Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly
Speaker 1: Markets podcast. I'm Sarah pont Zach, a market supporter on
Speaker 1: the Cross Asset Team, and i am Mike Reagan, a
Speaker 1: senior editor on the Markets Team. This week on the show,
Speaker 1: the first half of the year is officially over and
Speaker 1: the scores are on the door. It was the best
Speaker 1: first half for U S stocks since n We saw
Speaker 1: a record rally in investment grade credit, strong numbers across commodities,
Speaker 1: to and the list goes on. Now, what to watch
Speaker 1: out for going forwards? Well, one thing we can watch
Speaker 1: out for is our guests, Sarah. Two very good guests
Speaker 1: this week, joining us for the first time on the podcast,
Speaker 1: Mr Pim Fox. Sarah, did you know Pim was a
Speaker 1: a onetime Florida man. I'm just learning this today. However,
Speaker 1: he doesn't seem like he's really a big fan of
Speaker 1: this date, well, at least not in the summertime. The
Speaker 1: humidity and the heat, you know, moves a little too
Speaker 1: high for me. Okay, now now the excuses come out.
Speaker 1: That's right. We'll talk about air conditioning later on in
Speaker 1: the program. Pim has a whole investment thesis centered around
Speaker 1: air conditioning. It's pretty interesting actually. Also joining us from
Speaker 1: the bonds and FX team Katie Greifeld, who I do
Speaker 1: not believe has any Florida connections now. Actually my parents
Speaker 1: relocated to Florida their soccer. Yeah, they made the plunge
Speaker 1: and fulfilled the stereotypes. So you're a part time Florida
Speaker 1: I'm the only non Florida connection here to get in.
Speaker 1: Somehow I feel lost. Anyway, as Sarah said, the first
Speaker 1: half of the year is in the books. What a
Speaker 1: ferocious rally in not only stocks but bonds. Katie, that
Speaker 1: FX markets going nowhere. However, But Pam, I'm curious, did
Speaker 1: anything surprise you in this first half? Well, I can
Speaker 1: give you some of the numbers. I mean, SMP five
Speaker 1: hundred more than so far this year. Right, So the
Speaker 1: first half of the year up. So that's kind of
Speaker 1: bogey for all of the act of money managers. Plus
Speaker 1: you take a look at the NASDA gets up about
Speaker 1: twenty two percent. And as you just mentioned, bonds rally
Speaker 1: for US treasuries I mean, dig this. You know the
Speaker 1: four week bill will yield you two point to two percent. Oh,
Speaker 1: but if you decide to lend your money to the
Speaker 1: government for ten years you will only get one point
Speaker 1: nine five so not exactly a great return, but that
Speaker 1: inverted yield curve certainly causing a lot of consternation, and
Speaker 1: we got to look forward to that July thirty thirty
Speaker 1: one FED meeting to find out are they actually going
Speaker 1: to cut rates? It really is pretty amazing. But Katie,
Speaker 1: one place that we have not really seen any volatility,
Speaker 1: any excitement this year, at least until maybe recently you
Speaker 1: can make the case for is the FX market. How
Speaker 1: difficult has it been to be a reporter who cover
Speaker 1: as currencies this far into the year. You know, it's
Speaker 1: been really frustrating for me as a reporter, and uh,
Speaker 1: I imagine if you're trying to make money there, it's
Speaker 1: even more frustrating. But yeah, you know, you've seen these
Speaker 1: just crazy moves and bond yields all across the world,
Speaker 1: and FX has really been trading sideways. There's just no
Speaker 1: volatility there. And uh, you know, this is something I
Speaker 1: talk about with sources a lot. It's all anyone wants
Speaker 1: to talk about is where is the volatility? And I mean,
Speaker 1: even though you are seeing these big yield moves, which
Speaker 1: you know typically would expect currencies to respond to that's
Speaker 1: been caused by this stubblish shift by global banks around
Speaker 1: the world. So we're all going in the same direction
Speaker 1: in terms of monetary policy, and that just doesn't breed
Speaker 1: effects volatility. You know, even if you want to sell
Speaker 1: the dollar, what do you sell it against everyone's stubblish? Yeah,
Speaker 1: I think to put some numbers on it. Last time
Speaker 1: I looked at a chart of the Dollar Index. Now,
Speaker 1: this thing has been around since nineteen seventy three. I
Speaker 1: believe the range between high and low has only been
Speaker 1: about three and a half percent. Now, if this year
Speaker 1: ended today, which obviously it won't, but unless Sarah, I
Speaker 1: know nothing that you don't, you can confirm it it
Speaker 1: would be. Then it would be the narrowest trading range
Speaker 1: ever since at least nineteen seventy three for the dollar index.
