WEBVTT - Bloomberg Surveillance TV: October 29th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amrie Hordernt. Join us each day 0:00:18.760 --> 0:00:22.320 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.400 Terminal and the Bloomberg Business App. The investors pricing at 0:00:37.400 --> 0:00:39.640 a quarter point cord from the FMC at two pm 0:00:39.680 --> 0:00:43.159 Eastern Time. Blake Gwinno RBC Capital Markets. Right in the following, 0:00:43.200 --> 0:00:46.360 the Economic Bankdroop continues to provide the FMC with a 0:00:46.440 --> 0:00:49.480 window for delivering interest rate cards. They're going to take it. 0:00:49.600 --> 0:00:51.479 Blake joins us now for more Blake and morning, Good 0:00:51.479 --> 0:00:51.839 to see you. 0:00:51.880 --> 0:00:52.320 Good to see you. 0:00:52.600 --> 0:00:54.360 The last time the Fed made a decision, you made 0:00:54.400 --> 0:00:57.400 a very important point that the outlook hadn't changed so much, 0:00:57.520 --> 0:01:00.280 but the risks around the outlook have What are the 0:01:00.360 --> 0:01:02.480 risks around the outlook now and have they developed since 0:01:02.480 --> 0:01:03.120 the Fed last. 0:01:03.040 --> 0:01:05.240 May exactly the same as they were in September. 0:01:05.920 --> 0:01:07.440 I mean, part of that is obviously because we're not 0:01:07.440 --> 0:01:09.720 getting the official sector data. But even if you look 0:01:09.720 --> 0:01:11.880 at what we have, we have received so the CPI 0:01:11.959 --> 0:01:14.399 that they decided to release the private sector data, and 0:01:14.400 --> 0:01:16.080 I would say also the Beige book that they had, 0:01:16.560 --> 0:01:18.360 you know, the Beage Book really kind of characterized things 0:01:18.400 --> 0:01:21.200 as largely in the same place as they were in September. 0:01:21.280 --> 0:01:23.279 So I don't think the Fed's really gotten any information 0:01:23.319 --> 0:01:25.880 that's really going to change our outlook. I would expect Pale, 0:01:26.200 --> 0:01:27.600 you know, any comments that he's going to make on 0:01:27.640 --> 0:01:31.479 the macro economic outlook you know this afternoon are probably 0:01:31.520 --> 0:01:33.240 going to be largely what he made in September. 0:01:33.280 --> 0:01:35.760 So it cuts twenty five. Can a guide to December? 0:01:36.200 --> 0:01:38.000 I don't think he does, And I think, if anything, 0:01:38.080 --> 0:01:39.319 I think the markets are going to be much more 0:01:39.360 --> 0:01:41.440 focused around some of the meta conversation about what are 0:01:41.440 --> 0:01:43.679 they looking at. I mean, if this continues for another 0:01:43.680 --> 0:01:46.720 two months, if this continues in the December meeting, I 0:01:46.720 --> 0:01:49.440 think what I'm most interested in are any questions around 0:01:49.480 --> 0:01:51.240 what data are you putting most. 0:01:51.080 --> 0:01:52.240 Important on one of the metrics? 0:01:52.280 --> 0:01:55.000 Yeah, We know their reaction function to some degree around 0:01:55.160 --> 0:01:57.480 the official sector data, and we know how they're thinking about, 0:01:57.760 --> 0:02:01.000 you know, an unemployment rate or about PE levels, but 0:02:01.400 --> 0:02:04.400 we don't really know how they're using the data that 0:02:04.440 --> 0:02:06.400 they do have right now, And I think it'd be 0:02:06.400 --> 0:02:08.240 interesting to hear how they're kind of thinking about things, 0:02:08.280 --> 0:02:10.480 what metrics they're looking at, and what's going to make 0:02:10.480 --> 0:02:12.240 that decision around December. 0:02:12.280 --> 0:02:13.560 Well, wasn't that a risk in itself? 0:02:13.600 --> 0:02:15.400 The fact that they don't have data and we have 0:02:15.440 --> 0:02:19.160 this data desert. How much can they lean on September 0:02:19.639 --> 0:02:22.079 going forward if you're a data dependent. 