WEBVTT - Streaming Trends, Market Forecast, Ford Mach-E Price Cut 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.160 at Bloomberg dot com slash podcast. Let's bring in Mark Douglas. 0:00:22.480 --> 0:00:26.080 He is the CEO of Mountain m n T n UH, 0:00:26.079 --> 0:00:27.760 and we bring him in to talk about all things 0:00:27.840 --> 0:00:30.040 tech really on the on the com side, on the 0:00:30.080 --> 0:00:32.280 streaming side, and Adam all lined up to talk about 0:00:32.520 --> 0:00:34.640 Netflix and what I feel like is a turnaround and 0:00:34.680 --> 0:00:37.640 sentiment there as well as Google. They're getting sued by 0:00:37.640 --> 0:00:39.320 the Department of Justice and it's going to be a 0:00:39.400 --> 0:00:42.800 jury trial. Holy Comoley could be the first breakup since 0:00:42.840 --> 0:00:46.279 mob El. Remember that that can't happen. I don't think 0:00:46.320 --> 0:00:48.920 so either. But um, let's talk to Mark first about 0:00:49.040 --> 0:00:52.040 the tech sector in general. Mark, we have these big 0:00:52.040 --> 0:00:57.600 earnings coming out this week, Amazon, Alphabet and Apple, UM 0:00:57.640 --> 0:01:01.600 and everyone is expecting this earning sea to be horrendous, 0:01:01.760 --> 0:01:04.880 So executives might even take advantage. We thought of this 0:01:04.920 --> 0:01:07.160 earning season to throw in the kitchen sink and get 0:01:07.200 --> 0:01:09.360 everything out of the way. You know, are all their 0:01:09.360 --> 0:01:13.160 dirty laundry. It hasn't been that bad, has it. It hasn't. 0:01:13.319 --> 0:01:17.040 I think, um, this is an interesting place win right 0:01:17.080 --> 0:01:20.160 now because normally, if you look back at all the 0:01:20.200 --> 0:01:23.880 previous downturns, it's like this is herd mentality where everyone 0:01:24.520 --> 0:01:27.440 like when rushes to the next thing, Like when if 0:01:27.480 --> 0:01:30.840 you go back to two thousand when the tech sector crash, 0:01:31.160 --> 0:01:34.480 then everyone ran that by houses and then you know, 0:01:34.520 --> 0:01:36.840 it's like this herd. But right now the herd is 0:01:36.880 --> 0:01:41.200 just kind of grazing, just all kind of standing around, 0:01:41.760 --> 0:01:44.600 not knowing where to go or what to do. So 0:01:44.760 --> 0:01:49.080 things are neither like going up nor they like crashing 0:01:49.120 --> 0:01:51.920 that hard. Everyone's waiting for you know, what am I 0:01:51.960 --> 0:01:54.480 supposed to do now? And nobody seems to know. I 0:01:54.480 --> 0:01:58.920 think what I'm hearing from some tech analysts is tech 0:01:59.000 --> 0:02:02.080 spending is still gonna go row intercessionary environment. It's just 0:02:02.080 --> 0:02:05.240 gonna grow at a lower rate than we've been used to. 0:02:05.720 --> 0:02:07.160 Is that kind of how you see? It was on 0:02:07.320 --> 0:02:12.160 fire over the last It's very hard to forecast revenue 0:02:12.400 --> 0:02:15.440 in a tech company right now, because your customers don't 0:02:15.440 --> 0:02:18.000 even know what they want, what they're going to spend. 0:02:18.040 --> 0:02:21.320 So I know from my company, like our customers normally 0:02:21.360 --> 0:02:25.360 tell us that by in December what their plans are 0:02:25.440 --> 0:02:27.840 for Q one. Most of them didn't even know until 0:02:28.040 --> 0:02:30.720 like third week of January. That is still trying to 0:02:30.760 --> 0:02:33.560 figure it out. So it's really hard to forecast. So 0:02:33.600 --> 0:02:36.880 I think you're gonna see forecasts be pretty soft, but 0:02:37.080 --> 0:02:40.359 it's an opportunity for overachievement. Everyone's going to be kind 0:02:40.360 --> 0:02:43.160 of kind of the other um, you know, the other 0:02:43.280 --> 0:02:46.040 thread that we can pull from tech has been labor. 0:02:46.800 --> 0:02:49.840 They've been firing all the excess workers that they rushed 0:02:50.000 --> 0:02:52.519 higher over the last year and a half two years. 