1 00:00:14,240 --> 00:00:18,400 Speaker 1: Hello, and welcome to What Goes Up a weekly markets podcast. 2 00:00:18,720 --> 00:00:21,240 Speaker 1: My name is Mike Reagan, and I'm a senior editor 3 00:00:21,239 --> 00:00:24,320 Speaker 1: at Bloomberg. And this week on the show, well, it 4 00:00:24,400 --> 00:00:26,560 Speaker 1: kind of feels like someone pulled the rug out from 5 00:00:26,640 --> 00:00:29,960 Speaker 1: under the reopening and reflation trade that so many investors 6 00:00:29,960 --> 00:00:34,479 Speaker 1: were gung ho about. Treasury yields are sinking, banks, energy 7 00:00:34,479 --> 00:00:37,159 Speaker 1: and travel companies have vanished from the leaderboards of the 8 00:00:37,159 --> 00:00:40,680 Speaker 1: stock market, and those old usual suspects, the tech and 9 00:00:40,720 --> 00:00:43,920 Speaker 1: internet mega cap stocks are back in the driver's seat. 10 00:00:44,720 --> 00:00:46,559 Speaker 1: What should we make of it all? Well, we'll get 11 00:00:46,600 --> 00:00:49,360 Speaker 1: into it with the chief investment officer for the America's 12 00:00:49,400 --> 00:00:53,600 Speaker 1: at a major asset management firm. But first, apologies to 13 00:00:53,720 --> 00:00:56,360 Speaker 1: Charlie Pellet fans, but this week's co host is no 14 00:00:56,560 --> 00:00:59,760 Speaker 1: mystery to our listeners. It's our old friend, Katie Greifeld, 15 00:00:59,800 --> 00:01:02,240 Speaker 1: the cross sass every reporter and co host of Take 16 00:01:02,320 --> 00:01:05,440 Speaker 1: Stock on Bloomberg. Quicktake, Katie. Great to have you back 17 00:01:05,480 --> 00:01:08,920 Speaker 1: on the show. Thanks for inviting me. I'm I was 18 00:01:09,000 --> 00:01:12,320 Speaker 1: excited to get your invite. Oh good and no offense, Katie, 19 00:01:12,319 --> 00:01:14,560 Speaker 1: But I think you might be our least mysterious co 20 00:01:14,720 --> 00:01:17,480 Speaker 1: host when it comes to mystery cost like I can predict. 21 00:01:17,520 --> 00:01:21,720 Speaker 1: I think I could predict your weekend already. Can I try? Yeah, 22 00:01:21,800 --> 00:01:24,800 Speaker 1: go for it. I'm curious. Okay, So Friday we all 23 00:01:24,800 --> 00:01:27,440 Speaker 1: know starts with the famous Friday tweet from you with 24 00:01:27,440 --> 00:01:29,640 Speaker 1: with a cat and the milk bath. Then, of course, 25 00:01:30,319 --> 00:01:33,680 Speaker 1: then something involving animals in the weekend, either a horse 26 00:01:33,760 --> 00:01:37,520 Speaker 1: or turtles, anything like that on top sounds about right 27 00:01:38,040 --> 00:01:40,679 Speaker 1: like most Fridays. I'm going to tweet the cat at 28 00:01:40,760 --> 00:01:43,400 Speaker 1: about four pm, gonna ride out the rest of the day. 29 00:01:43,520 --> 00:01:46,040 Speaker 1: Then I'm going to drive to New Jersey, stay at 30 00:01:46,040 --> 00:01:50,760 Speaker 1: my parents house, and probably go horseback riding. Okay, I promised. 31 00:01:50,760 --> 00:01:54,080 Speaker 1: I have a vibrant social life. I'm married, people love me. 32 00:01:54,800 --> 00:01:57,520 Speaker 1: I just go to New Jersey every weekend. There's there's 33 00:01:57,560 --> 00:01:59,440 Speaker 1: nothing wrong with that. Also, I wanted to ask you 34 00:01:59,440 --> 00:02:02,600 Speaker 1: about you had a a very tremendous outing last week. 35 00:02:02,800 --> 00:02:06,280 Speaker 1: I think it was the Olympic Trials, the Olympic track Trials. 36 00:02:06,800 --> 00:02:10,520 Speaker 1: Tell me about that, did I'm so glad you asked. 37 00:02:10,560 --> 00:02:13,200 Speaker 1: I'm dying to talk about it. I went to Eugene, 38 00:02:13,280 --> 00:02:16,280 Speaker 1: Oregon to catch the Track and Field Olympic Trials. Since 39 00:02:16,680 --> 00:02:18,639 Speaker 1: I don't think I'm going to Japan. I don't think 40 00:02:18,639 --> 00:02:22,359 Speaker 1: I'm gonna make it to Tokyo. I don't think, yeah, no, 41 00:02:22,520 --> 00:02:24,919 Speaker 1: I'll get stopped at the door. So, I mean, I'm 42 00:02:24,960 --> 00:02:28,440 Speaker 1: a huge track fan. Obviously, track has been in the 43 00:02:28,440 --> 00:02:31,959 Speaker 1: news quite a bit the past week with Shackery Richardson. 44 00:02:32,960 --> 00:02:35,720 Speaker 1: But I did get to see her run before that, 45 00:02:35,880 --> 00:02:38,360 Speaker 1: so right, and so you didn't know one knew one 46 00:02:38,400 --> 00:02:40,560 Speaker 1: so afterwards that she was going to be suspended and 47 00:02:40,880 --> 00:02:43,160 Speaker 1: not able to compete, right, she she did the trials, 48 00:02:43,200 --> 00:02:45,799 Speaker 1: so you got to see her run. That's interesting. What's 49 00:02:45,800 --> 00:02:49,480 Speaker 1: your take on all that? So I think the failed 50 00:02:49,520 --> 00:02:53,880 Speaker 1: drug tests she tested positive for marijuana was on June, 51 00:02:54,240 --> 00:02:57,760 Speaker 1: so it's a one month suspension. It's not a like 52 00:02:57,800 --> 00:03:01,320 Speaker 1: a hefty band or anything. But because of the date 53 00:03:01,400 --> 00:03:04,760 Speaker 1: that had happened, it disqualified her results from the trials. 54 00:03:04,800 --> 00:03:07,920 Speaker 1: So even though she's our fastest woman at the one, 55 00:03:09,200 --> 00:03:12,359 Speaker 1: she can't compete, and it's it's I think it's hard 56 00:03:12,400 --> 00:03:14,280 Speaker 1: for Americans. I mean, it's hard for me to wrap 57 00:03:14,320 --> 00:03:18,120 Speaker 1: my mind around it that marijuana is considered a performance 58 00:03:18,200 --> 00:03:22,200 Speaker 1: enhancing drug and that she can't compete in the Olympics, 59 00:03:22,680 --> 00:03:24,839 Speaker 1: because I mean, it's legal in so many states here, 60 00:03:24,880 --> 00:03:28,440 Speaker 1: but we're talking about international rules here, so STANDI too different. 61 00:03:29,160 --> 00:03:32,519 Speaker 1: My joke, of course, was that you know, marijuana makes 62 00:03:32,520 --> 00:03:35,440 Speaker 1: you slow and lazy, so if you're caught, we're not 63 00:03:35,480 --> 00:03:37,400 Speaker 1: going to let you go win medals at the Olympics. 64 00:03:37,720 --> 00:03:40,720 Speaker 1: That that's the thing. It's like, Okay, her time is 65 00:03:40,840 --> 00:03:44,480 Speaker 1: arguably more impressive knowing that you know she was smoking 66 00:03:44,520 --> 00:03:48,320 Speaker 1: marijuana having it in some form beforehand, Like that's those 67 00:03:48,360 --> 00:03:51,480 Speaker 1: are fast twitched muscles you need. Doesn't go hand in 68 00:03:51,520 --> 00:03:54,680 Speaker 1: hand with cannabis. Now you must be you must be 69 00:03:54,840 --> 00:03:57,360 Speaker 1: tempted to put strap on the track shoes and get 70 00:03:57,480 --> 00:03:59,800 Speaker 1: get there and fill that spot. You know if my country, 71 00:04:00,040 --> 00:04:03,560 Speaker 1: it's me all right, well we need to hear on 72 00:04:03,560 --> 00:04:06,920 Speaker 1: the podcast and uh now we're going to introduce the guests. 