Speaker 1: I mean, is it? That's basically the long insured of
Speaker 1: it is that all central banks are devilish. Uh, there's
Speaker 1: really no edge anywhere in the currency market. Is that?
Speaker 1: Is that the general thinking of Unfortunately, UM and I
Speaker 1: have I'm going to one up you on a stag.
Speaker 1: So if you go back to the first quarter, I
Speaker 1: guess we're in the third quarter now, but Euro dollar,
Speaker 1: which is the most actively traded currency pair, it's like
Speaker 1: of global currency trading, and it's you know, the most
Speaker 1: liquid market. So that was the tightest quarterly training range
Speaker 1: since the inception of the euro. It's it's been really
Speaker 1: grim And I was just talking about this with a
Speaker 1: few people yesterday. I mean, is there any reason for
Speaker 1: open the you know, the coming months and uh, unless
Speaker 1: you think that one of these major global central banks
Speaker 1: is going to diverge, you know, in the group of
Speaker 1: ten space, we're really looking at more sideways trading. So
Speaker 1: buckle up. Pinning down the trajectory of the dollar seems
Speaker 1: like it has been extremely hard to do. However, it
Speaker 1: doesn't just have implications for the currency markets, of course,
Speaker 1: it's very closely interrelated with the movements in the commodity markets.
Speaker 1: Also what it means for U S stocks or really
Speaker 1: global stocks as well as these currency relations come into
Speaker 1: shape going forwards, when you talk to traders, are you
Speaker 1: hearing more that the dollar is set to fall because
Speaker 1: the FED is incrementally turning more devish or is there
Speaker 1: a case to be made against that too, because we're
Speaker 1: set to see other central banks turn more dovish as well.
Speaker 1: It's really hard and that's mostly what I hear when
Speaker 1: I talk to people. You know, even if you really
Speaker 1: think the US economy is going nowhere, it's going to
Speaker 1: slow down. I mean, if you look abroad Europe, Japan,
Speaker 1: there's you know, no reason for celebration there either. So
Speaker 1: you know, if you want to be barish the dollar,
Speaker 1: and this is the beauty of currencies, you have to
Speaker 1: pick something you like better. And from what I'm hearing
Speaker 1: too from people, you know, even if they like to
Speaker 1: make a barished dollar call, it's really hard to have
Speaker 1: conviction in that. So you might see some tactical trades
Speaker 1: here and there, but you know, I'm really not getting
Speaker 1: a high sense of conviction from really anyone I talked to. Yeah,
Speaker 1: and obviously this type of nonvolatility is bad news for
Speaker 1: currency traders, maybe not such bad news for the rest
Speaker 1: of US PIM Right, you had a post talking about
Speaker 1: how the recent weakness in the dollar. Now it is
Speaker 1: still in this this very low range, uh small range
Speaker 1: that it's traded in all year, but the last couple
Speaker 1: of weeks you've seen it sell off. For example, let's
Speaker 1: say against the Canadian looney, Right, I mean, the Canadian
Speaker 1: government released report having to do with their trade surplus
Speaker 1: that was a big surprise. This comes even after we
Speaker 1: see oil decline in price over the last let's say,
Speaker 1: a couple of months into April, and as a result
Speaker 1: of the decline and the value of the dollar, it's
Speaker 1: an interesting connection between loan origination in the United States,
Speaker 1: something I had never really thought of, and a report
Speaker 1: by the Federal Reserves. Some research took a look and said,
Speaker 1: you know, about a two and a half percent decrease
Speaker 1: UH in the US dollar would lead to an increase
Speaker 1: of ten percent in US bank corporate loan origination. And
Speaker 1: the reason the really I mean, you know, okay, you know,
Speaker 1: you try to follow the bread crumbs here, but I mean,
Speaker 1: the reason that was given in the research is that
Speaker 1: typically what happens is when the dollar strengthens, that kills
Speaker 1: emerging markets, and that typically sends everybody in one direction,
Speaker 1: and that causes lending to pull back because it makes
Speaker 1: people risk averse. So you see this sell off and
Speaker 1: eat in emerging markets, you get a risk averse feeling
Speaker 1: on the part of bankers and they contract their lending. Conversely,
Speaker 1: if the dollar continues, its more recent slide against let's
Speaker 1: say the Canadian looney or maybe even the euro. We've
Speaker 1: had comments from the President having to do with currency manipulation,
Speaker 1: whether it comes to the Euro or whether the Chinese. Uh.