0:02:53.360 --> 0:02:55.160 Where do you think we are there? I mean, the 0:02:55.440 --> 0:02:58.000 question is a lot of people think they're gonna fire 0:02:58.040 --> 0:03:01.760 too many people. UM obviously hired too many people. But 0:03:01.840 --> 0:03:04.720 can't they run with a surplus of employees? Well, I 0:03:04.720 --> 0:03:08.520 think some people would say Ellen, Elon Musk obviously, if 0:03:08.520 --> 0:03:13.280 you say Elon Musk, other Elons, Yeah, whoever that is. 0:03:13.960 --> 0:03:15.920 I think a lot of people would say Ellen proved 0:03:15.960 --> 0:03:18.799 that maybe a lot of tech companies have over hired 0:03:18.919 --> 0:03:22.880 since you know, but nothing has changed since he essentially 0:03:22.960 --> 0:03:25.000 cut eighty percent of the staff or our parts of 0:03:25.080 --> 0:03:27.480 eighty percent of staff. I talked to people, and some 0:03:27.560 --> 0:03:30.000 of these big Twitter you mean yea Twitter. I talked 0:03:30.040 --> 0:03:32.360 to some people, you know, people at some of the 0:03:32.360 --> 0:03:35.800 big companies I do, big tech companies do wonder what 0:03:35.880 --> 0:03:38.480 do you do for a living at this time at 0:03:38.520 --> 0:03:41.360 this company? So there's there's definitely fat. If you guys 0:03:41.360 --> 0:03:43.760 see some of the videos that post away, people say 0:03:43.800 --> 0:03:46.840 the day in the life of working at Google and 0:03:46.840 --> 0:03:48.640 and I saw one the other day and the person 0:03:48.680 --> 0:03:52.280 got laid off a weekly. So there's there's fat to 0:03:52.360 --> 0:03:54.800 cut on in allge So there's still more pink slift 0:03:54.880 --> 0:03:58.800 to come. I don't know. And we haven't seen that 0:03:58.880 --> 0:04:02.400 kind of firing. No, no, this is definitely I mean 0:04:02.720 --> 0:04:06.880 what you know, everyone knows we're kind of in a 0:04:06.640 --> 0:04:10.440 in a downward you know, the market crash. Everything's going down, 0:04:10.920 --> 0:04:13.680 but um, it's going to go back up. Also, I 0:04:13.680 --> 0:04:18.000 I talked to some like people who manage um trillions 0:04:18.000 --> 0:04:21.159 of dollars, like some of the biggest equity firms in 0:04:21.160 --> 0:04:24.279 the world, and they seem like they're really anxious to 0:04:24.400 --> 0:04:27.560 put money back in the stock market, and and if 0:04:27.640 --> 0:04:29.440 they do, the market is going to go up. So 0:04:29.480 --> 0:04:32.200 I think they're people are ready to get back in. 0:04:32.320 --> 0:04:34.880 They just want stability before they mark. What are you 0:04:34.880 --> 0:04:36.920 hearing from some of the digital advertising players out there? 0:04:37.080 --> 0:04:39.640 You know, we're gonna hear from Facebook and Google and 0:04:39.760 --> 0:04:42.559 uh and some of the other's Amazon of course this week. 0:04:43.400 --> 0:04:45.240 How tough is it out there in the digital ad 0:04:45.279 --> 0:04:50.159 space if if you're not in the growth sectors? Pretty tough. So, um, 0:04:50.200 --> 0:04:54.880 my company were in performance television with returning TV into 0:04:54.880 --> 0:04:59.159 this direct response at channel and so if we look 0:04:59.160 --> 0:05:02.560 at our customer as we already have, they're they're covering, 0:05:02.680 --> 0:05:06.359 you know, they're not really increasing or decreasing. So but 0:05:06.480 --> 0:05:09.000 we have all this growth from new customers coming into 0:05:09.080 --> 0:05:12.040 the market. If you don't have that trend of a 0:05:12.040 --> 0:05:14.640 lot of new customers, it's it's are you guys playing 0:05:14.680 --> 0:05:18.080 in the in the streaming the ad supported streaming business? Exactly? Yeah, 0:05:18.120 --> 0:05:22.120 we're turning streaming television into essentially add words for for 0:05:22.200 --> 0:05:25.200 TV and that's where the incremental AD dollars are going. 