WEBVTT - Bloomberg Surveillance TV: June 2nd, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordert. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>am Eastern. Subscribe to the podcast on Apple, Spotify or

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business app. So here's the latest

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<v Speaker 2>this morning, US manufacturing activity expanding at his fastest pace

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<v Speaker 2>in four years. Investors are waiting more data to reinforce

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<v Speaker 2>bets on the path for interest rates. Kit Jigs of

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<v Speaker 2>Self Gen Writing, While President Trump's hopes for FED easing

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<v Speaker 2>may be disappointed, hikes are off the table for now.

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<v Speaker 2>Kit Jigs joins us some more. Kit Welcome to the program, Buddy,

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<v Speaker 2>good to see my apologies about the result over the weekend.

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<v Speaker 2>I've squeezed that into the end of the conversation.

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<v Speaker 3>Kit.

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<v Speaker 2>How high is that bar for that rate?

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<v Speaker 4>Hik of this feder reserve?

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<v Speaker 5>It seems very high. Now, it's not going to feel

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<v Speaker 5>so high in six, nine, twelve, twelve months time. I

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<v Speaker 5>think the world will eventually change. Look, the US economy is,

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<v Speaker 5>without doubt not just out growing the rest of the world,

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<v Speaker 5>but it's grown pretty strongly.

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<v Speaker 3>If that's the case, kit, what is the barrier potentially

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<v Speaker 3>raising rates and not just once but several times. And

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<v Speaker 3>we were just talking to somebody talking about how is

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<v Speaker 3>the ten year yield getting onmoored? With all of the

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<v Speaker 3>capital spending from big tech giants. We're seeing inflationary pressures

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<v Speaker 3>coming from Myria at different places. I mean, would it

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<v Speaker 3>be a problem if they hight rates?

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<v Speaker 5>Well, if you leave it too long, and you height

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<v Speaker 5>rates too much, too fast, too late, then you you know,

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<v Speaker 5>that is a recept recipe for a recession. Equally, I

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<v Speaker 5>almost want to flip it sideways over here where the

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<v Speaker 5>danger is with the slowing economies. We're going to raise

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<v Speaker 5>rates the market things. We're going to raise rates at

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<v Speaker 5>the ECB several times, which seems to me a sort

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<v Speaker 5>of a quicker way to a problem. But yeah, I

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<v Speaker 5>think that. You know, I've always assumed the Fed's fast,

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<v Speaker 5>smart enough that they don't get too far behind the curve,

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<v Speaker 5>and that what we'll find is that the story just

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<v Speaker 5>changes through time, and that one of the things about

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<v Speaker 5>Kevin Walsh now turning up and being there will be

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<v Speaker 5>that it'll be possible to turn that story around, make

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<v Speaker 5>it clear that this economy is doing better than others.

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<v Speaker 5>The terms of trade shocks in its favor. Obviously, the

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<v Speaker 5>technology boom is still happening, and gradually, gradually.

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<v Speaker 4>There'll be a rethink if that's the case.

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<v Speaker 3>I'm wondering if you push that through the currency channel

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<v Speaker 3>what that means. If you have rate hikes that are

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<v Speaker 3>a mistake in your view from the ECB, they could

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<v Speaker 3>potentially create an economic problem, and you have a US

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<v Speaker 3>economy going strong in a federal reserve that sits on

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<v Speaker 3>its hands.

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<v Speaker 4>Do you want to own the dollar or do you

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<v Speaker 4>want to sell it?

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<v Speaker 6>I want to own it.

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<v Speaker 5>I mean, I know I'm not relaxed about it, but

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<v Speaker 5>I get asked, you know why if you think, if

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<v Speaker 5>we think that the rates are going to go up

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<v Speaker 5>in Europe, why don't I want to own the Europe

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<v Speaker 5>Because they're going up despite their not being enough growth. Fundamentally,

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<v Speaker 5>that's the issue that tightening into wheat growth environment's just

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<v Speaker 5>going to make things worse, Whereas in the United States,

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<v Speaker 5>what's holding me back is a central bank that doesn't

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<v Speaker 5>recognize the problem at hand. But they'll get there because

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<v Speaker 5>you know, that's the kind of organization it is. There's

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<v Speaker 5>a lot of people on the FMC, a lot of

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<v Speaker 5>regional governors will who will react to what they see

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<v Speaker 5>in front of them with the economy, and I think

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<v Speaker 5>in due course that's going to argue that, yeah, we're neutral,

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<v Speaker 5>not at super easy policy, but we need to be

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<v Speaker 5>better than that. Numbers like this morning's they just push

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<v Speaker 5>in that direction.

