WEBVTT - SCOTUS Abortion Pill Ruling 0:00:02.920 --> 0:00:07.280 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.960 --> 0:00:13.840 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:13.920 --> 0:00:17.239 weekdays at ten am Eastern on Applecarplaying and Broun Auto 0:00:17.360 --> 0:00:20.239 with the Bloomberg Business app. Listen on demand wherever you 0:00:20.320 --> 0:00:24.000 get your podcasts, or watch us live on YouTube. 0:00:24.880 --> 0:00:26.680 Alex Steel and Paul Sweeney, we're live here in our 0:00:26.680 --> 0:00:30.240 Bloomberg Interactive Brokers studio. We're streaming live on YouTube as well, 0:00:30.520 --> 0:00:33.600 so head over to YouTube dot com and search Bloomer 0:00:33.640 --> 0:00:34.879 Podcast and that's where you'll find this. 0:00:34.920 --> 0:00:35.200 Well. 0:00:35.520 --> 0:00:37.880 A significant story that we're following today, of course, is 0:00:37.920 --> 0:00:41.080 the US Supreme Court preserved full access to a widely 0:00:41.159 --> 0:00:43.800 used abortion pill in a case that carried major steaks 0:00:44.240 --> 0:00:48.160 for reproductive rights and election year results. Of court unanimly 0:00:48.240 --> 0:00:51.599 overturned a federal appeals that would have barred mail order 0:00:51.640 --> 0:00:55.000 prescriptions of MiFi pristone, the drug now used in more 0:00:55.000 --> 0:00:58.480 than half of US abortions. Let's get some color on that. 0:00:58.560 --> 0:01:01.920 We do that with Wendy Schiller is the professor at 0:01:02.040 --> 0:01:06.240 Brown University. What do you make of this decision coming 0:01:06.240 --> 0:01:09.440 out of this Supreme Court here in what is an 0:01:09.440 --> 0:01:10.040 election here? 0:01:11.240 --> 0:01:11.440 Yeah? 0:01:11.520 --> 0:01:13.800 Hi, Paul, I mean, it's a it's an interesting decision. 0:01:13.880 --> 0:01:17.400 They really use the idea of standing. They basically said, 0:01:17.440 --> 0:01:20.320 you know, the people who are suing are not injured 0:01:21.200 --> 0:01:25.720 direct or directly impacted by this by the FDA's power 0:01:25.760 --> 0:01:31.400 to approve this called abortion pill. But that's the moniker 0:01:31.440 --> 0:01:35.319 for it. And so they really stuck to jurisdiction like, 0:01:35.520 --> 0:01:36.440 we you don't have. 0:01:36.480 --> 0:01:38.400 Standing to bring this case to us. 0:01:38.600 --> 0:01:42.720 The Fifth Circuit, you know, said upheld the plaintiff's request, 0:01:42.920 --> 0:01:45.120 but also in their opinion said, well, we're not sure 0:01:45.120 --> 0:01:46.560 this is going to hold up at the Supreme Court. 0:01:46.840 --> 0:01:47.280 None of the. 0:01:47.240 --> 0:01:48.720 Plaintiffs are directly injured. 0:01:48.720 --> 0:01:52.360 And that's the way the Supreme Court unanimously got out 0:01:52.400 --> 0:01:56.600 of sort of the bigger debate about this pill and abortion. 0:01:56.760 --> 0:01:59.840 It is used in the majority of medical abortions in 0:01:59.840 --> 0:02:02.880 the country. So the politics are that the Republicans can 0:02:02.880 --> 0:02:05.840 breathe a sigh of relief because the Democrats cannot make 0:02:05.880 --> 0:02:09.480 this another issue on top of abortion access. But on 0:02:09.520 --> 0:02:13.200 the other hand, pro life groups will now push Republicans 0:02:13.480 --> 0:02:16.959 on the campaign trail to say they'll do something legislatively 0:02:17.360 --> 0:02:20.040 about this rather than through the courts. 0:02:20.320 --> 0:02:22.560 What could they do legislatively, then what would be on 0:02:22.600 --> 0:02:23.280 the docket for that. 0:02:23.880 --> 0:02:26.600 Well, alex I could do a few different things. One 0:02:26.639 --> 0:02:28.800 is they could limit the jurisdiction of the FDA. 0:02:29.800 --> 0:02:31.520 They could try to. 0:02:31.440 --> 0:02:33.919 Reverse the supremacy clause, which is that the federal law 0:02:34.120 --> 0:02:38.480 supersedes state law. Louisiana, for example, has now scheduled this 0:02:38.600 --> 0:02:44.280 particular pill as a dangerous substance, which really limits its access. 