 00:26:37,280 --> 00:26:39,679 Speaker 9: a lot of volatility that you know we like a 546 00:26:39,720 --> 00:26:43,120 Speaker 9: lot in terms of having in our portfolios and performing 547 00:26:43,200 --> 00:26:47,360 Speaker 9: well in addition to you know, all of the sort 548 00:26:47,359 --> 00:26:51,280 Speaker 9: of underlying fundamentals that support it in terms of the 549 00:26:51,280 --> 00:26:52,320 Speaker 9: corporate issuer base. 550 00:26:52,640 --> 00:26:54,560 Speaker 5: So what are you finding in your market here? What's 551 00:26:54,600 --> 00:26:57,480 Speaker 5: the You know, there's a lot of uncertainty in the marketplace. 552 00:26:57,520 --> 00:27:00,720 Speaker 5: We see that reflected in across financial markets. Where are 553 00:27:00,760 --> 00:27:02,399 Speaker 5: you seeing it in the high old market and the 554 00:27:02,480 --> 00:27:04,359 Speaker 5: leverage loan markets? What's happening today? 555 00:27:05,040 --> 00:27:05,440 Speaker 2: Sure? 556 00:27:05,640 --> 00:27:09,760 Speaker 9: Well, these markets are really solving for two things. 557 00:27:09,800 --> 00:27:10,159 Speaker 2: Really. 558 00:27:10,240 --> 00:27:13,160 Speaker 9: The first is the first order impact of terrific exposure, 559 00:27:13,200 --> 00:27:16,920 Speaker 9: and so you've seen those types of credits that have 560 00:27:17,080 --> 00:27:20,879 Speaker 9: direct import exposure and predominantly to China sell off the 561 00:27:20,920 --> 00:27:23,959 Speaker 9: most in terms of price. The second thing the market's 562 00:27:23,960 --> 00:27:26,840 Speaker 9: solving for is what is the economic uncertainty that we 563 00:27:26,920 --> 00:27:30,480 Speaker 9: are already experiencing. You know, we have some distortion today 564 00:27:30,480 --> 00:27:32,240 Speaker 9: in terms of GDP data. 565 00:27:31,960 --> 00:27:33,399 Speaker 2: But how long will that last? 566 00:27:33,800 --> 00:27:37,440 Speaker 9: And how will these corporate issuers fare and navigate this environment? 567 00:27:38,240 --> 00:27:40,960 Speaker 9: And so you're seeing much higher dispersion in the market. 568 00:27:40,960 --> 00:27:44,080 Speaker 9: This is not dissimilar from other asset classes where you're 569 00:27:44,119 --> 00:27:47,240 Speaker 9: seeing certain sectors trade off more so than others certain 570 00:27:47,280 --> 00:27:50,919 Speaker 9: credits to us. We think this is the beginning of 571 00:27:50,960 --> 00:27:52,320 Speaker 9: a really nice opportunity. 572 00:27:52,720 --> 00:27:54,520 Speaker 5: When I was at the Chase Manhattan Bank, I was 573 00:27:54,560 --> 00:27:58,480 Speaker 5: doing leverage lending to TMT companies. I do a five 574 00:27:58,520 --> 00:28:01,600 Speaker 5: hundred million dollar loan, indicate forty to eighty million dollars 575 00:28:01,680 --> 00:28:04,760 Speaker 5: off my books that guys like you. Although I don't 576 00:28:04,760 --> 00:28:09,000 Speaker 5: remember ever being in sent a monk marketing a loan. 577 00:28:09,960 --> 00:28:13,520 Speaker 5: So in the senior secured highly leveraged loans, is that 578 00:28:13,600 --> 00:28:14,840 Speaker 5: something you guys look at? 579 00:28:15,200 --> 00:28:15,760 Speaker 2: Absolutely? 580 00:28:15,880 --> 00:28:20,520 Speaker 9: Yeah, we look at senior secured levered loans as well 581 00:28:20,560 --> 00:28:24,199 Speaker 9: as HYLD bonds. I mean those primarily comprise the leverage 582 00:28:24,200 --> 00:28:26,840 Speaker 9: credit universe, and they can come in both public and 583 00:28:26,880 --> 00:28:27,760 Speaker 9: private flavors. 584 00:28:28,040 --> 00:28:32,040 Speaker 5: Are there certain industries you guys like today? Does anything 585 00:28:32,119 --> 00:28:33,480 Speaker 5: screen better one or the other? 586 00:28:34,440 --> 00:28:34,760 Speaker 2: Sure? 587 00:28:34,840 --> 00:28:36,920 Speaker 9: I mean there are some industries that we think will 588 00:28:36,960 --> 00:28:39,000 Speaker 9: have more resilience through this environment. 589 00:28:39,120 --> 00:28:41,160 Speaker 2: There don't have import risk. 590 00:28:41,720 --> 00:28:44,200 Speaker 9: They may have some cyclicality attached to them, but they 591 00:28:44,240 --> 00:28:47,400 Speaker 9: have contractual revenues, so they have a lot of visibility 592 00:28:47,440 --> 00:28:49,560 Speaker 9: into the future. And they're the ones who are not 593 00:28:49,640 --> 00:28:52,440 Speaker 9: necessarily softening their outlooks when they're reporting. 