Speaker 1: You want to remember that if you get this fall
Speaker 1: in the value of the dollar, you could see a
Speaker 1: big boost in bank lending. And this comes at just
Speaker 1: the same time that the Federal Reserve has also basically
Speaker 1: taken the handcuffs off of us, you know, big financial
Speaker 1: companies to go ahead and do stock buy backs and
Speaker 1: increase their dividends to investors. That's very interesting, I've got
Speaker 1: to say. But you mentioned the relationship between the dollar
Speaker 1: and emerging markets, and I have to say, on my end,
Speaker 1: a lot of the people I've been speaking with lately
Speaker 1: are growing more and more bullish on emerging markets. Also
Speaker 1: see more upside and commodities because of that relationship, and
Speaker 1: do think that the dollar could fall further. And I
Speaker 1: want to bring that over within the commodity space to oil. PIM,
Speaker 1: Can you just walk us through this past week what
Speaker 1: is going on with oil? You have all that come
Speaker 1: out extend production cuts and then we see oil just
Speaker 1: fall off a cliff, right, Uh, Oil the price of
Speaker 1: let me just give you the bigger context, because you
Speaker 1: may not call that oil crude. Oil West Texas into
Speaker 1: media traded on the IMAX is actually up twenty five
Speaker 1: since the beginning of the year, but still down from
Speaker 1: the high, right, and it is down four percent just
Speaker 1: since April. So I think that the there's a there's
Speaker 1: a term called the recency uh bias, right, that the
Speaker 1: things that happen most closely in time to now are
Speaker 1: the things that dominate your thinking. And as you described it,
Speaker 1: you have a situation where there is more oil than
Speaker 1: there is growth and demand. And it is obviously the
Speaker 1: OPEC plus one, you know, with Russia is saying that
Speaker 1: they're going to curtail production. They're trying to maintain some
Speaker 1: level of pricing. But you've got US shale producers, they're
Speaker 1: the swing producers here. And you also have a big
Speaker 1: switch in terms of electricity generation that's being done with
Speaker 1: natural gas, and natural gas prices at least so far
Speaker 1: have gone nowhere. We're in the three dollars per million
Speaker 1: b to you. So you know, oil and energy companies
Speaker 1: they have still been struggling. When you take a look
Speaker 1: at their performance in the SMPA well, and natural gas
Speaker 1: not exactly in short supply in this country, You're correct.
Speaker 1: I mean, you know, they have some cases where because
Speaker 1: of the pipeline bottlenecks that producers of natural gas are
Speaker 1: actually paying to have someone take the natural gas away.
Speaker 1: Negative actually negative pricing for certain types of natural gas.
Speaker 1: Well somewhere, we're negative pricing isn't uncommon? Is the sovereign
Speaker 1: bond market around the globe now a day's This past
Speaker 1: week we did also get some new news regarding the
Speaker 1: European Central Bank, and that is the nomination of Madame
Speaker 1: Christine Legard to potentially head up the ECB after Mario
Speaker 1: drags exit. What implications could this possibly even have for
Speaker 1: Marcus Katie, Yeah, so Christine Legard, it's it's great because
Speaker 1: you know, we know her views, we know her record,
Speaker 1: and uh, talking to people, I really hear that she's
Speaker 1: probably gonna you know, continue on, uh you know the
Speaker 1: drag e trajectory, bring in some more easing and uh
Speaker 1: that should you know, that's good news for bonds, in
Speaker 1: particular Italian bonds, and you've been seeing yields drop there
Speaker 1: and she hasn't even you know, been confirmed yet in
Speaker 1: terms of buns. Though, it's interesting, you know, with buns
Speaker 1: already near record low yields negative right, yeah, very negative negative?
Speaker 1: What what what can they buy that they haven't already bought?