0:02:44.600 --> 0:02:46.320 That's going to happen in more states. 0:02:46.360 --> 0:02:48.640 The question is can the federal government undo that or 0:02:48.680 --> 0:02:52.519 contradict that? So they could push for laws that say, 0:02:52.520 --> 0:02:56.120 in this particular case, the FDA overreaches and Congress is 0:02:56.160 --> 0:02:56.960 not giving. 0:02:56.680 --> 0:02:57.840 The FDA this power. 0:02:58.120 --> 0:03:01.000 I think it's unlikely that the congres will do that 0:03:01.160 --> 0:03:03.079 for lots of reasons. 0:03:02.720 --> 0:03:04.639 Having to do with drug development and access. 0:03:05.040 --> 0:03:08.360 But it could be something that some Republicans bring up 0:03:08.360 --> 0:03:11.400 on the campaign trail. But it will only sort of 0:03:11.440 --> 0:03:14.840 fire up people who are really concerned about abortion access, 0:03:14.880 --> 0:03:17.799 who showed their electoral might in twenty twenty two. 0:03:18.000 --> 0:03:19.760 And are expected to get out the door again in 0:03:19.800 --> 0:03:20.280 twenty four. 0:03:20.840 --> 0:03:24.799 So I guess, Wendy, how do you think each campaign 0:03:24.840 --> 0:03:28.480 will maybe approach this issue here? I mean, are they 0:03:28.520 --> 0:03:31.440 just going to say, you know, the Supreme Court is ruling, 0:03:31.480 --> 0:03:33.680 will continue to rule, and will abide by that. I mean, 0:03:33.680 --> 0:03:35.960 how how is this ruling today? I think we'll impact 0:03:36.000 --> 0:03:38.119 twenty four Well, Paul. 0:03:37.920 --> 0:03:38.640 I mean Paul and Ox. 0:03:38.720 --> 0:03:41.440 I think by the my administration will take credit for 0:03:41.560 --> 0:03:44.880 having an FDA and some of these decisions predate the 0:03:44.920 --> 0:03:50.320 Biden administration, but protecting the FDA's discretion and FDA as 0:03:50.360 --> 0:03:54.240 a medical institution, and they'll say, listen, if you want 0:03:54.240 --> 0:03:56.560 to make sure that your access not just to this drug, 0:03:56.760 --> 0:03:59.440 but to lots of other drugs that might help you 0:03:59.760 --> 0:04:01.800 or save your life, you have to go with us, 0:04:01.880 --> 0:04:04.400 because we're the ones who believe in science. That will 0:04:04.400 --> 0:04:07.200 be the Biden message. Trump will be quiet about this. 0:04:07.280 --> 0:04:10.640 He has tried to back away from abortion, really saying 0:04:10.720 --> 0:04:13.440 leaving to the states rather than going for some national band, 0:04:13.720 --> 0:04:16.760 because he recognizes that all the issues that could deny 0:04:16.839 --> 0:04:19.599 him a victory, abortion is very high in the list, 0:04:19.920 --> 0:04:22.880 especially in states like at least Arizona for now and 0:04:23.000 --> 0:04:24.719 possibly also on the ballot in Florida. 0:04:24.880 --> 0:04:27.360 So there is another abortion case before the Supreme Court. 0:04:27.400 --> 0:04:29.040 Can you walk us through what that is and how 0:04:29.040 --> 0:04:29.599 it differs. 0:04:30.760 --> 0:04:34.360 Well, I mean, the other thing is about whether emergency 0:04:34.440 --> 0:04:39.159 room doctors and hospitals have to provide abortion to save 0:04:39.200 --> 0:04:40.159 the life of somebody. 0:04:40.160 --> 0:04:41.760 In other words, to make the case. 0:04:41.880 --> 0:04:44.839 That even in a state that doesn't allow abortion in 0:04:44.920 --> 0:04:47.640 case of danger to the life of the mother, that 0:04:47.680 --> 0:04:50.520 they in fact are obligated to and have to do 0:04:50.600 --> 0:04:53.440 this and won't be put in prison or you know, 0:04:53.600 --> 0:04:54.480 sued for doing it. 0:04:54.680 --> 0:04:55.560 So this is a. 0:04:55.480 --> 0:04:59.640 Really big case because we've already seen where doctors have 0:04:59.720 --> 0:05:03.160 become more hesitant in states like Texas for really taking 0:05:03.200 --> 0:05:05.200 this step in order to save the life of a 0:05:05.240 --> 0:05:08.040 mother for fear of prosecution or losing your medical license, 0:05:08.080 --> 0:05:11.200 for example. So this is a bigger case for the 0:05:11.240 --> 0:05:13.799 actual surgical procedures of a worship. 