0:02:21.639 --> 0:02:24.360 FED Well, it does make things interesting. 0:02:24.360 --> 0:02:26.520 And I'm a little bit torn about what the base 0:02:26.600 --> 0:02:29.720 case into December is if we don't get data, because 0:02:29.720 --> 0:02:31.960 on the one hand, you kind of have this do 0:02:32.080 --> 0:02:34.160 no harm type of idea where I could see the 0:02:34.160 --> 0:02:36.600 hawks on the committee saying, hey, look, we cut the 0:02:36.720 --> 0:02:39.760 last two meetings. We did get inflation data, which shows 0:02:40.000 --> 0:02:42.840 the services side of things a little more pressure than 0:02:42.840 --> 0:02:45.239 we'd like to see. Maybe we should just play it 0:02:45.280 --> 0:02:47.160 safe and not do anything. But you can also make 0:02:47.200 --> 0:02:48.880 the case on the other side, which is that those 0:02:48.960 --> 0:02:51.840 labor market risks are still apparent ADP is still showing 0:02:51.840 --> 0:02:54.880 this low hiring, slow firing mode. So I'm not even 0:02:54.960 --> 0:02:57.480 really sure what the base case is into December if 0:02:57.520 --> 0:03:00.399 we have no new government data coming out. 0:03:00.480 --> 0:03:03.040 Is it possible the descent could come both ways? And 0:03:03.120 --> 0:03:03.640 this may thing? 0:03:03.880 --> 0:03:06.120 Absolutely? I think that was true last meeting as well. 0:03:06.160 --> 0:03:07.720 I was actually curious to see if we got two 0:03:07.760 --> 0:03:09.800 descents at the last meeting, because I think you have 0:03:09.919 --> 0:03:13.359 some members, like you know, Hammick Schmid who have come 0:03:13.400 --> 0:03:17.680 out and now, you know, not everybody can descent, so 0:03:17.680 --> 0:03:21.040 we're just talking about the voting members. Schmid could certainly descent, 0:03:21.960 --> 0:03:23.920 and we have heard those members kind of take a 0:03:23.919 --> 0:03:25.760 harder stance on the inflation side and said, you know, 0:03:26.120 --> 0:03:28.960 unlike Waller and I would say, now pale at this point, 0:03:29.240 --> 0:03:31.040 not so quick to kind of dismiss some of the. 0:03:30.960 --> 0:03:33.200 Inflation pressure we're seeing. They're not ready to write. 0:03:33.040 --> 0:03:35.400 It off as only a tear iff problem, you know, 0:03:35.440 --> 0:03:38.280 something that's going to dissipate as that one time price 0:03:38.280 --> 0:03:39.640 shot kind of moves through the system. 0:03:39.680 --> 0:03:42.480 I believe that Hammock can descent next year, and the 0:03:42.520 --> 0:03:44.600 mix next year maybe gets a little bit more interesting. 0:03:44.640 --> 0:03:46.320 So let's talk about that. We're going to get a 0:03:46.400 --> 0:03:49.720 change of leadership in May. How easy is it just 0:03:49.760 --> 0:03:51.400 to lead the committee and say, you know what we're 0:03:51.400 --> 0:03:53.400 going to get in this direction given the mix we 0:03:53.440 --> 0:03:54.680 might say in twenty six. 0:03:55.000 --> 0:03:56.520 It really depends on the personnel. 0:03:56.600 --> 0:03:58.640 And I think this is you know, one conversation I've 0:03:58.640 --> 0:04:00.400 had a lot with clients who have kind of said, well, 0:04:00.400 --> 0:04:02.840 we're going to get a very dubvish FED share from 0:04:02.880 --> 0:04:04.720 Trump and they're going to come in and you know, 0:04:04.800 --> 0:04:06.560 we're going to slash rates one hundred basis points to 0:04:06.560 --> 0:04:07.360 do when they want FED shair. 0:04:07.440 --> 0:04:09.720 Yeah, that's just not how things work. And I think. 