0:05:25.240 --> 0:05:27.760 Are they going to Peacock versus NBC? Are they're going 0:05:27.800 --> 0:05:30.760 to Paramount Plus versus the cps, Well, they're just going 0:05:30.839 --> 0:05:33.960 into I think streaming in general. I think I think 0:05:34.000 --> 0:05:38.440 it's television after you know, it's kind of almost one 0:05:38.480 --> 0:05:43.080 of the first like traditional ad channels. And now for 0:05:43.120 --> 0:05:45.919 the first time in what is it seven eight decades, 0:05:46.600 --> 0:05:50.680 it's now like this full digital marketing channels. So it's 0:05:50.720 --> 0:05:54.400 become a growth set. It's it's become a growth sector again. 0:05:54.440 --> 0:05:57.160 And I think all the TV networks, but especially like 0:05:57.720 --> 0:06:02.240 NBC at Comcast, um Disney Plus and Hulu. You know 0:06:02.320 --> 0:06:05.760 those companies that are really obviously Netflix now with their 0:06:05.800 --> 0:06:09.600 ad business, they're you know, they're those companies that really 0:06:09.640 --> 0:06:11.640 have the dollars to investment. They are going to benefit 0:06:11.680 --> 0:06:14.800 the most. Does Google own the marketplace for ads, for 0:06:14.880 --> 0:06:17.680 digital ads, no matter where you're going to advertise, no 0:06:17.720 --> 0:06:20.520 matter who's buying the ads. Do they own that? Is 0:06:20.560 --> 0:06:23.200 that the problem with the well they own? They own search. 0:06:23.400 --> 0:06:25.440 I think I'm glad you brought that up. But just 0:06:25.560 --> 0:06:28.400 in general, a little known fact is that for the 0:06:28.520 --> 0:06:33.560 first time, Google and Meta like don't have less than 0:06:33.600 --> 0:06:36.200 half the march, so the rest of the market is 0:06:36.240 --> 0:06:39.760 actually growing. I mean, on the whole Google lawsuit thing, 0:06:40.040 --> 0:06:43.920 I think that it's UM not directed with the real 0:06:43.960 --> 0:06:47.200 action is the analogy I would use is what they're 0:06:47.200 --> 0:06:50.800 suing them over the tools, like the software that serves 0:06:50.839 --> 0:06:54.120 an AD. So that's like going after a company because 0:06:54.160 --> 0:06:57.479 they have a dominant position in hammers where the real 0:06:57.520 --> 0:07:00.160 action is, well, they have all the data and where 0:07:00.200 --> 0:07:03.279 people are going to move to. That's where the real access. 0:07:03.760 --> 0:07:07.880 Google has just a massive amount of data. Know, Google 0:07:07.920 --> 0:07:10.240 knows I'm here right now, right because I have Google 0:07:10.280 --> 0:07:13.120 Maps in my pocket. But we're gonna sue him over 0:07:13.160 --> 0:07:16.160 the hammers, like it makes no sense. And I think 0:07:16.200 --> 0:07:20.480 this one after al Capone for Taxia, Yeah, exactly, that works. 0:07:20.480 --> 0:07:23.120 So I think this um the government going after them 0:07:23.320 --> 0:07:25.960 is not actually going to have much of an impact 0:07:26.000 --> 0:07:29.600 because where the real action is is the data privacy 0:07:29.680 --> 0:07:35.520 legislation around the data. All privacy legislation makes Google, Meta, 0:07:35.880 --> 0:07:40.679 Apple and Amazon essentially even stronger because it goes after 0:07:40.720 --> 0:07:45.240 anonymous data while they have like your personal identity, and 0:07:45.280 --> 0:07:48.480 so they get to continue to use the personal data 0:07:48.800 --> 0:07:52.440 while everyone else's market. That's a big player on TikTok, 0:07:52.440 --> 0:07:56.160 he's all over that platform. Talks about TikTok, What do 0:07:56.160 --> 0:08:00.440 you tell us what's the future of TikTok. Uh, Well, 0:08:01.040 --> 0:08:03.920 it's i there's so many people using it, it's not 0:08:03.960 --> 0:08:06.160 going to be banned in the United States that I 0:08:06.240 --> 0:08:08.760 was thinking, Yeah, that ships sail. I mean Trump years 0:08:08.760 --> 0:08:12.000 ago tried to bring up this issue and everyone was like, 0:08:12.040 --> 0:08:14.480 well if Donald Trump spring it up, we're not gonna 0:08:14.560 --> 0:08:18.080 listen that. You know, they have all of the status 0:08:18.080 --> 0:08:21.400 an open mic in every living room. But um TikTok 0:08:21.520 --> 0:08:24.520 is doing extremely well. I don't see it diminishing in 0:08:24.560 --> 0:08:27.440 any way in the near future. So they are crushing it. 0:08:27.480 --> 0:08:30.480 And what about Netflix. I mean, this was last year 0:08:30.520 --> 0:08:33.040 the market beat it down like a redheaded step child. 