0:05:14.520 --> 0:05:17.400 So I guess you know, as you think about it, 0:05:17.440 --> 0:05:20.680 just in the context of a presidential election year, Wendy, 0:05:22.160 --> 0:05:24.760 what do you think are members of Congress. Are they 0:05:24.760 --> 0:05:26.880 bringing this to the forefront or they just don't want 0:05:26.880 --> 0:05:30.560 to get anywhere near this issue in what is an 0:05:30.560 --> 0:05:31.120 election year. 0:05:31.960 --> 0:05:35.480 Well, Democrats want to basically advertise in most but not 0:05:35.560 --> 0:05:38.120 all states, that they are the party that will try 0:05:38.120 --> 0:05:43.080 to protect access to reproductive health care, particularly in cases 0:05:43.120 --> 0:05:46.720 of rape. Incess life of the mother, but also that 0:05:46.839 --> 0:05:50.360 they are the party that will not come after contraception. 0:05:50.520 --> 0:05:53.400 For example, there are public and members of Congress, with 0:05:53.520 --> 0:05:56.320 some exceptions, want to really stay away from this issue. 0:05:56.320 --> 0:05:58.679 They really believe that this is the one. 0:05:58.520 --> 0:06:01.520 Issue that could cost them congression, racists, and the presidency, 0:06:02.160 --> 0:06:04.159 just based on what we saw in twenty twenty. 0:06:04.000 --> 0:06:06.960 Two in response to the Dobbs' decision. So Republicans want 0:06:06.960 --> 0:06:07.719 to stay away from it. 0:06:07.760 --> 0:06:10.560 They're hoping the court doesn't give the other side a 0:06:10.560 --> 0:06:13.120 lot of ammunition. And the Democrats are really going to 0:06:13.200 --> 0:06:16.279 hit home with this message, particularly in those two swings 0:06:15.880 --> 0:06:18.159 that I mentioned, Arizona and Florida. 0:06:18.200 --> 0:06:20.159 So considering that the case that we found out about 0:06:20.160 --> 0:06:23.240 today was a procedural issue and that's why the vote 0:06:23.279 --> 0:06:25.320 went the way it went, what are going to be 0:06:25.320 --> 0:06:27.599 the two sides in the Idaho case. 0:06:28.760 --> 0:06:31.520 Well, this is really it will come back to the 0:06:31.560 --> 0:06:35.640 Court's position that abortion is a state's issue, that states 0:06:35.680 --> 0:06:39.080 have the right to regulate all conditions and access for abortion. 0:06:39.480 --> 0:06:42.600 That's pretty much what Dobbs did, and now Trump has 0:06:42.640 --> 0:06:44.880 reiterated that he believes it's up to the states. 0:06:45.120 --> 0:06:48.719 So if states want to criminalize giving a woman an abortion, 0:06:48.960 --> 0:06:51.440 even to save her life. I'm not sure the Supreme 0:06:51.440 --> 0:06:55.599 Court's going to step in and say no, no, They've already. 0:06:55.480 --> 0:06:57.279 Basically said it's up to the states. 0:06:57.600 --> 0:07:00.719 So I think that's the big question mark, and politically 0:07:00.800 --> 0:07:03.960 for the Republicans, this is a very difficult issue if 0:07:03.960 --> 0:07:07.880 it in fact becomes the case that doctors are threatened 0:07:07.920 --> 0:07:10.480 with prison for saving the life of a woman. 0:07:11.000 --> 0:07:12.800 You know, that affects women everywhere. 