WEBVTT - Stocks Notch Back-to-Back Gains as Dollar Climbs 0:00:02.520 --> 0:00:10.760 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week, 0:00:10.880 --> 0:00:14.720 Daily reporting from the magazine that helps global leaders stay 0:00:14.760 --> 0:00:18.800 ahead with insight on the people, companies, and trends shaping 0:00:18.840 --> 0:00:23.760 today's complex economy, plus global business, finance and tech news 0:00:23.800 --> 0:00:27.840 as it happens. The Bloomberg Business Week Daily Podcast with 0:00:27.960 --> 0:00:31.720 Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:31.920 --> 0:00:33.960 We got with is Eric Wiener. He's Bloomberg News Equity 0:00:34.120 --> 0:00:36.839 America's team leader. He's the author of several books, including 0:00:36.880 --> 0:00:38.839 What Goes Up in Oral History of Wall Street from 0:00:38.840 --> 0:00:41.199 the Great Depression through the Internet bubble in the nine 0:00:41.200 --> 0:00:43.440 to eleven attacks. He joins us here in the Bloomberg 0:00:43.520 --> 0:00:47.080 Interactive Brokers studio. You walked in, I asked how you're doing. 0:00:47.120 --> 0:00:50.279 You said, it's been a day. I think it's fair 0:00:50.320 --> 0:00:50.720 to say. 0:00:50.640 --> 0:00:51.960 That, say that every day. 0:00:52.000 --> 0:00:54.160 That's what I was just gonna say. But I want 0:00:54.200 --> 0:00:55.360 to talk to you about a story that you just 0:00:55.520 --> 0:00:59.680 edited that talks about retail traders coming in and buying 0:00:59.720 --> 0:01:00.080 the day. 0:01:00.680 --> 0:01:00.880 Is that? 0:01:01.080 --> 0:01:02.920 Is that what we're seeing right now? They haven't been 0:01:02.920 --> 0:01:03.640 scared away yet. 0:01:03.800 --> 0:01:06.880 They have not been scared away, and the money well 0:01:07.240 --> 0:01:10.479 where it's interesting because we're seeing different kinds of buying. 0:01:10.800 --> 0:01:12.440 So the kind of buying we're. 0:01:12.280 --> 0:01:15.839 Seeing is actual individuals going into the market and buying 0:01:15.880 --> 0:01:20.760 individual stocks or buying ETF's big flows coming from these guys. 0:01:21.080 --> 0:01:25.240 And in the story which by Esha Day couldn't recommend 0:01:25.280 --> 0:01:28.559 it enough, there are some really great quotes about people 0:01:28.600 --> 0:01:32.319 looking for magic in the market and whatever else. And 0:01:32.560 --> 0:01:37.040 but when you look at the broader UH indicators of 0:01:37.120 --> 0:01:41.199 like iras four to one k's, that looks a little 0:01:41.200 --> 0:01:44.759 bit more bearish, actually significantly more bearish. What's happening there 0:01:44.800 --> 0:01:48.640 appears to be people sort of thinking should I take 0:01:48.680 --> 0:01:50.080 my retirement into cash? 0:01:50.200 --> 0:01:52.880 That I yeah, that's scary to hear. 0:01:53.080 --> 0:01:55.160 Yeah, so after. 0:01:54.840 --> 0:01:56.640 The selling just saying had enough. 0:01:56.640 --> 0:02:00.120 It's enough, right, and that like that is actually the 0:02:00.120 --> 0:02:01.520 biggest pilot cash we have. 0:02:02.120 --> 0:02:04.160 So if if. 0:02:04.000 --> 0:02:08.960 That turns bearish, that becomes a very different story because 0:02:09.040 --> 0:02:12.919 that consistently adds to the stock market going up. There's 0:02:12.960 --> 0:02:16.320 constantly this pressure of buying. Other countries don't have that. 0:02:16.680 --> 0:02:18.920 So that's unique to the United States and it's. 0:02:18.840 --> 0:02:19.760 Part of our market. 