WEBVTT - US Stocks Drift as Precious Metals Bounce Back 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.880 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:26.960 or watch us live on YouTube. 0:00:27.120 --> 0:00:29.200 Think back on twenty twenty five the returns we've had 0:00:29.200 --> 0:00:31.760 inequities and fixed income and commodities, and think about twenty 0:00:31.800 --> 0:00:34.000 twenty six worst opportunities and where you really want to 0:00:34.000 --> 0:00:37.360 start is in technology. We do that with Dan Ives. 0:00:37.680 --> 0:00:40.320 He's a senior tech analyst and head of technology research 0:00:40.360 --> 0:00:41.360 at what Bush Security Stand. 0:00:41.360 --> 0:00:44.320 Thanks for being in our studio here heres always all. 0:00:44.280 --> 0:00:47.480 Right, set us. Let's set us up for twenty twenty 0:00:47.520 --> 0:00:50.519 six in tech, I mean the consumer electronics shows in 0:00:50.560 --> 0:00:52.120 a couple of weeks in Vegas. I'm sure you're going 0:00:52.159 --> 0:00:55.080 to be their huge presence there. Use my name. If 0:00:55.080 --> 0:00:56.680 you go to Bolajia, they'll take care of you. I know. 0:00:57.640 --> 0:01:00.120 So just you know, you say Sweeney, it'll always gets 0:01:00.120 --> 0:01:00.520 the best. 0:01:01.400 --> 0:01:04.800 Open stores opens. What are you thinking about twenty twenty 0:01:04.840 --> 0:01:05.639 six year for AI? 0:01:06.480 --> 0:01:09.199 Look, I mean obviously it starts off at Cees where 0:01:09.240 --> 0:01:12.240 I think that Jensen's speech on that Monday is going 0:01:12.319 --> 0:01:15.480 to set the tone tone set right in terms of 0:01:15.840 --> 0:01:20.200 autonomous robotics, physical AI. But look, I think the reality 0:01:20.319 --> 0:01:22.600 is is that despite a lot of the haters and 0:01:22.640 --> 0:01:25.959 the bears and hibernation mood, it is going to be 0:01:26.160 --> 0:01:29.600 I think just a booming year for AI and tech stocks, 0:01:29.800 --> 0:01:32.000 especially in the first half of the year. I think 0:01:32.080 --> 0:01:36.319 investors are underestimating, specifically on software, like we talked about 0:01:36.360 --> 0:01:39.560 not just Palenteer, but Manga, dB Snowflake, go Out, the 0:01:39.600 --> 0:01:43.280 infrastructure plays nebiis and some of those others. It's about 0:01:43.280 --> 0:01:49.400 the derivative please the second, third, fourth derivatives, CrowdStrike, cybersecurity, power, Alto, 0:01:50.200 --> 0:01:52.320 and I think what we're going to see play out 0:01:52.720 --> 0:01:56.200 Microsoft Oracle. Look, I think we said here a year 0:01:56.240 --> 0:02:01.080 from now, Oracle is the name that I think investors 0:02:01.080 --> 0:02:04.080 are just throwing in the garbage. That's the one I 0:02:04.080 --> 0:02:07.680 think investors are getting, yeah, because it's the view, like 0:02:09.000 --> 0:02:12.079 taking on debt, open ai is not going to be 0:02:12.120 --> 0:02:14.240 good for their bill. Look, if you look at any 0:02:14.520 --> 0:02:19.760 open AI related tech stock, from AMD to you know, 0:02:19.840 --> 0:02:24.400 to Microsoft to Oracle, those stocks have sold off significantly. 0:02:24.400 --> 0:02:27.239 And I think the reality is this is an AI 0:02:27.400 --> 0:02:30.840 revolution where you're in. We talked about the AI party. 0:02:30.840 --> 0:02:33.920 It's ten thirty ten forty five pm. Party goes to 0:02:33.960 --> 0:02:36.959 four am, start a nine pm and Open AI is 0:02:36.960 --> 0:02:38.600 going to play a huge role in that in the 0:02:38.639 --> 0:02:42.000 infrastructure build out. So to me, Paul, it's like I think, 0:02:42.040 --> 0:02:44.480 like tech stocks, they're up twenty five percent. 