0:08:33.080 --> 0:08:36.760 And I nothing against Gingers. I am a step child myself. 0:08:36.760 --> 0:08:40.000 So but now it seems like sentiment is really shifted, 0:08:40.080 --> 0:08:42.000 especially after the last Earns report they added seven and 0:08:42.000 --> 0:08:44.280 a half million subscribers. Yeah, I mean the market is 0:08:44.320 --> 0:08:47.400 just up and down on in general, but on Netflix 0:08:47.440 --> 0:08:50.440 in particular. Thing about Netflix, just through the math. Let's 0:08:50.440 --> 0:08:54.320 say they're average subscriptions like twelve dollars. They have two 0:08:54.400 --> 0:08:57.480 hundred and forty million subscribes. It's like three billion dollars 0:08:57.520 --> 0:09:00.439 a month coming in and people like, yeah, but they 0:09:00.520 --> 0:09:04.320 missed you know, subscriber numbers by hundred thousands. Yeah, but 0:09:04.440 --> 0:09:08.440 they got three a billion dollars in three billion dollars 0:09:08.440 --> 0:09:13.120 a month. It's just overreactions, possibly in both directions. Overreacted 0:09:13.160 --> 0:09:15.840 in terms of downward sentiment and possibly a little bit 0:09:15.880 --> 0:09:17.920 and upward sentiment. And we got some new management there, 0:09:17.920 --> 0:09:20.319 so we'll see how that plays out. YEA, so good stuff. 0:09:20.320 --> 0:09:23.640 Mark Douglas, President and CEO of Mountain, joining us in 0:09:23.679 --> 0:09:27.080 our Bloomberg Interactive Broker Studio giving us the latest on 0:09:27.160 --> 0:09:32.800 all things tech and all things digital advertising. Quincy Crosby 0:09:32.880 --> 0:09:35.600 joints us here. She's a chief Global strategist for lp 0:09:36.080 --> 0:09:39.480 L Financial. That's a nastact treated firm lp L. A 0:09:39.760 --> 0:09:42.880 is it took her load into your Bloomberg terminal, Quincy, 0:09:43.000 --> 0:09:46.800 A lot to digest here this week. What's most important 0:09:46.800 --> 0:09:48.560 to you? What's your gonna what's gonna be your focus 0:09:48.559 --> 0:09:54.160 this week? Simply because we had a strong rally. Volume 0:09:54.280 --> 0:09:57.960 was good on the rally, and the rally was cyclically 0:09:58.480 --> 0:10:02.000 oriented for the most are. Now granted you we can 0:10:02.080 --> 0:10:04.880 dismiss the rally. We can say it was you know, 0:10:05.040 --> 0:10:08.920 short covering UH traders going in and taking advantage of 0:10:08.920 --> 0:10:13.720 the tax claws only in in you know. Uh. But 0:10:13.920 --> 0:10:19.199 nonetheless you started to see volume pickup in rally, and 0:10:19.240 --> 0:10:23.000 it was a rally that suggested that the market is 0:10:23.040 --> 0:10:26.199 looking ahead of everything. You know, we always would say 0:10:26.240 --> 0:10:29.640 the market gets news worked. Anyway, February tends to be 0:10:29.720 --> 0:10:33.840 a month where the market is tends to actually say, 0:10:34.200 --> 0:10:38.520 have these rallies, um dissipate. It's probably the worst month 0:10:38.640 --> 0:10:41.880 for the market next to September. So we're gonna watch 0:10:42.040 --> 0:10:45.199 very closely how these big tech names do because the 0:10:45.400 --> 0:10:49.240 waiting in the indextions, it's just them that these are 0:10:49.280 --> 0:10:51.040 the big tech guys. We're gonna see if they can 0:10:51.440 --> 0:10:54.760 if they can garner any interest from traders at least 0:10:54.760 --> 0:10:58.600 and certainly investors. All Right, so, um, what are you 0:10:58.640 --> 0:11:02.160 looking forward to see to prove that this rally really 0:11:02.200 --> 0:11:04.840 has legs? Quincy? I mean, what are some signs? I 0:11:04.880 --> 0:11:08.440 was just looking at the break down of um, the 0:11:08.480 --> 0:11:11.240 industrial groups that have won and lost this year, and 0:11:11.240 --> 0:11:14.559 you've got all the you know, consumer discretionary and tech 0:11:14.600 --> 0:11:19.720 companies that have done well. Meanwhile, consumer staples and um, 0:11:19.760 --> 0:11:22.360 you know, utilities have done poorly. So it looks like 0:11:22.400 --> 0:11:26.280 the defensive are getting sold off. And the um You know, 0:11:26.320 --> 0:11:29.480 the growth companies are are putting up some gains, but 0:11:29.520 --> 0:11:32.360 I guess that could be explained by the short covering narrative. 