0:02:20.880 --> 0:02:24.600 Maybe I'm just like naive here, but I thought that 0:02:25.520 --> 0:02:27.880 I thought that in retirement portfolios. People had like target 0:02:27.960 --> 0:02:30.840 date funds, and you basically don't touch it until you 0:02:30.840 --> 0:02:33.799 You just don't touch it until you retire. Look, you're 0:02:33.800 --> 0:02:35.480 not an investment advisor. I'm not gonna ask you to 0:02:35.520 --> 0:02:38.799 give advice here. But I didn't know people played with 0:02:39.000 --> 0:02:42.080 that money. They do, and so I do. 0:02:42.320 --> 0:02:46.840 I do not that the that is off limits, Yes, 0:02:46.919 --> 0:02:48.920 that is, and you think about it. You try not 0:02:49.000 --> 0:02:51.760 to look at it. You think about it once a quarter. 0:02:52.160 --> 0:02:54.799 You adjusters don't look at it. 0:02:54.840 --> 0:02:56.440 I haven't looked at it, and it. 0:02:56.400 --> 0:02:59.200 Takes a lot, but I like in my head have 0:02:59.280 --> 0:03:01.480 like percentages of what's been going on here, and so 0:03:01.760 --> 0:03:03.120 I don't want to touch it, but anymy go ahead. 0:03:03.160 --> 0:03:07.000 Yeah, and the target date fun thing is important because 0:03:07.520 --> 0:03:10.760 as you get closer I'm an old man, as you 0:03:10.800 --> 0:03:14.640 get closer to retirement, you do different things. You de risk, 0:03:15.600 --> 0:03:19.360 you know, you lessen stocks more in stable things. But 0:03:19.880 --> 0:03:24.079 you do have people who view their IRA or their 0:03:24.080 --> 0:03:25.919 formum one K as a trading vehicle. 0:03:25.960 --> 0:03:27.960 Well, and to be fair, we have seen the bond 0:03:28.040 --> 0:03:30.440 market not do what it's typically supposed to do in 0:03:30.480 --> 0:03:33.440 an environment where stocks go down, So that could cause 0:03:33.480 --> 0:03:34.600 some people to maybe freaked out. 0:03:34.680 --> 0:03:35.920 So how do you make sense of this of someone 0:03:35.960 --> 0:03:37.840 who follows the markets right, and you're thinking about the 0:03:37.920 --> 0:03:39.640 role of retail traders who can be in and out 0:03:39.680 --> 0:03:42.600 pretty quickly and stuff. Maybe it's not that long term bet. 0:03:43.000 --> 0:03:45.440 So what does it really indicate about the markets other 0:03:45.480 --> 0:03:46.600 than it's kind of a plaything. 0:03:47.120 --> 0:03:51.120 Well, what they're buying is the traditional stuff, Well, the 0:03:51.160 --> 0:03:54.600 traditional stuff being like big tech and the big names 0:03:54.800 --> 0:04:00.720 and those that they're like fans. It's like, you know, 0:04:00.800 --> 0:04:02.960 rooting for your favorite football team, rooting for your favorite 0:04:02.960 --> 0:04:03.520 baseball team. 0:04:03.560 --> 0:04:05.600 They are going to buy they believe in Ela Musk. 0:04:05.800 --> 0:04:09.360 They're going to keep buying those stocks until they're proven wrong, 0:04:09.800 --> 0:04:11.960 or until they feel that they're proven wrong. So it's 0:04:11.960 --> 0:04:18.280 a different kind of mentality. The shifting of retirement funds 0:04:18.400 --> 0:04:24.160 to de risking, that's a more programmed move, and that 0:04:24.480 --> 0:04:27.680 if that is in fact a long term trend that 0:04:27.760 --> 0:04:28.760 actually is troubling. 0:04:29.160 --> 0:04:31.080 Does it ever become if we look at the retail 0:04:31.080 --> 0:04:32.720 side of this, does it ever become Do we ever 0:04:32.720 --> 0:04:34.960 get to the point where, and maybe this happened post 0:04:35.080 --> 0:04:39.320 twenty twenty into twenty twenty one, when retail really ruled, 0:04:40.320 --> 0:04:42.160 do we get to a point where retail doesn't have 0:04:42.200 --> 0:04:43.279 the money to buy the dip. 0:04:44.720 --> 0:04:51.800 Yeah, that absolutely happens. The bigger point is that they 0:04:51.880 --> 0:04:57.240 tend to turn bearish right as the market is ready 0:04:57.279 --> 0:05:01.200 to turn bullish. It's kind of a country very indicator. 0:05:01.279 --> 0:05:04.360 If you talk to Wall Street pros so there, when 0:05:04.400 --> 0:05:09.080 they see over enthusiasm among the retail crowd, they kind 0:05:09.080 --> 0:05:10.039 of get nervous. 