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<v Speaker 7>Kit though there was an ECB report that says gold

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<v Speaker 7>replaces US treasuries as the world's top reserve acid.

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<v Speaker 4>Are you worried about d dollarization.

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<v Speaker 5>Yet the margin, I mean that the dollars being the

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<v Speaker 5>world's reserve currency to a much greater degree and for

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<v Speaker 5>longer than, for example, the pound was so that the

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<v Speaker 5>global economy is so dependent on it that we get

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<v Speaker 5>de dollarization at the margin in the same way as

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<v Speaker 5>that there's not enough gold in the world to replace

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<v Speaker 5>a fraction of the US treasuries that people might want

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<v Speaker 5>to own instead. So yeah, at the margin that there'll

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<v Speaker 5>be some of that and the dollar will be less dominant,

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<v Speaker 5>but it will probably still be more dominant than Sterling

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<v Speaker 5>was one hundred and fifty years ago.

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<v Speaker 2>What does the ECP have in common with Arsenal Football

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<v Speaker 2>Club kit.

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<v Speaker 5>That they are too defensive. That's the fundamental issue in

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<v Speaker 5>my heart, that their game plan isn't going to win

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<v Speaker 5>them the Champions League. That's probably the quick way of

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<v Speaker 5>putting it. The US is the FED is much more

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<v Speaker 5>like much more like Bar Saint Ramin. And in the end,

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<v Speaker 5>you know, this could be long drawn out, it could

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<v Speaker 5>be painful, it could go to extra time and to penalties.

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<v Speaker 5>But I don't think the ECB can win this with

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<v Speaker 5>premature tightening and such a defensive strategy.

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<v Speaker 2>Stay with us more Blindberg surveillance coming up after this.

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<v Speaker 2>I'm a QE of PSP growth. Right in the following,

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<v Speaker 2>Berkshire is effectively putting its stamp of approval on the

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<v Speaker 2>idea that AI is not just market hyphe but a

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<v Speaker 2>durable infrastructure shift worth funding at scale. Mama's in the studio,

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<v Speaker 2>MA make a morning and to see you morning. It's

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<v Speaker 2>great to see you in person. Let's talk about the

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<v Speaker 2>supply tons of it? Is it going to be met

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<v Speaker 2>with a lot of demand.

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<v Speaker 8>I think demand is showing no signs of slowing down.

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<v Speaker 8>And we're talking about building out essentially the real roads

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<v Speaker 8>and the electricity grids of AI, right, so everyone's piling on.

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<v Speaker 8>Everyone wants to grab as much as they can. This

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<v Speaker 8>is almost like a war on oil. That's like the

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<v Speaker 8>new compute. So I don't see demands slowing down at all.

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<v Speaker 2>I asked this question earlier on this morning, how much

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<v Speaker 2>runway do you think there is here? People are wondering

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<v Speaker 2>what innings we're in. You know that cliche kind of

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<v Speaker 2>question on Wall Street? How much runway do you think

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<v Speaker 2>there is here?

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<v Speaker 6>I think it's the early innings.

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<v Speaker 8>I do think the questions will start to be asked

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<v Speaker 8>in terms of when is the payback on this capex

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<v Speaker 8>because these numbers are staggering. I think Alphabet or the

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<v Speaker 8>reason they're raising this much equity is their CAPEC spend

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<v Speaker 8>this years it's going to be two hundred billion dollars,

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<v Speaker 8>and of the Max seven together, I think we're talking

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<v Speaker 8>six hundred and seven hundred billion, maybe even more depending

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<v Speaker 8>on what we q acid is. And so far, no

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<v Speaker 8>one seems to be asking where's that return going to

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<v Speaker 8>come from who is going to fund it?

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<v Speaker 6>But I think we will soon.

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<v Speaker 8>But the fact that people are not asking that question

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<v Speaker 8>yet shows me that we're still in the early innings

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<v Speaker 8>of AI and this is just the land grab.

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<v Speaker 3>Demand is outstripping supply again and again and again. With HPE,

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<v Speaker 3>we saw that as well, that really this is an

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<v Speaker 3>issue of just supply not being able to keep up.