73 00:04:06,920 --> 00:04:10,480 Speaker 1: Really excited to have this guest. He is, as I said, 74 00:04:10,520 --> 00:04:14,760 Speaker 1: the chief Investment officer for the America's at DWS. His 75 00:04:14,880 --> 00:04:18,400 Speaker 1: name is David Bianco. David, welcome to the show. Hello, Mike, 76 00:04:18,600 --> 00:04:21,640 Speaker 1: thanks for having me. Great that. Now, David, I want 77 00:04:21,640 --> 00:04:24,000 Speaker 1: to talk about sort of what we uh flicked at 78 00:04:24,040 --> 00:04:26,720 Speaker 1: in the introduction there, and it seems to me that 79 00:04:26,800 --> 00:04:30,400 Speaker 1: this week, um and maybe the last two weeks there's 80 00:04:30,480 --> 00:04:32,640 Speaker 1: kind of kind of been sort of a repricing in 81 00:04:32,680 --> 00:04:35,960 Speaker 1: the market of what to expect from the economy. Maybe 82 00:04:36,000 --> 00:04:40,400 Speaker 1: people are a little less gung ho as they formerly 83 00:04:40,440 --> 00:04:43,960 Speaker 1: were about how strong and how long this this boom 84 00:04:44,000 --> 00:04:47,040 Speaker 1: from the economic reopening will be. I'm curious what your 85 00:04:47,040 --> 00:04:49,400 Speaker 1: take on that is. How are you you know, has 86 00:04:49,480 --> 00:04:53,279 Speaker 1: anything changed materially for for the economic outlook? Is this 87 00:04:53,400 --> 00:04:55,640 Speaker 1: kind of a just a growth scare we're going through. 88 00:04:55,640 --> 00:04:59,320 Speaker 1: What's your what's your opinion? Well, Mike, I think the 89 00:04:59,320 --> 00:05:02,760 Speaker 1: weather is changing, but not the climate. And what I 90 00:05:02,800 --> 00:05:06,080 Speaker 1: mean by that is that this reflation of view and 91 00:05:06,160 --> 00:05:08,880 Speaker 1: trade that people have been playing since the start of 92 00:05:08,880 --> 00:05:12,599 Speaker 1: the year and about the reopening of the economy, the 93 00:05:12,680 --> 00:05:16,800 Speaker 1: ref the reflation trade and the big inflation fears are 94 00:05:16,920 --> 00:05:20,880 Speaker 1: blowing over, but the recovery is still with us. We 95 00:05:20,920 --> 00:05:25,440 Speaker 1: still very much believe in a recovery, continued economic growth, 96 00:05:25,560 --> 00:05:28,400 Speaker 1: even at an accelerated pace for the next couple of years. 97 00:05:29,000 --> 00:05:31,600 Speaker 1: And what we think is happening is simply a return 98 00:05:32,279 --> 00:05:35,560 Speaker 1: to the leadership of the digital and growth stock businesses 99 00:05:36,000 --> 00:05:39,359 Speaker 1: in the equity market. So, whether it's changing but not 100 00:05:39,440 --> 00:05:42,240 Speaker 1: the climate, it maybe a return to the normal situation 101 00:05:42,880 --> 00:05:45,840 Speaker 1: of what we had within an economy and investment leadership 102 00:05:45,920 --> 00:05:49,200 Speaker 1: prior to the pandemic, and so before we you know, 103 00:05:49,279 --> 00:05:53,040 Speaker 1: really dig into you know, digital businesses and how you 104 00:05:53,080 --> 00:05:55,920 Speaker 1: invest around that view. I want to talk a little 105 00:05:55,920 --> 00:06:00,000 Speaker 1: bit more about this week because it's felt very um 106 00:06:00,279 --> 00:06:03,159 Speaker 1: just very dramatic, and I'm curious, you know, when you 107 00:06:03,200 --> 00:06:06,040 Speaker 1: look at what's happening with the bond market, with treasury yields, 108 00:06:06,040 --> 00:06:09,560 Speaker 1: how that's bleeding through into equities. I mean, what is 109 00:06:09,600 --> 00:06:13,800 Speaker 1: the trigger people really really concerned about the delta variant, 110 00:06:13,880 --> 00:06:17,120 Speaker 1: for example, or is is this more positioning sort of 111 00:06:17,160 --> 00:06:20,760 Speaker 1: wash out going on. It's a few things, and I 112 00:06:20,800 --> 00:06:24,800 Speaker 1: guess they're each worth pointing out. What we've seen happen 113 00:06:25,279 --> 00:06:30,480 Speaker 1: is a surprising decline uh in in long term treasury yields, 114 00:06:30,520 --> 00:06:33,600 Speaker 1: as you said, from the about one point seven five 115 00:06:33,720 --> 00:06:38,720 Speaker 1: percent back in March to one point three percent right now, 116 00:06:38,760 --> 00:06:41,440 Speaker 1: even one and a quarter percent on an intra day basis. 117 00:06:41,839 --> 00:06:44,400 Speaker 1: And this all occurred over the past several months. As 118 00:06:44,560 --> 00:06:48,160 Speaker 1: most investors, including us, we're expecting interest rates to continue 119 00:06:48,160 --> 00:06:51,520 Speaker 1: working their way upward. So why did interest rates um 120 00:06:52,240 --> 00:06:54,320 Speaker 1: they collapse of the dramatic word, But why do they 121 00:06:54,400 --> 00:06:58,280 Speaker 1: fall so much and so quickly when everybody was expecting 122 00:06:58,320 --> 00:07:03,479 Speaker 1: the opposite. So yes, it may be people on winding 123 00:07:03,520 --> 00:07:06,680 Speaker 1: a crowded bit of expecting interest rates to rise, but 124 00:07:06,720 --> 00:07:09,600 Speaker 1: there's some good reasons for why this has happened at 125 00:07:09,640 --> 00:07:13,680 Speaker 1: this moment, and that includes that. First, if you go 126 00:07:13,760 --> 00:07:17,720 Speaker 1: back to the June fo MC meeting and and share 127 00:07:17,760 --> 00:07:21,240 Speaker 1: Powell's press conference, he did a very good job of 128 00:07:21,360 --> 00:07:25,240 Speaker 1: using his communication skills and communication tools. What he did 129 00:07:25,280 --> 00:07:29,800 Speaker 1: was he acknowledged that inflation is uh running a bit hot, 130 00:07:30,400 --> 00:07:32,960 Speaker 1: and he discussed that when the time comes, they will 131 00:07:33,000 --> 00:07:38,400 Speaker 1: take their other tools to contain inflation, and and that 132 00:07:38,400 --> 00:07:42,600 Speaker 1: that made the currency market a lot more comfortable that 133 00:07:42,680 --> 00:07:45,640 Speaker 1: when the time comes, the FED will defend the dollar 134 00:07:46,120 --> 00:07:49,680 Speaker 1: and keep inflation anchored close to its two two and 135 00:07:49,720 --> 00:07:53,040 Speaker 1: a half percent expectation. So one, it started off with 136 00:07:53,640 --> 00:07:57,320 Speaker 1: reassurances from the Fed that when the time comes, they'll 137 00:07:57,360 --> 00:07:59,800 Speaker 1: take action and they've got the tools to take action, 138 00:08:00,200 --> 00:08:02,480 