0:05:10.560 --> 0:05:12.680 This would be an indicator of that. 0:05:14.040 --> 0:05:17.680 But when they start seeing that the fundamentals are strong, 0:05:17.920 --> 0:05:20.039 growth should be you know, stock should be moving up, 0:05:20.080 --> 0:05:23.160 growth is okay, and the retail crowd is going no, 0:05:24.120 --> 0:05:26.480 that's when actually the Wall Street pro. 0:05:26.440 --> 0:05:28.560 Step in and they say, there's a contrary indicator. 0:05:28.760 --> 0:05:32.760 So you know, Eric like, I feel like, if you 0:05:32.760 --> 0:05:34.000 want to tell a story, you can find the data 0:05:34.040 --> 0:05:36.320 points right. So here I'm looking going back to the 0:05:36.440 --> 0:05:40.359 end of twenty twenty two to today, we're up forty 0:05:40.360 --> 0:05:42.640 percent on the S and P five hundred. We're down 0:05:42.640 --> 0:05:45.160 about eight percent year to date, almost nine percent. 0:05:45.240 --> 0:05:46.320 So I think that. 0:05:46.320 --> 0:05:49.640 Doesn't feel so bad. But I mean, do we have 0:05:49.720 --> 0:05:52.680 to think about the last two years or prior years. 0:05:52.720 --> 0:05:58.560 We're maybe off the charts anomalies more so, I don't know, like, 0:05:58.600 --> 0:06:00.679 how do you like when you start playing around with numbers? 0:06:00.720 --> 0:06:01.880 You know what I mean? You can start looking at 0:06:01.920 --> 0:06:02.839 things a little bit differently. 0:06:03.080 --> 0:06:05.000 There are a lot of ways to thin slice this. 0:06:05.160 --> 0:06:08.320 The big numbers to me are two straight years of 0:06:08.360 --> 0:06:13.960 twenty plus percent returns. That's rare, and that's the kind 0:06:14.000 --> 0:06:16.760 of thing where like, no matter who's president, no matter 0:06:16.920 --> 0:06:19.839 what the market is, a kind of a pullback would 0:06:19.880 --> 0:06:24.400 be expected. What's different now is that the political regime changed, 0:06:24.839 --> 0:06:28.080 And normally that doesn't actually mean all that much, but 0:06:28.120 --> 0:06:31.120 it really does here, so everybody. 0:06:30.720 --> 0:06:32.720 Wants as soon as if you. 0:06:32.920 --> 0:06:37.640 Take a step back and just look up to the 0:06:38.120 --> 0:06:42.279 day the inauguration day on January twentieth, or if you 0:06:42.400 --> 0:06:46.320 look at the tariff anounce the day of the tariff announcements, 0:06:46.680 --> 0:06:49.920 can you start seeing a downward trajectory where you see 0:06:49.960 --> 0:06:52.680 the market reacting to what is going on politically. 0:06:53.120 --> 0:06:56.560 That's different. So if you were looking at this year. 0:06:56.360 --> 0:06:59.640 And coming in and you're like, you know, it's president X, 0:06:59.800 --> 0:07:02.120 doesn't matter who it is, and the plans are just 0:07:02.160 --> 0:07:03.880 going to be to keep doing what we've been doing, 0:07:04.240 --> 0:07:06.600 then the market sells off a little bit and you 0:07:06.640 --> 0:07:08.200 look at it and you say, okay, well maybe I 0:07:08.279 --> 0:07:12.920 take some profits here whatever, But it's not this cataclysmic 0:07:13.160 --> 0:07:17.000 sweeping up, sweeping down in that story we talk about. 0:07:17.040 --> 0:07:20.600 We've had just in like the last fourteen sessions, we've 0:07:20.640 --> 0:07:23.640 had five two percent down more than two percent down 0:07:23.720 --> 0:07:27.800 days and two or three two percent up days, which 0:07:28.040 --> 0:07:32.720 like that's incredible, that's crazy swings. So this is the 0:07:32.800 --> 0:07:35.760 difference between now and what was going on before, is 0:07:35.800 --> 0:07:38.880 that this is actually directly related to Washington, and we 0:07:39.040 --> 0:07:41.960 have no clarity on what's going to come out of there. 