Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Single best Idea on an Interesting Monday, as well, a
Speaker 2: nice eclectic set of guests, as we all recovered from
Speaker 2: brackets blown up. Richard Truman, you know our producer. He's
Speaker 2: the one leading the charge here at Team Surveillance with
Speaker 2: a sprightly bracket, to say the least. Leading the charge
Speaker 2: today on equity Discussion Stock market Discussion was liz Anne
Speaker 2: Sanders at Charles Schwab. She was absolutely brilliant in parsing
Speaker 2: out price to earnings ratio, the numerator and the denominator. Here,
Speaker 2: liz Ane Sanders, you.
Speaker 3: Have to segment it. You're still in the mid to
Speaker 3: high twenties for Tech or the Magnificent seven. Then you
Speaker 3: get closer to twenty. We've come down from about a
Speaker 3: twenty two for Multiple about twenty. Then you can go
Speaker 3: equal weight or S and p xmag seven and you're
Speaker 3: into the teens there.
Speaker 4: So it really.
Speaker 3: Depends on how you segment thing. The problem is that
Speaker 3: we've had a declining numerator and a declining denominator. As
Speaker 3: I mentioned, I think we need to see stability in
Speaker 3: the denominator part of the equation to provide a little
Speaker 3: bit of a lift from evaluation perspective. We're not quite
Speaker 3: there yet.
Speaker 2: Absolutely brilliant bronze it. Here's the way it works, folks.
Speaker 2: Any given ratio, I don't care what it is in
Speaker 2: the case of the vanilla price to earnings ratio, but
Speaker 2: it can be priced to cash flow whatever. There's a numerator,
Speaker 2: the number up top and the denominator of the number
Speaker 2: down below, and they each have two ways that can
Speaker 2: go well. They can stay stable, but for the point
Speaker 2: of discussion, the numerator can go up or down. The
Speaker 2: denominator can go up or down, which means you have
Speaker 2: four outcomes, and instead what you're in the media constantly
Speaker 2: is a single static number. Analysis pros likely Zan Saunders
Speaker 2: are always looking at the dynamics. You'll hear the phrase
Speaker 2: partial differentials, which is fancy calculus. Talk about the movement
Speaker 2: of those four outcomes in the numerator and in the denominator.
Speaker 2: With us today, Joe Lavarren, you have SMBC Nico, Joe
Speaker 2: with his experience with Lawrence Cudlow in the first Trump administration.
Speaker 2: Joe lavarn talking here about the unemployment rate.
Speaker 4: We tend not to look at other economists in part
Speaker 4: because we don't want to be biased, but to get
Speaker 4: a higher rate, tom we'd have to be really pessimistic
Speaker 4: on growth. Also, to Oakin's law is useful, which is
Speaker 4: that you know what Oakins law is, but it's the
Speaker 4: relationship between potential GDP and what actually happens in the economy.
Speaker 4: And the other thing is this is that even if
Speaker 4: we had a slow period of growth this year, maybe
Speaker 4: you talked earlier about the pain, Yes, we're gonna have
Speaker 4: somewhat of a pullback on the fiscal side. Secretary Besset
Speaker 4: mentioned detox. But if all of a sudden it looks
Speaker 4: like twenty twenty six is going to accelerate, financial editions
Speaker 4: leads in anticipation of that, hopefully there'll be some clarity
Speaker 4: on the tax side, and companies wouldn't lay people off,
Speaker 4: so there'd be no reason for the underpoint rate to
Speaker 4: rise if the twelve month forward was improving.
Speaker 2: Joelivern SMBC there, and I really want to mention a
Speaker 2: research shout of side research that came out to a
Speaker 2: Torsten Slock at Apollo Global with a blistering two paragraphs
Speaker 2: modeling out what we're all observing. Whatever your politics is,
Speaker 2: the decline in immigration. At Apollo Global Management, they model
Speaker 2: out a new run rate of sixty thousand and six
Speaker 2: to zero on non farm payrolls. That is a shocking number,
Speaker 2: bringing it down from the conventional one fifty down to
Speaker 2: maybe one twenty and now well below one hundred thousand
Speaker 2: per month on non farm payrolls. That is just amazing.
Speaker 2: Two paragraphs on the changing of America. On your commute
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