Speaker 1: And if your money sitting at the central bank is
Speaker 1: actually disappearing, what incentive could they possibly offer corporations to
Speaker 1: actually spend the money. And when the news came out
Speaker 1: that Laguard was going to be Draggings replacement, you did
Speaker 1: see that drop in the euro suggesting that people think
Speaker 1: she will even be more dovish. So yeah, I guess
Speaker 1: I I echo him's question, what what what will they buy? Well,
Speaker 1: I'm excited to find out. I think we all are.
Speaker 1: The euro. It's interesting though, and this is something I
Speaker 1: was talking about with people. So yes, uh, the e
Speaker 1: c B has an easing bias, we know that. But
Speaker 1: you know, if push comes to shove and we really
Speaker 1: enter a global easing cycle, the Fed has much more
Speaker 1: ammunition to cut rates to ease policy than the ECB.
Speaker 1: They're kind of tapped out when it comes to monetary policy,
Speaker 1: so that actually, you know, the Euro might struggle to
Speaker 1: weaken too much against the dollar given that, you know,
Speaker 1: just the Fed has so much more room to ease policy,
Speaker 1: which again brings us back to this ranger trading in So,
Speaker 1: with the fed's next meeting coming up at the end
Speaker 1: of July, um you have the stock market just dare
Speaker 1: I say the word melt up, but just flying higher,
Speaker 1: as Pim said, nineteen percent or whatever higher for the
Speaker 1: SMP five And of course we're gonna get it. You know,
Speaker 1: probably what July mid July fifteen, we're gonna start getting
Speaker 1: earnings for the second quarter, and we'll see whether corporate
Speaker 1: earnings are are keeping pace because the pe on the
Speaker 1: SMP five hundred I think right now is like eighteen
Speaker 1: nineteen depending upon how you look at it. That's historically
Speaker 1: pretty high. So, Katie, do people really believe that we're
Speaker 1: going to get this rate cut? Even with the stock
Speaker 1: market shooting to the moon like this? I mean, is
Speaker 1: this sort of ratching those bets down a little bit
Speaker 1: as we watch stocks higher? You know, it's really crazy,
Speaker 1: but it doesn't seem like it. It really still feels
Speaker 1: like July is a lock. You know, of a week
Speaker 1: or two ago, we were saying maybe fifty basis points
Speaker 1: and obviously Bullard poured some cold water on that, but
Speaker 1: I would love to see what it would take to
Speaker 1: get the market to sort of pair those bets, because
Speaker 1: I mean, even with the outcome of the G twenty meeting,
Speaker 1: you really didn't see expectations, Budge. And you know, these
Speaker 1: geopolitical tensions was a large in a large part what
Speaker 1: caused this repricing of the FED. And initially when when
Speaker 1: you said sorry, when you said Jim Jim Bullard of
Speaker 1: the St. Louis FED. And it makes me think about
Speaker 1: the two new members that the President has proposed for
Speaker 1: the Federal Reserve. One of them is coming from the St.
Speaker 1: Louis FED. This is Christopher Waller, right, he's the director
Speaker 1: of research there. And then you've got Judy Shelton, who
Speaker 1: at one time, well I don't know whether she still does,
Speaker 1: but at one time she talked about the return to
Speaker 1: the gold standards. We sounds like some others that we've
Speaker 1: heard nominated to the FED boards. And you know, you
Speaker 1: you take a look at the price that you talked
Speaker 1: earlier about, So, okay, what do you do if you
Speaker 1: sell the dollar? A lot of people have been buying gold.
Speaker 1: You've seen the gold rally up what about ten year
Speaker 1: to date, and most of that has really come in
Speaker 1: the last month. It's it's very clear that when President
Speaker 1: Trump is either tweeting or even going ahead and nominating
Speaker 1: people to the FED board, he wants doves. He wants
Speaker 1: people who are going to go in to the FED
Speaker 1: and really fight for cuts and see easier monetary policy.
Speaker 1: And I will say, if you go back and you
Speaker 1: look through history, it's really not uncommon actually for the
Speaker 1: FED to cut rates with socks near all time highs.