0:07:12.840 --> 0:07:16.840 It affects women and their daughters, It affects a lot 0:07:16.920 --> 0:07:19.160 of people in their daily life in terms of the 0:07:19.240 --> 0:07:22.160 reproductive health, people who are trying to get pregnant, people 0:07:22.160 --> 0:07:25.320 have a complicated pregnancy. So it really gets to that 0:07:25.480 --> 0:07:29.560 core of voters that rejected the Republicans in twenty twenty 0:07:29.600 --> 0:07:31.840 two in this issue and are very likely to do 0:07:31.920 --> 0:07:35.000 so again if it is the case that a state 0:07:35.480 --> 0:07:38.040 can really prevent a doctor from saving women's life. 0:07:38.400 --> 0:07:41.720 So are we going to end up Wendy with abortion 0:07:41.840 --> 0:07:45.520 policies that really are red and blue? Are we going 0:07:45.560 --> 0:07:48.120 to have that checkerboard in this country? Is that kind 0:07:48.120 --> 0:07:50.000 of how this thing may develop? 0:07:50.920 --> 0:07:53.200 I mean, you can argue, Paul that we already have that, 0:07:54.200 --> 0:07:56.120 and we certainly had a little bit of that before 0:07:56.240 --> 0:07:59.760 abortion was legalized in nineteen seventy three with the court decision, 0:08:00.840 --> 0:08:04.520 And really, when you think about it, there are states 0:08:04.520 --> 0:08:07.480 where it's really almost virtually impossible to get an abortion, 0:08:08.160 --> 0:08:10.400 and certainly for the six week abortion band, that becomes 0:08:10.480 --> 0:08:12.200 very difficult because a lot of women don't know they're 0:08:12.200 --> 0:08:14.920 pregnant by then. We really have a situation where there 0:08:15.000 --> 0:08:17.960 is a slight majority of states where abortion is still accessible, 0:08:18.200 --> 0:08:20.400 and then we have a great number of states, more 0:08:20.440 --> 0:08:23.520 than twenty where it's very difficult for a women to 0:08:24.000 --> 0:08:26.360 get an abortion, and sometimes even. 0:08:26.120 --> 0:08:29.040 In the case of a rape ancestor life of the mother. 0:08:29.280 --> 0:08:32.040 Now, Texas argues that's not their law, that people are 0:08:32.080 --> 0:08:35.720 misinterpreting it, that in fact that doctors can perform this 0:08:36.040 --> 0:08:38.960 in Texas and not be penalized and not be criminalized. 0:08:39.440 --> 0:08:42.560 But the perception is out there that you can in 0:08:42.600 --> 0:08:44.079 fact bring this kind of charge or even I a 0:08:44.120 --> 0:08:46.439 civilian can bring a charge against you for it. So 0:08:46.480 --> 0:08:52.559 it's really deterring women's seeking of abortion in those states. Now, 0:08:52.840 --> 0:08:55.360 some other opponents will point out the fact that we 0:08:55.400 --> 0:08:57.599 actually had a slight increase in the overall number of 0:08:57.600 --> 0:09:00.880 abortions last year, and that's where access to this pill 0:09:01.200 --> 0:09:04.400 makes a huge difference for many women in America in 0:09:04.480 --> 0:09:05.600 terms of securing an abortion. 0:09:06.360 --> 0:09:09.000 Interesting, Okay, that actually really helps to highlight that even 0:09:09.000 --> 0:09:12.480 though it'd be difficult, that's why this pill became so important, Wendy, 0:09:12.920 --> 0:09:15.880 really amazing stuff. Definitely looking forward to having you back, 0:09:15.920 --> 0:09:19.840 wend You Shiller, Professor at Brown University there standing by, 0:09:20.400 --> 0:09:24.240 but nonetheless definitely sets the stage for the November election 0:09:24.360 --> 0:09:26.160 and sort of the policies that will come after that, 0:09:26.200 --> 0:09:28.480 which to me then makes the question, as an investor, 0:09:28.559 --> 0:09:30.320 bringing it back to our home base, what do you 0:09:30.320 --> 0:09:30.800 do about this? 0:09:31.080 --> 0:09:31.560 Yeah? 0:09:31.640 --> 0:09:35.720 And clearly clearly investors are very worried about immigration, I 0:09:35.720 --> 0:09:40.200 mean investors, voters everywhere, sure, very worried about immigration, and 0:09:40.320 --> 0:09:43.280 very worried about fiscal policy. Like France has made that clear, 0:09:43.440 --> 0:09:46.640 the UK has made that clear, India made that clear, 0:09:47.200 --> 0:09:50.719 Mexico made that clear. What do we do with that now? 0:09:51.000 --> 0:09:52.960 If we look forward to the US in November, because 0:09:53.000 --> 0:09:55.320 no one's going to be tackling a fiscal policy. 