0:04:09.600 --> 0:04:13.160 We're you know, we're kind of a product of this 0:04:13.280 --> 0:04:15.880 last forty years where we've had very strong FED shairs 0:04:15.880 --> 0:04:18.240 who I think have a very good give and take 0:04:18.279 --> 0:04:21.479 with the rest of the committee. They're respected by the committee, 0:04:21.480 --> 0:04:24.440 They're taking information from the Committee incorporating that into their 0:04:24.480 --> 0:04:28.360 own views, and so, yeah, the chair has spoken for 0:04:28.440 --> 0:04:31.800 the direction of policy. If we get somebody who is 0:04:31.960 --> 0:04:34.560 very outside of that consensus, who's to say the chair 0:04:34.640 --> 0:04:36.640 isn't a descent at every meeting. I mean, it could 0:04:36.640 --> 0:04:38.919 be very interesting. But what if we have mirror and 0:04:38.960 --> 0:04:40.960 the new chair dissenting at every meeting. 0:04:41.040 --> 0:04:42.760 For the record, I saw this in the UK more 0:04:42.760 --> 0:04:44.960 than ten years ago. I remember when Governor King wont 0:04:45.000 --> 0:04:48.040 another round of q E and kept dissenting and voting 0:04:48.040 --> 0:04:49.920 for it. So we've seen that happen in the UK. 0:04:50.240 --> 0:04:52.640 You suggested we might see a UK type scenario. 0:04:53.520 --> 0:04:54.440 It's just not what we're used to. 0:04:54.560 --> 0:04:56.760 We used to the green spans of this world. 0:04:56.839 --> 0:04:59.480 Yeah, And I think if we're thinking about how dubbish 0:04:59.480 --> 0:05:01.760 the FED is next year, it's not just about how 0:05:01.800 --> 0:05:04.560 dubvish the new chair is, it's also about how effective 0:05:04.560 --> 0:05:07.240 they're going to be a delivering on that dubbishness. 0:05:07.320 --> 0:05:09.120 Well, who's the most dubbish center of this lift? Would 0:05:09.120 --> 0:05:10.360 you say that's Kevin Hassett? 0:05:10.680 --> 0:05:12.640 I would say you'd look at somebody who is closer 0:05:12.680 --> 0:05:16.080 to the administration, so HEYESI or a worsh you know, but. 0:05:16.160 --> 0:05:20.160 Somebody he's a hawk. He was, Let's be very clear, 0:05:20.200 --> 0:05:22.520 he was not anymore. 0:05:22.600 --> 0:05:24.640 So I think you'd look at somebody who was much 0:05:24.640 --> 0:05:27.360 closer to the administration is probably arguing for the most cuts, 0:05:27.600 --> 0:05:30.200 but also in the same you know, in the same respect, 0:05:30.279 --> 0:05:32.000 also maybe not being able to sway the rest of 0:05:32.000 --> 0:05:32.800 the committee, but. 0:05:32.760 --> 0:05:36.159 It'll be transparent. If it is someone like Kevin Hassett, 0:05:37.000 --> 0:05:40.120 it'll be transparent. It's not like author Burns and Nixon, 0:05:40.160 --> 0:05:43.159 where the market didn't really understand how close that relationship is. 0:05:43.240 --> 0:05:45.920 It'll be very transparent to the market that, Okay, this 0:05:46.080 --> 0:05:49.200 policy could be heavily influenced by Trump himself. 0:05:49.400 --> 0:05:51.359 Well, I think it will be clear that that person 0:05:51.360 --> 0:05:54.880 could be heavily influenced. But then that comes That's where 0:05:54.880 --> 0:05:57.040 the question of how much control over the rest of 0:05:57.040 --> 0:05:58.680 the committee they have comes in, because that's where I 0:05:58.680 --> 0:06:00.880 think somebody like a Waller who may not be as 0:06:00.920 --> 0:06:02.880 close to the administration, who may kind of go off 0:06:02.880 --> 0:06:05.640 on their own, and you know, he's leaving leaning dubbish now, 0:06:05.720 --> 0:06:08.600 but maybe that framework changes. He's going to be much 0:06:08.600 --> 0:06:10.679 more effective and I think you know has that respect, 0:06:10.720 --> 0:06:14.680 he has a very understandable framework for where that dubbishness 0:06:14.760 --> 0:06:17.960 is coming from, and so may actually deliver more cuts 0:06:18.000 --> 0:06:19.479 than somebody who you would expect to be a more 0:06:19.520 --> 0:06:20.200 dubbish member. 