594 00:28:52,720 --> 00:28:56,600 Speaker 2: Since your garner this morning posts for a nice lengthy conversation. 595 00:28:57,240 --> 00:29:00,680 Speaker 2: Here he's senior bank loan portfolio manager Beach Point Capital. 596 00:29:01,320 --> 00:29:03,680 Speaker 2: Here he's driving the market lower. We are at negative 597 00:29:03,720 --> 00:29:07,320 Speaker 2: seventy now negative seventy nine on futures vis out two 598 00:29:07,360 --> 00:29:10,720 Speaker 2: big figures twenty six point four eight. The ten year yield, 599 00:29:11,040 --> 00:29:13,920 Speaker 2: you know, I was making jokes about it, but you 600 00:29:13,960 --> 00:29:16,880 Speaker 2: know I'm not there yet. The ten year year olds 601 00:29:16,880 --> 00:29:19,160 Speaker 2: four point eight percent, I'm not in a three ninety 602 00:29:19,240 --> 00:29:23,160 Speaker 2: nine watch I look at the number one question. Paul's 603 00:29:23,160 --> 00:29:26,120 Speaker 2: been great on this, but just the prism and particularly 604 00:29:26,160 --> 00:29:30,600 Speaker 2: in the crucible of Southern California, of Pacific Investment Managing Company, 605 00:29:30,680 --> 00:29:35,760 Speaker 2: of TCW, the Capital Group, Aminson, all of the finance 606 00:29:35,800 --> 00:29:38,719 Speaker 2: out there. How do you people look at private credit? 607 00:29:39,280 --> 00:29:43,080 Speaker 2: I mean, what is your window into private credit from 608 00:29:43,120 --> 00:29:45,920 Speaker 2: the adults out in Southern California. 609 00:29:46,120 --> 00:29:48,000 Speaker 9: Well, we at Beach Point invest in both public and 610 00:29:48,200 --> 00:29:51,800 Speaker 9: private credit. And what we've observed in the growth of 611 00:29:51,800 --> 00:29:55,240 Speaker 9: that particular corner of the market is that companies have 612 00:29:55,280 --> 00:29:58,120 Speaker 9: a choice. They can finance themselves in various ways, and 613 00:29:58,160 --> 00:30:01,080 Speaker 9: they can there are different would say puts in takes 614 00:30:01,120 --> 00:30:04,600 Speaker 9: for doing so in either public or private, but you 615 00:30:04,640 --> 00:30:06,920 Speaker 9: can't ignore the amount of credit creation that's gone on 616 00:30:07,120 --> 00:30:09,760 Speaker 9: in the private markets, and it is scaled at a 617 00:30:09,840 --> 00:30:12,840 Speaker 9: time when we have not had a prolonged depreciation and 618 00:30:12,960 --> 00:30:17,120 Speaker 9: asset prices or a real credit freeze, and so they 619 00:30:17,880 --> 00:30:22,680 Speaker 9: most credit private credit funds have built in defense mechanisms 620 00:30:22,720 --> 00:30:25,640 Speaker 9: in terms of you know, not marketing to market. 621 00:30:26,000 --> 00:30:28,080 Speaker 2: You know, good liquidity, a. 622 00:30:28,120 --> 00:30:31,000 Speaker 9: Very sticker sticky investor base. All of these attributes are 623 00:30:31,080 --> 00:30:33,720 Speaker 9: very positive to be able to see through this particular environment. 624 00:30:33,920 --> 00:30:36,840 Speaker 2: Okay, but this is important. I don't trust mark to market. 625 00:30:37,000 --> 00:30:39,000 Speaker 2: How do they do a legitimate I mean, let's take 626 00:30:39,040 --> 00:30:41,880 Speaker 2: it even over to private equity. Is it like VC 627 00:30:42,000 --> 00:30:44,200 Speaker 2: where they're making it up as they go or is 628 00:30:44,200 --> 00:30:45,960 Speaker 2: a legitimate mark to market? 629 00:30:46,360 --> 00:30:50,360 Speaker 9: Well, the pricing services would would provide legitimate pricing for 630 00:30:50,400 --> 00:30:54,120 Speaker 9: those assets. The danger comes in just that, you know, 631 00:30:54,560 --> 00:30:57,920 Speaker 9: for example, an environment we're in, the more prolonged it becomes, 632 00:30:58,240 --> 00:31:01,080 Speaker 9: the more damage to these companies op reading ability and 633 00:31:01,120 --> 00:31:04,760 Speaker 9: their profit margins would occur. And as that starts to erode, 634 00:31:05,040 --> 00:31:07,640 Speaker 9: you know, perhaps some of those prices don't fully reflect 635 00:31:07,680 --> 00:31:09,520 Speaker 9: the underlying ask do you have in your head? 636 00:31:09,520 --> 00:31:11,479 Speaker 2: And the average duration of private credit? 637 00:31:12,240 --> 00:31:14,360 Speaker 9: Well, a lot of private credit is floating, right, So 638 00:31:14,360 --> 00:31:16,280 Speaker 9: in terms of interest rate duration, it's not going to 639 00:31:16,280 --> 00:31:18,600 Speaker 9: be sensitive moves of you know, the ten year for. 640 00:31:18,680 --> 00:31:20,320 Speaker 2: Exact, almost European, right. 