0:02:44.400 --> 0:02:47.240 Really twenty six, But I mean is that the big 0:02:47.360 --> 0:02:50.600 names like in Vidia, because I think to myself, lots 0:02:50.639 --> 0:02:52.600 of competition out there for them. First of all, supply 0:02:52.720 --> 0:02:56.079 chain challenges continue, but you've also got Google and Amazon, 0:02:56.160 --> 0:03:00.000 big competitors who are playing catch up with Nvidia. Can 0:03:00.200 --> 0:03:02.919 it really hold on to that momentum in twenty twenty six. 0:03:02.960 --> 0:03:05.600 Well, there's only one godfather of AI. He's wearing a 0:03:05.600 --> 0:03:08.119 black leather jacket. His name's Jensen, And I think, look, 0:03:08.520 --> 0:03:13.040 they are five years ahead of any other competitor. That's 0:03:13.080 --> 0:03:17.079 why look for them, like even their third best chip 0:03:17.440 --> 0:03:22.160 restricted each two hundreds right in China despite whatever the 0:03:22.200 --> 0:03:27.640 polotic baba JD tencent, they want those chips because it 0:03:27.720 --> 0:03:33.000 comes down to like they are so many years ahead 0:03:33.040 --> 0:03:36.440 of competition. I think book AMD, that's going to be 0:03:36.480 --> 0:03:39.800 a major play that we see playing out and then 0:03:39.800 --> 0:03:42.680 I think you start to look at like what Google's doing, 0:03:42.840 --> 0:03:46.520 what Microsoft is doing. So in this chip world, it's 0:03:46.520 --> 0:03:48.640 in the AI arms rates. But here's the deal. For 0:03:48.680 --> 0:03:51.920 the first time in thirty years, US is ahead of 0:03:52.000 --> 0:03:53.160 China when it comes to tech. 0:03:53.480 --> 0:03:54.400 How about that? 0:03:54.400 --> 0:03:57.360 That that is I think that's really like the most 0:03:57.360 --> 0:03:58.760 important thing here is that's it's. 0:03:58.600 --> 0:04:00.880 Getting lost in the sauce. I feel what you just said. 0:04:00.760 --> 0:04:03.800 What is because for so many times, like I'd be 0:04:03.880 --> 0:04:09.440 in Taiwan eighteen hours seeing like factory fabs, then land 0:04:09.480 --> 0:04:12.200 the newer garaport, there's some fisfied dung and donuts and 0:04:12.240 --> 0:04:16.600 you're like, wow, we are like Sobahat now switched. 0:04:17.560 --> 0:04:20.000 So is Opening Eye going to go public in twenty 0:04:20.040 --> 0:04:22.160 twenty six and is that going to be a seminal event. 0:04:22.000 --> 0:04:26.359 For I think early twenty seven? Okay, they go, they 0:04:26.440 --> 0:04:29.320 could file maybe by the way twenty six, But but 0:04:29.560 --> 0:04:33.200 I think that's the thing like SpaceX, you think about Anthropic, 0:04:33.800 --> 0:04:38.039 you think about open Ai. Look, the reality is is 0:04:38.080 --> 0:04:42.280 that you know, people talk about bubble some of the 0:04:42.279 --> 0:04:45.080 best companies that haven't even gone public yet. And I 0:04:45.120 --> 0:04:49.159 think there's a supply demand for big growth names. And 0:04:49.200 --> 0:04:53.520 that's why to me, I think investors that are seeing 0:04:53.520 --> 0:04:57.919 it's a bubble text done, they're doing it from the 0:04:57.920 --> 0:05:00.320 twenty fifth four of New York City office building Metro 0:05:00.440 --> 0:05:02.960 North right. I mean the reality is like for someone 0:05:03.000 --> 0:05:06.200 like me that sees it globally, sees the demand that 0:05:06.240 --> 0:05:10.400 supply is twelve to one for video chips today in Asia. 0:05:10.600 --> 0:05:12.720 But here's the question is there enough energy out there 0:05:12.720 --> 0:05:14.560 to meet that supply? Because that's one of the big 0:05:14.839 --> 0:05:16.159 the biggest challenge going forward. 0:05:16.240 --> 0:05:19.320 That's Look, if you think the thing to me that 0:05:19.440 --> 0:05:22.120 like if you're just like what could spoil the AI party? 0:05:22.320 --> 0:05:26.599 It's not about demand fourth and dust revolution. It's not 0:05:26.640 --> 0:05:31.479 about like the use cases. It's energy and regulation. And 0:05:31.560 --> 0:05:35.400 look energy, that's why like you know, you look what's 0:05:35.400 --> 0:05:38.080 happening a nuclear You saw the TAE deal with you 0:05:38.120 --> 0:05:40.920 know obviously trum media. You saw what Google's doing in 0:05:41.040 --> 0:05:43.960 terms of them buying their own energy company. I mean, 0:05:45.160 --> 0:05:48.440 energy is the biggest restriction in the US. But I 0:05:48.480 --> 0:05:51.039 continue to believe like nuclear is going to be the 0:05:51.040 --> 0:05:51.599 play there. 