Speaker 1: and we saw the dollar fine support and that was 139 00:08:02,920 --> 00:08:08,440 Speaker 1: the first um trigger to bringing bond investors back with 140 00:08:08,520 --> 00:08:14,080 Speaker 1: some confidence. Secondly, there's been these delays in new fiscal 141 00:08:14,120 --> 00:08:18,440 Speaker 1: stimulus legislation many people figured there'd be an infrastructure package 142 00:08:18,480 --> 00:08:21,760 Speaker 1: passed by the fourth of July, and then that has 143 00:08:21,800 --> 00:08:24,200 Speaker 1: not happened, and there's fears that there may not be 144 00:08:24,280 --> 00:08:28,240 Speaker 1: any legislation before the August recess. So we we still 145 00:08:28,280 --> 00:08:32,120 Speaker 1: expect some stimulus packages, but probably a little bit later 146 00:08:32,520 --> 00:08:35,000 Speaker 1: and a little bit more moderate and size than had 147 00:08:35,040 --> 00:08:39,560 Speaker 1: been previously discussed UH back during the UH the elections, 148 00:08:39,600 --> 00:08:42,840 Speaker 1: and and and afterward. And then third, yes, the delta 149 00:08:42,960 --> 00:08:46,319 Speaker 1: variant this is this is with us, and it is 150 00:08:46,360 --> 00:08:48,920 Speaker 1: a real threat to those in the world and those 151 00:08:48,920 --> 00:08:52,720 Speaker 1: countries that don't have the vaccine. So it through as 152 00:08:52,720 --> 00:08:56,240 Speaker 1: a wrinkle in the reopening story, certainly for the world 153 00:08:56,960 --> 00:08:59,520 Speaker 1: as we're still struggling after all this time to fully 154 00:08:59,559 --> 00:09:03,480 Speaker 1: return to normal UH in this in this pandemic UH. 155 00:09:03,520 --> 00:09:05,640 Speaker 1: And then the idea that there would be tons of 156 00:09:05,679 --> 00:09:09,000 Speaker 1: fiscal stimulus UH coming, we might have to wait longer, 157 00:09:09,200 --> 00:09:11,600 Speaker 1: a little bit more moderate in size, And the FED 158 00:09:11,640 --> 00:09:13,439 Speaker 1: has made it clear they're not going to let inflation 159 00:09:13,520 --> 00:09:16,640 Speaker 1: run out of control in the coming years. For those reasons, 160 00:09:16,960 --> 00:09:21,600 Speaker 1: tenure yields dropped UM because I think it's surprised everybody's expectations. 161 00:09:22,040 --> 00:09:25,160 Speaker 1: But we do think that interest rates will grind upward 162 00:09:25,240 --> 00:09:27,920 Speaker 1: over time, and our view here at THEWS as as 163 00:09:27,960 --> 00:09:30,520 Speaker 1: a tenure yield, whether it be a year from now 164 00:09:30,880 --> 00:09:32,880 Speaker 1: or not much longer than that, we do think the 165 00:09:32,920 --> 00:09:38,160 Speaker 1: tenure yield will get back to above. It's interesting, you know, 166 00:09:38,760 --> 00:09:40,920 Speaker 1: every time the bond market moves, it always seems like 167 00:09:41,000 --> 00:09:43,839 Speaker 1: the stock market looks at the bond market as sort 168 00:09:43,840 --> 00:09:47,400 Speaker 1: of the wiser older brother sister who knows something that 169 00:09:47,440 --> 00:09:50,439 Speaker 1: you don't, and and stock market, you know, it takes 170 00:09:50,440 --> 00:10:03,160 Speaker 1: its cues from that. David. Obviously, we're approaching sort of 171 00:10:03,200 --> 00:10:07,400 Speaker 1: the beginning of earning season for the second quarter. Um, 172 00:10:07,480 --> 00:10:10,640 Speaker 1: we're gonna get a fire hose of new information, uh, 173 00:10:10,679 --> 00:10:13,280 Speaker 1: you know, not only reported results, but outlooks for the 174 00:10:13,320 --> 00:10:16,440 Speaker 1: rest of the year. I guess the one kind of 175 00:10:16,520 --> 00:10:20,760 Speaker 1: top of mind question I have is is there any 176 00:10:20,800 --> 00:10:25,520 Speaker 1: concern about all these supply bottlenecks uh and and supply 177 00:10:25,920 --> 00:10:30,160 Speaker 1: issues that that we're hearing about. Is that set the 178 00:10:30,200 --> 00:10:33,840 Speaker 1: stage for possibly some some downward surprises and earnings in 179 00:10:33,920 --> 00:10:35,880 Speaker 1: certain sectors? In your mind, I mean, are there some 180 00:10:35,920 --> 00:10:39,360 Speaker 1: companies who because of these issues are not really able 181 00:10:39,440 --> 00:10:43,320 Speaker 1: to participate in this booming rebound like they would otherwise 182 00:10:43,480 --> 00:10:49,240 Speaker 1: if the supply chain was was functioning normally. Yes, there's 183 00:10:49,360 --> 00:10:53,920 Speaker 1: challenges and meeting demand, and there's there's uh uh there 184 00:10:53,960 --> 00:10:57,120 Speaker 1: there there's higher cost to many cases to to meeting demand, 185 00:10:57,160 --> 00:10:59,920 Speaker 1: and part of that is because of a more lots 186 00:11:00,000 --> 00:11:03,400 Speaker 1: sided nature of the demand. Everybody kind of ran to 187 00:11:03,480 --> 00:11:06,720 Speaker 1: one side of the ship and wanted goods rather than 188 00:11:06,760 --> 00:11:09,480 Speaker 1: the normal services that they would consume. During this pandemic, 189 00:11:09,960 --> 00:11:12,640 Speaker 1: they went from their urban lifestyle to more of a 190 00:11:12,640 --> 00:11:16,479 Speaker 1: suburban lifestyle, and they've turned their homes into their offices 191 00:11:16,559 --> 00:11:19,840 Speaker 1: and their schools into their So the point is, yes, 192 00:11:19,880 --> 00:11:24,200 Speaker 1: there's been demand ships, and there's been challenges in in 193 00:11:24,400 --> 00:11:27,200 Speaker 1: responding to that demand. This is part of the reason 194 00:11:27,200 --> 00:11:31,160 Speaker 1: why there there there are some signs of of inflation 195 00:11:31,200 --> 00:11:34,120 Speaker 1: running hot right now. Um, And we'll talk more about 196 00:11:34,160 --> 00:11:37,760 Speaker 1: inflation in a moment. But I think during earning season 197 00:11:38,520 --> 00:11:41,800 Speaker 1: you will come across companies that point to not being 198 00:11:41,840 --> 00:11:45,680 Speaker 1: able to achieve both the sales that they could have 199 00:11:45,720 --> 00:11:49,840 Speaker 1: achieved owing to inventories being too light or their supply 200 00:11:49,920 --> 00:11:53,680 Speaker 1: chains being bottlenecked. Um. But I actually think you're going 201 00:11:53,760 --> 00:11:57,080 Speaker 1: to find more of those challenges at companies that are 202 00:11:57,120 --> 00:11:59,800 Speaker 1: related to the reopening that are related to UH to 203 00:12:00,040 --> 00:12:03,520 Speaker 1: goods demand. The funny thing is the digital side of 204 00:12:03,559 --> 00:12:09,120 Speaker 1: the economy isn't having any trouble responding to demand. UM. 205 00:12:09,160 --> 00:12:12,600 Speaker 1: Their growth is