641 00:31:20,360 --> 00:31:22,320 Speaker 9: But what they do have, if they were a margin market, 642 00:31:22,400 --> 00:31:24,600 Speaker 9: is spread duration. So they are going to be sensitive 643 00:31:24,680 --> 00:31:28,680 Speaker 9: to interest rate duration in terms of the reaction to 644 00:31:28,920 --> 00:31:32,800 Speaker 9: risk assets in the credit space to whatever is happening 645 00:31:32,840 --> 00:31:35,480 Speaker 9: in the economy as it relates to the risk free rate. 646 00:31:35,600 --> 00:31:38,360 Speaker 5: Did you understand what he said that I went to 647 00:31:38,400 --> 00:31:40,560 Speaker 5: the Chase Manhattan Bank credit training program. 648 00:31:41,160 --> 00:31:41,720 Speaker 2: You survived. 649 00:31:41,760 --> 00:31:45,360 Speaker 5: I forgotten more than this guy knows. So I go 650 00:31:45,440 --> 00:31:48,960 Speaker 5: to the Beach Point Capital website. Very nice website. The 651 00:31:49,000 --> 00:31:51,400 Speaker 5: intro video is of Manhattan. 652 00:31:51,800 --> 00:31:53,120 Speaker 2: We have a New York office. 653 00:31:53,040 --> 00:31:58,280 Speaker 5: Yeah, you can't find something in LA Come on. 654 00:31:58,360 --> 00:32:00,920 Speaker 2: Come to the Chase. Don't get me New York City 655 00:32:01,000 --> 00:32:03,760 Speaker 2: man having Visita stuff? Are you guys three days a 656 00:32:03,800 --> 00:32:04,680 Speaker 2: week at Michael's? 657 00:32:04,960 --> 00:32:08,120 Speaker 5: Is that what you're doing three days a week at 658 00:32:08,160 --> 00:32:09,640 Speaker 5: Michael Credit? 659 00:32:09,640 --> 00:32:10,320 Speaker 2: People over there? 660 00:32:10,480 --> 00:32:12,720 Speaker 5: How do you guys think about credit qualities? Is that 661 00:32:12,800 --> 00:32:14,920 Speaker 5: we haven't had to worry about credit quality for that? 662 00:32:14,920 --> 00:32:15,320 Speaker 2: That's right. 663 00:32:15,640 --> 00:32:18,240 Speaker 5: I don't know. Fifteen years since a great financial crisis, 664 00:32:18,760 --> 00:32:21,040 Speaker 5: is that something you're telling your animals, Hey, guys, go 665 00:32:21,120 --> 00:32:23,720 Speaker 5: back to your models, start stressing them out a little bit. 666 00:32:23,960 --> 00:32:25,320 Speaker 5: How do you guys think about credit quality? 667 00:32:25,360 --> 00:32:28,360 Speaker 9: Yeah, it's a great question, and it's really where the 668 00:32:28,400 --> 00:32:31,120 Speaker 9: proverbial rubber will meet the road the longer this goes. 669 00:32:31,280 --> 00:32:33,280 Speaker 9: And so the way we look at it is, well, 670 00:32:33,320 --> 00:32:35,760 Speaker 9: first of all, we're coming off of the inflationary and 671 00:32:35,840 --> 00:32:39,880 Speaker 9: rate hiking cycle, which allowed companies with pricing power to 672 00:32:39,880 --> 00:32:42,920 Speaker 9: improve their margins and that's what really fed into the 673 00:32:42,960 --> 00:32:46,080 Speaker 9: solid credit fundamentals that we have today. And so the 674 00:32:46,200 --> 00:32:49,760 Speaker 9: risk is that that profitability starts to come off in 675 00:32:49,800 --> 00:32:52,680 Speaker 9: a stagflationary environment and that's going to start to erode 676 00:32:52,720 --> 00:32:56,320 Speaker 9: credit fundamentals. That's when you start to seeing trouble increased 677 00:32:56,320 --> 00:32:58,920 Speaker 9: defaults start to increase. And so the way we approach 678 00:32:58,960 --> 00:33:01,920 Speaker 9: it is we take everything from the macro level down 679 00:33:01,960 --> 00:33:04,120 Speaker 9: to the micro level. We want our analysts to be 680 00:33:04,200 --> 00:33:06,480 Speaker 9: calling the management teams of the issuers in which we 681 00:33:06,560 --> 00:33:10,040 Speaker 9: invest regularly to get their outlook, what their color is, 682 00:33:10,800 --> 00:33:13,920 Speaker 9: and to stress test their companies and their business models 683 00:33:13,960 --> 00:33:16,920 Speaker 9: for a variety a range of outcomes that we can 684 00:33:16,960 --> 00:33:17,560 Speaker 9: foresee for. 685 00:33:17,520 --> 00:33:20,400 Speaker 2: Global Wall Street, a great conversation. We continue with Sigeon 686 00:33:20,440 --> 00:33:24,120 Speaker 2: Baueren of Santa Monica. I mean, can we just go there? 