0:05:52.520 --> 0:05:55.640 See Yes, it's two and fifty three undred thousand people 0:05:55.800 --> 0:05:58.240 to send on Vegas Ford and it's been going there 0:05:58.279 --> 0:06:00.960 for forty years, I've been going to this thing. This 0:06:01.040 --> 0:06:05.960 one feels like we might get like a seminal announcement 0:06:06.160 --> 0:06:09.320 coming out of this, whether it's a product, service, an investment, 0:06:09.480 --> 0:06:12.200 a deal. It just feels like maybe this CEES might 0:06:12.240 --> 0:06:15.120 be something where something really material pops out of there. 0:06:15.240 --> 0:06:18.800 Yes, I agree, because like look, for so many years, 0:06:18.800 --> 0:06:21.880 CEES is like, oh, a great refrigerator that talks to you, 0:06:22.400 --> 0:06:27.240 a cool drone that now it's really become like central 0:06:28.080 --> 0:06:30.480 to the when you think about the AI revolution, I 0:06:30.520 --> 0:06:32.400 think when you do about chips, when you look what's 0:06:32.400 --> 0:06:36.159 coming out of AMD, I think Nvidia is really gonna 0:06:36.160 --> 0:06:39.800 double down on robotics. I think quantum is another one. 0:06:39.839 --> 0:06:41.839 If you go back a year ago, that's where Jensen 0:06:41.960 --> 0:06:44.320 was sort of quantums, Like ten fifteen years away, Qualm 0:06:44.360 --> 0:06:46.400 stocks sold up. I actually think there's gonna be a 0:06:46.440 --> 0:06:49.239 lot more bullish when it comes to quantum. And look, 0:06:49.400 --> 0:06:51.760 I know half the companies that I know that are 0:06:51.800 --> 0:06:55.960 going there. They're not officially there. Why they go in there. 0:06:56.000 --> 0:06:58.680 They're not going there to you know, to go to 0:06:58.760 --> 0:07:00.599 the Cosmo or go to the wind for dinner. They're 0:07:00.640 --> 0:07:03.599 going because they're looking. They're looking for acquisitions. 0:07:03.640 --> 0:07:06.680 I kind of feel like during CS if I talked 0:07:06.680 --> 0:07:08.880 to a CEO, I think my first question is could 0:07:08.920 --> 0:07:11.240 be why you're not in Vegas? Like, I don't care 0:07:11.280 --> 0:07:12.840 what business you're in. I'm in the pain. 0:07:12.920 --> 0:07:16.360 You're touched by the technology. 0:07:15.480 --> 0:07:18.680 Yeah, exactly. But to Paul's point, it's this isn't just 0:07:18.760 --> 0:07:25.240 about like consumer gadgets one hundred inch televisions that somehow 0:07:25.320 --> 0:07:28.960 talk to you. Now it's really become central to like 0:07:29.280 --> 0:07:32.080 where the technology. Think about the Chinese presence there in 0:07:32.160 --> 0:07:35.400 terms of X paying bid everyone else. You think about 0:07:35.400 --> 0:07:39.000 autonomous robotics, and that's why, like I think the one 0:07:39.080 --> 0:07:41.600 thing like to stress to anyone listening is like this 0:07:41.720 --> 0:07:42.280 is AI. 0:07:42.400 --> 0:07:42.920 It's not just. 0:07:42.840 --> 0:07:46.160 About like chat, GPT, but what mile do you use? 0:07:46.720 --> 0:07:49.840 We are now this is the year Apple goes deep 0:07:49.880 --> 0:07:51.680 thousands of deep end and pool when it comes to 0:07:51.680 --> 0:07:54.600 a on the consumer side, we're now going to hit 0:07:54.680 --> 0:07:58.200 the next level of the AI revolution. But this is 0:07:58.240 --> 0:08:02.080 a nineteen ninety six moment, noine, nineteen ninety nine, two 0:08:02.120 --> 0:08:03.119 thousand bubble moments. 0:08:03.200 --> 0:08:06.880 Yes, thankfully. Do we expect a big China presence at 0:08:06.880 --> 0:08:09.600 this thing given the relationship right now between the US 0:08:09.640 --> 0:08:10.120 and China. 