occurring and and they're keeping up with 206 00:12:12,600 --> 00:12:17,880 Speaker 1: the demand very well with very low sometimes no incremental costs. Yeah, 207 00:12:18,360 --> 00:12:22,040 Speaker 1: turn on another server in the cloud somewhere and it's 208 00:12:22,040 --> 00:12:26,680 Speaker 1: aneviable business. I was trying to find the stat but 209 00:12:27,160 --> 00:12:30,880 Speaker 1: Bank of America had a great statu last earning seasons 210 00:12:30,880 --> 00:12:33,160 Speaker 1: that if you look at the number of mentions of 211 00:12:33,200 --> 00:12:36,520 Speaker 1: inflation on earnings called it had gone up something like. 212 00:12:37,720 --> 00:12:40,640 Speaker 1: That's not an exact number, so don't quote me, but 213 00:12:40,880 --> 00:12:43,040 Speaker 1: I'm curious, David, I do want to hear about your 214 00:12:43,080 --> 00:12:47,760 Speaker 1: expectations for this coming earnn's earning season. And also something 215 00:12:47,800 --> 00:12:50,240 Speaker 1: I think about, uh, you know, every three months, is 216 00:12:50,280 --> 00:12:55,000 Speaker 1: how much do earnings really matters? That really, uh, the 217 00:12:55,040 --> 00:12:58,200 Speaker 1: most important signal for the stock market. It's supposed to be, 218 00:12:58,320 --> 00:13:01,760 Speaker 1: but is it actually short answer, it is certainly one 219 00:13:01,800 --> 00:13:05,200 Speaker 1: of the very most important aspects UH earnings, not just 220 00:13:05,280 --> 00:13:08,800 Speaker 1: earnings today, but the earnings outlook of course, but earnings 221 00:13:08,800 --> 00:13:12,320 Speaker 1: and interest rates, and then on certainty around earnings and 222 00:13:12,360 --> 00:13:15,640 Speaker 1: interest rates, thus the risk premium, your discount rate. Those 223 00:13:15,679 --> 00:13:18,240 Speaker 1: are the three things that drive the equity market. UM. 224 00:13:18,800 --> 00:13:21,840 Speaker 1: So any insights we get on an important driver like 225 00:13:21,960 --> 00:13:25,360 Speaker 1: earnings now and and for the outlook, yes, it's very important. 226 00:13:25,600 --> 00:13:30,520 Speaker 1: And second quarter earning season is upon us. UM. We 227 00:13:30,559 --> 00:13:34,280 Speaker 1: are going to go through this ritual of we all 228 00:13:34,320 --> 00:13:37,359 Speaker 1: know that the companies are going to beat the analyst expectations. 229 00:13:37,679 --> 00:13:41,760 Speaker 1: It happens every single quarter, other than when there's economic 230 00:13:41,800 --> 00:13:44,760 Speaker 1: shocks that come on suddenly and then the earnings missed 231 00:13:44,760 --> 00:13:48,480 Speaker 1: and it's part of a recession beginning UH. Other times, 232 00:13:49,160 --> 00:13:53,600 Speaker 1: the aggregate earnings beat is usually about three percent, and 233 00:13:53,760 --> 00:13:58,560 Speaker 1: usually two thirds of companies UH beat on the earnings estimates. 234 00:13:59,160 --> 00:14:02,040 Speaker 1: What's happened in the recent quarters, including the first quarter, 235 00:14:04,040 --> 00:14:07,480 Speaker 1: more than the companies beat the estimates. And in the 236 00:14:07,520 --> 00:14:12,120 Speaker 1: first quarter the beat was and aggregate it was tremendous. 237 00:14:13,000 --> 00:14:15,440 Speaker 1: We went into the first quarter earning season saying the 238 00:14:15,520 --> 00:14:17,400 Speaker 1: numbers are too low, they're going to be beaten by 239 00:14:17,440 --> 00:14:20,480 Speaker 1: at least ten percent, and we're saying the same thing 240 00:14:20,520 --> 00:14:23,400 Speaker 1: for the second quarter right now. The analyst bottom up 241 00:14:23,480 --> 00:14:27,640 Speaker 1: number for the SMP five aggregate earnings just forty five 242 00:14:27,680 --> 00:14:31,160 Speaker 1: dollars per share. We expect that to be beaten by 243 00:14:31,200 --> 00:14:34,320 Speaker 1: at least ten percent. That if we're gonna get fifty 244 00:14:34,440 --> 00:14:37,960 Speaker 1: or higher of earnings in Q two, what I would 245 00:14:37,960 --> 00:14:40,520 Speaker 1: tell you is what's ahead is a whole bunch of 246 00:14:40,520 --> 00:14:44,440 Speaker 1: you know, beat reports from companies, But it is entirely 247 00:14:44,520 --> 00:14:47,320 Speaker 1: expected from the equity market that if we don't have 248 00:14:47,400 --> 00:14:49,720 Speaker 1: at least a ten percent, at least a double digit 249 00:14:50,080 --> 00:14:54,600 Speaker 1: type of beat, that will be a disappointment. UM investors 250 00:14:54,600 --> 00:14:59,560 Speaker 1: are basically valuing the SMP right now on the idea 251 00:14:59,600 --> 00:15:03,840 Speaker 1: that there's at least two hundred dollars of annualized earnings power, 252 00:15:04,280 --> 00:15:06,520 Speaker 1: and we saw very very close to that in the 253 00:15:06,560 --> 00:15:10,120 Speaker 1: first quarter of this year forty nine per Sure, some 254 00:15:10,200 --> 00:15:13,000 Speaker 1: things like lone loss reserve at leases helping to boost 255 00:15:13,000 --> 00:15:16,080 Speaker 1: the earnings, but with the economic growth that we've seen 256 00:15:16,160 --> 00:15:19,560 Speaker 1: during Q two, US real GDP growth should be eight 257 00:15:21,480 --> 00:15:25,760 Speaker 1: uh growth on an annualized basis. That and even just 258 00:15:25,800 --> 00:15:29,280 Speaker 1: the seasonality of second quarter earnings being stronger than first quarter, 259 00:15:30,280 --> 00:15:32,240 Speaker 1: we expect in there and we very much believe there 260 00:15:32,240 --> 00:15:34,560 Speaker 1: will be over fifty dollars of earnings out of out 261 00:15:34,560 --> 00:15:36,920 Speaker 1: of the season. I've said a lot, but what I 262 00:15:36,920 --> 00:15:38,640 Speaker 1: want to tell you, really, what I think would be 263 00:15:38,720 --> 00:15:43,240 Speaker 1: interesting is if, on a sequential basis, the digital stocks, 264 00:15:43,240 --> 00:15:46,640 Speaker 1: the tech communications, and the growth stocks in general, if 265 00:15:46,680 --> 00:15:50,120 Speaker 1: they can keep pace with the same type of growth 266 00:15:50,240 --> 00:15:54,400 Speaker 1: rates sales earnings as the big cyclical reopening place, if 267 00:15:54,400 --> 00:15:56,960 Speaker 1: they have similar growth rates, If this is the moment 268 00:15:57,040 --> 00:16:00,120 Speaker 1: for deep cyclicals to shine, and yet such of the 269 00:16:00,200 --> 00:16:03,200 Speaker 1: growth stocks still have earnings of growth, that's pretty comparable. 