0:07:42.120 --> 0:07:44.760 All right, crazy stuff. As always, Eric, thank you so much. 0:07:45.080 --> 0:07:48.440 Appreciate Eric Weener, Senior Editor Equities America's joining us here 0:07:48.600 --> 0:07:49.160 in studio. 0:07:50.040 --> 0:07:53.720 You're listening to the Bloomberg Business Week Podcast. Catch us 0:07:53.800 --> 0:07:56.800 live weekday afternoons from two to five y's during Listen 0:07:56.840 --> 0:08:00.640 on Applecarplay and Android Otto with the Bloomberg As, or 0:08:00.840 --> 0:08:03.240 watch us live on YouTube. 0:08:03.440 --> 0:08:06.000 As Carol mentioned, we're focused on the stock market, the 0:08:06.040 --> 0:08:08.840 bond market. Earlier, the S and P five hundred rallied 0:08:08.840 --> 0:08:11.000 as much as three point four percent. These were off 0:08:11.040 --> 0:08:13.560 of media reports that the US was considering lower levees 0:08:13.600 --> 0:08:16.880 on China. Then we saw stocks pair gains after Treasury 0:08:16.920 --> 0:08:20.040 Secretary Scott Besson casts some doubts on a timely resolution 0:08:20.480 --> 0:08:22.560 on the US China trade war. We want to get 0:08:22.600 --> 0:08:25.000 into what's happening in the bond market because we are 0:08:25.040 --> 0:08:28.440 seeing long maturity treasury yields fall, at least felt earlier 0:08:28.480 --> 0:08:31.360 after the President laed fears that he would fire FED 0:08:31.440 --> 0:08:34.400 chair J. Powell. A lot to unpack here. Fortunately, we 0:08:34.440 --> 0:08:37.880 got Katie Kominski with us. She's chief research strategist air 0:08:37.880 --> 0:08:41.600 portfolio manager at Alpha Simplex Group. She joins US from Boston. Katie, 0:08:41.640 --> 0:08:43.480 it's been a bit since we spoke to you. There's 0:08:43.480 --> 0:08:46.679 been a lot happening when it comes to the bond market, 0:08:46.800 --> 0:08:49.719 so we wanted to get your view on really how 0:08:49.760 --> 0:08:53.280 you're thinking about this asset class in an environment where 0:08:53.559 --> 0:08:57.280 it's not necessarily behaving in the way that it typically 0:08:57.280 --> 0:09:00.480 behaves when there's a sell off an aquities. 0:09:02.200 --> 0:09:04.319 That is such a good question. It is the most 0:09:04.360 --> 0:09:06.960 important thing to look at this month. If you look 0:09:07.000 --> 0:09:10.160 at what happened, equities were down and you didn't see 0:09:10.200 --> 0:09:13.520 bonds rallying in response to such an extreme event, And 0:09:13.600 --> 0:09:16.600 to me, this is a suggestion that the market is 0:09:16.679 --> 0:09:20.480 much more concerned about sort of the vulnerability of US 0:09:20.520 --> 0:09:24.400 assets but also the potential for inflation. So both of 0:09:24.440 --> 0:09:28.000 those narratives are key here, and that means that bonds 0:09:28.080 --> 0:09:30.640 are just not behaving like the safe haven asset that 0:09:30.720 --> 0:09:33.600 we love, but gold has so who knows. 0:09:33.679 --> 0:09:35.000 It's definitely something to note. 0:09:35.280 --> 0:09:37.040 Yeah, how do you make sense of that? Like you're 0:09:37.080 --> 0:09:39.720 someone who's watched this, first of all, the bond market 0:09:39.720 --> 0:09:43.480 when it's not acting like it's supposed to, Like, do 0:09:43.559 --> 0:09:45.560 alarm bells go off in your brain and you're like, 0:09:45.800 --> 0:09:47.160 wait a bitute. 