Speaker 1: And Katie, most of the people I've spoken with have
Speaker 1: really echoed a similar tone, saying you kind of get
Speaker 1: the best of both worlds. Actually, since we didn't get
Speaker 1: a deal out of the G twenty this past weekend,
Speaker 1: because there's still uncertainty and that could give the Fed
Speaker 1: a little bit more leverage to cut rates before a
Speaker 1: deal could potentially take shape. But Pim, I also want
Speaker 1: to ask you, I know, a big question coming out
Speaker 1: of the first half has been how is it possible
Speaker 1: that we can continue to see bonds rally alongside the
Speaker 1: stock market? How do you try to reconcile things. I mean,
Speaker 1: I'm sorry to make it sound like it's simple, but
Speaker 1: at least to be it's simple. Well, it's very clear
Speaker 1: it has to do with the fact that you have
Speaker 1: so many committed buyers. I mean, if you're running a
Speaker 1: large pension fund, if you're running a municipal pension fund,
Speaker 1: if you're running uh an insurance company, if you're running
Speaker 1: any kind of endowment, anything that has long term liabilities,
Speaker 1: you're not deciding whether you're going to buy your going
Speaker 1: to buy your It's not like, you know, we look
Speaker 1: at it and we compare one asset class to another.
Speaker 1: They're not comparing any asset classes. They're always in there buying.
Speaker 1: They have to buy. And then to the point earlier
Speaker 1: that Katie was making having to do with negative interest
Speaker 1: rates in other parts of the world, if you are
Speaker 1: a let's say European pension plan and you're looking at
Speaker 1: liabilities ten thirty years down the road, what are you
Speaker 1: gonna do. You're gonna buy negative yielding German ones, or
Speaker 1: maybe you're gonna go and you're gonna take one point
Speaker 1: nine five for US treasury ten uere. So I don't
Speaker 1: I don't think that that's necessarily you know, it's not
Speaker 1: either or. And when you look at the returns, let's say,
Speaker 1: of stocks, you know you can there are a lot
Speaker 1: of stocks that you can buy that will produce dividend
Speaker 1: yields that are double what you could get into treasury. Now,
Speaker 1: obviously you got volatility and risk and all, but on
Speaker 1: a relative basis. If you're managing people's money and they say, well,
Speaker 1: you know, great, I can't live on two percent, You're
Speaker 1: gonna have to go find them something else. There's an
Speaker 1: interesting report out I think it's Mike Mayo, who's now
Speaker 1: at well as far Ago, pointing out that the dividend
Speaker 1: you get on banks three the expected dividend anyway after
Speaker 1: the stress test is rivaling utilities at half the pe.
Speaker 1: I mean, pim is are we're gonna see banks, uh
Speaker 1: finally start out performing the market? Do you think? Yeah? Well,
Speaker 1: I mean I wrote up a piece for the m
Speaker 1: Live blog earlier in the month about that having to
Speaker 1: do with buy backs and dividend increases. Now we talk
Speaker 1: about buy backs that are just limited to financial companies,
Speaker 1: and corporations continue to spend what excess cash they have
Speaker 1: on buying back their shares. Of course it makes their
Speaker 1: EPs look good. Uh that also, you know up ceo
Speaker 1: pay because they're measured on what the stock price does.
Speaker 1: But having said that, it doesn't look like anyone's going
Speaker 1: to start cutting dividends, specifically in the financial sector, just
Speaker 1: when they got the green light from the FED and
Speaker 1: those stress tests to go ahead and do it, and
Speaker 1: we know that this is something they've already said they're
Speaker 1: gonna do. And one more post you had that really
Speaker 1: caught my eye. It was about air conditioning in Europe. Well,
Speaker 1: this goes back, This goes back to Sarah's up impending
Speaker 1: trip to Florida. You know, you're not going to Florida
Speaker 1: unless you have air conditioning. And maybe that's something that
Speaker 1: the Europeans will be paying attention to because while Southern
Speaker 1: Europe has a lot of air conditioning, you know, Spain,
Speaker 1: Italy and so on, France and Germany and the Netherlands,
Speaker 1: northern European countries in the UK, typically they do not
Speaker 1: have residential air conditioning. Five percent of France, five percent
Speaker 1: of French homes and under two percent of German homes.
Speaker 1: And I'm not even thinking about offices and trains and
Speaker 1: various public venues. A lot of them do not have
Speaker 1: cooling capacity above ninety degrees fahrenheit. So if it goes
Speaker 1: above ninety degrees fahrenheit and you're a German high speed train.
Speaker 1: Good luck right, and it hit it went over in
Speaker 1: much of the continent. You had a record in France.
Speaker 1: I think it was a hundred and four degrees in France.