270 00:16:04,440 --> 00:16:08,040 Speaker 1: It may be again the reason why that reflation trade 271 00:16:08,680 --> 00:16:14,000 Speaker 1: is whether that's fading away. So David, Uh, can you 272 00:16:14,040 --> 00:16:16,280 Speaker 1: break it down for us, UH as far as kind 273 00:16:16,280 --> 00:16:18,840 Speaker 1: of what what the house view is at THEWS, as 274 00:16:18,880 --> 00:16:21,960 Speaker 1: far as allocation. You know, it sounds like you're pretty 275 00:16:22,000 --> 00:16:24,680 Speaker 1: bullish on sort of the fang type of names that 276 00:16:24,880 --> 00:16:29,000 Speaker 1: the digital uh, you know, heavy internet type of stocks. Uh, 277 00:16:29,440 --> 00:16:31,040 Speaker 1: let me know if that's fair to say. And sort 278 00:16:31,080 --> 00:16:33,400 Speaker 1: of what else, you know, where else in the market 279 00:16:33,400 --> 00:16:35,760 Speaker 1: are you looking for opportunities and what are you kind 280 00:16:35,800 --> 00:16:40,240 Speaker 1: of underweight at the moment. Yes, we are bullsh tech, 281 00:16:40,440 --> 00:16:44,400 Speaker 1: We are bullish growth stocks, UM. But our biggest message 282 00:16:44,400 --> 00:16:46,680 Speaker 1: since the start of this year, late last year was 283 00:16:47,720 --> 00:16:51,560 Speaker 1: stay diversified. It's an uncertain environment. It's still the early 284 00:16:51,640 --> 00:16:56,840 Speaker 1: years of a new expansion, new policies, UM, new investment trends, 285 00:16:56,880 --> 00:16:59,800 Speaker 1: some of the some some of the same trends digitalization 286 00:17:00,360 --> 00:17:03,120 Speaker 1: E s G, but some new ones to UH, what 287 00:17:03,520 --> 00:17:06,040 Speaker 1: exactly we're gonna do if on the clean energy front 288 00:17:06,080 --> 00:17:08,840 Speaker 1: out front faster we're gonna move toward that, UM, what's 289 00:17:08,880 --> 00:17:11,879 Speaker 1: going to happen to the disrupted businesses versus the disruptors? 290 00:17:12,520 --> 00:17:17,400 Speaker 1: Point is, UM, we don't want to uh take any 291 00:17:17,480 --> 00:17:22,119 Speaker 1: oversized UM macro risks. What we are doing is we 292 00:17:22,160 --> 00:17:30,680 Speaker 1: are moderately overweight equities UH, equity allocation versus normally for 293 00:17:30,720 --> 00:17:34,600 Speaker 1: our moderate risk portfolios and ask an allocation were moderately 294 00:17:34,800 --> 00:17:40,320 Speaker 1: overweight equities, moderately underweight fixed income the same about five points. 295 00:17:40,400 --> 00:17:44,880 Speaker 1: And then within equities UH. Right now, since the start 296 00:17:44,880 --> 00:17:48,240 Speaker 1: of the year, we've been overweight foreign equities both Europe 297 00:17:48,280 --> 00:17:52,120 Speaker 1: and and Asia. UH. And then within the United States, 298 00:17:52,480 --> 00:17:55,400 Speaker 1: we started the year overweight small caps. Now we're equal weight. 299 00:17:56,040 --> 00:17:58,439 Speaker 1: The rest of our allocation in the United States is 300 00:17:58,480 --> 00:18:02,800 Speaker 1: tilted toward growth, and our our idea was it was 301 00:18:02,840 --> 00:18:08,080 Speaker 1: better to find value opportunities energy industrial materials abroad, such 302 00:18:08,119 --> 00:18:11,400 Speaker 1: as in Europe. UH. And we stuck with the growth stocks, 303 00:18:11,400 --> 00:18:15,200 Speaker 1: but plus banks in the United States, we've been underweight 304 00:18:15,520 --> 00:18:35,679 Speaker 1: US energy industrials and materials companies. And so I'm curious 305 00:18:35,720 --> 00:18:39,640 Speaker 1: to hear your FED expectations UH specifically both in terms 306 00:18:39,720 --> 00:18:43,240 Speaker 1: of you know, when they actually uh move off of zero, 307 00:18:43,400 --> 00:18:46,879 Speaker 1: but also obviously there's been a lot of taper chatter 308 00:18:47,040 --> 00:18:49,400 Speaker 1: in the past few months. We had the talking about 309 00:18:49,480 --> 00:18:53,960 Speaker 1: talking about meeting UH from the FED in June. How 310 00:18:54,000 --> 00:18:58,160 Speaker 1: do you factor taper like the potential of a taper 311 00:18:58,240 --> 00:19:02,680 Speaker 1: into your asset allocation view is right. So our view 312 00:19:02,760 --> 00:19:05,879 Speaker 1: on what monetary policy is likely to be over the 313 00:19:05,880 --> 00:19:10,800 Speaker 1: next few years is that is about using communication tools 314 00:19:11,520 --> 00:19:15,760 Speaker 1: and that's a very powerful tool and share Powell did 315 00:19:15,760 --> 00:19:18,120 Speaker 1: a good job of it at the f OMC media 316 00:19:18,160 --> 00:19:20,600 Speaker 1: in in the press conference in June, as I said, 317 00:19:21,520 --> 00:19:25,000 Speaker 1: but we do not think uh they taper until two. 318 00:19:25,240 --> 00:19:29,000 Speaker 1: They may lay out a plan UH for when they 319 00:19:29,080 --> 00:19:32,120 Speaker 1: do it UH in late one, but we don't believe 320 00:19:32,160 --> 00:19:35,359 Speaker 1: they actually reduced the one billion dollars of purchases a 321 00:19:35,359 --> 00:19:39,600 Speaker 1: month until and then they'll taper over the course of two, 322 00:19:40,200 --> 00:19:43,560 Speaker 1: probably bring it to to zero or close to zero 323 00:19:43,640 --> 00:19:47,240 Speaker 1: over a twelve month period, and then the lift off conversation, 324 00:19:47,440 --> 00:19:50,960 Speaker 1: what will the Fed do with rates? We believe the 325 00:19:51,000 --> 00:19:56,879 Speaker 1: Fed will not high rates until three UM about communications 326 00:19:56,920 --> 00:20:01,679 Speaker 1: two about tapering, about h aiking rates, we don't think 327 00:20:01,680 --> 00:20:06,480 Speaker 1: they hike until but how fast they hike and ultimately 328 00:20:06,600 --> 00:20:09,520 Speaker 1: what rate they hike to is an uncertainty and one 329 00:20:09,520 --> 00:20:14,879 Speaker 1: that ties back to inflation. So we are we would 330 00:20:14,880 --> 00:20:18,320 Speaker 1: say no hikes for now, but there you know, a 331 00:20:18,400 --> 00:20:21,359 Speaker 1: couple of years away, and when they come, we're not 332 00:20:21,600 --> 00:20:25,919 Speaker 1: entirely sure where they plateau. But if fiscal policy is 333 00:20:26,040 --> 00:20:29,280 Speaker 1: right sized, then the Fed probably doesn't need to go 334 00:20:29,640 --> 00:20:33,040 Speaker 1: too far above two in order on the overnight rate 335 00:20:33,040 --> 00:20:37,679 Speaker 1: to keep inflation close too. And David, obviously, one of 336 00:20:37,680 --> 00:20:41,639 Speaker 1: the the sort of Fed watcher events this week was 337 00:20:41,680 --> 00:20:43,719 Speaker 1: there had been a lot of speculation that maybe the 338 00:20:43,760 --> 00:20:48,680 Speaker 1: Fed would start tapering their mortgage backed security purchases before 339 00:20:48,720 --> 00:20:52,600 Speaker 1: before the treasury purchases. That notion seems to have been 340 00:20:52,640 --> 00:20:56,000 Speaker 