0:06:20.520 --> 0:06:24.120 Stay with us. More Bloomberg surveillance coming up after this. 0:06:32.800 --> 0:06:35.719 Start setting fresh records ahead of a Max seven earnings test. 0:06:35.920 --> 0:06:38.599 Gagi Chantry of Black Rock writing. Investors are looking for 0:06:38.680 --> 0:06:42.680 proof that cloud growth is reaccelerating and the massive AI 0:06:42.800 --> 0:06:47.400 campex is converting into real paying workloads. Gargee Joints US 0:06:47.400 --> 0:06:49.680 now for more. Garkiy Cadmonic, Hi, good morning, it's. 0:06:49.520 --> 0:06:50.000 Going to see you. 0:06:50.040 --> 0:06:52.440 So out of the three, then this week FED decision 0:06:52.600 --> 0:06:53.760 Trade talks earnings. 0:06:53.960 --> 0:06:55.359 Does earnings take number one spot? 0:06:55.640 --> 0:06:57.880 Well, the volatility Markets team to think soon if you 0:06:57.880 --> 0:07:00.400 look at what's priced in in terms of moves per day, 0:07:00.440 --> 0:07:02.839 it certainly seems like the earnings are what's going to 0:07:02.839 --> 0:07:06.080 be a bigger driver. But certainly with the FLED, I 0:07:06.120 --> 0:07:09.680 think we should pay particular attention to what happens with 0:07:09.760 --> 0:07:12.160 the balance sheet. I do think that the twenty five 0:07:12.240 --> 0:07:15.880 basis point rate cut is very well advertised and very 0:07:15.920 --> 0:07:19.080 well priced, but it's really about if they do do 0:07:19.200 --> 0:07:21.800 something with the balance sheet runoff and if that gets 0:07:21.840 --> 0:07:25.160 announced today. Obviously we heard from chair Powell earlier in 0:07:25.200 --> 0:07:27.600 the month which was about in the coming months, but 0:07:27.640 --> 0:07:30.160 the market is expecting for some sound, some sort of 0:07:30.200 --> 0:07:32.840 announcement today, so that would be important. And then of 0:07:32.880 --> 0:07:35.040 course for the rest of the week it's earnings. And 0:07:35.080 --> 0:07:37.440 then finally the New York Marathon, the New York Marathon. 0:07:37.480 --> 0:07:38.760 For you do you want do you want to share it? 0:07:38.800 --> 0:07:41.000 Up front? How many marathons? If you wrote run many 0:07:41.040 --> 0:07:43.240 in the numbers, many in the twenties. Now we're in 0:07:43.280 --> 0:07:45.320 the twenties, okay. And what charity are supporting. 0:07:45.640 --> 0:07:48.840 It's called Shoe for Africa. It's a charity for children 0:07:48.840 --> 0:07:50.480 in Kenya and it's building a hospital. 0:07:50.640 --> 0:07:53.160 Very cool. So if anyone wants to donate, of course, reach. 0:07:52.960 --> 0:07:55.679 Out modest it's twenty six that is insane. 0:07:55.720 --> 0:07:58.440 Twenty six is absolutely unreal. We're going to talk about 0:07:58.480 --> 0:08:01.320 that later. Let's focus on this if we can QT. 0:08:01.680 --> 0:08:03.960 What are the implications of backing off from QT? 0:08:04.280 --> 0:08:07.760 Absolutely so a couple of things. First, recognizing if that 0:08:07.920 --> 0:08:11.880 does happen, where does the where do the reinvestments go? 0:08:12.040 --> 0:08:13.040 I think that's the main thing. 0:08:13.120 --> 0:08:16.840 Does it get reinvestment reinvested back into bills only? Or 0:08:16.920 --> 0:08:20.200 is it along all tenors off the curve? And obviously 0:08:20.240 --> 0:08:22.000 if it is a long all tennors of the curve, 0:08:22.080 --> 0:08:24.320 that's more demand coming in for treasuring markets. And I 0:08:24.400 --> 0:08:26.920 do think if we look at what the long end, 0:08:26.920 --> 0:08:29.000 the very long end thirty years or so have done 0:08:29.360 --> 0:08:31.880 over the past month I think there is a little 0:08:31.920 --> 0:08:35.040 bit of expectation of that coming back into the market. 