0:08:10.160 --> 0:08:14.600 If you're a China tech company, you have to come here. 0:08:14.800 --> 0:08:17.320 And I think, like when I think about like the 0:08:17.320 --> 0:08:20.400 Presidence last year, that was already significant. This year it 0:08:20.520 --> 0:08:24.560 is it's booming because for them, okay, like they're not 0:08:24.600 --> 0:08:27.280 going to be able to sell into the US at 0:08:27.320 --> 0:08:30.400 least currently, but this for them, it's a flex to 0:08:30.520 --> 0:08:33.280 muscles on the global stage in terms of them selling 0:08:33.440 --> 0:08:38.319 South America, Europe, Australia. I mean that is that world 0:08:38.320 --> 0:08:40.920 descends upon the stay. We're right, because when you this 0:08:40.960 --> 0:08:44.200 is the world event. But to Paul's point, like if 0:08:44.240 --> 0:08:48.640 you're not there, it's almost like being at a wedding 0:08:49.120 --> 0:08:53.400 at a table by the kitchen with random people instead 0:08:53.400 --> 0:08:55.520 of being at like kind of like Paul, he's always 0:08:55.520 --> 0:08:57.880 like front and center, like he's at the cool table. 0:08:58.800 --> 0:09:02.120 Matt Campbell named seven teenth Penn State head football coach. 0:09:02.840 --> 0:09:03.400 What do you think? 0:09:03.800 --> 0:09:07.400 Look, I think Campbell like he is the right guy 0:09:07.440 --> 0:09:09.400 for Penn State. I mean it's not just that it's 0:09:09.440 --> 0:09:12.360 the staff he's going to bring in. He's he knows 0:09:12.440 --> 0:09:15.439 how to recruit. I think he's the magic formula. I 0:09:15.440 --> 0:09:17.360 think now we'll get Dan town Win from the USC 0:09:17.400 --> 0:09:20.160 as a defensive coordinator. This is going to build the 0:09:20.240 --> 0:09:23.800 stage to what I've like people will say next year, 0:09:23.800 --> 0:09:25.959 I got to rebuild in here. I disagree. I think 0:09:26.200 --> 0:09:28.800 this gets us back into the playoffs next year, and 0:09:28.840 --> 0:09:31.199 it goes back to the dream for a Natty in 0:09:31.600 --> 0:09:32.960 twenty seven or twenty eight. 0:09:33.160 --> 0:09:36.600 There we go Penn State, a new cycle there as 0:09:36.640 --> 0:09:38.520 coach Franklin moves on to Virginia Tech. We got the 0:09:38.800 --> 0:09:41.480 Matt Campbelltoner come up there at Penn State and Dan 0:09:41.559 --> 0:09:44.640 I very is an alument and very involved this school. 0:09:44.920 --> 0:09:46.760 Dan I thanks so much for joining us. Is Senior Tech, 0:09:46.760 --> 0:09:49.440 anols is web Bush Security giving us the latest thoughts there. 0:09:51.200 --> 0:09:54.360 Stay with us. More from Bloomberg Surveillance coming up after this. 0:10:00.559 --> 0:10:04.160 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:10:04.240 --> 0:10:07.760 weekday afternoons from seven to ten am. E'stern listen on Apple, 0:10:07.800 --> 0:10:11.160 Karplay and Android Otto with the Bloomberg Business app, or 0:10:11.280 --> 0:10:12.760 watch us live on YouTube. 0:10:12.920 --> 0:10:16.000 Let's talk a little geopolitics, because goodness knows, there is 0:10:16.040 --> 0:10:18.000 a bunch of stuff happening all the time. And our 0:10:18.040 --> 0:10:22.360 next guest says, geopolitics is no longer background noise. It 0:10:22.440 --> 0:10:26.400 is now a core pricing mechanism in global markets. So 0:10:26.480 --> 0:10:29.200 let's dig in with Patrick Murphy, his executive director of 0:10:29.240 --> 0:10:33.880 Geopolitical Advisors at Hillco Global. Patrick, thanks so much for 0:10:33.920 --> 0:10:38.559 being with us, just an overview here on I mean, 0:10:38.720 --> 0:10:41.679 right now on the hot seat, we've got Trump talking 0:10:41.679 --> 0:10:44.760 to net and Yahoo, Trump talking to Putin and to Zelenski. 0:10:45.080 --> 0:10:50.040 How are those big talks playing out in the stock market. 