0:11:32.440 --> 0:11:35.880 So what do we need to see UM two ensure 0:11:36.000 --> 0:11:39.559 us that this rally is solid. Well, what one thing 0:11:39.600 --> 0:11:43.560 would be I look at the semiconductors. They are the 0:11:43.559 --> 0:11:47.280 they are the consummate dull weather for global growth, and 0:11:47.440 --> 0:11:50.760 they've been they've actually the days that they've been outperforming 0:11:50.880 --> 0:11:55.240 even the the growth growth nas the gross the growth residence, 0:11:55.280 --> 0:11:58.120 so to speak. We'll say if they can hold, obviously 0:11:58.160 --> 0:12:01.000 then they sell off, but we'll see if they can hold. 0:12:01.080 --> 0:12:05.960 It's very important that they participate, uh in a rally 0:12:06.160 --> 0:12:09.600 and stay strong. You know. The other thing that we're 0:12:09.600 --> 0:12:11.960 going to look at is on a technical basis, is 0:12:12.000 --> 0:12:15.520 whether or not going through the obstacle course of this 0:12:15.559 --> 0:12:20.599 week their earnings obstacle course the said statement his press conference, 0:12:20.960 --> 0:12:25.360 then you know Friday's payroll report and see where wages are, 0:12:25.360 --> 0:12:28.320 how they're moving. Is whether or not this market an 0:12:28.360 --> 0:12:32.520 a rally. If it does rally, can actually cross forty 0:12:34.800 --> 0:12:37.920 that is, you know, one of the most important levels 0:12:37.960 --> 0:12:41.400 for the market, and it's been difficult obviously for this 0:12:41.720 --> 0:12:48.079 market to launch an absolute attack on quincy. Tough, tough 0:12:49.000 --> 0:12:51.040 for everybody out there and the equity biz in the 0:12:51.080 --> 0:12:54.600 fixed income markets as you start oute, what are you 0:12:54.600 --> 0:12:58.079 telling your clients in terms of positioning here after such 0:12:58.120 --> 0:13:02.040 a tough year. Well, you know, we're trying to figure 0:13:02.040 --> 0:13:05.720 out obviously, whether or not the market has discounted a recession. 0:13:06.040 --> 0:13:08.959 Is it an earnings recession? Is that a rolling recession 0:13:09.320 --> 0:13:11.600 is going to be a shallow recession. Our view at 0:13:11.679 --> 0:13:15.680 LPL researches that will be fairly shallow. That's with all 0:13:15.679 --> 0:13:19.199 the information we have now. However, one thing that we 0:13:19.280 --> 0:13:22.160 have now it's not just about equities. We've got the 0:13:22.200 --> 0:13:25.800 sixth income market and we're looking at it and investing 0:13:25.840 --> 0:13:30.920 in it. The treasury market is offering very attractive return, 0:13:31.000 --> 0:13:35.680 guaranteed return, and investment grade corporates as well. We also 0:13:35.760 --> 0:13:38.920 sawt we're not advocating this, but we've seen money going 0:13:38.960 --> 0:13:41.719 into high yield. Who whatever thought, you know, if all 0:13:41.760 --> 0:13:44.319 of these dire headlines, money would go into high yield. 0:13:44.559 --> 0:13:46.600 But those are the ones who think we're not going 0:13:46.640 --> 0:13:49.280 to have a recession, will be a soft or soft 0:13:49.320 --> 0:13:53.520 just landing. But the point is that companies when out 0:13:53.559 --> 0:13:57.520 and borrowed during the period when money was so easy 0:13:57.880 --> 0:14:01.160 and rates were so low, so that their balances, their 0:14:01.200 --> 0:14:06.400 cash balances are strong. And right now these companies are 0:14:06.480 --> 0:14:10.040 still you know, making certain that they cut costs when 0:14:10.040 --> 0:14:12.600 they have to and that you know, they're going to 0:14:12.679 --> 0:14:18.000 manage costs going into three, especially if there is a recession. 