1: squashed this week by the Minutes and some other communications. UM. 341 00:20:56,080 --> 00:20:58,159 Speaker 1: But to rewind a little bit to what you were 342 00:20:58,160 --> 00:21:01,240 Speaker 1: saying about that hot housing mark, it I gotta say, boy, 343 00:21:01,280 --> 00:21:05,280 Speaker 1: for any of us around back in oh six oh seven, UM, 344 00:21:05,359 --> 00:21:07,480 Speaker 1: in the in the whole boom and bust cycle of 345 00:21:07,560 --> 00:21:10,679 Speaker 1: the housing market. Um, it's hard not to have a 346 00:21:10,680 --> 00:21:13,399 Speaker 1: bit of a flashback. I mean, obviously the structure of 347 00:21:13,440 --> 00:21:17,760 Speaker 1: the you know, structured finance world is not as vulnerable 348 00:21:17,880 --> 00:21:21,440 Speaker 1: I hope anyway, knock on wood as it was back then. UM. 349 00:21:21,440 --> 00:21:25,200 Speaker 1: But still you gotta wonder about this super hot housing 350 00:21:25,240 --> 00:21:29,600 Speaker 1: market and you know what that means going forward? Um, 351 00:21:30,680 --> 00:21:33,520 Speaker 1: it's not a risk, it's sort of an overheating of 352 00:21:33,560 --> 00:21:35,480 Speaker 1: the housing market, or risk in your mind has it 353 00:21:35,520 --> 00:21:39,240 Speaker 1: overheated already? And how do we sort of how should 354 00:21:39,280 --> 00:21:41,720 Speaker 1: we sort of think about housing going forward from here? 355 00:21:43,080 --> 00:21:45,639 Speaker 1: I think the best way to think about housing is 356 00:21:46,000 --> 00:21:51,119 Speaker 1: it is cyclical. Um. It is a long cycle UM. Industry, 357 00:21:51,280 --> 00:21:55,800 Speaker 1: sector of the economy. UM. And sometimes it's something you 358 00:21:55,840 --> 00:21:58,960 Speaker 1: just can't fight too much. And and yes, you know, 359 00:21:59,040 --> 00:22:03,359 Speaker 1: we all have views on and when markets get overheated, UM, 360 00:22:03,440 --> 00:22:06,679 Speaker 1: And sometimes we turn to policy centers to try to 361 00:22:06,720 --> 00:22:09,120 Speaker 1: adjust things. But you know, the FED would quickly make 362 00:22:09,160 --> 00:22:11,160 Speaker 1: the point that their tools are blunt tools and there's 363 00:22:11,200 --> 00:22:13,760 Speaker 1: only so much they can do. And should they really 364 00:22:14,680 --> 00:22:18,000 Speaker 1: change their asset purchase program because some people think the 365 00:22:18,000 --> 00:22:22,080 Speaker 1: housing market is is too hot in terms of price UM. 366 00:22:22,119 --> 00:22:23,600 Speaker 1: So I think it's one thing for them to comment 367 00:22:23,680 --> 00:22:27,480 Speaker 1: about it carefully, um, but probably stay the course on 368 00:22:27,520 --> 00:22:30,639 Speaker 1: their plans, you know, and responding to broader things like 369 00:22:30,680 --> 00:22:34,600 Speaker 1: the labor market and inflation measures broadly before they change 370 00:22:34,600 --> 00:22:38,159 Speaker 1: any of their big policy tools like asset purchases and 371 00:22:37,840 --> 00:22:40,639 Speaker 1: and so forth. And and then you have more to 372 00:22:40,680 --> 00:22:42,960 Speaker 1: your your your your question. Though my view on the 373 00:22:42,960 --> 00:22:46,840 Speaker 1: housing market is, um, it's sending a very valuable price 374 00:22:46,920 --> 00:22:49,360 Speaker 1: signal right now. It is saying we need more housing. 375 00:22:49,520 --> 00:22:52,560 Speaker 1: It is haying that part of the pandemic has been 376 00:22:52,640 --> 00:22:56,240 Speaker 1: that people are using homes as more than a place 377 00:22:56,240 --> 00:22:59,000 Speaker 1: to hang their hat. H It is it is their office, 378 00:22:59,040 --> 00:23:02,159 Speaker 1: that is their school, It is their sanctuary, is their oasis. 379 00:23:02,240 --> 00:23:04,639 Speaker 1: And in these times, I think the pandemic might have 380 00:23:04,800 --> 00:23:08,120 Speaker 1: been one of these life experiences where people say, I'm 381 00:23:08,119 --> 00:23:10,040 Speaker 1: just gonna live for the moment, and if there's this 382 00:23:10,160 --> 00:23:13,320 Speaker 1: car or boat or home I wanted they make, might 383 00:23:13,320 --> 00:23:16,399 Speaker 1: be moving more quickly to do it. Certainly, the interest 384 00:23:16,480 --> 00:23:19,760 Speaker 1: rates are low, and so a lot has come together 385 00:23:19,960 --> 00:23:23,160 Speaker 1: to make a special moment for housing, and that doesn't 386 00:23:23,160 --> 00:23:26,320 Speaker 1: mean it will last forever. I have argued that things 387 00:23:26,320 --> 00:23:30,399 Speaker 1: like home prices, car prices commodity prices. These are the 388 00:23:30,480 --> 00:23:32,240 Speaker 1: kind of things where I think we should be pretty 389 00:23:32,240 --> 00:23:35,199 Speaker 1: comfortable with. The idea may take some Timeally, in the 390 00:23:35,200 --> 00:23:38,320 Speaker 1: case of housing, that high prices will help fix high prices, 391 00:23:38,359 --> 00:23:41,439 Speaker 1: there will be a supply side response. I don't see 392 00:23:41,480 --> 00:23:46,359 Speaker 1: those things as persistent sources of inflation. UM. So I 393 00:23:46,359 --> 00:23:47,960 Speaker 1: mean to answer your question, I do think the housing 394 00:23:48,000 --> 00:23:50,960 Speaker 1: markets a little overcooked, but not that it's unhealthy. I 395 00:23:50,960 --> 00:23:53,960 Speaker 1: don't expect to collapse in prices. Again, this ties back 396 00:23:54,000 --> 00:23:57,119 Speaker 1: to interest rates. Um. But I do also think there 397 00:23:57,119 --> 00:23:59,040 Speaker 1: will be a supply response. And then it's not as 398 00:23:59,040 --> 00:24:01,119 Speaker 1: easy as it wasn't the US to do it, but 399 00:24:01,200 --> 00:24:05,000 Speaker 1: there will be a supply response. Don't forget it's you know, 400 00:24:06,040 --> 00:24:08,199 Speaker 1: it's easier for workers to be wherever they want to 401 00:24:08,200 --> 00:24:10,920 Speaker 1: be and for new housing stock to be placed wherever 402 00:24:11,000 --> 00:24:13,680 Speaker 1: you can place it versus, you know, next to city 403 00:24:13,680 --> 00:24:16,800 Speaker 1: centers in the past. Right that that makes a lot 404 00:24:16,840 --> 00:24:20,119 Speaker 1: of sense. David uh and Katie's David said, the housing 405 00:24:20,119 --> 00:24:22,840 Speaker 1: markets sending a signal that we need more housing. I'm 406 00:24:22,840 --> 00:24:25,280 Speaker 1: gonna send a signal that we need more crazy things. 407 00:24:25,480 --> 00:24:29,000 Speaker 1: That's that's I was wondering where we were going with 408 00:24:29,040 --> 00:24:33,480 Speaker 1: that it's usually I'm not very mysterious either. You can 409 00:24:33,760 --> 00:24:36,439 Speaker 1: you can spot a segue for me. Come come into MILEA. 