687 00:33:24,160 --> 00:33:26,560 Speaker 2: You forget about this in New York. So I want 688 00:33:26,560 --> 00:33:29,080 Speaker 2: to point out. Let me three tweets in a row, 689 00:33:29,160 --> 00:33:32,360 Speaker 2: back to back. Liz Ane Sanders Zandy of Moody's. Firman 690 00:33:32,440 --> 00:33:36,640 Speaker 2: of Harvard liz Ane Sanders net exports subtracted nearly five 691 00:33:36,720 --> 00:33:41,640 Speaker 2: percentage points, most in history, Zandy of Moody's. The decline 692 00:33:41,640 --> 00:33:47,360 Speaker 2: in GDP overstates the weakness, but it is weak. Professor 693 00:33:47,440 --> 00:33:51,080 Speaker 2: Furhman of X ten at Harvard. Not the most exciting 694 00:33:51,160 --> 00:33:56,680 Speaker 2: day to day, but private wages X incentive compensation up nicely, 695 00:33:56,760 --> 00:34:00,560 Speaker 2: a slight bump, but take it together, ECI is still 696 00:34:00,840 --> 00:34:04,480 Speaker 2: a downward transcident. Did you take X tenant Harvard? Did 697 00:34:04,480 --> 00:34:08,719 Speaker 2: you survive? Was at manku or Feldsteam? So I did? 698 00:34:08,760 --> 00:34:10,600 Speaker 9: But then I also went to the University of Chicago 699 00:34:10,640 --> 00:34:13,840 Speaker 9: Business School, where I also survived, had a concentration in 700 00:34:13,880 --> 00:34:15,799 Speaker 9: the economics, so yes, do. 701 00:34:15,880 --> 00:34:19,520 Speaker 5: Much math there. So what do you think this Federal 702 00:34:19,560 --> 00:34:21,480 Speaker 5: Reserve is going to do? Here? What are you guys 703 00:34:21,480 --> 00:34:24,839 Speaker 5: at each point thinking about this year? I am I'm 704 00:34:24,840 --> 00:34:27,319 Speaker 5: not sure how much they can do given some of 705 00:34:27,320 --> 00:34:29,560 Speaker 5: the things that are happening. From a policy perspective, I'm 706 00:34:29,560 --> 00:34:31,080 Speaker 5: not really sure how much they can do. How do 707 00:34:31,120 --> 00:34:32,239 Speaker 5: you what are you guys discounting? 708 00:34:33,000 --> 00:34:34,080 Speaker 2: Well, we would agree with that. 709 00:34:34,200 --> 00:34:38,279 Speaker 9: We think that, I mean, similar to the last uh 710 00:34:38,560 --> 00:34:40,479 Speaker 9: sort of well, during the rate hiking cycle in twenty 711 00:34:40,480 --> 00:34:43,760 Speaker 9: twenty two and twenty three, the FED was effectively given 712 00:34:43,800 --> 00:34:46,520 Speaker 9: permission to raise rates because it was doing so into 713 00:34:46,520 --> 00:34:50,160 Speaker 9: a strong economy in a very strong consumer base, and 714 00:34:50,320 --> 00:34:54,160 Speaker 9: until pass forward to today the soft data translates into 715 00:34:54,280 --> 00:34:56,680 Speaker 9: much weaker hard data, we would agree that the Fed, 716 00:34:57,160 --> 00:34:59,640 Speaker 9: if they had their wish, would stay on pause. And 717 00:34:59,719 --> 00:35:03,200 Speaker 9: so that's one reason why on the margin we like 718 00:35:03,239 --> 00:35:06,760 Speaker 9: floating right over you know, fixed rate high yield for example, 719 00:35:07,520 --> 00:35:11,080 Speaker 9: because of that extra current income and carry that you 720 00:35:11,200 --> 00:35:15,200 Speaker 9: get through this particular cycle. And so it's really that's 721 00:35:15,239 --> 00:35:18,040 Speaker 9: the real tension, though, what does the FED do? Which 722 00:35:18,080 --> 00:35:21,000 Speaker 9: side of their dual mandate do they attempt to resolve? 723 00:35:21,440 --> 00:35:23,920 Speaker 9: And we think it's going to be still sensitive to 724 00:35:23,960 --> 00:35:27,400 Speaker 9: inflation over the near term until we get data that 725 00:35:27,480 --> 00:35:30,239 Speaker 9: shows that, you know, we're not really experiencing the same 726 00:35:30,280 --> 00:35:31,600 Speaker 9: inflationary pressures that we did. 727 00:35:31,719 --> 00:35:35,560 Speaker 2: Last one final question and this is really important. And 728 00:35:35,880 --> 00:35:38,239 Speaker 2: we've talked to the La Port people all the time, 729 00:35:38,280 --> 00:35:41,240 Speaker 2: I mean, you guys in southern California and the absolute 730 00:35:41,320 --> 00:35:43,840 Speaker 2: crucible of this trade war at la and Long Beach 731 00:35:44,680 --> 00:35:48,399 Speaker 2: as well. And it's just as simple as is there 732 00:35:48,400 --> 00:35:50,680 Speaker 2: a belief at Beach Point that we just get back 733 00:35:50,719 --> 00:35:53,880 Speaker 2: to normal after this trade war? Or is this a 734 00:35:53,960 --> 00:35:56,719 Speaker 2: new I we're going to do this for Thomas cohon 735 00:35:56,800 --> 00:35:59,040 Speaker 2: or Harvard forty nine, I think it was. Is it 736 00:35:59,040 --> 00:35:59,920 Speaker 2: a new paradigm? 