0:14:18.240 --> 0:14:21.560 So we're saying investment grade corporate, we're saying the treasury 0:14:22.120 --> 0:14:26.040 that can help the portfolio. And also on the equity side, 0:14:26.200 --> 0:14:29.960 we're looking at dividends. This is crucial, we think for 0:14:30.000 --> 0:14:32.840 this market. And you know, some of the sectors are 0:14:32.880 --> 0:14:37.280 doing well. Take a look at the industrials today, they're up. Granted, 0:14:37.640 --> 0:14:42.960 the the defense names are helping to underpin the the 0:14:43.040 --> 0:14:47.600 industrials along with machinery. So there are pockets in the 0:14:47.680 --> 0:14:52.280 market that are still attractive, attractively valued, especially after sell 0:14:52.280 --> 0:14:55.200 off such as we had in the defense names, but 0:14:55.240 --> 0:14:59.640 they're coming back today. So again, until there is more 0:14:59.720 --> 0:15:03.360 certain in terms of where we are headed and whether 0:15:03.480 --> 0:15:07.600 or not the market is actually discounted even a percentage 0:15:07.720 --> 0:15:11.320 of a possibility of that you know, final final deep 0:15:11.400 --> 0:15:15.280 sell off, we want the clients to be uh certain, careful, 0:15:15.360 --> 0:15:19.000 conservative Quincy. Just want to ask before you came to 0:15:19.000 --> 0:15:21.640 Wall Street, you spent a lot of time at diplomatic 0:15:21.640 --> 0:15:26.080 postings around the world. Uh. You served as Assistant Secretary 0:15:26.120 --> 0:15:30.560 of Commerce and also UM as Energy attached at the 0:15:30.760 --> 0:15:33.560 US Embassy in London. UM, what do you think about 0:15:33.640 --> 0:15:36.600 the reopening of China and the kind of I guess, 0:15:36.680 --> 0:15:41.080 the the spat that seems to be, you know, mellowing 0:15:41.160 --> 0:15:44.720 out between the US and China right now. How is 0:15:44.760 --> 0:15:47.160 that going to drive the market this year? You know 0:15:47.360 --> 0:15:50.640 obviously that this is you know, a major event. Is 0:15:50.680 --> 0:15:53.800 the world's second largest economy. And it was interesting that 0:15:53.960 --> 0:15:59.280 when they announced the final lift of the zero COVID policy, 0:15:59.800 --> 0:16:03.800 we the countries that country indexes that've got a booth 0:16:04.120 --> 0:16:08.120 were none other than Germany, France, Italy. These are that 0:16:08.240 --> 0:16:11.720 these are the strongest trading partners in the West with China, 0:16:12.000 --> 0:16:16.520 not necessarily the US. So the question becomes whether or 0:16:16.640 --> 0:16:20.960 not this um, you know, multilateral approach that let received 0:16:21.000 --> 0:16:24.960 from China around the world trying to shore up uh, 0:16:25.160 --> 0:16:29.400 you know, positive on the bilateral front, good feelings and 0:16:29.520 --> 0:16:32.960 so on, even with the United States, But whether or 0:16:33.040 --> 0:16:36.880 not it masks UM. You know, the issue on Taiwan. 0:16:37.280 --> 0:16:41.320 And the other issue is regarding selling of any kind 0:16:41.400 --> 0:16:46.040 of technology that helps the military. Their military has grown, 0:16:46.520 --> 0:16:49.960 is grown faster than our military. Take a look at 0:16:50.040 --> 0:16:55.080 the naval components. It's it's larger than than the the 0:16:55.280 --> 0:16:58.760 US and even today, I mean speaking of you know, Europe, 0:16:59.320 --> 0:17:02.320 the US is been pushing the Netherlands with a SML 0:17:02.440 --> 0:17:06.479 but you know it's it is a chip mak, right, 0:17:07.359 --> 0:17:11.359 it's a manufacturer ships. Uh. Finally they have come out 0:17:11.400 --> 0:17:13.240 and said they're going to be more cheerful with their 0:17:13.280 --> 0:17:16.800 sales to China. They're going to you know, trying to 0:17:17.720 --> 0:17:20.679 break off some of the parts that would go right 0:17:20.760 --> 0:17:25.080 into laws. Um. Yeah, so that is not going away. 0:17:25.640 --> 0:17:28.560 