0:09:47.880 --> 0:09:50.600 Oh, definitely, because I mean, if you think about the 0:09:50.640 --> 0:09:53.120 typical narrative of this type of move when you have 0:09:53.280 --> 0:09:56.640 such a large risk off you know, trade like we've 0:09:56.640 --> 0:09:59.199 seen in the last few weeks, although it has been volatile, 0:09:59.559 --> 0:10:02.199 you think about the sort of where do you go 0:10:02.400 --> 0:10:06.160 to find safe haven and that's usually fixed income and 0:10:06.679 --> 0:10:09.760 that's not the case if you think there's a probability 0:10:09.800 --> 0:10:13.360 that this type of risk off move could cause dumping 0:10:13.360 --> 0:10:16.120 of US assets or a lack of trust in sort 0:10:16.120 --> 0:10:19.520 of US treasuries, and that's what the market has been 0:10:19.520 --> 0:10:22.079 concerned about. And we've definitely seen some of those signals, 0:10:22.480 --> 0:10:25.080 albeit days like today in the last couple of days, 0:10:25.080 --> 0:10:25.640 you're seeing some. 0:10:25.679 --> 0:10:27.120 Retraction of that concern. 0:10:27.760 --> 0:10:30.600 You're seeing a flattening of the yield curve, which would 0:10:30.679 --> 0:10:32.520 kind of say that people are a little less concerned 0:10:32.520 --> 0:10:32.920 about that. 0:10:33.320 --> 0:10:34.439 But it is definitely. 0:10:34.160 --> 0:10:36.280 Something we're going to have to watch because bonds are 0:10:36.320 --> 0:10:37.920 just not behaving how we would think. 0:10:38.280 --> 0:10:42.000 Do you think the US is losing its status as 0:10:42.559 --> 0:10:46.680 the haven, as the safety play, as the central bank 0:10:47.120 --> 0:10:47.800 to the world. 0:10:49.280 --> 0:10:52.360 Well, I mean that is a clearly important narrative. 0:10:52.400 --> 0:10:54.960 I mean, look how much the markets have moved based 0:10:55.000 --> 0:10:57.479 on the independence of the FED. 0:10:57.320 --> 0:10:58.640 And sort of concern over that. 0:11:00.280 --> 0:11:03.000 Concern as well is that when you have flows out 0:11:03.240 --> 0:11:06.280 of US assets, that they don't get recycled back into 0:11:06.800 --> 0:11:09.920 US treasuries. And so the concern with that is that 0:11:09.960 --> 0:11:12.800 we're just losing some of that safe haven status. And 0:11:12.920 --> 0:11:16.360 it's still too early to tell, but the early indications 0:11:16.360 --> 0:11:18.559 in the market suggest that we should worry about it 0:11:18.640 --> 0:11:19.520 and think about it. 0:11:19.640 --> 0:11:21.600 You know, it's funny I think about Katie. You know, 0:11:21.600 --> 0:11:23.679 for such a long time in terms of US equities, 0:11:23.679 --> 0:11:26.480 we talked about Tina, right, there is no alternative, and 0:11:26.559 --> 0:11:29.800 so money just kept coming into the US equity story 0:11:29.880 --> 0:11:33.320 and markets. So I feel like too, as you say, 0:11:33.320 --> 0:11:35.959 with the ultimate safe haven US treasuries, that there was 0:11:36.000 --> 0:11:40.719 no alternative. Is there, realistically, though, an alternative that I 0:11:40.840 --> 0:11:43.880 understand there are that might give you higher yield or 0:11:44.480 --> 0:11:48.720 but I mean with the same security and dependency that 0:11:48.760 --> 0:11:51.199 the US treasuries have, is there an alternative? 0:11:52.360 --> 0:11:55.320 Oh, I forgot about, Tina, But yeah, I mean, I 0:11:55.360 --> 0:11:57.400 know it wasn't so long ago. I love that it 0:11:57.440 --> 0:11:59.400 wasn't that long ago. But it's been a busy month. 0:11:59.480 --> 0:12:01.640 But yeah, you know, that is a really good question. 0:12:01.800 --> 0:12:03.880 And that's why I think if you look at the 0:12:03.920 --> 0:12:05.000 only place people. 0:12:04.880 --> 0:12:07.840 Have run to is gold, which you know, and. 0:12:07.760 --> 0:12:10.040 That has been such a big story because there's just 0:12:10.559 --> 0:12:14.040 people don't know what that alternative is yet, and there's 0:12:14.040 --> 0:12:19.040 still questionability of whether or not treasuries could be more vulnerable, 0:12:19.400 --> 0:12:21.520 and so I think we're going to have to really 0:12:21.840 --> 0:12:23.600 I don't know the answer, and I think the market 0:12:23.600 --> 0:12:27.000 doesn't know the answer. So at this point, the alternatives 0:12:27.000 --> 0:12:29.559 aren't clear, especially in a world where inflation could be 0:12:29.600 --> 0:12:30.840 an issue. 