0:08:35.200 --> 0:08:38.679 So if we don't get anything at all, maybe at 0:08:38.760 --> 0:08:40.600 least in the very long end of the curve, we 0:08:40.640 --> 0:08:43.280 could get a little bit more of that steepening that 0:08:43.360 --> 0:08:45.400 we began to see earlier this year and then it 0:08:45.520 --> 0:08:48.120 sort of stopped for the moment. But at the same time, 0:08:48.200 --> 0:08:50.280 you know, we've talked about this for a while, this 0:08:50.440 --> 0:08:54.120 is a really good opportunity in the markets to clip coupon, 0:08:54.640 --> 0:08:56.960 especially if you're in that belly, maybe that three to 0:08:57.040 --> 0:08:59.800 ten year part of the market that still remains. We're 0:09:00.040 --> 0:09:02.199 still in a path for the FED to cut now 0:09:02.600 --> 0:09:06.440 and again in December, so very clearly that's going to 0:09:06.480 --> 0:09:09.760 be another boost to equity as well as income markets. 0:09:09.800 --> 0:09:12.240 The FED cutting in December. Are they basically accepting that 0:09:12.320 --> 0:09:13.840 three percent is the new two percent? 0:09:14.360 --> 0:09:16.800 I don't know that it's three percent per se. If 0:09:16.880 --> 0:09:20.240 you think about especially with this last CPI print, what 0:09:20.280 --> 0:09:23.760 we saw was that very sharp and clear deceleration in 0:09:23.840 --> 0:09:27.640 oeer and where we saw the inflation was in much 0:09:27.679 --> 0:09:32.240 more of the temporary area such as teriff related goods, 0:09:32.240 --> 0:09:35.080 a parallel, et cetera. If we continue to see that 0:09:35.640 --> 0:09:39.360 deceleration in OER in shelter. More broadly, I think you 0:09:39.400 --> 0:09:41.439 can reach a world by the end of twenty twenty 0:09:41.480 --> 0:09:43.559 six when you're seeing sort of that two and a 0:09:43.679 --> 0:09:47.120 half percent core CPI, and I think that is something 0:09:47.200 --> 0:09:50.600 that the FED will accept and be able to at 0:09:50.720 --> 0:09:53.840 least the FED, you know, the future FED probably will 0:09:53.880 --> 0:09:57.320 be able to live with in a world where some 0:09:57.400 --> 0:10:00.640 of the inflation that is coming through its probably more 0:10:00.679 --> 0:10:03.480 transitory in nature. I think it's all about shelter, and 0:10:03.520 --> 0:10:06.120 it's all about OAR, and we've seen some very good 0:10:06.200 --> 0:10:07.040 numbers on that front. 0:10:07.240 --> 0:10:10.439 Just have the trade talks happening, the possible lowering rate 0:10:11.000 --> 0:10:13.160 of the US tariff level on China. 0:10:13.240 --> 0:10:14.760 Is that helpful for the Federal Reserve? 0:10:14.920 --> 0:10:16.679 I think it has to be. Again when we talk 0:10:16.720 --> 0:10:20.960 about what is the transitory, temporary drivers of inflation, some 0:10:21.000 --> 0:10:23.079 of those, as we have seen in the core goods 0:10:23.160 --> 0:10:26.200 data over the last three months, are very much related 0:10:26.280 --> 0:10:29.600 to those tariff inputs. So to the extent we now 0:10:29.920 --> 0:10:33.199 can live in a world where that tariff rate is 0:10:33.320 --> 0:10:36.439 severely higher than last year, but not as high as 0:10:36.440 --> 0:10:39.280 we had expected. It's not in the twenties, maybe in 0:10:39.320 --> 0:10:42.400 the mid teens, and it's passing through slowly. I think 0:10:42.400 --> 0:10:45.760 that's another important point. How much is the consumer bearing 0:10:45.800 --> 0:10:49.040 and so far we've only we haven't seen as much 0:10:49.080 --> 0:10:52.560 as perhaps feared in Q one and Q two. All 0:10:52.600 --> 0:10:55.560 of those I think that that rate coming lower, maybe 0:10:55.679 --> 0:10:59.360 settling in the mid teens, as well as the transmission 0:10:59.440 --> 0:11:02.679 mechanism being lower than originally feared, are good for a 0:11:02.720 --> 0:11:05.320 FED that wants to keep interest rates more moderate. 0:11:05.400 --> 0:11:07.560 So that's the framework for thinking about this market. Let's 0:11:07.559 --> 0:11:10.240 talk about this market how to express risks. So yesterday 0:11:10.320 --> 0:11:12.880 was an odd session, three hundred and ninety eight decliners 0:11:12.880 --> 0:11:15.120 on the S and P five hundred, only one hundred 0:11:15.120 --> 0:11:16.200 and four stocks advance. 