410 00:24:36,640 --> 00:24:40,080 Speaker 1: So stand clear of the craziest things we saw in 411 00:24:40,200 --> 00:24:44,800 Speaker 1: markets this week, David, we have a attrition. Some make 412 00:24:45,119 --> 00:24:47,760 Speaker 1: including myself, may call it a gimmick here, but it's 413 00:24:47,760 --> 00:24:49,560 Speaker 1: a lot of fun. We call it the craziest thing 414 00:24:50,000 --> 00:24:52,440 Speaker 1: I saw in markets this week. Katie, let's start with you. 415 00:24:52,520 --> 00:24:55,639 Speaker 1: I'm curious what your craziest thing is. Okay, so this 416 00:24:56,520 --> 00:25:00,600 Speaker 1: this story. So there's this. It's sir goal. It's an 417 00:25:00,640 --> 00:25:03,600 Speaker 1: issuer of a stable coin, a stable coin for people 418 00:25:03,680 --> 00:25:08,040 Speaker 1: not in the crypto weeds. It's digital currency. It's peg 419 00:25:08,240 --> 00:25:12,320 Speaker 1: to another asset sometimes that's the US dollar anyway, Circle 420 00:25:12,440 --> 00:25:16,200 Speaker 1: which issues the U s DC stable coin. It's going 421 00:25:16,480 --> 00:25:20,000 Speaker 1: public via a spack in a four point five billion 422 00:25:20,080 --> 00:25:22,399 Speaker 1: dollar deal. And this is crazy to me because it 423 00:25:22,480 --> 00:25:26,720 Speaker 1: feels very much like a January February one story. Like 424 00:25:26,800 --> 00:25:28,840 Speaker 1: I thought we were over crypto. I thought we were 425 00:25:28,880 --> 00:25:31,840 Speaker 1: over spacked. So this was to see this headline was 426 00:25:31,920 --> 00:25:34,239 Speaker 1: kind of a blast from the past. That's pretty good. 427 00:25:34,240 --> 00:25:36,360 Speaker 1: If you can marry crypto to a spack, I think 428 00:25:36,520 --> 00:25:41,399 Speaker 1: we've reached peakslow for Yeah, yeah, I thought we were 429 00:25:41,440 --> 00:25:43,840 Speaker 1: past the peak, and I don't know, maybe we never 430 00:25:43,880 --> 00:25:47,760 Speaker 1: got off the mountain. It keeps getting more and more 431 00:25:49,320 --> 00:25:51,720 Speaker 1: every day. Yes, you never know when that peak is. 432 00:25:51,800 --> 00:25:54,600 Speaker 1: Really of of crazy things like that, that's pretty good one. 433 00:25:54,600 --> 00:25:56,560 Speaker 1: I agree, I and uh, I kind of missed a 434 00:25:56,560 --> 00:25:57,960 Speaker 1: boat on that. I had wanted to write a story 435 00:25:58,040 --> 00:26:01,000 Speaker 1: just on the notion of stable coins. And it's tremendously 436 00:26:01,359 --> 00:26:04,480 Speaker 1: harder than it sounds to get a crypto to actually 437 00:26:04,520 --> 00:26:07,800 Speaker 1: trade it that one dollar price. It's it's an interesting phenomenon. 438 00:26:08,040 --> 00:26:10,600 Speaker 1: I mean, I'm so obsessed with tether and the fact 439 00:26:10,640 --> 00:26:12,960 Speaker 1: that it's it's just a money market fund. It just 440 00:26:13,000 --> 00:26:16,280 Speaker 1: owns commercial paper. But that's a whole another podcast. That's 441 00:26:16,280 --> 00:26:17,920 Speaker 1: a great way to think about it. And also you 442 00:26:17,960 --> 00:26:19,600 Speaker 1: can think about it when a money market fund does 443 00:26:19,680 --> 00:26:22,320 Speaker 1: break the buck, how traumatic that can be for markets. 444 00:26:22,400 --> 00:26:25,760 Speaker 1: So so something keep an eye on for sure. How 445 00:26:25,760 --> 00:26:30,040 Speaker 1: about you, David, what's the craziest thing you've seen recently? Well, 446 00:26:30,080 --> 00:26:32,080 Speaker 1: maybe on a serious note, I mean, the crazy thing 447 00:26:32,320 --> 00:26:36,640 Speaker 1: in markets over the past week was the surprising decline 448 00:26:36,680 --> 00:26:42,760 Speaker 1: in interest rates, and yet the most of the Bonafi 449 00:26:42,920 --> 00:26:46,720 Speaker 1: bond substitutes and the equity market. The utility sector didn't 450 00:26:46,760 --> 00:26:49,440 Speaker 1: really budge it's interest rates are this low and and 451 00:26:50,080 --> 00:26:52,560 Speaker 1: felt recently you tell what you should be doing better. 452 00:26:53,240 --> 00:26:55,800 Speaker 1: Another disconnect was just the way we see these big 453 00:26:55,920 --> 00:26:58,639 Speaker 1: cap tech names in the United States keep climbing to 454 00:26:58,920 --> 00:27:01,200 Speaker 1: the sky and a lot of people running for the 455 00:27:01,240 --> 00:27:03,280 Speaker 1: hills when it comes at least Americans anyhow. With with 456 00:27:03,440 --> 00:27:07,440 Speaker 1: with Chinese technology stocks, Uh, well, there's some reasons for that, 457 00:27:07,640 --> 00:27:11,720 Speaker 1: but uh, these are these are great companies, Eastern technology, 458 00:27:11,800 --> 00:27:15,240 Speaker 1: Western technology, great companies. I I think, uh, there's some 459 00:27:15,320 --> 00:27:19,560 Speaker 1: opportunities in those those Chinese stocks and technology stocks. Um. 460 00:27:19,920 --> 00:27:21,359 Speaker 1: I don't know. It was fourth of July not so 461 00:27:21,480 --> 00:27:23,280 Speaker 1: long ago. That was a wild time. I think for 462 00:27:23,320 --> 00:27:26,320 Speaker 1: a lot of people is getting back out outdoors and 463 00:27:26,560 --> 00:27:30,800 Speaker 1: uh enjoying themselves, uh without masks. Uh. I'm from Long 464 00:27:30,840 --> 00:27:34,920 Speaker 1: Island Port, Washington. There's a fifty boat raft up out there, 465 00:27:35,280 --> 00:27:37,680 Speaker 1: big party, a lot of fun. But you know what, 466 00:27:38,040 --> 00:27:39,359 Speaker 1: I think there's gonna be a lot of boats for 467 00:27:39,440 --> 00:27:45,399 Speaker 1: sale at the all right, that's got that's good. I 468 00:27:45,440 --> 00:27:47,760 Speaker 1: wouldn't mind picking up a cheap boat here in New Jersey. 