0:10:51.400 --> 0:10:53.960 Oh well, at first, Alex bol thanks for having me on. 0:10:54.360 --> 0:10:56.880 It's playing big time because you know, when we look 0:10:56.880 --> 0:10:59.520 at geopolitics, it's now not just background noise as you mentioned, 0:10:59.559 --> 0:11:04.520 it's really we're pricing mechanism out there. So these geopolitical things, 0:11:04.559 --> 0:11:06.920 I mean especially at least when you look at our 0:11:06.960 --> 0:11:10.760 shipping costs from last year of three hundred percent, why 0:11:10.960 --> 0:11:14.960 because we're the attacks against the shipping lanes there, especially 0:11:15.000 --> 0:11:17.560 in the Red Sea, So in those certain routes, shipping 0:11:17.559 --> 0:11:20.280 costs going up three hundred percent. So you know when 0:11:20.280 --> 0:11:24.040 you say four hundred forty percent of the world's container 0:11:24.080 --> 0:11:26.880 traffic comes from that region, that's a big deal. So 0:11:26.880 --> 0:11:29.600 that's why you solved. The United States and UK joined 0:11:29.640 --> 0:11:32.400 forces and what we call it Operation rough Rider to 0:11:32.480 --> 0:11:36.000 attack the Sudi huthis there to put them back on 0:11:36.080 --> 0:11:38.760 our heels. But it's still a volatile region. So that's 0:11:38.760 --> 0:11:41.920 why this at the end of twenty twenty five, we 0:11:42.000 --> 0:11:44.800 need to make sure that we are moving the ball forward, 0:11:45.240 --> 0:11:50.080 hopefully some peace so we can just continue this. You know, 0:11:50.720 --> 0:11:52.440 economy that's moving in the right direction. 0:11:53.160 --> 0:11:55.680 Patrick, you're a young guy, but many you've done a 0:11:55.679 --> 0:11:58.000 lot in your life. I mean, this dude a rack 0:11:58.360 --> 0:12:00.720 a served US Army. Okay, so thank you for your 0:12:00.760 --> 0:12:05.839 servicer in a rack in Bosnia, thirty second Undersecretary of 0:12:05.840 --> 0:12:07.840 the Army. Not even sure what that means, but it 0:12:07.960 --> 0:12:11.800 sounds really cool. Served in the US House of Representatives. 0:12:12.200 --> 0:12:14.240 I mean, the dudes had like three lives and he's 0:12:14.240 --> 0:12:15.520 still young men very cool. 0:12:15.600 --> 0:12:17.559 Well, I drink a lot of coffee, My friend drink 0:12:17.600 --> 0:12:19.080 a lot of coffee. 0:12:19.520 --> 0:12:24.040 Pat When you when you talk to corporations out there, executives, 0:12:24.240 --> 0:12:28.679 they did they understand that you know this, they really 0:12:28.720 --> 0:12:32.839 are impacted by geopolitics because I think we as consumers 0:12:32.840 --> 0:12:35.199 and investors, we learned that the hard way during kind 0:12:35.200 --> 0:12:37.120 of the pandemic, if you will, we Cas said, boy, 0:12:37.200 --> 0:12:39.000 that's global supply chains pretty fragile. 0:12:39.600 --> 0:12:41.400 Yeah, No, doubt about it. And I think what you're 0:12:41.440 --> 0:12:44.280 seeing Paul is markets are rewarding resilience. 0:12:44.360 --> 0:12:45.240 You look, look at the numbers. 0:12:45.240 --> 0:12:48.120 I'm a numbers guy, right, So seventy percent of global 0:12:48.120 --> 0:12:53.120 manufacturing their manufacturer basically like they're saying, hey, we want 0:12:53.160 --> 0:12:55.800 to make sure that we are increasing on shore or 0:12:55.880 --> 0:12:58.400 near shore. Why because they want to make sure that 0:12:58.679 --> 0:13:01.640 you know, they're moving from just in time basically inventory 0:13:01.679 --> 0:13:04.960 models to make sure they're being replaced by hybrid systems. 0:13:05.280 --> 0:13:08.880 So sixty percent basically a saty stock, right because we 0:13:08.920 --> 0:13:11.600 saw the work COVID when they were hurting, they weren't 0:13:11.640 --> 0:13:14.920 able to react and produce for their customers. So that's 0:13:14.960 --> 0:13:18.840 what Hillco does. And we're phenomenal and basically excelling for 0:13:18.920 --> 0:13:21.440 our clients where we say, hey, let's make sure that 0:13:21.480 --> 0:13:25.520 we're doing pricing and repositioning when you look at these 0:13:25.679 --> 0:13:31.040 jew political dislocations, particularly though where the public policy collides 0:13:31.360 --> 0:13:34.080 with private capital. So you know we are best in 0:13:34.080 --> 0:13:35.760 the world at this. I'm excited to be part of 0:13:35.760 --> 