0:11:16.480 --> 0:11:18.400 This was very top heavy, led by tech. 0:11:18.600 --> 0:11:20.240 Don't ask me why it doesn't add up to five 0:11:20.280 --> 0:11:22.200 hundred on the S and P five hundred, Complain to 0:11:22.240 --> 0:11:25.640 someone else. This came from Deutsche banker Jim Reid, and 0:11:25.760 --> 0:11:28.400 he put up these numbers and said they're only one 0:11:28.480 --> 0:11:30.240 hundred and four advances on the S and P, the 0:11:30.280 --> 0:11:32.360 fewest in over two weeks and actually the fewest on 0:11:32.400 --> 0:11:35.040 an update as far back as my data on advances 0:11:35.040 --> 0:11:39.160 and decliners goes, thanks to nineteen ninety what's the takeaway 0:11:39.280 --> 0:11:40.520 from the last twenty four hours. 0:11:40.640 --> 0:11:42.600 I think the takeaway maybe not just for the last 0:11:42.640 --> 0:11:45.160 twenty four hours, I would say the last year is 0:11:45.240 --> 0:11:48.920 that earnings growth is driving as in p performance, and 0:11:48.960 --> 0:11:51.280 you want to be where the earnings growth is and 0:11:51.360 --> 0:11:54.760 where is that earnings growth. It is in those hyperscalar names. 0:11:55.040 --> 0:11:57.880 It is in AI and frankly it is broadening out 0:11:57.880 --> 0:12:00.760 a little bit too broad, large gap, and I think 0:12:00.840 --> 0:12:03.400 that's where you want to be. You know, could we 0:12:03.559 --> 0:12:06.400 get a few negative surprises of the course of the 0:12:06.440 --> 0:12:09.520 next three days and could that maybe bring a little 0:12:09.520 --> 0:12:12.439 bit of volatility, some down days in the market. Absolutely, 0:12:12.760 --> 0:12:17.439 But is there a structural story here, especially around AI monetization. 0:12:17.960 --> 0:12:20.040 We think so. We've been talking about this from the 0:12:20.040 --> 0:12:23.120 start of the year with respect to our positive view 0:12:23.160 --> 0:12:26.040 around AI, and we think as long as we see 0:12:26.040 --> 0:12:30.040 that demand as well as their monetization, as well as 0:12:30.120 --> 0:12:33.559 the user actually being able to benefit from AI, we 0:12:33.640 --> 0:12:36.640 might see that in ad revenues and such. I think 0:12:36.640 --> 0:12:40.480 this continues. I think it might broaden out to more 0:12:40.600 --> 0:12:42.960 of the larger cap names instead of just the four 0:12:43.080 --> 0:12:46.240 or five hyperscalers. I think that's something we're looking forward 0:12:46.320 --> 0:12:50.120 to and telling investors to focus on. But the point 0:12:50.320 --> 0:12:53.280 about yesterday and a very small percentage of the index 0:12:53.320 --> 0:12:55.199 being up is not a new story. It is a 0:12:55.240 --> 0:12:58.200 feature of this market, not a bug. That is where 0:12:58.200 --> 0:12:59.160 the earnings growth is. 0:12:59.280 --> 0:13:01.360 So let's look at the black recommend you you're familiar 0:13:01.360 --> 0:13:03.120 with it more than I am. Is this just a 0:13:03.200 --> 0:13:06.600 vanilla sm P five hundred market camp whited index story? 0:13:06.600 --> 0:13:08.920 Express risk that way or is it more optimal waite 0:13:08.920 --> 0:13:10.439 to express risk in the secuity market. 0:13:10.559 --> 0:13:13.440 It can be depending on who the investor is. And 0:13:13.480 --> 0:13:16.079 again some people just want you know, you're stepping into 0:13:16.120 --> 0:13:18.000 the market for the first time and you want something 0:13:18.040 --> 0:13:20.800 easy and IVV will do the job for you. What 0:13:20.880 --> 0:13:23.840 we are telling investors though, this is the time to 0:13:23.920 --> 0:13:27.600 focus on things like BAI, which is our actively managed 0:13:27.679 --> 0:13:32.640 AI ETF, which again gives you some of those very 0:13:32.679 --> 0:13:36.320 specific earning story in the AI space. We think you 0:13:36.440 --> 