0:09:55.320 --> 0:09:58.040 No I mean deficit, no way, I mean deficits continue 0:09:58.040 --> 0:10:01.160 to run rampant at the national debt continues to balloon 0:10:01.240 --> 0:10:05.480 as a percentage of GDP. And but quite frankly, I've 0:10:05.520 --> 0:10:06.200 been around a while. 0:10:06.240 --> 0:10:08.880 This is always yeah, yeah, always. 0:10:08.440 --> 0:10:10.920 Been an issue, and no one has had the political 0:10:11.040 --> 0:10:12.760 or economic courage to try to tackle it. 0:10:12.800 --> 0:10:14.040 So I'm not sure what changes. 0:10:14.200 --> 0:10:16.120 It's always the whole like it matters, when it matters, 0:10:16.160 --> 0:10:17.439 it doesn't matter, do I mean at the end of 0:10:17.480 --> 0:10:17.840 the day, And. 0:10:17.840 --> 0:10:18.680 That's what it comes down to. 0:10:18.679 --> 0:10:22.840 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:10:22.920 --> 0:10:26.480 weekdays at ten am Eastern on applecar Play and Android 0:10:26.480 --> 0:10:29.640 Auto with the Bloomberg Business. You can also listen live 0:10:29.720 --> 0:10:32.920 on Amazon Alexa from our flagship New York station, Just 0:10:32.960 --> 0:10:35.520 Say Alexa, play Bloomberg eleven. 0:10:35.320 --> 0:10:40.839 Thirty Alex Steel alongside Paul Sweeney. This is Bloomberg Intelligence Radio. 0:10:40.840 --> 0:10:43.360 We bring you all the top news and analysis with 0:10:43.480 --> 0:10:45.880 our Bloomberg analysts. They cover two thousand companies in one 0:10:45.920 --> 0:10:48.719 hundred and thirty industries worldwide. And then sometimes we take 0:10:48.720 --> 0:10:51.720 you outside Bloomberg Intelligence for the view on the street. 0:10:51.720 --> 0:10:55.000 Today we go to Christina Hooper, chief Global market strategist 0:10:55.080 --> 0:10:59.079 over at Invesco. She joins us. Now, Christina, I gotta 0:10:59.080 --> 0:11:01.280 say on board now, like we got through CPI and 0:11:01.280 --> 0:11:03.760 we got through the FED. Okay, bonds are still getting 0:11:03.760 --> 0:11:05.840 a bid. So I put out there that we could 0:11:05.880 --> 0:11:09.800 see some significant levels now lower in yields. What do 0:11:09.880 --> 0:11:11.160 you make of the market, What are we going to 0:11:11.200 --> 0:11:12.040 be looking at next? 0:11:13.840 --> 0:11:16.280 So I think next up on the docket is going 0:11:16.320 --> 0:11:20.400 to be Friday's inflation expectations from the University of Michigan. 0:11:20.760 --> 0:11:24.320 Now it might not seem that important, but to central bankers, 0:11:24.400 --> 0:11:28.520 consumer inflation expectations are important. It's part of the calculus. 0:11:28.640 --> 0:11:30.960 If we go back to June of twenty twenty two, 0:11:31.480 --> 0:11:34.040 you may recall the FED messaged in advance of that 0:11:34.080 --> 0:11:36.880 meeting that it was only going to hike fifty basis points, 0:11:37.120 --> 0:11:40.079 then turned around and hiked seventy five basis points, and 0:11:40.160 --> 0:11:42.640 when asked about it at the press conference, J. Powell 0:11:42.720 --> 0:11:47.160 pointed to a few different data points, including Michigan inflation expectations. 0:11:47.160 --> 0:11:50.240 So I think it's important, But I also am confident 0:11:50.280 --> 0:11:54.120 that it's going to show that inflation expectations are pretty 0:11:54.360 --> 0:11:57.040 well anchored, and it will be part of the mosaic 0:11:57.080 --> 0:12:00.440 of data that the FED reviews next time, and which 0:12:00.520 --> 0:12:03.600 I think will cause the FED to begin cutting in the. 0:12:03.559 --> 0:12:06.360 Third quarter, cutting in the third quarter. 0:12:06.440 --> 0:12:09.680 Okay, So I know you know at this time of year, Christina. 