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<v Speaker 4>How much pricing power is there?

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<v Speaker 3>I mean, can they just keep raising prices to the

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<v Speaker 3>moon for some of these parts that are in the

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<v Speaker 3>choke points that essentially are necessary for the build out?

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<v Speaker 6>It sort of seems that way, doesn't it.

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<v Speaker 8>I think you touch on an interesting point, which is

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<v Speaker 8>where is the choke point? And I do think if

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<v Speaker 8>you look at sort of the core suppliers GPUs memory, yes,

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<v Speaker 8>like you're strictly where the bock is and that makes sense,

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<v Speaker 8>and I think they probably will commit pricing power for

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<v Speaker 8>quite a bit. But where I start maybe start to

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<v Speaker 8>worry in the market is if the rally becomes broader.

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<v Speaker 8>I could see a world where there's so much frenzy

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<v Speaker 8>around AI that anything that even touches the supply chain

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<v Speaker 8>gets seen as a AI beneficiary.

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<v Speaker 6>And I think that's when you get into trouble.

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<v Speaker 8>Is I don't know if this is a good example,

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<v Speaker 8>but data center cooling right, this is marginally touching the space,

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<v Speaker 8>but also obviously very different than memory.

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<v Speaker 6>I do think for the core.

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<v Speaker 8>Spaces of memory and GPU, you probably see that rally

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<v Speaker 8>go for quite a bit longer.

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<v Speaker 3>Yeah, like when a shoe company becomes an AI company,

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<v Speaker 3>then potentially that.

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<v Speaker 4>Raises some concerns.

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<v Speaker 3>I just wonder, you know how much companies have to

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<v Speaker 3>show return on investment going forward to keep investing at

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<v Speaker 3>the pace that they are to rebuild their entire infrastructure

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<v Speaker 3>or is that not necessary yet?

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<v Speaker 6>Yeah?

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<v Speaker 8>And I think in some ways, right, we can talk

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<v Speaker 8>about the anthropic IPO in a little bit see anthropics

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<v Speaker 8>numbers could be interesting on this front.

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<v Speaker 6>Well, first of all, we at PSP we think about

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<v Speaker 6>this a lot.

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<v Speaker 8>We actually hosted an event a month ago where we

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<v Speaker 8>gathered fortune five hundred CEOs and AI entrepreneurs together in

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<v Speaker 8>one room and be like, what is actually valuable to

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<v Speaker 8>being built? Like when do you see ROI or does

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<v Speaker 8>it just build build build and was pa some some

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<v Speaker 8>interesting insights there. But back to anthropic the interesting thing

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<v Speaker 8>we could see from them is From the very beginning,

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<v Speaker 8>the narrative has been about enterprise adoption. It's not just

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<v Speaker 8>about having the best model, it's about having how do

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<v Speaker 8>we drive actual productivity in customers. And they've done well

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<v Speaker 8>as a result, but seeing their numbers, hopefully we will

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<v Speaker 8>soon will show that if retension is good, if we're

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<v Speaker 8>continuing to see spend increase among the largest corporate spenders,

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<v Speaker 8>then maybe AI skeptics could be a little wrong in

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<v Speaker 8>terms of how far we are in the AI ad

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<v Speaker 8>option curve.

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<v Speaker 4>After all, let's talk about the Anthropic IPO.

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<v Speaker 7>You say it's going to be not just a massive

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<v Speaker 7>deal in terms of being first for open AI, but

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<v Speaker 7>also along the entire AI stack.

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<v Speaker 4>What are these smaller A companies going to be looking for?

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<v Speaker 6>Yeah, I think everyone will be watching them. It's going

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<v Speaker 6>to affect the whole AI stack because.

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<v Speaker 8>Essentially, Anthropic is the first AI in need of company

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<v Speaker 8>to go public, and they're going in public at a

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<v Speaker 8>trillion dollar valuation, And there's this belief in the market

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<v Speaker 8>that AI is going to be so much bigger than

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<v Speaker 8>traditional software. So if traditional software is a trillion market globally,

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<v Speaker 8>AI could be ten times that, twenty times that I've

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<v Speaker 8>heard fifty times, like fifty times as the highest I've

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<v Speaker 8>heard in terms of how much bigger AI will be

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<v Speaker 8>than traditional software. So if you're thinking there's a market

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<v Speaker 8>that creates fifty trillion dollars of new market cap, obviously

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<v Speaker 8>that has implications.