0:13:39.679 should have that satellite allocation. The other thing that we're 0:13:39.720 --> 0:13:43.240 talking about is if you're thinking about the broadening out 0:13:43.480 --> 0:13:47.320 theme with respect to large caps. Again, that is something 0:13:47.360 --> 0:13:50.400 you can do again with a black Rock large gap 0:13:50.520 --> 0:13:53.520 value or a black Rock large gap It's called blc 0:13:53.840 --> 0:13:55.480 R fund, which is sort of the rest of the 0:13:55.559 --> 0:13:57.920 market with a focus as well on a. 0:13:57.960 --> 0:13:58.800 Large cap deck. 0:13:59.240 --> 0:14:02.760 And then I'd think for many investors out there right now, 0:14:02.880 --> 0:14:05.880 especially you're getting that six six and a half seven 0:14:05.920 --> 0:14:07.920 percent income, you no longer have to wait Toll You're 0:14:07.960 --> 0:14:11.400 eighty five years old for fixed income. I own fixed income. 0:14:11.440 --> 0:14:13.760 I hope you guys do again focusing on something like 0:14:13.840 --> 0:14:18.000 bink earning that six percent coupon, it's a really great opportunity, 0:14:18.160 --> 0:14:20.680 especially with the Fed boys, to cut more. 0:14:20.640 --> 0:14:21.280 Stay with us. 0:14:21.600 --> 0:14:34.200 More Bloomberg surveillance coming up after this. So here's the 0:14:34.240 --> 0:14:37.480 latest this morning in video, extending gains after President Trump 0:14:37.480 --> 0:14:40.640 said he will discuss the chip makers Blackwell Ai processes 0:14:40.680 --> 0:14:43.560 with the Chinese leader pre Fedogho of News Street Research, 0:14:43.680 --> 0:14:45.800 keeping a buy rating on the stock with a price 0:14:45.880 --> 0:14:49.000 target of two thirty five. Pierre, that quote from the 0:14:49.000 --> 0:14:51.240 president overnight and welcome to the program. Let me read 0:14:51.280 --> 0:14:53.680 it out for you. It's very basic, very simple. It's 0:14:53.680 --> 0:14:56.000 worth a few hundred billion, apparently to this market camp. 0:14:56.240 --> 0:15:00.240 We'll be speaking about Blackwell's Pierre. How important is that 0:15:00.240 --> 0:15:02.800 that we're opening the door to Infinia being app to 0:15:02.840 --> 0:15:05.520 sell the high end ships into China? 0:15:06.800 --> 0:15:10.520 Well, John's thinking about it in absolute terms, Nvidia historically 0:15:11.200 --> 0:15:13.960 hard like twenty twenty five percent of their revenues coming 0:15:13.960 --> 0:15:17.240 from China, so we are talking like a fifty. 0:15:16.920 --> 0:15:20.840 Billion dollar annual revenue opportunity. 0:15:20.920 --> 0:15:23.880 So yes, as you said, easily worth a few hundred 0:15:23.880 --> 0:15:25.080 billion dollars. 0:15:26.200 --> 0:15:29.960 Now, if you take a step back, the almost. 0:15:29.680 --> 0:15:34.800 Like like the surprising perspective is that given the scale 0:15:34.800 --> 0:15:37.440 of the success of Nvidia, it's actually a relatively small 0:15:37.480 --> 0:15:41.520 moving part when you compare that to what Jansen said 0:15:41.600 --> 0:15:44.880 yesterday in Washington. He said he was expecting like a 0:15:44.880 --> 0:15:48.680 half a trillion dollars of cumulated revenue for the black 0:15:48.720 --> 0:15:52.040 Well and Ravine product cycles this year and next year. 0:15:52.960 --> 0:15:55.400 We are talking here numbers that are like fifty percent 0:15:55.480 --> 0:15:59.640 above what consensus expectations are today. So it's a very 0:15:59.760 --> 0:16:02.720 very nice comments from the President on the on the 0:16:02.840 --> 0:16:06.560 diverse super chips is actually a small moving part this 0:16:06.640 --> 0:16:11.680 morning compared to what Insten said yesterday yesterday, and then 0:16:11.760 --> 0:16:15.800 said the market is still accelerating, which is very very impressive. 