Speaker 1: So what are the ways to invest there? You go? See? Well, okay,
Speaker 1: So what I did was I took a look at
Speaker 1: the refrigerants, the actual gases, the industrial gases that go
Speaker 1: into air conditioning systems, because if you're gonna buy an
Speaker 1: air conditioner, they've got to have something to actually cool
Speaker 1: the air. And they're are a variety of rules and
Speaker 1: regulations having to do with hydro fluoral carbons and so on.
Speaker 1: But there there's air liquid, there is um Linda, the
Speaker 1: Industrial Gas company. All of those might benefit because they
Speaker 1: produced the kinds of industrial gases that are compliant with
Speaker 1: the European Union regulations. Interesting stuff again from him, Love
Speaker 1: having here and get your air conditioning in Europe. I
Speaker 1: want to turn the tables really quickly on Mike, because
Speaker 1: back on January fourth, he issued an outlook for the
Speaker 1: Markets Live blog. So I figured it was only fair
Speaker 1: if I pulled out my highlighter and my red pen
Speaker 1: and I granted him and saw where his outlook actually stands,
Speaker 1: and I have to say he did pretty well. Um,
Speaker 1: very equity focus. But I'll run through That's why we're
Speaker 1: talking about it. Right. If this were wrong, he would
Speaker 1: have absolutely shunned me from talking about it on what
Speaker 1: goes up? But here we are talking about it. We'll
Speaker 1: talk about my post saying was the floor for ten
Speaker 1: year yields? That was very wrong, and that came mid June.
Speaker 1: You have a lot of company. I do not know
Speaker 1: one Wall Street strategist who called the bond mark. Oh no.
Speaker 1: But now we have Golden JP Morgan coming out saying
Speaker 1: we could see one point seven five flow forecasts. It's
Speaker 1: pretty fun. Let's go back to how I was right. Right,
Speaker 1: We'll go back to how you're right. I'll start with
Speaker 1: the ones that we're right. How about that? So the
Speaker 1: first one was the consensus is calling for a stronger
Speaker 1: stock market with double digit percentage gains for the SMP
Speaker 1: five hundred in the coming year. Clearly, we are already there,
Speaker 1: double digit gains in the first half of the year,
Speaker 1: there's no doubt about that. Now this one, it's talking
Speaker 1: about the year end target. So he said the average
Speaker 1: estimate from a survey of a hundred seventy markets live readers,
Speaker 1: so not necessarily my himself, but those who feed into
Speaker 1: the Market's live blog. Is for the SMP to close
Speaker 1: the year at nine, that would have been a twelve
Speaker 1: percent gain. So sure, we got a twelve percent gain,
Speaker 1: but we are already way past that. And if you
Speaker 1: compare that to say the SMP ends around three thousand
Speaker 1: or so, that's seven percent above that level. So we're
Speaker 1: already there. We're already there, We're already past. It's a
Speaker 1: long year. Sorry, we could see, we'll see what happens.
Speaker 1: We could always come back down. But my point was
Speaker 1: everybody likes to be a contrarian, you know. Pim and
Speaker 1: I thought, sometimes the consensus gets it right. And that's
Speaker 1: that seemed right to me because at the time, all
Speaker 1: those predictions were made before the market freaked out in
Speaker 1: December and then it looked like they were calling for
Speaker 1: this unrealistic rally. But uh, you get you know, broken clock.
Speaker 1: I'll give you a one more that's right, and that's
Speaker 1: on EPs estimates. So he wrote that bottom up estimates
Speaker 1: show analysts expect earnings per share growth of eight point
Speaker 1: three percent in now that was down from eleven percent
Speaker 1: towards the end of last year, and then he said
Speaker 1: estimates may fall further fall. They absolutely have. Now we're
Speaker 1: expecting four percent earnings growth for the year, and we
Speaker 1: could see that potentially fall even further as well. Um,
Speaker 1: but it's only fair if I also say one that
Speaker 1: you got wrong, Mike, and I think we should go
Speaker 1: with Actually, we'll keep it with earnings. So you said
Speaker 1: that still SMP five hundred companies have a pension to
Speaker 1: consistently beat estimates, which they do. But then you said
Speaker 1: we could potentially even see double digit earnings growth. I'd
Speaker 1: say that's long that's long gone. But overall, i'd give
Speaker 1: you a solid solid you could get a B minus
Speaker 1: I mean B plus, B plus or A minus. Got
Speaker 1: to remember, MYLM, it's amazing how you could be too
Speaker 1: optimistic about the earnings and not optimistic enough about the price. Yeah, well,
Speaker 1: let that one resolved. Sorry, is it that time? It's time?