0:12:31.120 --> 0:12:31.640 Definitely. 0:12:32.120 --> 0:12:34.440 So the whip saw the back and forth, you know, 0:12:35.040 --> 0:12:36.760 is there a point this is something we talk about, 0:12:36.800 --> 0:12:38.760 like with our Gena Martin Adams in terms and other 0:12:38.800 --> 0:12:42.560 market strategists unlike yourself, where there's a point where there's 0:12:42.600 --> 0:12:44.920 just so much back and forth that investors are like, 0:12:45.000 --> 0:12:48.760 I'm out and there's long term implications. I don't know, 0:12:48.880 --> 0:12:53.160 help me in terms of the markets here the treasury trade. 0:12:53.200 --> 0:12:57.040 Is there a point where global investors truly say I'm out? 0:12:57.120 --> 0:12:57.800 And what is that? 0:12:57.960 --> 0:12:58.200 Is it? 0:12:58.640 --> 0:13:01.679 Vetcher J. Powell being moved? Is it the constant back 0:13:01.760 --> 0:13:05.079 and forth? Like, what is that tipping point where investors 0:13:05.080 --> 0:13:06.560 are like, can't do this anymore? 0:13:07.679 --> 0:13:07.839 Well? 0:13:07.880 --> 0:13:10.080 I think, I mean we have seen those type of 0:13:10.080 --> 0:13:13.959 actions in terms of speculative volumes. Yeah, when you look 0:13:14.000 --> 0:13:18.960 at signals, signals have really reduced and generally technical signals 0:13:18.960 --> 0:13:20.200 have become very muted. 0:13:20.600 --> 0:13:21.719 And that's consistent with. 0:13:21.760 --> 0:13:24.960 Sort of investor behavior as well. I'd say that, you know, 0:13:25.040 --> 0:13:28.640 even though you've seen a lot of swings, there definitely 0:13:28.679 --> 0:13:32.520 becomes a point where people just wait. And I think 0:13:32.760 --> 0:13:35.360 if we get into that situation, it could take a 0:13:35.360 --> 0:13:37.640 little bit of time for them to get risk back 0:13:37.679 --> 0:13:39.440 on the table. I think this week is a good 0:13:39.440 --> 0:13:42.480 example that you know, there are still people looking for that, 0:13:42.960 --> 0:13:46.600 you know, recovery. They're looking for sort of potential opportunities, 0:13:46.640 --> 0:13:49.080 which means that it's not there yet, but a lot 0:13:49.160 --> 0:13:53.719 of people have de risks substantially already and they may 0:13:53.720 --> 0:13:55.079 not be coming back right away. 0:13:55.559 --> 0:13:56.960 Katy, you want to go back to something that you 0:13:57.040 --> 0:13:58.959 said that you have your eye on, which is the 0:13:59.000 --> 0:14:02.079 status of the US as this haven, as the dollars 0:14:02.640 --> 0:14:06.800 you know, as the safety or haven currency, the US 0:14:06.880 --> 0:14:10.400 treasury market as one where people can rely on backed 0:14:10.400 --> 0:14:13.319 by the full faith and credit of the US government. 0:14:13.400 --> 0:14:17.160 You said you're watching that status closely, but let's play 0:14:17.160 --> 0:14:19.120 that out a little bit. What happens if the US 0:14:19.160 --> 0:14:22.600 does lose its status. What are the implications of that. 0:14:23.920 --> 0:14:27.160 Well, it would be massive flow into other assets and 0:14:27.280 --> 0:14:30.760 potential for dumping of US treasuries, and what that would 0:14:30.760 --> 0:14:33.360 do is steep in the US yield curve. And that's 0:14:33.400 --> 0:14:35.160 why we've specifically seen. 0:14:34.960 --> 0:14:37.720 That type of movement, but not in extremity. 0:14:38.640 --> 0:14:41.720 So I think it's really a question of flows and preferences, 0:14:41.960 --> 0:14:47.400 and that could be disadvantageous to US assets, depending of course, 0:14:47.440 --> 0:14:50.800 on how extreme it would be. We've already seen massive 0:14:50.800 --> 0:14:54.200 flows to the yen and the euro, and I think 0:14:54.480 --> 0:14:58.240 as we navigate those trends if they continue much longer, 0:14:58.280 --> 0:14:59.920 that that will get people concerned. 