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<v Speaker 6>Up and cross the sack.

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<v Speaker 8>And if you look at any of the listings around

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<v Speaker 8>top AI companies, I think Bloomberg has one that's top

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<v Speaker 8>twenty four AI companies to watch. You can look at

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<v Speaker 8>the Forbes AI fifty as a rough proxy for what

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<v Speaker 8>the market thinks is like the top tier AI companies,

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<v Speaker 8>all of them are valued at at least one billion

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<v Speaker 8>or more, which means investors think they're going to be

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<v Speaker 8>ten civilians, they're going to be a trillion dollars. And

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<v Speaker 8>it's every part of the sack. It's not just the

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<v Speaker 8>models like open to AI or anthropic. You have infrastructure

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<v Speaker 8>infrastructure companies so this is like Base ten foul together.

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<v Speaker 8>You have application layer companies so this is like Synthesia,

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<v Speaker 8>This is like Decagone, a Bridge Harvey. All these companies

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<v Speaker 8>sitting at billions of dollars of value. Issues is going

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<v Speaker 8>to be looking an anthropic to see if the public

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<v Speaker 8>markets will truly view EI as a different crop of companies.

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<v Speaker 2>Stay with us more Bloomberg Surveillance coming up after this.

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<v Speaker 2>We begin this out, we'll stop holding on to record

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<v Speaker 2>highs as Alphabet is planning to raise eighty billion dollars

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<v Speaker 2>in equity capital. Monica dissent serve JP Morgan Private Bank,

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<v Speaker 2>saying the following, stay invested in the AI supercycle, but

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<v Speaker 2>b selective. Monica joins US now for more Monica, good morning,

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<v Speaker 2>could see you, Thank you. I'm just thinking about the

0:10:48.720 --> 0:10:52.280
<v Speaker 2>clients that you speak to, investors, individuals, families, family offices.

0:10:52.600 --> 0:10:55.040
<v Speaker 2>How much exposure do they have to these names already

0:10:55.040 --> 0:10:56.680
<v Speaker 2>through private markets.

0:10:56.760 --> 0:11:00.679
<v Speaker 1>It's funny on private markets with everything that's happening lines overnight.

0:11:00.880 --> 0:11:03.240
<v Speaker 1>I think so many people assumed that's where you had

0:11:03.280 --> 0:11:06.760
<v Speaker 1>to be to get the value today to play AI,

0:11:07.080 --> 0:11:08.439
<v Speaker 1>and then you see this news over night and you

0:11:08.480 --> 0:11:10.800
<v Speaker 1>realize maybe there are more opportunities in public markets.

0:11:10.960 --> 0:11:11.120
<v Speaker 4>Now.

0:11:11.120 --> 0:11:12.960
<v Speaker 1>You look at a name like Alphabet, which has run

0:11:13.000 --> 0:11:14.920
<v Speaker 1>over one hundred percent in the last year, and to

0:11:14.960 --> 0:11:16.720
<v Speaker 1>see it holding in this well this morning, it is

0:11:16.720 --> 0:11:18.760
<v Speaker 1>pretty interesting. And so I think the bottom line is

0:11:19.200 --> 0:11:21.920
<v Speaker 1>there are absolutely opportunities in private markets, but there's still

0:11:21.920 --> 0:11:24.160
<v Speaker 1>at to do in the public side as companies make investments,

0:11:24.440 --> 0:11:26.480
<v Speaker 1>and you look at these companies like alphabet with a

0:11:26.520 --> 0:11:29.320
<v Speaker 1>significant free cash flow generation, it still feels like there's

0:11:29.360 --> 0:11:30.120
<v Speaker 1>value on both sides.

0:11:30.200 --> 0:11:31.360
<v Speaker 2>Why do you think the value is then in the

0:11:31.400 --> 0:11:33.120
<v Speaker 2>equity market, let's explore that a bit a bit more

0:11:33.160 --> 0:11:34.800
<v Speaker 2>on the public side, where do you stay at the moment?