0:12:09.840 --> 0:12:12.240 You know, every six months, folks that investo you bring 0:12:12.280 --> 0:12:14.839 together some of your key investment professionals, thought leaders and 0:12:15.320 --> 0:12:18.520 think about the next six months. What's the next six 0:12:18.520 --> 0:12:19.439 months look to you, guys. 0:12:22.080 --> 0:12:26.520 So, in terms of the economy, we expect to continue 0:12:26.559 --> 0:12:30.720 to see a slowdown in the US, a cooling, but 0:12:30.880 --> 0:12:33.920 we would anticipate that that's going to be relatively brief 0:12:34.000 --> 0:12:36.760 and that by the end of the year we'll see 0:12:36.760 --> 0:12:41.880 a reacceleration and growth. They'll be catalysts like the start 0:12:41.920 --> 0:12:47.120 of recuts as well as improvements in real income that 0:12:47.240 --> 0:12:51.920 will help consumers. So all in all, a better picture 0:12:52.040 --> 0:12:54.400 economically by the end of the year, but nothing bad 0:12:54.440 --> 0:12:58.760 in between. And we would anticipate markets starting to discount 0:12:58.760 --> 0:13:02.280 that soon. That would mean a broadening of the stock market, 0:13:02.679 --> 0:13:07.280 more participation, better performance from cyclicals and smaller caps, and 0:13:07.320 --> 0:13:10.680 in a more sustained way. Once we start to see 0:13:11.400 --> 0:13:13.439 the rate cuts begin from the FED. 0:13:14.240 --> 0:13:17.200 So but once you see that growth and the cuts, 0:13:17.640 --> 0:13:19.560 does that lead to higher inflation then. 0:13:21.559 --> 0:13:21.599 No. 0:13:21.960 --> 0:13:24.440 I think that the FED has done a very good 0:13:24.559 --> 0:13:29.080 job putting out the flames of higher in inflation. So 0:13:29.600 --> 0:13:32.120 I don't think the risk is as big as they 0:13:32.280 --> 0:13:36.000 suggested yesterday that there could be some kind of resurgence 0:13:36.080 --> 0:13:38.559 in inflation. And we certainly don't have the kind of 0:13:38.600 --> 0:13:41.800 fiscal stimulus we had that I think was an important 0:13:41.840 --> 0:13:46.200 part of why we saw such a big increase in inflation. 0:13:46.880 --> 0:13:51.160 I just don't see that happening going forward. 0:13:52.200 --> 0:13:55.880 How about in Europe, Christina, the last couple of days, 0:13:55.880 --> 0:13:59.680 we've seen some changes in the EU. We've seen in 0:13:59.760 --> 0:14:04.120 France snap elections. We now have the France Germany ten 0:14:04.200 --> 0:14:07.000 year yield gap set for the widest since twenty seventeen. 0:14:07.120 --> 0:14:08.320 Look at you, look at me. 0:14:08.360 --> 0:14:13.599 Gotpad exactly all geopolitical. How do you think about the 0:14:13.600 --> 0:14:16.440 European Zone, because it seems to be some unsteadiness there. 0:14:18.440 --> 0:14:20.800 Well, we try to put blinders on when it comes 0:14:20.880 --> 0:14:25.040 to politics because it can cause volatility in the short term, 0:14:25.680 --> 0:14:29.080 but beyond that tends not to have a significant impact 0:14:29.160 --> 0:14:32.760 on markets. So when I look at Europe, what I 0:14:32.840 --> 0:14:37.480 see is positive economic surprise, and I see the potential 0:14:37.600 --> 0:14:40.560 for more of that going forward. We also when we 0:14:40.640 --> 0:14:43.960 look at European equities and UK equities, what we see 0:14:44.040 --> 0:14:48.160 is greater exposure to cyclicals, so they'd be more sensitive 0:14:48.200 --> 0:14:53.440 and potentially benefit from an economic reacceleration. And I also 0:14:53.600 --> 0:14:58.200 see an increase in stock buybacks coming in both those markets. 0:14:58.360 --> 0:15:01.000 So there's a lot to be very positive about when 0:15:01.040 --> 0:15:02.920 we look at Europe and the UK. 0:15:03.280 --> 0:15:05.160 How can you put blinders on when it comes to 0:15:05.240 --> 0:15:09.200 politics in that we've seen a lot of violent shocks 0:15:09.280 --> 0:15:13.200 in the market, whether it's France or Mexico, or South 0:15:13.240 --> 0:15:17.600 Africa or India, and the market reaction is what seems 0:15:17.600 --> 0:15:21.480 to be catching investors on the back foot. Are we 0:15:21.640 --> 0:15:25.880 learning a market reaction function to the election in November? 