0:15:00.120 --> 0:15:02.080 What about the auctions, we had a five year today, 0:15:02.840 --> 0:15:07.760 we did see demand rising at that seventy billion dollars 0:15:07.760 --> 0:15:10.400 scale a five year note. How closely are you're watching 0:15:10.440 --> 0:15:12.720 the auctions? What are they telling you in terms of 0:15:12.840 --> 0:15:16.920 investor demand and still having confidence in the US government. 0:15:18.120 --> 0:15:20.760 Well, I'd say, I mean, the auctions have been reasonable 0:15:21.280 --> 0:15:23.600 and there's been plenty of demand, so that is a 0:15:23.640 --> 0:15:24.440 positive sign. 0:15:25.600 --> 0:15:27.760 Where we see the trends. 0:15:27.320 --> 0:15:30.160 That are more concerning is actually in the market pricing 0:15:30.600 --> 0:15:33.200 less so in sort of the demand for auctions and 0:15:33.240 --> 0:15:36.040 sort of imagine that you know, auctions is sort of 0:15:36.120 --> 0:15:39.440 newly issued treasuries, but there's a lot of treasuries that 0:15:39.480 --> 0:15:41.840 people are holding, and I think that is going to 0:15:41.880 --> 0:15:44.400 be a little harder to measure and that will come 0:15:44.440 --> 0:15:47.320 out in sort of pricing as well. So I think 0:15:47.360 --> 0:15:50.240 it's really going to be watching if this theme accelerates 0:15:50.280 --> 0:15:51.120 more or. 0:15:51.040 --> 0:15:52.080 If it calms down. 0:15:52.200 --> 0:15:54.480 And we're already seeing that in the policy right now 0:15:54.520 --> 0:15:58.040 that there's sort of a backtrack to kind of avoid 0:15:58.080 --> 0:15:59.760 some of that, So that may be something that they're 0:15:59.760 --> 0:16:01.160 atally really thinking about. 0:16:01.360 --> 0:16:02.960 Even though they may not be saying that. 0:16:02.840 --> 0:16:05.320 Well, that's in our last minute. I mean, do you 0:16:05.440 --> 0:16:08.600 feel like things are calming down or is it that 0:16:08.720 --> 0:16:12.000 even the back and forth is calming down a little bit? 0:16:13.400 --> 0:16:16.000 I'd say that, you know, people are becoming a little 0:16:16.000 --> 0:16:18.360 bit you know, numb to it a little bit, I'd say, 0:16:18.360 --> 0:16:19.920 but I think if you look at the size of 0:16:19.960 --> 0:16:22.120 the moves, I mean three percent moves, I know that 0:16:22.160 --> 0:16:22.800 it abated. 0:16:22.840 --> 0:16:25.320 Some today are large moves. 0:16:25.320 --> 0:16:28.280 Generally, I would estimate those roughly as a three sigma move. 0:16:28.120 --> 0:16:29.800 For the S and P in a day. We have 0:16:29.880 --> 0:16:30.760 those every day now. 0:16:30.840 --> 0:16:34.040 So so I think there's some of that that, you know, 0:16:34.120 --> 0:16:38.400 kind of people fatigue, you know, uncertainty fatigue. But there 0:16:38.600 --> 0:16:42.200 is also sort of some backtracking and some positive news 0:16:42.240 --> 0:16:45.440 that sort of maybe it's not as extreme as I 0:16:45.600 --> 0:16:48.200 had thought, and that that has an ability to kind 0:16:48.240 --> 0:16:49.480 of calm. 0:16:49.080 --> 0:16:50.840 Investors a little bit. But I think it's going to 0:16:50.880 --> 0:16:51.200 take time. 0:16:51.320 --> 0:16:54.880 What's more likely in this last thirty seconds ten you're 0:16:54.920 --> 0:16:57.120 getting back up to five percent, are going back down 0:16:57.520 --> 0:16:58.520 to four or below? 