0:13:37.920 this team. I love being part of the army team, Paul. 0:13:37.960 --> 0:13:40.400 As you mentioned, I was a soldier in Iraq, professor 0:13:40.400 --> 0:13:43.599 at West Point, and I was at the undersectar is 0:13:43.640 --> 0:13:45.280 basically the COO of the army, and I was the 0:13:45.320 --> 0:13:48.320 acting start to the Army. But now I'm with the 0:13:48.360 --> 0:13:50.880 great team at Hellco Global and you know, as a 0:13:50.880 --> 0:13:54.720 part time professor at West Point. I'm sorry at Whartonell, 0:13:55.120 --> 0:13:58.160 but it's just an exciting time to be a geopolitics 0:13:58.200 --> 0:14:00.559 and make sure we're helping our clients be ahead of 0:14:00.600 --> 0:14:00.960 the curve. 0:14:01.280 --> 0:14:02.719 I like how we just slips in there that he's 0:14:02.760 --> 0:14:04.880 now our professor at Wharton. Sure, you have like four 0:14:04.920 --> 0:14:08.760 careers going on here, Patrick, I'm just curious what you're 0:14:08.760 --> 0:14:11.720 hearing from your clients and as they look at investments 0:14:11.720 --> 0:14:14.080 through this geopolitical lens, and what are some of their 0:14:14.200 --> 0:14:16.680 biggest concerns heading into the new year. 0:14:18.320 --> 0:14:20.360 I think they want to make sure that there's certainty 0:14:20.360 --> 0:14:22.520 out there, right, and I think we all come together 0:14:22.560 --> 0:14:25.280 as the markets first to make sure that we're speaking 0:14:25.320 --> 0:14:27.960 in one voice. You know, we used to say politics 0:14:28.040 --> 0:14:31.720 should end at our water's edge. We know that might 0:14:31.760 --> 0:14:33.800 be trite and not necessarily the case in this And 0:14:33.840 --> 0:14:37.120 I served in Congress when I came back from Iraq, 0:14:38.120 --> 0:14:39.880 and you know I saw in the Pentagon, but there 0:14:39.960 --> 0:14:41.800 aren't a lot of folks out there that just want 0:14:42.120 --> 0:14:45.440 certainty so it can make the right decisions. But Alexis, 0:14:45.480 --> 0:14:49.520 what you're seeing is that there's a massive public private partnership. 0:14:49.720 --> 0:14:52.840 What does that mean? That means like industrial policy is 0:14:52.880 --> 0:14:56.240 being reshaped out there, from chips to ships. What does 0:14:56.280 --> 0:14:58.440 that mean? That means that you're seeing things like the 0:14:58.560 --> 0:15:01.680 Chips Act, right, Yeah, was tens of billions of dollars 0:15:01.680 --> 0:15:07.200 of government investment, but that triggered three hundred billion an investment, 0:15:07.640 --> 0:15:10.320 and with semiconductor industry that's a positive thing. But it's 0:15:10.320 --> 0:15:12.960 not just in semi conductors, not just with chimps. It's 0:15:13.000 --> 0:15:17.200 also in defense. You saw in this administration they just 0:15:17.280 --> 0:15:19.960 passed a bill that is going to provide two hundred 0:15:20.080 --> 0:15:23.000 billion dollars to the Department of Defense now called the 0:15:23.040 --> 0:15:26.280 Department of War, to what's called their Office of Strategic 0:15:26.320 --> 0:15:30.320 Capital to develop these public fire partnerships. So you're seeing 0:15:30.560 --> 0:15:32.400 the government put in there that's again two hundred billion 0:15:32.760 --> 0:15:34.120 is over the next four years. 0:15:34.280 --> 0:15:37.000 But then you're seeing JP Morgan Jay. 0:15:36.840 --> 0:15:39.320 Say, hey, we're going to make sure we put one 0:15:39.360 --> 0:15:42.320 point five try dollars an investment what they're calling a 0:15:42.440 --> 0:15:46.480 resiliency and Security Initiative where they're making sure that they're 0:15:46.480 --> 0:15:50.200 added the curve too, because why because in defense last 0:15:50.240 --> 0:15:54.680 year two point four to four trillion dollars in defense spending, 0:15:54.840 --> 0:15:58.800 right where there's this recount calibration with you know, basically 0:15:58.880 --> 0:16:01.640 world powers to make sure that you know, to do 0:16:01.680 --> 0:16:04.200 