Speaker 1: It is the time for the craziest thing I ever
Speaker 1: saw in markets this week our weekly ritual on the podcast.
Speaker 1: Did they warn you Katie about this? We weren't you?
Speaker 1: I've been warned. Yes, I'm prepared, Yes I knew Katie comfortably.
Speaker 1: I did my homework, all right, Then you start, what's
Speaker 1: the craziest thing you saw on? Okay, I'm happy I'm
Speaker 1: going first so no one else steals it. But I
Speaker 1: thought the price of tin was really interesting. It plunged
Speaker 1: price of tin. Tin. Okay, So again, I'm a currency
Speaker 1: and bond reporter, not an expert here, but the price
Speaker 1: of tin plunged by the most in seven years this week,
Speaker 1: and I have no idea why, but obviously Bloomberg authors do,
Speaker 1: so this is what they said. The International Tin Association
Speaker 1: blamed the drop in prices on manipulation by institutional investors
Speaker 1: in China's domestic markets. I yeah, so their words, not mine,
Speaker 1: but yeah, check it out. The price of tin plunged
Speaker 1: this week. That's amazing. Pin. Did you have a call
Speaker 1: a market call? And I had no, I had no,
Speaker 1: I had no tin market call. Um. But but I
Speaker 1: would say that the thing that I was taking a
Speaker 1: look at this week had to do with commodo these
Speaker 1: and it has to do with things like cobalt, nickel
Speaker 1: and lithium, right, and this has to do with batteries,
Speaker 1: and then that has to do with Tesla, and we
Speaker 1: got the Tesla results, and they were great and the
Speaker 1: stock went up. But my only point is that if
Speaker 1: we are replacing OPEC as the source of fuel for
Speaker 1: internal combustion engine cars and replacing it with China as
Speaker 1: the really or maybe South Korea you can add into
Speaker 1: but South Korea and China as the two suppliers of
Speaker 1: battery technology, that poses an interesting dynamic in the future,
Speaker 1: doesn't it. Because we've been through the opeque stuff, right,
Speaker 1: I mean, this is, you know, controlling markets, controlling prices,
Speaker 1: and now you're talking about China, which controls about seventy
Speaker 1: percent of the actual UH processed lithium that goes into batteries.
Speaker 1: They don't mind it necessarily all there, but they process
Speaker 1: it and they turn it into batteries and that's what
Speaker 1: runs electric cars. What if they start messing with it
Speaker 1: like they did with the tin according to our there's
Speaker 1: a lot of risks here. There you go, and the
Speaker 1: good news the price of tinfoil hats went down. Everyone
Speaker 1: everyone really sees that as just in time. Sarah, what's
Speaker 1: the craziest thing you saw this week? I'm going to say,
Speaker 1: we're really all going out on a limb today, But
Speaker 1: this headline really caught my eye across the bluebrick terminal.
Speaker 1: It's beyond meat fever turns the tiny P into America's
Speaker 1: hot new crop. So we're actually seeing P prices increase
Speaker 1: because there is such a craze for vegetarianism, veganism and
Speaker 1: beyond meat, burgers, beyond burgers, whatever you make of it,
Speaker 1: and P is the input into that. And I want
Speaker 1: to read you a quote from one of the farmers.
Speaker 1: This farmer said that essentially beyond meats goal of helping
Speaker 1: wean humans off of meat consumption quote unquote does not
Speaker 1: interest me at all. I am a traditional meat guy
Speaker 1: and pro rancher. Then you went on to say about
Speaker 1: the PA, at the beginning, we didn't see it as
Speaker 1: a money maker. It just made the far more sustainable.
Speaker 1: I am excited for new markets for the peas. So
Speaker 1: we'll see what happens with the peace going forwards. But
Speaker 1: beyond meat really helping the price out, can we invest
Speaker 1: in peace? Is there are there futures? I guess so
Speaker 1: maybe in the Princess and the mattress. All right, these
Speaker 1: are all pretty good. I'm gonna I feel like I'm
Speaker 1: cheating with my craziest thing because it's kind of a
Speaker 1: duplicate of last week's crazy thing, but there has been developments.