0:11:34.960 --> 0:11:36.080
<v Speaker 1>You know, at the beginning of the year, we were

0:11:36.080 --> 0:11:38.200
<v Speaker 1>a little worried, right because you looked at valuations over

0:11:38.280 --> 0:11:41.040
<v Speaker 1>twenty times, you know, earning's growth pising of digits, and

0:11:41.040 --> 0:11:43.120
<v Speaker 1>you said, okay, maybe that's about where it should be,

0:11:43.200 --> 0:11:44.800
<v Speaker 1>maybe a little stretched, and then you know all the

0:11:44.800 --> 0:11:46.920
<v Speaker 1>geopolitical fears, and you said, okay, can we actually hold

0:11:46.960 --> 0:11:49.199
<v Speaker 1>on to twenty plus times? And now here we are

0:11:49.280 --> 0:11:52.120
<v Speaker 1>and what's happened. Obviously, your earnings have significantly outpaced what

0:11:52.120 --> 0:11:54.480
<v Speaker 1>we thought. But it's not just earnings growth, it's revenues

0:11:54.520 --> 0:11:57.760
<v Speaker 1>are accelerating, margins are expanding, and again it's not just tech.

0:11:58.160 --> 0:11:59.160
<v Speaker 6>You're actually seeing breadth.

0:11:59.240 --> 0:12:01.120
<v Speaker 1>Because a year ago, with the big concern was it's

0:12:01.200 --> 0:12:03.719
<v Speaker 1>just the mag seven, it's just tech. We're seeing that

0:12:03.760 --> 0:12:06.439
<v Speaker 1>margin expansion in most sectors actually, and So that's what's

0:12:06.440 --> 0:12:08.319
<v Speaker 1>really interesting that you're finally seeing some of this follow

0:12:08.360 --> 0:12:10.880
<v Speaker 1>through in the market. To me, that tells me fundamentals

0:12:10.920 --> 0:12:13.079
<v Speaker 1>actually might be better than people fought and maybe twenty

0:12:13.120 --> 0:12:15.320
<v Speaker 1>times isn't outlandish for equity markets.

0:12:15.360 --> 0:12:17.720
<v Speaker 3>What's driving the broadening ad It's certainly not coming from

0:12:17.760 --> 0:12:20.600
<v Speaker 3>a cheaper commodity prices, it's not coming from disinflation, So

0:12:20.880 --> 0:12:22.000
<v Speaker 3>where is it coming from.

0:12:22.320 --> 0:12:25.240
<v Speaker 1>It's funny because a year ago, year plus ago, everyone

0:12:25.280 --> 0:12:27.199
<v Speaker 1>would push back and say, how can margins expand? And

0:12:27.200 --> 0:12:29.400
<v Speaker 1>that's where you get this AI story and you haven't

0:12:29.440 --> 0:12:31.480
<v Speaker 1>seen it, I think as significant as it will be,

0:12:31.720 --> 0:12:33.480
<v Speaker 1>but I do wonder, are you're starting to see some

0:12:33.920 --> 0:12:37.160
<v Speaker 1>benefit from these investments. Again, it's really hard to put

0:12:37.200 --> 0:12:39.120
<v Speaker 1>numbers around it, and I think that's where the market struggles.

0:12:39.120 --> 0:12:41.240
<v Speaker 1>That's where investors struggle because if I can't put an

0:12:41.280 --> 0:12:43.000
<v Speaker 1>estimate on it, how can I look at evaluation and

0:12:43.000 --> 0:12:45.400
<v Speaker 1>say this stock is worth X in two years? But

0:12:45.520 --> 0:12:47.320
<v Speaker 1>it seems like it has to be there. And then

0:12:47.360 --> 0:12:50.360
<v Speaker 1>you wonder, Okay, if companies raise prices never actually took

0:12:50.400 --> 0:12:52.800
<v Speaker 1>them back down, if there's been some moderation in the

0:12:52.880 --> 0:12:54.400
<v Speaker 1>rate of inflation in that up if it helps on

0:12:54.400 --> 0:12:55.240
<v Speaker 1>the margin side as well.

0:12:55.240 --> 0:12:59.480
<v Speaker 3>There's always someone know when you're investing in technological technological cycle.

0:12:59.840 --> 0:13:02.200
<v Speaker 3>But if I think about, say the Industrial Revolution with

0:13:02.280 --> 0:13:04.560
<v Speaker 3>the train, you're investing a train to get from here

0:13:04.600 --> 0:13:05.040
<v Speaker 3>to there.

0:13:05.360 --> 0:13:06.360
<v Speaker 6>With this, it's different.

0:13:06.400 --> 0:13:10.600
<v Speaker 3>People don't totally understand exactly what iteration is going to

0:13:10.640 --> 0:13:13.200
<v Speaker 3>be one at the end of.