what's necessary to keep their family safe, and they have 0:16:04.360 --> 0:16:08.680 security goals. NATO specifically, he's all about. They're supposially now 0:16:08.720 --> 0:16:12.600 hitting three point five percent of their GDP and defense spending, 0:16:12.840 --> 0:16:16.120 some countries like Germany blowing past four percent. So you're 0:16:16.160 --> 0:16:22.440 seeing this real recaliber caliberation going on and it's exciting 0:16:22.520 --> 0:16:24.040 to be part of it. And that's what our clients want. 0:16:24.080 --> 0:16:28.400 They want the data that's going to affect their bottom line. 0:16:28.440 --> 0:16:30.440 It's gonna affect their customers to make sure they're head 0:16:30.480 --> 0:16:32.320 to curve and sleep with the wheel. 0:16:32.840 --> 0:16:37.520 Patrick, we've seen some movement towards near shoring, friends shoring, 0:16:37.680 --> 0:16:40.160 on shoring, all that type of stuff of various parts 0:16:40.160 --> 0:16:43.440 of the economy. Does that signal that globalization is dead? 0:16:45.480 --> 0:16:48.000 I wouldn't say it's dead. I think we had an 0:16:48.000 --> 0:16:50.200 air of globalization and now we have an era of 0:16:50.360 --> 0:16:57.160 basically strategic I would say fragmentation where you're having a 0:16:57.160 --> 0:17:00.960 clear alignment with countries that are aligned with their values 0:17:01.400 --> 0:17:04.080 toward each other. And I think you're going to see that, 0:17:04.520 --> 0:17:07.280 you know, moving forward, and that's why you know they're 0:17:07.280 --> 0:17:13.280 protecting you basically the supplying channels out there. I've already 0:17:13.280 --> 0:17:17.000 mentioned that shipping container routes, especially dealing with you know, 0:17:17.040 --> 0:17:18.840 the red seat as who has canal, But I think 0:17:18.880 --> 0:17:22.400 you're also seeing it on making sure that they're really 0:17:22.440 --> 0:17:28.480 evaluating the market specifically really valuing Paul, the basically resiliency 0:17:29.320 --> 0:17:32.240 that we haven't seen before because they understand that things 0:17:32.240 --> 0:17:35.240 could change on a dime. And I think that's where 0:17:35.640 --> 0:17:38.159 at HOPKA we really excel on that, you know, the 0:17:38.200 --> 0:17:42.800 pricing and repositioningid these geopolitical dislocations that we're seeing out 0:17:42.800 --> 0:17:46.720 there and so and it's not partisan, Paul, I mean 0:17:46.760 --> 0:17:50.919 because he saw on their President Biden about sixteen million 0:17:50.920 --> 0:17:53.040 new jobs and it's four years, but one point five 0:17:53.080 --> 0:17:56.600 million jobs in manufacturing, and they're seeing President Trump now 0:17:56.600 --> 0:18:01.440 doubled down on American manufacturing and you know, I think 0:18:01.640 --> 0:18:04.600 it's going to be here to stay, you know, moving forward. Yep. 0:18:04.680 --> 0:18:06.560 All right, Patrick, thank you so much for joining us 0:18:06.560 --> 0:18:10.840 really appreciate it. Patrick Murphy, He's the executive director Geopolitical Advisors. 0:18:11.240 --> 0:18:16.520 The firm is Hillco Global. Stay with us. More from 0:18:16.560 --> 0:18:18.720 Bloomberg Surveillance coming up after this. 0:18:24.920 --> 0:18:28.520 You're listening to the Bloomberg Surveillance Podcast. Catch us Live 0:18:28.560 --> 0:18:31.720 weekday afternoons from seven to ten am Eastern Listen on 0:18:31.840 --> 0:18:35.240 Apple Karplay and Android Auto with the Bloomberg Business app, 0:18:35.400 --> 0:18:37.120 or watch US Live on YouTube. 0:18:37.320 --> 0:18:41.280 Alonso Munos Droids is here, Chief Investment Officer, Hamilton Capital Partners. Alonso, 0:18:41.359 --> 0:18:43.480 you sit down with your clients here and you say, boy, 0:18:43.560 --> 0:18:46.639 we had a good twenty twenty five. Stocks, Euro up 0:18:46.920 --> 0:18:51.440 fifteen to twenty percent, high single digit returns on your 0:18:51.600 --> 0:18:54.399 fixed income investments. Commodities have been ripping, like we just 0:18:54.440 --> 0:18:57.560 mentioned gold and silver. What's the conversation for twenty twenty 0:18:57.560 --> 0:18:58.399 six with your clients? 