737 00:36:00,239 --> 00:36:03,880 Speaker 9: Yeah, that's a great question. We would say that it 738 00:36:03,960 --> 00:36:06,239 Speaker 9: kind of depends on the cohde of the market you're discussing. 739 00:36:06,320 --> 00:36:08,799 Speaker 9: So it is a new paradigm for smaller companies. They 740 00:36:08,840 --> 00:36:11,719 Speaker 9: can't they don't have the bargaining power. They don't they 741 00:36:11,719 --> 00:36:15,839 Speaker 9: can't easily diversify their supply lines. And so if this 742 00:36:15,960 --> 00:36:18,360 Speaker 9: really is even a ninety day pause on tariffs, but 743 00:36:18,360 --> 00:36:22,400 Speaker 9: then it recommences some of those smaller types of companies 744 00:36:22,400 --> 00:36:24,239 Speaker 9: are just going to have a lot of difficulty in 745 00:36:24,280 --> 00:36:27,279 Speaker 9: this new economic structure that we've established. 746 00:36:27,320 --> 00:36:31,759 Speaker 2: One final question, when the Harvard Club of Southern California 747 00:36:32,200 --> 00:36:35,719 Speaker 2: gets together at Cheves Ravine for the Dodgers, are you 748 00:36:35,719 --> 00:36:40,440 Speaker 2: guys sitting by the dugout. We will sit wherever we can. 749 00:36:40,520 --> 00:36:46,360 Speaker 2: And Dodgers, especially when they're playing that's right. I like 750 00:36:46,400 --> 00:36:52,760 Speaker 2: to cheer on Mookie right go away, very painful. 751 00:36:52,400 --> 00:36:54,360 Speaker 9: So benefits from those types of trades. 752 00:36:55,080 --> 00:36:57,480 Speaker 2: Don't be a stranger. Next time, brings your Oam Schneider 753 00:36:57,480 --> 00:37:00,520 Speaker 2: opinion with you, we'll have the two you on here 754 00:37:00,600 --> 00:37:03,080 Speaker 2: in short, short paper and long only paper. 755 00:37:03,280 --> 00:37:07,160 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 756 00:37:07,200 --> 00:37:10,240 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 757 00:37:10,239 --> 00:37:13,280 Speaker 1: Auto with the Bloomberg Business App. You can also listen 758 00:37:13,360 --> 00:37:16,600 Speaker 1: live on Amazon Alexa from our flagship New York station. 759 00:37:17,160 --> 00:37:19,840 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 760 00:37:20,280 --> 00:37:22,680 Speaker 2: Yeah. I look at Ridholt's book I'm Not to Invest? 761 00:37:22,800 --> 00:37:22,880 Speaker 5: Ye? 762 00:37:23,600 --> 00:37:28,160 Speaker 2: Do you understand Amazon's put that little Amber Goldie number 763 00:37:28,239 --> 00:37:30,760 Speaker 2: one best seller, wasn't it? Yeah? 764 00:37:30,920 --> 00:37:31,960 Speaker 5: Oh, I didn't know that. 765 00:37:32,080 --> 00:37:34,640 Speaker 2: He wakes up every morning and he buys fifty bucks. 766 00:37:34,760 --> 00:37:37,960 Speaker 2: Just goos the numbers. Kelly Cox has read it cover 767 00:37:38,040 --> 00:37:40,880 Speaker 2: to cover. She joins us right now working as Baryo 768 00:37:40,880 --> 00:37:44,640 Speaker 2: as Chief market strategist Riddles Wealth Management. Let's just cut 769 00:37:44,680 --> 00:37:49,480 Speaker 2: to the case, Kelly. Part one bad ideas Section two, 770 00:37:49,880 --> 00:37:56,720 Speaker 2: Media madness. How does our audience interpret market punditry given 771 00:37:56,760 --> 00:37:57,840 Speaker 2: this chaos? 772 00:37:58,160 --> 00:38:01,400 Speaker 10: This feels like a loaded question, but seriously, you have 773 00:38:01,480 --> 00:38:03,520 Speaker 10: to watch your media diet here. Barry is one of 774 00:38:03,560 --> 00:38:06,120 Speaker 10: the biggest disciples of this, and you know, honestly read 775 00:38:06,120 --> 00:38:07,040 Speaker 10: Berry if you haven't. 776 00:38:07,840 --> 00:38:09,920 Speaker 3: But there's a lot of noise out there. 777 00:38:09,960 --> 00:38:13,200 Speaker 10: I think I'm under I'm understating that. But you have 778 00:38:13,239 --> 00:38:16,360 Speaker 10: to also remember your time frame. Look years and decades 779 00:38:16,400 --> 00:38:18,680 Speaker 10: down the road. Many of us are investing for retirement. 780 00:38:19,040 --> 00:38:23,040 Speaker 10: So as you process headlines, take them in, contextualize them, 781 00:38:23,160 --> 00:38:25,640 Speaker 10: but ultimately remember that ninety percent of them aren't going 782 00:38:25,680 --> 00:38:26,320 Speaker 10: to affect. 