And you know, and by the way, it is in 0:17:28.680 --> 0:17:34.399 the US across the aisles, Democrats and Republicans, this is 0:17:35.040 --> 0:17:38.719 an area where they agree they do to be sot 0:17:38.760 --> 0:17:41.040 on China. One of the very few. Quincy, thanks so 0:17:41.119 --> 0:17:43.720 much for joining us. Quincy Crosby there. She is chief 0:17:43.840 --> 0:17:48.160 global strategist at LPL Financial. Joining us to talk about 0:17:48.200 --> 0:17:50.600 what to expect in the markets after this rally that 0:17:50.640 --> 0:17:55.160 we've seen and throughout the rest of the year. Let's 0:17:55.200 --> 0:17:57.800 talk stocks right now. Ted Oakley founder managing partner of 0:17:57.880 --> 0:18:02.920 ox Bow Advisors, joins us Ted. I mean brutal year 0:18:02.960 --> 0:18:07.080 for equities, also for fixed income as well. What do 0:18:07.119 --> 0:18:09.199 you what's the message you went out to your clients 0:18:09.280 --> 0:18:11.200 with when you were kind of saying, all right, let's 0:18:11.200 --> 0:18:14.399 get ready for well, I think you know what we 0:18:14.520 --> 0:18:17.639 did in twenty two was we were extremely defensive. You know, 0:18:17.720 --> 0:18:23.159 we were fifty uh cash or short term treasuries primarily. 0:18:23.880 --> 0:18:28.160 So while but your your clients don't your clients don't 0:18:28.200 --> 0:18:31.119 mind you being in that much cash. Well, we were 0:18:31.160 --> 0:18:33.680 getting you gotta remember now, it's not that it's not 0:18:33.840 --> 0:18:36.920 Tina anymore. You can get you can get four and 0:18:36.960 --> 0:18:39.159 a half percent or four sixty five right now and 0:18:39.280 --> 0:18:42.040 even a three months and so we do a lot 0:18:42.160 --> 0:18:44.560 with the floating right treasuries, but that's just a holding 0:18:44.600 --> 0:18:48.000 spot for us UM. And then this year coming into it, 0:18:48.119 --> 0:18:49.760 we just don't have I mean, we have a lot 0:18:49.840 --> 0:18:52.800 of stocks on the two D probably a two hundred 0:18:52.880 --> 0:18:56.280 stock screen we have, but none of those are they're 0:18:56.359 --> 0:18:59.760 just not in evaluation areas where we want to come 0:18:59.800 --> 0:19:02.720 by can we own stocks? But the stocks we've alreadyo owned, 0:19:02.760 --> 0:19:05.760 but we're not buying too many things. You know, right 0:19:05.800 --> 0:19:07.840 at this point other than some income oinants, we are 0:19:07.960 --> 0:19:11.440 buying another portfolio. What are the levels that you're watching for, 0:19:11.800 --> 0:19:14.240 and um, what do you think it's gonna take for 0:19:14.320 --> 0:19:16.159 us to get down back down there again? Because we've 0:19:16.200 --> 0:19:19.879 had pretty a pretty enthusiastic rally we have and I 0:19:19.960 --> 0:19:23.159 will tell you it reminds me of the January of 0:19:23.240 --> 0:19:25.880 oh one, two thousand one, you know, in the matter 0:19:26.200 --> 0:19:30.000 markets seld Off hard nasdac uh you know, during two 0:19:30.119 --> 0:19:31.800 thousand and came back at the end of the year, 0:19:32.320 --> 0:19:34.920 had a good month in January, and then the rest 0:19:34.960 --> 0:19:37.760 of the year of NAZAC getting a lower by far 0:19:37.840 --> 0:19:40.040 of a lot of that. And so we're sort of 0:19:40.240 --> 0:19:44.439 and people they talked about, you know, two thousand nine eleven, 0:19:44.520 --> 0:19:46.880 but acts of the market was lower before and ended 0:19:46.920 --> 0:19:48.600 up the year like that. So anyway, go to back 0:19:48.600 --> 0:19:51.640 to your question what we're looking for. If you say 0:19:51.760 --> 0:19:53.920 we're gonna do two hundred dollars on the SMP, I 0:19:54.040 --> 0:19:56.159 know everybody's at two twenty five and all that, but 0:19:56.200 --> 0:20:00.280 we think two hundred would be the best might be. 0:20:01.800 --> 0:20:05.320 And so if you put yeah, put you know, if 0:20:05.359 --> 0:20:08.760 you look at two hundred, it's only twelve or cent 0:20:08.840 --> 0:20:11.800 below estimates. It's not that