0:18:58.480 --> 0:19:00.560 Good morning, Paul, going to be here. Can't the markets 0:19:00.600 --> 0:19:03.000 close everything? We're done? No, Look, I think we have 0:19:03.080 --> 0:19:04.879 to be sanguine about the fact that there may be 0:19:04.920 --> 0:19:07.320 some volatility next year. We have some big catalysts that 0:19:07.359 --> 0:19:10.399 we're looking forward to, like FED policy, FED rate cuts 0:19:10.400 --> 0:19:13.159 maybe in January, maybe not a lot of the expectations 0:19:13.440 --> 0:19:15.320 or that the Fed's now going to pull back. We're 0:19:15.320 --> 0:19:17.800 looking at the Supreme Court and what they do with tariffs. 0:19:17.800 --> 0:19:19.680 I think that's a big deal, and so I think 0:19:19.680 --> 0:19:21.919 we're going to be, you know, really open to next year. 0:19:21.960 --> 0:19:23.480 We're keeping a little bit of cash on hand, but 0:19:23.480 --> 0:19:25.280 we're going to stay on the AI trade. I think 0:19:25.320 --> 0:19:27.040 that's what we're going to do going into next year. 0:19:27.600 --> 0:19:30.960 So you're staying on the AI trains, as you said 0:19:30.960 --> 0:19:32.800 in your note. But if you're also holding onto some 0:19:32.880 --> 0:19:35.280 dry powder, where are you looking for those other opportunities? 0:19:35.480 --> 0:19:36.119 Where might they be? 0:19:36.359 --> 0:19:36.800 Alexis. 0:19:36.840 --> 0:19:38.960 I think what we've been doing and our thought logic 0:19:39.000 --> 0:19:40.760 going in next year is to buy the back end 0:19:40.760 --> 0:19:43.199 of the yield curve of the US treagery curve, just 0:19:43.240 --> 0:19:44.919 to lock in some of those rates or clients. We 0:19:44.960 --> 0:19:47.440 expect that rates will start to come down maybe next year. 0:19:47.520 --> 0:19:49.560 We saw that the unemployment rate moved up to four 0:19:49.600 --> 0:19:52.800 point six, so there's a balance on Hey, everything's great. 0:19:52.840 --> 0:19:55.359 GDP was really strong, there's a lot of money flowing 0:19:55.400 --> 0:19:57.320 into this market with there are a lot of folks 0:19:57.320 --> 0:20:00.159 struggling out there too. The unemployment rate is rising. The 0:20:00.200 --> 0:20:02.840 FED is backed into a quarter, Jerome Palace on his 0:20:02.880 --> 0:20:04.760 way out. So we're thinking about about a lot of 0:20:04.760 --> 0:20:06.800 things for us right now. It's lock in some of 0:20:06.800 --> 0:20:10.320 these rates, put in a simple hedge, and go into 0:20:10.359 --> 0:20:12.280 next year, although you know, with some risk, with a 0:20:12.320 --> 0:20:13.400 lot of optimism as well. 0:20:14.160 --> 0:20:15.720 I see you know some of your core holdings at 0:20:15.760 --> 0:20:20.119 your firm, Google, Tesla, Meta, We're gonna have the biggest 0:20:20.160 --> 0:20:22.440 supporter arguably on the seal side of those types of names. 0:20:22.520 --> 0:20:24.600 Dan Ives coming in a little bit later here this morning. 0:20:24.640 --> 0:20:28.120 Here those stocks have been such good performers over the years. 0:20:28.600 --> 0:20:30.960 What gives you a conviction to stay with them as 0:20:30.960 --> 0:20:33.760 opposed to maybe, you know, maybe rotate into some other 0:20:33.800 --> 0:20:34.560 areas well. 0:20:34.600 --> 0:20:36.199 We're always looking forward. I mean, we don't like to 0:20:36.200 --> 0:20:38.520 look backwards. But if you haven't owned the Big the 0:20:38.640 --> 0:20:41.000 Megacap seven or the Max seven we used to call him, 0:20:41.040 --> 0:20:43.720 than you've missed out on tremendous returns. And I think 0:20:43.720 --> 0:20:46.760 for the everyday investor, for you know, folks are accumulating wealth, 0:20:46.800 --> 0:20:48.919 you have to be in these names, these leaders that 0:20:49.240 --> 0:20:50.760 have led in the past but are leading into the 0:20:50.760 --> 0:20:54.000