0:13:13.120 --> 0:13:14.240
<v Speaker 4>Whatever this is.

0:13:15.320 --> 0:13:16.560
<v Speaker 6>How difficult is it.

0:13:16.559 --> 0:13:20.080
<v Speaker 3>To remain nimble and to remain live at a time

0:13:20.160 --> 0:13:23.920
<v Speaker 3>of such incredible uncertainty around the thesis that's raising trillions

0:13:23.960 --> 0:13:24.520
<v Speaker 3>of dollars.

0:13:25.240 --> 0:13:27.160
<v Speaker 1>I think it's really difficult, and it's why you've seen

0:13:27.160 --> 0:13:29.520
<v Speaker 1>this concentration. I think in these tech names right, those

0:13:29.559 --> 0:13:32.319
<v Speaker 1>are the deep pockets, clear beneficiars at the beginning when

0:13:32.320 --> 0:13:35.280
<v Speaker 1>we talk about being nimble, being selective. Now most of

0:13:35.320 --> 0:13:37.240
<v Speaker 1>my clients are saying, where else can I invest? Where

0:13:37.240 --> 0:13:39.160
<v Speaker 1>are the sectors that haven't worked who could be a

0:13:39.160 --> 0:13:41.040
<v Speaker 1>bit efficiar of AI? And I look at something like

0:13:41.080 --> 0:13:44.840
<v Speaker 1>financials sector that's been down while the SMP is up

0:13:44.840 --> 0:13:47.280
<v Speaker 1>over the last few months and yet probably stands to

0:13:47.280 --> 0:13:49.760
<v Speaker 1>benefit from rates hanging in here, And certainly if you're

0:13:49.760 --> 0:13:52.240
<v Speaker 1>a financial institution, you will benefit from AI makes it

0:13:52.280 --> 0:13:54.120
<v Speaker 1>easier to underwrite credit. Maybe you get a little smarter,

0:13:54.120 --> 0:13:56.080
<v Speaker 1>a little more nimble than some of your businesses, and

0:13:56.080 --> 0:13:57.520
<v Speaker 1>suddenly you can make an argument.

0:13:57.280 --> 0:13:58.400
<v Speaker 4>For another sector to benefit.

0:13:58.440 --> 0:14:00.240
<v Speaker 1>And so I think that's where we're trying to look

0:14:00.280 --> 0:14:01.760
<v Speaker 1>is who hasn't participated in this rally?

0:14:01.960 --> 0:14:02.920
<v Speaker 4>Another sector that I love?

0:14:02.960 --> 0:14:05.800
<v Speaker 1>Looking at healthcare? If you believe in AI, how can

0:14:05.840 --> 0:14:09.560
<v Speaker 1>there not be significantly more innovation on the biotech side globally?

0:14:09.840 --> 0:14:12.080
<v Speaker 1>And you have seen a dislocation between healthcare and tech

0:14:12.120 --> 0:14:13.160
<v Speaker 1>over the last couple of years.

0:14:13.160 --> 0:14:15.240
<v Speaker 4>And so is it on the margins?

0:14:15.360 --> 0:14:17.560
<v Speaker 7>Is why you say the upside is underappreciated when it

0:14:17.559 --> 0:14:19.720
<v Speaker 7>comes to AI. Is it on the margins of these

0:14:19.760 --> 0:14:21.560
<v Speaker 7>other sectors that could benefit?

0:14:21.720 --> 0:14:23.560
<v Speaker 1>I think it's I used to be a selfide analyst,

0:14:23.800 --> 0:14:25.760
<v Speaker 1>We'd estimate numbers going be at one or two quarters.

0:14:25.800 --> 0:14:26.680
<v Speaker 4>That's kind of what you did.

0:14:26.960 --> 0:14:29.600
<v Speaker 1>How do you predict three four years out and actually

0:14:29.640 --> 0:14:31.200
<v Speaker 1>do a DCF and figure out what these stocks are

0:14:31.200 --> 0:14:33.160
<v Speaker 1>worth when you have really no idea how to put

0:14:33.200 --> 0:14:34.440
<v Speaker 1>pen to paper on this. And I think that's what

0:14:34.480 --> 0:14:36.720
<v Speaker 1>the market struggles with, It's what an investors struggle with.