far. So if you do 0:20:11.960 --> 0:20:14.600 two hundred and you take you know, you're take an 0:20:14.720 --> 0:20:18.400 SMP at calling four thousand sixty, you're almost at twenty 0:20:18.480 --> 0:20:21.399 multiple right now. And that's not where you get your 0:20:21.440 --> 0:20:24.480 best buys ever, And so that's kind of where we're 0:20:24.520 --> 0:20:27.520 looking at it. I think that's I think that's yet 0:20:27.640 --> 0:20:30.480 to come. And and I said, well, we'll see. I 0:20:30.520 --> 0:20:33.000 guess that's that's what makes a horse race. But that's 0:20:33.040 --> 0:20:35.480 where we are right now. So you know, this is 0:20:35.480 --> 0:20:37.439 gonna be a busy week TED four earnings. We've got 0:20:37.480 --> 0:20:41.159 a hundred nine SPI companies reporting here. Um, do you 0:20:41.240 --> 0:20:43.560 think we're gonna start seeing some big revisions downward in 0:20:43.680 --> 0:20:47.520 earnings guidance from a lot of these companies. Well, you should. 0:20:47.680 --> 0:20:49.560 But one of the things that we've noticed so much 0:20:49.640 --> 0:20:52.000 the last five years really is they've been allowed to 0:20:52.040 --> 0:20:54.920 get away with so much in the way of accruals 0:20:55.080 --> 0:20:57.480 and all these adjustments to gap earnings that you have 0:20:57.560 --> 0:20:59.960 to look through a lot of it. But I think 0:21:00.080 --> 0:21:02.679 if you looked at an acremement the real cash earnings, yes, 0:21:02.800 --> 0:21:04.560 I think those are some of those are gonna have 0:21:04.560 --> 0:21:08.040 to be revised down for sure. So what are some 0:21:08.119 --> 0:21:10.600 of the sectors here? I mean, I mean, as you 0:21:10.680 --> 0:21:13.399 sit here with the high levels of cash, when you 0:21:13.520 --> 0:21:15.440 do get ready to deploy, where do you think you'll 0:21:15.560 --> 0:21:17.000 you'll put it? Will it be in some of the 0:21:17.480 --> 0:21:19.720 defensive names where you try to get back into growth. 0:21:20.240 --> 0:21:22.440 Where do you think the play is going to be? Well, 0:21:22.520 --> 0:21:24.560 we have a mix. We have a mixed now. But 0:21:24.640 --> 0:21:26.920 if you look at our favorite companies, you know they're 0:21:26.960 --> 0:21:30.000 gonna be companies that can go through a tough procession period. 0:21:30.040 --> 0:21:33.639 If you take Visa and MasterCard, you know they have 0:21:33.800 --> 0:21:35.800 enough cash in a quarter almost to pay off all 0:21:35.840 --> 0:21:39.480 the debt um and and if you inflate people use cards, 0:21:39.600 --> 0:21:41.880 you know, the prices go up, people use cards more. 0:21:41.960 --> 0:21:45.760 We think two other things like that. You know, obviously 0:21:46.080 --> 0:21:50.080 you know we like uh, some defensive names O'Riley, you know, 0:21:50.320 --> 0:21:52.320 a health And then we you know, we on the 0:21:52.520 --> 0:21:55.399 we on the oils, we on gas pipelines, um. And 0:21:55.600 --> 0:21:58.159 we particularly like the oil wyalties because you don't have 0:21:58.240 --> 0:22:02.320 the capital investment. And so we think we mix all 0:22:02.359 --> 0:22:04.879 those together and come up with a pretty good, you know, 0:22:05.040 --> 0:22:07.159 pretty good mix overall. So we get some cash for 0:22:07.200 --> 0:22:11.680 at the same time. And I'm getting on the treasury yep. Absolutely, 0:22:11.720 --> 0:22:14.080 And I know you're based in Texas there. I'm just 0:22:14.280 --> 0:22:18.199 envisioning you sitting around with your buddies talking oil NonStop. Um, 0:22:19.040 --> 0:22:22.320 what is kind of the feeling down there about energy 0:22:23.000 --> 0:22:28.200 because it's had such a really two great years for investors. Yeah, well, 0:22:28.520 --> 0:22:30.159 you know I mentioned this to you before. A lot 0:22:30.200 --> 0:22:33.720 of the oil people are not uh they're not great 0:22:33.760 --> 0:22:36.000 for a sentiment here. You know, they get really excited 0:22:36.040 --> 0:22:39.280 about when the prices up. For us, we felt we've 0:22:39.280 --> 0:22:42.200