Speaker 1: Last week, my craziest thing PIM was there's actually an
Speaker 1: exchange where you can buy and sell sneakers. It's called
Speaker 1: stock Ax, and you, you know, buy a pair of
Speaker 1: Nikes for a hundred dollars and you keep them in
Speaker 1: the box for a few years, and then you sell
Speaker 1: them for three of years down the line. That's your
Speaker 1: retirement plan. That's so I'm gonna start a hedge fund
Speaker 1: the sneaker with some Nikes. I have a feeling. So
Speaker 1: this week, Nike released what they thought would be a
Speaker 1: patriotic sneaker with the Betsy Ross flag, you know, the
Speaker 1: thirteen stars um and before they could even get it
Speaker 1: on the market, Uh, Colin Kaepernick, who's one of their
Speaker 1: athletes that they sponsored, said, wait a minute, that thirteen
Speaker 1: star Betsy Ross flag is actually considered offensive to some people.
Speaker 1: Apparently part of the right wing is using that flag
Speaker 1: as a as part of their symbology. I don't really
Speaker 1: get it. I guess it harkens back to the time
Speaker 1: when slavery was still legal. Regardless, Nike said, all right,
Speaker 1: that's a bad idea. To release this shoe back to
Speaker 1: stock X. A few pairs trickled out. I think like
Speaker 1: sixty seven pairs of this sneaker traded on stock X,
Speaker 1: going for as high as twenty dollars. A pair of
Speaker 1: these sneakers that come with or without laces five hundred dollars,
Speaker 1: I would hope. So people will do anything nowadays for
Speaker 1: limited edition sneakers. I would say. Now, we also have
Speaker 1: one from Twitter that we have to bring to the
Speaker 1: podcast that we picked out. This came from at thirty
Speaker 1: seven Techno Shaman. Now he said he was watching the
Speaker 1: gold dollar pair quote unquote too fast, too soon, wasn't
Speaker 1: the case? It went further up against all odds, considering
Speaker 1: the correction right after G twenty talks. I bet some
Speaker 1: bears got caught unprepared. Now this goes to thinking, sure,
Speaker 1: we saw another rally in gold, we're back above four ounce,
Speaker 1: But does the rally and gold seems sustainable at this
Speaker 1: point in time? Oh gosh, I mean, I have no idea.
Speaker 1: All I can say is that if you hold a
Speaker 1: gold coin like a double Legal or a Kreugeran in
Speaker 1: your hand, you will understand how it makes you feel,
Speaker 1: rather than what it is sort of symbolically, and I
Speaker 1: think that many gold investors looked to that as the
Speaker 1: sort of inception of their interest in gold and what
Speaker 1: we've seen, for example, the Central Bank of China adding
Speaker 1: to their gold reserves. And if you believe that paper
Speaker 1: currencies are being debased, gold is certainly an option. I
Speaker 1: would say, announce a goal still costs about a grand grand,
Speaker 1: less than a pair of Airmas one Nikes, so and
Speaker 1: you can't wear the gold so nice. Try Twitter guy,
Speaker 1: but I think I think the Twitter guy Mike's can
Speaker 1: refer to everyone who now offers up their brilliant ideas
Speaker 1: on Twitter as Twitter guy. Although it's it's declare winner.
Speaker 1: I think Katie wins with the tin price manipulation. I
Speaker 1: totally missed that one. Usually I'm aware of these crazy
Speaker 1: market stories. I wasn't aware that there was a winner.
Speaker 1: I think this is the first week we got a winner,
Speaker 1: so you should be really get excited. I don't think
Speaker 1: you get the sneaker. Maybe a tin hat, though I
Speaker 1: think that's another tin hat. Katie Grindfeld, though pimp Box,
Speaker 1: thank you so much for joining the podcast today. What
Speaker 1: goes Up? We'll be back next week until then you
Speaker 1: can find us on the Bloomberg Terminal, website and app,
Speaker 1: or wherever you get your podcasts. We'd love it if
Speaker 1: you took the time to rate and review the show
Speaker 1: on Apple podcast so more listeners can find us. And
Speaker 1: you can also find us on Twitter. Follow me at
Speaker 1: Sarah Ponzack, Mike is at Rea Anonymous, Our guest Pimp
Speaker 1: Fox is at pim Fox, and Katie Greidfeld is at
Speaker 1: k Greifeld. You can also follow Bloomberg Podcasts at podcasts.
Speaker 1: What Goes Up is produced by Toprah Foreheads. The head
Speaker 1: of Bloomberg Podcasts is francesco Leavie. Thanks for listening, See
Speaker 1: you next time. Four