0:15:27.800 --> 0:15:31.040 Well, I think there's certainly the possibility that we have 0:15:31.080 --> 0:15:34.720 a significant market reaction in the short term. 0:15:35.080 --> 0:15:37.440 We have seen that absolutely. 0:15:36.840 --> 0:15:40.120 With Mexico, with India, and there's certainly the potential for 0:15:40.160 --> 0:15:44.200 it to happen again. But most investors have a longer 0:15:44.240 --> 0:15:47.920 time horizon than two weeks or a month or two months, 0:15:48.360 --> 0:15:50.960 and so that's why I would argue it's important to 0:15:50.960 --> 0:15:54.280 put blinders on when it comes to things like politics. 0:15:54.840 --> 0:15:56.840 All Right, So if we want to stay close to 0:15:56.920 --> 0:16:00.920 home US equities here, I just stay with a big 0:16:00.960 --> 0:16:05.080 cap growth names that have worked so well for so long, 0:16:05.240 --> 0:16:07.080 or do I try to get a little bit more 0:16:07.080 --> 0:16:09.240 bold here, take a long little more risk and try 0:16:09.240 --> 0:16:10.400 to find some value out there. 0:16:11.320 --> 0:16:13.080 I think you need to be well diversified. And for 0:16:13.320 --> 0:16:17.920 most investors, their portfolios are likely overweight the large caps 0:16:17.960 --> 0:16:20.920 the growth, so it's time to rebalance and ensure there's 0:16:21.000 --> 0:16:25.440 adequate exposure to smaller caps, to value to cyclicals. I 0:16:25.480 --> 0:16:29.280 think those areas will perform better as we start to 0:16:29.360 --> 0:16:33.520 discount a reacceleration in the economy. That doesn't mean that 0:16:33.600 --> 0:16:36.000 the big cap tech names are going to do terribly, 0:16:36.280 --> 0:16:38.800 just means that participation is going to broaden and we 0:16:38.840 --> 0:16:41.760 could actually see our performance by the cyclicals. 0:16:43.120 --> 0:16:44.680 Is that so diversified? 0:16:44.720 --> 0:16:44.800 So? 0:16:44.960 --> 0:16:47.640 And I know you mentioned cyclicals over in Europe as well. 0:16:48.360 --> 0:16:51.480 Do you need to sell tech to buy the cyclicals 0:16:52.200 --> 0:16:55.360 or do you just need to sort of take from cash? 0:16:55.360 --> 0:16:55.920 What do you think? 0:16:57.240 --> 0:17:00.800 I think what's more likely the case is that there 0:17:00.840 --> 0:17:04.720 is an overweight to cash and investors' portfolios, and especially 0:17:04.720 --> 0:17:07.640 as the FED begins to cut rates and cash isn't 0:17:07.640 --> 0:17:12.400 paying as much, there's a greater argument for reshuffling and 0:17:12.600 --> 0:17:16.200 at least allocating some of that overweight to cash, to cyclicals, 0:17:16.400 --> 0:17:18.720 but in some cases there could be extreme overweights and 0:17:18.760 --> 0:17:21.920 portfolios to technology and large cap growth, and it also 0:17:21.960 --> 0:17:23.640 makes sense to rebalance there as well. 0:17:24.640 --> 0:17:28.600 At alternative investments. We have private We all grew up 0:17:28.600 --> 0:17:32.680 with private equity, hedge funds. Now there's private credit. It 0:17:32.720 --> 0:17:36.360 seems like there's a lot of opportunities to allocate capital 0:17:36.400 --> 0:17:37.919 to alternative investments. 0:17:38.119 --> 0:17:39.840 How do you, guys invest go think about that. 0:17:41.200 --> 0:17:43.200 We think that makes a lot of sense. We were 0:17:43.200 --> 0:17:47.280 one of the earliest proponents of including alternatives in portfolio. 