783 00:38:26,040 --> 00:38:28,720 Speaker 2: Your decision, So why take them in? That's the arch question. 784 00:38:28,800 --> 00:38:31,600 Speaker 2: I'm as guilty of this as anyone. You got a 785 00:38:31,640 --> 00:38:34,719 Speaker 2: three year, of five year, a ten year perspective, and 786 00:38:34,800 --> 00:38:36,880 Speaker 2: I'm watching Bloomberg headlines. 787 00:38:38,080 --> 00:38:39,640 Speaker 10: Tom, you're talking against your own book. 788 00:38:40,960 --> 00:38:45,000 Speaker 2: But seriously, you know, why take in the short term madness? 789 00:38:45,040 --> 00:38:47,040 Speaker 2: If I got a three year perspective. 790 00:38:46,800 --> 00:38:49,239 Speaker 10: Well, we're all human. A lot of surpoils down to 791 00:38:49,480 --> 00:38:52,240 Speaker 10: we're all human and we want to hear what's happening 792 00:38:52,280 --> 00:38:55,040 Speaker 10: around us. That is natural, and I don't think that's 793 00:38:55,080 --> 00:38:56,800 Speaker 10: a bad thing. I don't think you can tell clients 794 00:38:56,800 --> 00:38:59,880 Speaker 10: and investors to just stop listening. That's that's like sticking 795 00:38:59,880 --> 00:39:00,720 Speaker 10: your head in the sand. 796 00:39:00,719 --> 00:39:01,520 Speaker 5: That's impossible. 797 00:39:01,600 --> 00:39:03,399 Speaker 2: We're human. If you know, if you get into Duke 798 00:39:03,400 --> 00:39:05,839 Speaker 2: in Chapel Hill, you choose to go to Chapel Hill, right. 799 00:39:05,840 --> 00:39:08,439 Speaker 10: Yeah, correct, So that's the other that's what humans do. Yes, 800 00:39:08,440 --> 00:39:09,040 Speaker 10: it's humans. 801 00:39:09,080 --> 00:39:09,719 Speaker 8: Do you know? 802 00:39:09,800 --> 00:39:11,279 Speaker 5: I just last week and I was down to Duke 803 00:39:11,320 --> 00:39:13,839 Speaker 5: for re unions and drove down Franklin Street and Chapel Hill. 804 00:39:14,160 --> 00:39:17,880 Speaker 5: There might not be a prettyer college town anywhere. 805 00:39:17,480 --> 00:39:17,640 Speaker 2: I know. 806 00:39:18,360 --> 00:39:23,000 Speaker 5: I agree with that football Kelly. So you know, ever, 807 00:39:23,160 --> 00:39:25,759 Speaker 5: I would say for the last fifteen years, tech has 808 00:39:25,880 --> 00:39:29,600 Speaker 5: driven equity returns. Is that still a story? Do you think? 809 00:39:30,080 --> 00:39:30,480 Speaker 3: Well? 810 00:39:30,840 --> 00:39:34,160 Speaker 10: Obviously, over the past few months they've driven returns in 811 00:39:34,200 --> 00:39:36,879 Speaker 10: the wrong direction, I mean, which makes sense, right, When 812 00:39:36,880 --> 00:39:39,399 Speaker 10: you hit bumpy roads in the stock market, usually what's 813 00:39:39,440 --> 00:39:42,520 Speaker 10: done really well sells off the hardest. Tech is in 814 00:39:42,560 --> 00:39:45,800 Speaker 10: a weird spot right now. Earnings expectations are high. Analysts 815 00:39:45,840 --> 00:39:49,200 Speaker 10: expect tech earnings to grow an astounding twenty five percent 816 00:39:49,280 --> 00:39:50,000 Speaker 10: this year. 817 00:39:50,080 --> 00:39:52,200 Speaker 5: Which feels really high. 818 00:39:52,080 --> 00:39:54,400 Speaker 10: Considering that tech is the most exposed from a cost 819 00:39:54,400 --> 00:39:58,840 Speaker 10: of goods perspective and an international revenue perspective. So combine 820 00:39:58,880 --> 00:40:01,120 Speaker 10: that with the fact that the AI story, while still 821 00:40:01,440 --> 00:40:03,880 Speaker 10: very real, might hit some speed bumps here as well, 822 00:40:04,320 --> 00:40:06,560 Speaker 10: and you have to wonder if there are better areas 823 00:40:06,600 --> 00:40:08,640 Speaker 10: to sit into whether this market sell off. 824 00:40:08,960 --> 00:40:11,719 Speaker 2: So how will you interpret Microsoft's earnings this after and 825 00:40:11,719 --> 00:40:16,480 Speaker 2: how does a general market strategist or our audience interpret 826 00:40:16,640 --> 00:40:18,759 Speaker 2: one ginormous companies report. 827 00:40:19,160 --> 00:40:20,759 Speaker 10: I think there are two ways to answer this. I 828 00:40:20,800 --> 00:40:23,200 Speaker 10: am a bird's eye view strategist, so I'm not I 829 00:40:23,560 --> 00:40:26,360 Speaker 10: look through earnings calls, but I'm not parsing through and 830 00:40:26,440 --> 00:40:28,839 Speaker 10: making calls on individual stocks. That's just not the way 831 00:40:28,880 --> 00:40:31,800 Speaker 10: we invest Atarate Holts. But of course we're watching earnings. 