469 00:27:47,920 --> 00:27:50,639 Speaker 1: I'll keep keep my eye out for that. But it's 470 00:27:50,680 --> 00:27:54,240 Speaker 1: a great point about the China stocks trade in the US. 471 00:27:54,320 --> 00:27:57,040 Speaker 1: I mean, I think they would call that a rug 472 00:27:57,160 --> 00:27:59,359 Speaker 1: poll in the in the crypto world. What happened with 473 00:28:00,240 --> 00:28:02,119 Speaker 1: and I confess I don't know do you pronounce a 474 00:28:02,200 --> 00:28:05,040 Speaker 1: D D or diety the I've been saying d D. 475 00:28:05,400 --> 00:28:09,040 Speaker 1: No one's corrected me. But yeah, I mean it's nuts. 476 00:28:09,440 --> 00:28:12,560 Speaker 1: I think it's it's just fallen. Not every day since 477 00:28:12,600 --> 00:28:16,640 Speaker 1: it's ipl but pretty much. And that was just last week. Yeah, yeah, 478 00:28:16,680 --> 00:28:20,520 Speaker 1: I think that's a story. Uh, this China crackdown on 479 00:28:21,359 --> 00:28:23,359 Speaker 1: Chinese company trading in the in the US, I think 480 00:28:23,400 --> 00:28:26,439 Speaker 1: that's a story to watch. That's an interesting Uh all right, 481 00:28:26,680 --> 00:28:28,600 Speaker 1: I'm gonna go with mine. As listeners know, I like 482 00:28:28,760 --> 00:28:32,960 Speaker 1: the alternative st class and I really love for some reason, 483 00:28:33,119 --> 00:28:35,520 Speaker 1: I don't ask me why, but I love antique documents 484 00:28:35,680 --> 00:28:39,120 Speaker 1: as an asset class. So this story is courtesy of 485 00:28:39,280 --> 00:28:44,840 Speaker 1: the Belfast Telegraph and very timely with the the euro 486 00:28:45,280 --> 00:28:49,200 Speaker 1: Football Championship going on. But a copy of the earliest 487 00:28:49,320 --> 00:28:54,040 Speaker 1: printed rules of Football will be auctioned later this month. Um. 488 00:28:54,360 --> 00:28:56,840 Speaker 1: It was one of two surviving copies of the first 489 00:28:57,000 --> 00:29:00,320 Speaker 1: rules printed in eighteen fifty nine by the World first 490 00:29:00,400 --> 00:29:04,440 Speaker 1: football club, which was Sheffield in northern England. So it's 491 00:29:04,480 --> 00:29:07,640 Speaker 1: time to play prices, right, David and Katie. Um, And 492 00:29:07,720 --> 00:29:10,960 Speaker 1: this hasn't gone talction yet, but they listed some of 493 00:29:11,040 --> 00:29:15,520 Speaker 1: these listed in expected bid for the first printed rules 494 00:29:16,200 --> 00:29:19,000 Speaker 1: of football. And I will put out pretty interesting that 495 00:29:19,200 --> 00:29:22,280 Speaker 1: some of the rules have survived all these years. The 496 00:29:22,360 --> 00:29:25,680 Speaker 1: indirect free kick, the corner kick and stuff like that. 497 00:29:25,800 --> 00:29:29,720 Speaker 1: We're in these original rules in eighteen fifty nine. So Katie, 498 00:29:30,320 --> 00:29:34,920 Speaker 1: what's your bid for the original rules of football? Okay? Sorry, 499 00:29:35,000 --> 00:29:39,320 Speaker 1: just to clarify, we're talking about like American football, soccer, 500 00:29:39,560 --> 00:29:42,680 Speaker 1: soccer soccer. Okay, alright, I thought we were in England 501 00:29:42,720 --> 00:29:47,360 Speaker 1: for a moment. Okay, so so soccer. I have no idea. 502 00:29:47,600 --> 00:29:50,880 Speaker 1: I'm just gonna embarrass myself and say fifty grounds. I 503 00:29:50,960 --> 00:29:53,120 Speaker 1: don't know, all right, I'm gonna I'm gonna keep a 504 00:29:53,160 --> 00:29:59,080 Speaker 1: poker face on that. Um. Okay, prices right, rules are 505 00:29:59,120 --> 00:30:01,520 Speaker 1: in effect. So you you could go under fifty grand 506 00:30:01,600 --> 00:30:03,959 Speaker 1: or or you could go fifty thousand and one. Uh, 507 00:30:05,520 --> 00:30:08,920 Speaker 1: I'd go over fifty thousand. UM. I often asked myself, 508 00:30:09,040 --> 00:30:10,400 Speaker 1: you know, what is it? What would this be worth 509 00:30:10,480 --> 00:30:11,880 Speaker 1: to who? And what does it means to those people 510 00:30:11,960 --> 00:30:14,320 Speaker 1: to pay. If it was the NFL would be worth 511 00:30:14,360 --> 00:30:16,000 Speaker 1: probably a little bit more than this, you know, than 512 00:30:16,120 --> 00:30:19,760 Speaker 1: than European football soccer. But yeah, I'm gonna go with 513 00:30:19,800 --> 00:30:22,800 Speaker 1: over fifty thousand. Hopefully it's on some nice parchment, so 514 00:30:23,200 --> 00:30:27,360 Speaker 1: you'll so you'll go, uh, fifty one dollar. I gotta say, 515 00:30:27,400 --> 00:30:29,480 Speaker 1: I'm stumped here. I don't know who to anoint the winner, 516 00:30:29,520 --> 00:30:36,000 Speaker 1: because the answer is fifty thou pounds exactly. So I won, 517 00:30:36,560 --> 00:30:39,800 Speaker 1: So Katie said fifty grand, she didn't denote the currency, 518 00:30:39,840 --> 00:30:41,960 Speaker 1: and David said over, So I think I think you're 519 00:30:41,960 --> 00:30:47,040 Speaker 1: both winners. I think, well, you guys, yep, you split 520 00:30:47,120 --> 00:30:52,320 Speaker 1: the whatever prices, right, Uh it's a new car. That's 521 00:30:52,320 --> 00:30:55,080 Speaker 1: always the big prize on the prices, right. But uh good, 522 00:30:55,160 --> 00:30:57,680 Speaker 1: that's a great guest, Katie. Usually you're you're a high bidder. 523 00:30:57,840 --> 00:31:01,200 Speaker 1: Usually you're you're you're above you know, and I try 524 00:31:01,320 --> 00:31:03,760 Speaker 1: not to be. I just have I mean, after the 525 00:31:03,800 --> 00:31:05,640 Speaker 1: whole n f T craze, I have no idea how 526 00:31:05,760 --> 00:31:08,440 Speaker 1: much anything as well, who knows what anything's worth anymore? 527 00:31:08,480 --> 00:31:11,600 Speaker 1: It's it's who knows, it's it's whatever the you know, 528 00:31:11,800 --> 00:31:14,280 Speaker 1: the greater fool theory is in full effect and a 529 00:31:14,360 --> 00:31:17,600 Speaker 1: lot of these things. But speaking of greater fools, I 530 00:31:17,680 --> 00:31:20,360 Speaker 1: think that's time for me to say goodbye and thank 531 00:31:20,400 --> 00:31:23,960 Speaker 1: you both Katie and David. Really great conversation. David, I 532 00:31:24,040 --> 00:31:26,520 Speaker 1: really enjoyed here in your thoughts and uh, hopefully we'll 533 00:31:26,520 --> 00:31:28,480 Speaker 1: get you back again to talk about markets once again. 534 00:31:28,600 --> 00:31:39,760 Speaker 1: That'd be great. Thanks Mike, thanksty What Goes Up. We'll 535 00:31:39,800 --> 00:31:41,760 Speaker 1: be back next week and so then you can find 536 00:31:41,840 --> 00:31:44,760 Speaker 1: us on the Bloomberg Terminal website and Apple or wherever 537 00:31:44,800 --> 00:31:47,360 Speaker 1: you get your podcast. We'd love it if you took 538 00:31:47,400 --> 00:31:49,320 Speaker 1: the time to rate and review the show on Apple 539 00:31:49,360 --> 00:31:52,480 Speaker 1: Podcast so more listeners can find us. And you can 540 00:31:52,520 --> 00:31:55,760 Speaker 1: find us on Twitter, follow me at Bring Anonymous. Katie 541 00:31:55,760 --> 00:31:59,680 Speaker 1: greyffeldt is at a greifeld can also follow Bloomberg Podcast 542 00:32:00,000 --> 00:32:03,040 Speaker 1: at podcast. I think you to Charlie Pall of Bloomberg 543 00:32:03,120 --> 00:32:05,120 Speaker 1: Radio and the voice of the New York City Subway System. 544 00:32:05,800 --> 00:32:08,360 Speaker 1: What Goes Up is produced by Top of Forehead. The 545 00:32:08,400 --> 00:32:12,400 Speaker 1: head of Bloomberg Podcast is Francesco Leaving. Thanks for listening. 546 00:32:12,440 --> 00:32:13,280 Speaker 1: To see you next time.