0:16:16.440 --> 0:16:19.120 He also said that China has made it clear they 0:16:19.200 --> 0:16:22.480 don't want Nvidia there right now, even though the President 0:16:22.520 --> 0:16:27.440 has allowed some licensing for some chips. If China can 0:16:27.440 --> 0:16:29.840 get their hands on blackwell, well they then want video 0:16:30.080 --> 0:16:31.000 in their marketplace. 0:16:32.800 --> 0:16:35.760 Yes, of course, what you're say in the market is that. 0:16:36.480 --> 0:16:38.840 And you know, we could talk about China this morning, 0:16:38.880 --> 0:16:43.600 we talk about Microsoft, Opena, about Amazon. 0:16:44.280 --> 0:16:45.720 Nobody wants in VideA. 0:16:45.800 --> 0:16:48.640 Everybody is worried about like the market power they have, 0:16:49.040 --> 0:16:52.560 but nobody can afford not to use that VideA if 0:16:53.280 --> 0:16:56.040 they can, because today being able to use in video 0:16:56.160 --> 0:17:01.200 chips gives you an this is youve advantage in terms 0:17:01.240 --> 0:17:04.640 of time to markeage. You can get going immediately as 0:17:04.640 --> 0:17:07.800 the highest visible performance. But everybody in the long term 0:17:07.880 --> 0:17:11.400 is working on you know, as donatives to in Vidia 0:17:11.520 --> 0:17:14.040 to keep in Vida's market bower in check. And so 0:17:14.080 --> 0:17:17.000 you see opening I signing giant deals with AMD. You 0:17:17.040 --> 0:17:19.720 see everybody doing being their own eysics and China is 0:17:19.760 --> 0:17:23.119 no different are donatives. But if to more they can 0:17:23.160 --> 0:17:25.560 get a few blackwords, it would take them immediately. 0:17:26.440 --> 0:17:29.320 And Video is clearly looking for an opportunity here pre 0:17:29.800 --> 0:17:32.240 and an opportunity that the President is offering them. But 0:17:32.280 --> 0:17:34.560 I just wondered to what extent China has been successful 0:17:34.760 --> 0:17:37.719 without access to the highest chips the high end chips. Pierre, 0:17:37.920 --> 0:17:40.280 it feels like deep Sink was a moment that happened. 0:17:40.280 --> 0:17:42.520 We wrestled with it and just moved on. But from 0:17:42.520 --> 0:17:44.640 the people we speak to, Pierre, it looks like China 0:17:44.640 --> 0:17:47.399 has been hyper focused on efficiency and the US is 0:17:47.440 --> 0:17:49.679 going in a different direction. But if you look at 0:17:49.720 --> 0:17:52.800 the strategies of either the US and China at the moment, 0:17:52.960 --> 0:17:55.960 who's got the lead, even before discussing access to the 0:17:56.040 --> 0:17:58.119 highest end in video chips, who's got the lead at 0:17:58.160 --> 0:17:58.520 the moment? 0:18:00.040 --> 0:18:02.480 Well, the lead, it's a great question. The lead is 0:18:02.480 --> 0:18:05.439 definitely at the frontier. It's being first to market with 0:18:05.520 --> 0:18:08.359 the most advanced models. And on that front, there is 0:18:08.400 --> 0:18:12.359 absolutely no question the US is in a very strong 0:18:12.440 --> 0:18:16.920 leadership position. Then now if you look at so that's 0:18:16.960 --> 0:18:19.600 like the technological leads. So the technological lead is very 0:18:19.600 --> 0:18:21.880 clearly in the US. Now you have the industrial lead, 0:18:21.960 --> 0:18:25.800 you have like the efficiency lead. Players like Diepsick are 0:18:25.880 --> 0:18:30.600 very are y are very good at making models more efficient, 0:18:30.600 --> 0:18:34.840 at distilling models, and so they player a very significant role. 0:18:34.920 --> 0:18:37.680 But when it comes to getting. 0:18:37.359 --> 0:18:41.000 Access to the largest clusters and running the most advanced models, 0:18:41.240 --> 0:18:43.360 all that is happening in the us for sure. 0:18:43.480 --> 0:18:45.320 So clearly we're getting a move in the pre market 0:18:45.320 --> 0:18:46.960 off the back of the story Stuck is up quite 0:18:46.960 --> 0:18:48.640 close to four percent. P I need to talk about 0:18:48.680 --> 0:18:51.480