WEBVTT - Single Best Idea with Tom Keene: Jeff Currie & Julian Emanuel

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea, what a couple of days has spend.

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<v Speaker 2>We going to CPI tomorrow in the retail sales conbo

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<v Speaker 2>at eight thirty. We'll have all our covers there. Michael

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<v Speaker 2>McKee leading our coverage for all of Bloomberg Media. But

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<v Speaker 2>just already an eventful week. I mean a market that's

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<v Speaker 2>not doing anything. You look at the screen and the

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<v Speaker 2>vix is like thirteen whatever, and you can first glance

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<v Speaker 2>at the Bloomberg launch pad and you're like, I can

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<v Speaker 2>take off the month, and then you look at some

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<v Speaker 2>of the nuances out there. I'll give you two nuances

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<v Speaker 2>right now. One is this dash to utilities because AI

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<v Speaker 2>is going to need all sorts of new electricity, and

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<v Speaker 2>the fact is utilities have done a moonshot. We'll get

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<v Speaker 2>the copper in a moment. And the other is what's

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<v Speaker 2>going on in the Pacific Rim And just quietly early

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<v Speaker 2>this morning, euro yen showed weekend strong euro and I'm

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<v Speaker 2>sorry they got to go into the Japanese evening and

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<v Speaker 2>discuss this. We'll have all of that across our Asia coverage.

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<v Speaker 2>Von Mann leading so much of that effort and Steve

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<v Speaker 2>Engel with his great reporting. But look for that based

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<v Speaker 2>on of Hong Kong, but also out of Japan as well.

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<v Speaker 2>I'm really watching euro Yen for a third Japanese intervention.

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<v Speaker 2>There's always a good intervention when Jeffrey Curry shows up.

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<v Speaker 2>He taught for years at his University of Chicago. The

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<v Speaker 2>great segment here for the longer podcast of the microeconomics

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<v Speaker 2>of oil, the shift that we're seeing in copper. But

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<v Speaker 2>here is Jeff Curry on copper in the new sustained rally,

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<v Speaker 2>the higher price of copper.

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<v Speaker 3>AI's you know, chips and copper. You need the chips,

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<v Speaker 3>but then you need the electrical wiring to be able

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<v Speaker 3>to power those chips. And one of those chips, the

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<v Speaker 3>video chips GPUs, consume as much power as the average

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<v Speaker 3>American household. So you're going to need a lot of

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<v Speaker 3>grid connection to be able to accommodate that type of growth.

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<v Speaker 3>And you know what is the bottleneck for that, It's copper.

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<v Speaker 3>So all roads lead to copper, whether if it's military, spen, AI,

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<v Speaker 3>data centers, Green Capex, they all point to copper.

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<v Speaker 2>Jeff Curry, of course, iconic at Golden Sex now holding

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<v Speaker 2>court at Carlisle groups as well. On the equity market,

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<v Speaker 2>some spirited discussion today, just no other way to put it,

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<v Speaker 2>a real debate about valuation, about the wall of money

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<v Speaker 2>that's out there comfortable with five percent money market fund.

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<v Speaker 2>Somebody on the live chat on YouTube said, hey, I

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<v Speaker 2>got a six month CD five point three five percent.

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<v Speaker 2>That gets your attention, But you look back at the

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<v Speaker 2>challenges the markets had, and Julian Ommanuel, working at Evercore ISI,

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<v Speaker 2>would make clear these are valuation dynamics. The simplicity route,

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<v Speaker 2>the one I do not recommend, is to look at

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<v Speaker 2>price is compared to earnings, and you get some form

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<v Speaker 2>of valuation. When you look at price as compared to earnings,

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<v Speaker 2>I would look much more at least drag cash flow

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<v Speaker 2>into it, that cash after capex, and of course with

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<v Speaker 2>the fancy stocks the Magnificent seven, there's some real capex

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<v Speaker 2>dynamics right now, or I'd really look at return on

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<v Speaker 2>an invested capital. But anyways, the valuation phrase always within

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<v Speaker 2>the media comes back to pe Julian Emmanuel of Evercore ISI.

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<v Speaker 1>The entire down draft in twenty twenty two and really

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<v Speaker 1>the other side in twenty twenty three, it was very

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<v Speaker 1>valuation driven. Okay, we understand that the earnings have migrated

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<v Speaker 1>towards for the most part, that's select seven, but at

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<v Speaker 1>the index level, the earnings have stayed roughly the same.

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<v Speaker 1>The thing about twenty twenty four which convinces us that

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<v Speaker 1>even though we think you have a correction in front

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<v Speaker 1>of you, is that the bullmarket has further legs. Is

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<v Speaker 1>you're actually going to see earnings growth for the first

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<v Speaker 1>time in two years. The surprises were much larger than

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<v Speaker 1>expected because revisions went down prior to the start of

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<v Speaker 1>the quarter. There isn't really an explanation other than perhaps

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<v Speaker 1>the message of what was a subpart GDP first quarter.

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<v Speaker 1>But you're basically on track five and a half maybe

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<v Speaker 1>six percent earnings growth, and from our view, that's good.

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<v Speaker 1>We expect roughly that rate of growth throughout the year.

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<v Speaker 1>But the problem for the markets is the market expects

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<v Speaker 1>that number to be upwards of ten percent.

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<v Speaker 2>Julian Emmanuel evercore Isi and I do want to make

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<v Speaker 2>note Gina Martin Adams of Bloomberg Intelligence has been way

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<v Speaker 2>out front with the earnings and revenue surprises that we've seen.

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<v Speaker 2>I should point out home Depot showing up today with

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<v Speaker 2>a pretty tepid, I'm sorry, seven point four percent mortgage

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<v Speaker 2>influenced earnings report. We'll get much more on that in

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<v Speaker 2>the coming days, I'm sure from our guests and from

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<v Speaker 2>Bloomberg Intelligence as well. We're out on Apple car Play

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<v Speaker 2>and Android play. This is growing out. The statistics are

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<v Speaker 2>unreal on this revolution of putting fancy communications into cars.

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<v Speaker 3>Now.

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<v Speaker 2>Obviously they're going into new cars, new cars, new cars,

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<v Speaker 2>and we look at Apple car Play as a three

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<v Speaker 2>year project, five year project as we see a rollover

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<v Speaker 2>changing within the automobile business towards these sophisticated dashboards where

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<v Speaker 2>you can find all of what we do with Bloomberg Podcasts,

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<v Speaker 2>all the radio interviews, even Carrol Master. It's just amazing.

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<v Speaker 2>Carrol Master's on Apple car Play as well. Out of YouTube.

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<v Speaker 2>other products that we have on Bloomberg podcast had mentioned

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<v Speaker 2>Matt Miller's Hot Pursuits something to watch for and David

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<v Speaker 2>Girl lighting up big take as well from New York

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<v Speaker 2>City inflation tomorrow. This is single best idea