0:14:36.760 --> 0:14:39.000
<v Speaker 1>And so when you have these like game shifting things

0:14:39.040 --> 0:14:41.600
<v Speaker 1>that happened in the dot com bubble as well. People

0:14:41.640 --> 0:14:44.040
<v Speaker 1>struggle because it's really hard to see five years out,

0:14:44.080 --> 0:14:46.560
<v Speaker 1>and so that makes equity investing a bit challenging. And

0:14:46.560 --> 0:14:48.840
<v Speaker 1>I think again it's why people go to the obvious places.

0:14:49.000 --> 0:14:51.280
<v Speaker 1>But now we're starting to see money want to shift

0:14:51.280 --> 0:14:52.640
<v Speaker 1>to other areas, and this is going to be the

0:14:52.680 --> 0:14:54.640
<v Speaker 1>challenge over the next year. Who are the next year

0:14:54.640 --> 0:14:57.040
<v Speaker 1>two to three sectors that will benefit when you.

0:14:57.000 --> 0:14:59.400
<v Speaker 7>Start the critical question for every clients your portfolio built

0:14:59.400 --> 0:15:02.320
<v Speaker 7>for a waald of high and more volatile inflation. Are

0:15:02.360 --> 0:15:05.320
<v Speaker 7>your clients right now more concerned about AI and the

0:15:05.360 --> 0:15:07.200
<v Speaker 7>future and how to predict this four or five years

0:15:07.240 --> 0:15:09.280
<v Speaker 7>or actually the conflict in the Middle East, or people

0:15:09.320 --> 0:15:10.600
<v Speaker 7>have just completely moved on.

0:15:10.880 --> 0:15:13.440
<v Speaker 1>It's so funny the questions around the conflict in the

0:15:13.440 --> 0:15:14.720
<v Speaker 1>Middle East. The beginning of the year, it was all

0:15:14.760 --> 0:15:17.280
<v Speaker 1>about AI and is it a bubble that has dissipated?

0:15:17.480 --> 0:15:19.560
<v Speaker 1>I think because this earning story has started to calm

0:15:19.560 --> 0:15:22.840
<v Speaker 1>those fears, then it's about the Middle East. Yet to

0:15:22.880 --> 0:15:26.880
<v Speaker 1>your point, I don't see portfolios that reflect this fear

0:15:27.440 --> 0:15:30.360
<v Speaker 1>about higher rates, higher inflation, and so that's normal. People

0:15:30.400 --> 0:15:32.600
<v Speaker 1>tend to kind of lag a little bit with these shifts.

0:15:32.800 --> 0:15:34.560
<v Speaker 1>But after this secuity rally, I think you have to

0:15:34.560 --> 0:15:36.520
<v Speaker 1>look even at some of these techniums and say, Okay,

0:15:36.760 --> 0:15:38.640
<v Speaker 1>should I take a little bit off the table and

0:15:38.680 --> 0:15:41.040
<v Speaker 1>think about rebalancing. Do I have enough in the sectors

0:15:41.040 --> 0:15:44.080
<v Speaker 1>that will benefit if inflation remains sticky slash higher? So

0:15:44.120 --> 0:15:48.280
<v Speaker 1>I think again, core real estate infrastructure, things like that.

0:15:48.440 --> 0:15:50.640
<v Speaker 1>We look at large family offices we work with still

0:15:50.680 --> 0:15:53.080
<v Speaker 1>significantly under allocated to where they say they want to be,

0:15:53.360 --> 0:15:54.960
<v Speaker 1>and I think no one wants to chase, but like

0:15:55.200 --> 0:15:57.240
<v Speaker 1>it does feel like you probably have a little more

0:15:57.240 --> 0:15:59.760
<v Speaker 1>balance there. These things didn't matter in your portfoliofivey, ten

0:15:59.840 --> 0:16:01.960
<v Speaker 1>year go and roads for lower Now they're rely much

0:16:01.960 --> 0:16:02.400
<v Speaker 1>more important.

0:16:02.400 --> 0:16:06.360
<v Speaker 2>I think this is the Bloomberg Surveillance Podcast, bringing you

0:16:06.760 --> 0:16:09.880
<v Speaker 2>the best in markets, economics, a gio politics. You can

0:16:09.920 --> 0:16:12.680
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0:16:12.720 --> 0:16:16.000
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0:16:16.040 --> 0:16:19.240
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0:16:19.240 --> 0:16:22.200
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