0:17:00.040 --> 0:17:02.200 Oh, I think I'm definitely more of a you know, 0:17:02.360 --> 0:17:04.800 you know me, more of a bear. So I would say, like, 0:17:04.880 --> 0:17:07.520 you know, five percent seems likely to be at some point, 0:17:07.680 --> 0:17:10.480 especially if we see inflation prints later this year, bigger 0:17:11.760 --> 0:17:14.040 and outside of what people would have liked due to 0:17:14.119 --> 0:17:15.000 tariff impacts. 0:17:15.200 --> 0:17:16.760 So that's definitely possible. 0:17:16.880 --> 0:17:18.520 Five percent in twenty twenty five. 0:17:20.280 --> 0:17:21.560 Possibly we'll look to see you. 0:17:21.640 --> 0:17:25.480 The CPI moves a lot coming at us, Katie. Thank 0:17:25.480 --> 0:17:28.240 you so much tying it all up so nicely. Kati Kaminski. 0:17:28.280 --> 0:17:31.720 She's chief research strategist portfolio manager of at Alpha Simplex Group. 0:17:31.800 --> 0:17:34.280 Joining us from Boston, Massachusetts. 0:17:36.240 --> 0:17:39.920 This is the Bloomberg Business Week Podcast. Listen live each 0:17:39.920 --> 0:17:43.320 weekday starting at two pm Eastern on Applecarplay and Android 0:17:43.359 --> 0:17:46.399 Auto with the Bloomberg Business App. You can also listen 0:17:46.480 --> 0:17:49.760 live on Amazon Alexa from our flagship New York station. 0:17:50.280 --> 0:17:52.960 Just say Alexa play Bloomberg eleven thirty. 0:17:54.040 --> 0:17:57.639 Because, as we mentioned, i'b just out with numbers. Shares 0:17:57.720 --> 0:18:01.639 we're higher in the after hours now down about three 0:18:01.760 --> 0:18:04.360 percent as we speak. I want to bring in Brent 0:18:04.400 --> 0:18:07.320 Thale Phil he's senior technology research analyst to Jefferies. He 0:18:07.400 --> 0:18:10.920 joins us from the West Coast. He's had literally six 0:18:11.000 --> 0:18:12.720 minutes to look at these numbers. 0:18:13.240 --> 0:18:14.400 Brett, Brent, what. 0:18:14.400 --> 0:18:18.119 Is your what is your view? Because at first in 0:18:18.160 --> 0:18:19.399 the after hours, and look, we have to take this 0:18:19.440 --> 0:18:21.080 with a grain of salt, but at first in the 0:18:21.119 --> 0:18:23.200 after hours, investors were happy with what they saw. 0:18:24.119 --> 0:18:26.760 Yeah, I mean it's an inline corner. You know, two 0:18:26.800 --> 0:18:29.000 percent revenue growth is not going to blow your socks off. 0:18:29.040 --> 0:18:32.320 But you know they are leading with nine percent software growth, 0:18:32.760 --> 0:18:33.520 and that was good. 0:18:33.560 --> 0:18:36.919 The consulting business was expected to be negative. It was flat. 0:18:37.760 --> 0:18:40.639 Everyone thought, given what's happening with Doze and all these 0:18:40.840 --> 0:18:43.919 potential economic slowdowns, the first place he would cut our consultants. 0:18:44.000 --> 0:18:46.800 So you know, that business being flat was a little 0:18:46.800 --> 0:18:47.960 bit better than the street thought. 0:18:48.040 --> 0:18:50.480 So cash flow had a really good. 0:18:50.320 --> 0:18:54.720 Number, So four point four billion versus two point seven estimates, 0:18:54.760 --> 0:18:56.600 so you know, good bottom. 0:18:56.280 --> 0:18:59.280 Line, you know, mediocre in line. 0:18:59.520 --> 0:18:59.760 You know. 0:19:00.240 --> 0:19:04.960 Again, I think this has been a story that's just stable, steady. Arvin, 0:19:05.040 --> 0:19:07.959 the CEO has done a really nice job transforming IBM 0:19:08.040 --> 0:19:11.880 into a software company versus just a consulting, low margin company, 0:19:12.480 --> 0:19:16.880 and we like their position. To your point, I think 0:19:17.359 --> 0:19:19.480 no one is going to see what happened with the 0:19:19.960 --> 0:19:22.719 tariffs or some of the concerns that are in place 0:19:22.840 --> 0:19:25.760 in April so these are all March border earnings, and 0:19:25.840 --> 0:19:28.199 again I think you know to your point, you're not 0:19:28.200 --> 0:19:31.399 going to feel this until the second quarter, and so 0:19:31.440 --> 0:19:34.560