832 00:40:31,840 --> 00:40:34,520 Speaker 10: Of course, you know you have to watch Microsoft earnings. 833 00:40:34,560 --> 00:40:36,480 Speaker 10: Microsoft is one of the biggest stocks on the market, 834 00:40:36,560 --> 00:40:38,680 Speaker 10: and I think it's an interesting bell weather right now, 835 00:40:38,719 --> 00:40:41,799 Speaker 10: as is Apples, as is Nvidia, A lot of those 836 00:40:41,840 --> 00:40:44,399 Speaker 10: MAGS seven stocks that we talk about because they are 837 00:40:44,480 --> 00:40:47,440 Speaker 10: a part of this tech sector that is incredibly exposed 838 00:40:47,480 --> 00:40:50,560 Speaker 10: to international well to tariffs and international catalysts. 839 00:40:50,880 --> 00:40:52,400 Speaker 2: How do you use the vis. 840 00:40:54,239 --> 00:40:57,080 Speaker 10: That's a fun question. So the VIX of course, is 841 00:40:57,080 --> 00:40:59,479 Speaker 10: the fear index. It's the gauge of thirty day SMP 842 00:40:59,560 --> 00:41:02,200 Speaker 10: options races. A lot of people watch as as a 843 00:41:02,239 --> 00:41:04,840 Speaker 10: sentiment index. I watch it as well. I think the 844 00:41:04,920 --> 00:41:07,000 Speaker 10: VIX has changed a lot because the options market has 845 00:41:07,040 --> 00:41:09,400 Speaker 10: just become so much more complex, so much more popular. 846 00:41:09,560 --> 00:41:12,000 Speaker 10: There are so many more options, for lack of a 847 00:41:12,040 --> 00:41:15,719 Speaker 10: better word, to hedge positions and hedge around events. So 848 00:41:16,239 --> 00:41:19,160 Speaker 10: typically in selloffs you see the VIX spike, and usually 849 00:41:19,200 --> 00:41:22,319 Speaker 10: when the VIC spikes, strategists like me say, okay, it's 850 00:41:22,320 --> 00:41:22,919 Speaker 10: time to buy. 851 00:41:23,080 --> 00:41:25,080 Speaker 5: I think it's a little more complicated. 852 00:41:24,640 --> 00:41:27,319 Speaker 10: Especially in selloffs where there are economic cracks, which I 853 00:41:27,640 --> 00:41:30,120 Speaker 10: expect to be the case here. I think it's an 854 00:41:30,120 --> 00:41:33,160 Speaker 10: open window for long term investors, you know, maybe thinking 855 00:41:33,320 --> 00:41:36,000 Speaker 10: think about being more opportunistic here. But I don't think 856 00:41:36,080 --> 00:41:38,520 Speaker 10: at this point the VIX could mark the bottom of 857 00:41:38,560 --> 00:41:39,080 Speaker 10: this sell off. 858 00:41:39,160 --> 00:41:40,200 Speaker 5: That's what I'm worried about. 859 00:41:40,440 --> 00:41:43,280 Speaker 2: I haven't seen the emotion though, No, I just haven't 860 00:41:43,280 --> 00:41:44,200 Speaker 2: seen the good arsis. 861 00:41:44,360 --> 00:41:46,759 Speaker 5: I've heard what they say it's been an orderly sell 862 00:41:46,800 --> 00:41:49,040 Speaker 5: off and those types of things. I don't know. But 863 00:41:49,080 --> 00:41:51,120 Speaker 5: we did that the VIS you know, you know, well 864 00:41:51,120 --> 00:41:52,640 Speaker 5: above thirty there for a while. 865 00:41:52,680 --> 00:41:55,960 Speaker 6: So Kelly did the good folks a road rid Holt's 866 00:41:55,960 --> 00:41:59,319 Speaker 6: Wealth Management. Have you guys changed kind of how you 867 00:41:59,360 --> 00:42:03,400 Speaker 6: think about stocks given that maybe this tariff thing's going 868 00:42:03,440 --> 00:42:05,560 Speaker 6: to be around for a while and some industries and 869 00:42:05,560 --> 00:42:07,400 Speaker 6: sectors will be more impacted than others. 870 00:42:07,600 --> 00:42:09,560 Speaker 5: Has it affected your stock selection at all? 871 00:42:10,080 --> 00:42:12,239 Speaker 10: Well, look, we've had a lot of conversations around this. 872 00:42:12,360 --> 00:42:14,640 Speaker 10: I think if you're a money manager and you haven't 873 00:42:14,760 --> 00:42:16,960 Speaker 10: at least had discussions around what's going on, then you're 874 00:42:16,960 --> 00:42:20,319 Speaker 10: probably falling behind. We haven't made any changes to our portfolios, 875 00:42:20,600 --> 00:42:23,960 Speaker 10: but we are, you know, thirty percent invested in international equities. 