0:17:48.040 --> 0:17:54.400 Still believe that's prudent for many investors' portfolios, that greater diversification, 0:17:54.920 --> 0:17:59.200 lower correlations. It all makes sense. And there are certainly 0:17:59.280 --> 0:18:02.080 many opportunities we're seeing in areas like private credit, and 0:18:02.119 --> 0:18:05.000 I would actually argue there are opportunities appearing in real 0:18:05.119 --> 0:18:11.159 estate as well, where well, we're certainly seeing European real 0:18:11.280 --> 0:18:14.159 estate has bottomed, and I also believe there are some 0:18:14.280 --> 0:18:17.920 opportunities in US real estate that will appear as the 0:18:18.000 --> 0:18:21.800 year progresses. Keep in mind that one important tail wind 0:18:21.880 --> 0:18:23.520 again will be rate cuts. 0:18:24.200 --> 0:18:28.400 So given what we saw Christina yesterday from the Federal Reserve, 0:18:28.440 --> 0:18:31.000 what we heard from the Federal reserve. What's pencil it 0:18:31.040 --> 0:18:32.800 in is your base case here? I know a lot 0:18:32.840 --> 0:18:35.000 of folks are trying to get a sense of do 0:18:35.040 --> 0:18:37.040 we have something in December? Do we have something maybe 0:18:37.160 --> 0:18:39.040 even a little bit sooner, but oh boy, we have 0:18:39.080 --> 0:18:41.560 this election. How do you guys think about it? 0:18:43.320 --> 0:18:46.720 Well, we hate to have false precision, but I do 0:18:46.920 --> 0:18:50.200 think we believe the most likely scenario is two rate 0:18:50.280 --> 0:18:54.240 cuts this year. And obviously the FED is very data dependent, 0:18:54.960 --> 0:18:58.520 so that can change. But based on what we've seen 0:18:58.560 --> 0:19:03.440 in terms of disinflationary progress, and given what the FED 0:19:03.480 --> 0:19:06.480 told us yesterday, which is that they anticipate one ray 0:19:06.480 --> 0:19:10.080 cut without any progress on disinflation, keep in mind their 0:19:10.119 --> 0:19:12.639 core PCE target, their forecasts for the end of this 0:19:12.760 --> 0:19:16.440 year is where core PCE is today. So I would 0:19:16.520 --> 0:19:21.320 argue that means that no progress equals one ray cut, 0:19:21.560 --> 0:19:26.560 then some progress in disinflation, which seems increasingly likely, could 0:19:26.640 --> 0:19:29.439 mean two ray cuts. I'm a believer in that, so 0:19:29.720 --> 0:19:33.399 I would argue the most likely scenario is September December. 0:19:33.840 --> 0:19:36.439 I don't think the election is going to change the 0:19:36.440 --> 0:19:38.600 FED timeline. They've been clear about that. 0:19:39.480 --> 0:19:43.639 Christina, really really interesting conversation. I learned a Ton Christina Hooper, 0:19:43.880 --> 0:19:47.320 chief Global market strategist over at Invesco, and that's that's 0:19:47.359 --> 0:19:50.960 the jewel. Right, you get growth, you get cuts, and 0:19:51.040 --> 0:19:53.560 you have inflation coming down, and that leads to your 0:19:53.640 --> 0:19:54.840 cyclical bias. 0:19:54.880 --> 0:19:56.440 At thein the day, it seems constructive. 0:19:56.680 --> 0:19:57.959 It seems like the best case scenario. 0:19:58.080 --> 0:19:58.240 Yeah. 0:19:58.240 --> 0:20:02.359 Absolutely, Mark also saying that the pain trade in the 0:20:02.400 --> 0:20:04.400 second half could also be led by cyclic goals because 0:20:04.480 --> 0:20:06.160 kind of no one's investing in them because they're all 0:20:06.160 --> 0:20:09.240 in tech and overweight tech. At the same time, we 0:20:09.240 --> 0:20:10.760 did get talked about bonds, but we will in the 0:20:10.800 --> 0:20:12.479 next hour. You look at the ten year down by 0:20:12.480 --> 0:20:15.520 another three basis points where to four point two eighty three. 0:20:15.680 --> 0:20:17.639 That's where we are for the ten year. Also that 0:20:17.720 --> 0:20:22.240 two year coming down as well to four point seven percent. 0:20:22.440 --> 0:20:24.680 As let's be honest, equity market's not doing much. 0:20:26.240 --> 0:20:30.040 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:20:30.200 --> 0:20:33.280 weekdays at ten am Eastern on Affo, Cardplay and Android 0:20:33.280 --> 0:20:36.320 Auto with the Bloomberg Business App. Listen on demand wherever 0:20:36.440 --> 0:20:39.560 you get your podcasts, or watch us live on YouTube. 0:20:41.400 --> 0:20:43.760 This is Bloomberg Intelligence Radio. We bring you all the 0:20:43.840 --> 0:20:46.000