876 00:42:24,040 --> 00:42:25,560 Speaker 5: Okay, so that's good in. 877 00:42:26,160 --> 00:42:29,239 Speaker 10: Our main equity sleeves. So we we've always been a 878 00:42:29,239 --> 00:42:31,480 Speaker 10: proponent of international investing. I think it's all the more 879 00:42:31,520 --> 00:42:34,399 Speaker 10: important right now because as money moves around, and money 880 00:42:34,400 --> 00:42:38,239 Speaker 10: doesn't evaporate, remember it moves somewhere always. You know, we 881 00:42:38,320 --> 00:42:40,960 Speaker 10: think it could be looking for international sources. But so far, 882 00:42:41,200 --> 00:42:44,000 Speaker 10: no changes, and you know, we build our portfolios so 883 00:42:44,400 --> 00:42:45,520 Speaker 10: we don't have to change. 884 00:42:45,680 --> 00:42:48,560 Speaker 2: Did you understand that you're thirty percent in international so 885 00:42:48,640 --> 00:42:52,319 Speaker 2: Barry can expense a trip to Italy? 886 00:42:52,360 --> 00:42:54,640 Speaker 10: Well, you've got to take them on up to Barry 887 00:42:54,680 --> 00:42:55,920 Speaker 10: and tell them I want to take it. 888 00:42:56,080 --> 00:42:58,480 Speaker 2: This is insufferable now because of the New York next. 889 00:42:58,600 --> 00:43:01,760 Speaker 2: I mean, sure, you guys, have you medicated, Barry. 890 00:43:03,480 --> 00:43:06,719 Speaker 10: We're definitely a Knick's office. That's something I've learned over 891 00:43:06,800 --> 00:43:10,120 Speaker 10: the past year or so. And everybody's pretty excited. I 892 00:43:10,120 --> 00:43:12,640 Speaker 10: don't get into the NBA. The Charlotte Hornets have haven't 893 00:43:12,640 --> 00:43:15,480 Speaker 10: been a part of the conversation forever. True, But I'm 894 00:43:15,520 --> 00:43:17,800 Speaker 10: happy for the Knicks, and I'm excited because my colleagues 895 00:43:17,840 --> 00:43:18,280 Speaker 10: are exciting. 896 00:43:19,239 --> 00:43:21,640 Speaker 5: Yeah, she's got some problems with the North Carolina Tar 897 00:43:21,800 --> 00:43:26,160 Speaker 5: Hills basketball program or the football program. Well, figure that's 898 00:43:26,360 --> 00:43:28,560 Speaker 5: to have fun, though, that's going to be fun. We 899 00:43:28,640 --> 00:43:33,399 Speaker 5: have Chapel Bill. Chapel Bill, that's right, Yeah, that's that's 900 00:43:33,600 --> 00:43:34,040 Speaker 5: his name. 901 00:43:35,160 --> 00:43:37,359 Speaker 2: There you go. I'll be careful, man. 902 00:43:37,560 --> 00:43:39,839 Speaker 5: I'm just saying I'm optimistic. 903 00:43:39,840 --> 00:43:41,000 Speaker 10: I'm cautiously optimistic. 904 00:43:41,000 --> 00:43:43,200 Speaker 2: Twenty seconds. What do you publish today? What's the lead 905 00:43:43,280 --> 00:43:47,080 Speaker 2: idea you're publishing within? You know, down negative four fifty. 906 00:43:47,320 --> 00:43:49,160 Speaker 10: There's going to be a lot of talk around stagfletion. 907 00:43:49,160 --> 00:43:50,520 Speaker 10: I've already written a lot about this. 908 00:43:50,680 --> 00:43:52,520 Speaker 2: Agreed, well said, I don't. 909 00:43:52,280 --> 00:43:56,480 Speaker 10: Think we are quite there yet. Obviously the GDP dad 910 00:43:56,480 --> 00:43:58,400 Speaker 10: it didn't look great, but there's still a pretty buoyant 911 00:43:58,400 --> 00:44:00,799 Speaker 10: demand underneath. And it's also hard to read data at 912 00:44:00,800 --> 00:44:02,920 Speaker 10: the moment because the craziness. 913 00:44:02,600 --> 00:44:05,000 Speaker 2: The GDP price it in deck just screamstagflation. 914 00:44:05,440 --> 00:44:08,440 Speaker 10: Yeah, And I think that's what's spooking people because that's 915 00:44:08,480 --> 00:44:10,880 Speaker 10: that's the worry in the background, right agree, keep us 916 00:44:10,920 --> 00:44:11,840 Speaker 10: economic trenching to be. 917 00:44:12,280 --> 00:44:14,440 Speaker 2: Lauren Summers, thank you so much for your coverage with 918 00:44:14,520 --> 00:44:18,160 Speaker 2: David Weston on that there is. Maybe it's not a 919 00:44:18,280 --> 00:44:22,400 Speaker 2: huge stagflation, but nevertheless it's tangible. Cayley Cox with his 920 00:44:22,520 --> 00:44:26,120 Speaker 2: Chief Market Strategies to Ridholtz Wealth Management. 921 00:44:26,280 --> 00:44:31,120 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 922 00:44:31,239 --> 00:44:35,520 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 923 00:44:35,640 --> 00:44:38,880 Speaker 1: seven to ten am Easter and on Bloomberg dot Com, 924 00:44:39,000 --> 00:44:42,840 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business App. 925 00:44:43,120 --> 00:44:46,240 Speaker 1: You can also watch us live every weekday on YouTube 926 00:44:46,520 --> 00:44:48,520 Speaker 1: and always on the Bloomberg Terminal