1 00:00:02,480 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,800 --> 00:00:17,880 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,960 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,320 --> 00:00:25,640 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,040 Speaker 1: us live on YouTube. 6 00:00:27,400 --> 00:00:30,520 Speaker 2: Perfect time now to recalibrate. He wrote four hundred pages 7 00:00:30,960 --> 00:00:33,680 Speaker 2: June twenty ninth. He's ripped it up. Change it. Investco 8 00:00:33,760 --> 00:00:36,040 Speaker 2: asked for a rewrite. How do you rewrite your mid 9 00:00:36,159 --> 00:00:38,880 Speaker 2: year Brian Leavitt, I would change it all that significantly. 10 00:00:39,040 --> 00:00:41,599 Speaker 2: After the inflation reports, Yeah, I mean our view. 11 00:00:41,640 --> 00:00:45,280 Speaker 3: Was that inflation expectations were already falling. Our view was 12 00:00:45,280 --> 00:00:48,560 Speaker 3: that the Federal Reserve was not going to raise interest rates, 13 00:00:48,560 --> 00:00:51,479 Speaker 3: and our view was that would be supportive of this 14 00:00:51,640 --> 00:00:54,640 Speaker 3: broadening in markets that we've seen, and I don't see 15 00:00:54,680 --> 00:00:57,360 Speaker 3: any need to change that. In fact, the inflation reports 16 00:00:57,360 --> 00:01:00,880 Speaker 3: were favorable to that view. We saw this week and 17 00:01:00,960 --> 00:01:03,400 Speaker 3: a little bit of the chatter out of the FOMC 18 00:01:03,720 --> 00:01:06,880 Speaker 3: was favorable to that view, at least sounding a little 19 00:01:06,880 --> 00:01:07,720 Speaker 3: bit less hawkish. 20 00:01:07,800 --> 00:01:10,040 Speaker 2: This week is a disinflation vector in place. 21 00:01:10,120 --> 00:01:12,039 Speaker 3: To me, it is I believe I don't know how 22 00:01:12,120 --> 00:01:13,960 Speaker 3: long it's gonna take but yeah, I believe it is. 23 00:01:14,000 --> 00:01:17,280 Speaker 3: I mean, look, you're gonna have some disruption with regards 24 00:01:17,319 --> 00:01:20,679 Speaker 3: to the Middle East, but I'm not setting monetary policy 25 00:01:20,800 --> 00:01:23,000 Speaker 3: based on where the price of oil is going, based 26 00:01:23,000 --> 00:01:23,720 Speaker 3: on where. 27 00:01:23,680 --> 00:01:25,040 Speaker 2: Supply shocks are. 28 00:01:25,440 --> 00:01:29,959 Speaker 3: Goods prices are relatively contained, shelters coming down, wages aren't robust, 29 00:01:30,280 --> 00:01:32,560 Speaker 3: So to me, that's not an environment you want to 30 00:01:32,640 --> 00:01:33,520 Speaker 3: raise interest rates. 31 00:01:34,080 --> 00:01:36,440 Speaker 4: Brian, we did hear from a FED chairman warsh over 32 00:01:36,480 --> 00:01:38,520 Speaker 4: the past couple of days in front of the House 33 00:01:38,560 --> 00:01:39,120 Speaker 4: and the Senate. 34 00:01:39,200 --> 00:01:40,720 Speaker 5: Here any takeaways for you. 35 00:01:40,680 --> 00:01:44,480 Speaker 3: Here, Yeah, my view is that the Federal reserve will 36 00:01:44,520 --> 00:01:47,720 Speaker 3: be on hold this year. I think actually the next 37 00:01:47,760 --> 00:01:50,000 Speaker 3: move would be a cut. I do think that the 38 00:01:50,040 --> 00:01:55,840 Speaker 3: economy slows a bit here with higher commodity costs back again, 39 00:01:56,600 --> 00:01:59,600 Speaker 3: you're seeing slow down in the emerging markets in China, 40 00:01:59,680 --> 00:02:01,640 Speaker 3: and that's not the environment you want. 41 00:02:01,480 --> 00:02:02,840 Speaker 2: To raise interest rates into. 42 00:02:03,680 --> 00:02:05,800 Speaker 4: We're getting rid into the teeth of the earnings we 43 00:02:05,800 --> 00:02:09,160 Speaker 4: had the big banks earlier this week. First quarter is 44 00:02:09,160 --> 00:02:10,960 Speaker 4: a tough act to follow. 45 00:02:11,000 --> 00:02:13,400 Speaker 5: What's your expectations for the second quarter and kind of 46 00:02:13,600 --> 00:02:14,600 Speaker 5: the back half guidance. 47 00:02:14,760 --> 00:02:15,760 Speaker 6: It's a tough act to follow. 48 00:02:15,800 --> 00:02:17,960 Speaker 3: But so far, so good, and it looks like we're 49 00:02:18,000 --> 00:02:21,560 Speaker 3: on pace for the fifteenth consecutive quarter of double digit 50 00:02:21,639 --> 00:02:24,640 Speaker 3: earnings growth, which is just remarkable. You don't get that 51 00:02:24,840 --> 00:02:27,840 Speaker 3: typically in the middle part of a cycle. You usually 52 00:02:27,880 --> 00:02:30,000 Speaker 3: get that coming out of a recession. So what we're 53 00:02:30,040 --> 00:02:33,160 Speaker 3: seeing has been nothing short of remarkable. And it's not 54 00:02:33,280 --> 00:02:35,880 Speaker 3: just the tech sector. Of course, tech and energy will 55 00:02:35,960 --> 00:02:39,200 Speaker 3: lead this time, but it is broad based. Like you said, 56 00:02:39,200 --> 00:02:42,000 Speaker 3: it's across financials, it's going to be across most sectors. 57 00:02:42,680 --> 00:02:47,640 Speaker 2: Positive for markets, How does a retirement plan do higher highs? 58 00:02:48,120 --> 00:02:53,119 Speaker 2: How do you do momentum in a long term conservative plan? 59 00:02:53,280 --> 00:02:55,400 Speaker 3: The reality is if you look at markets. You know, 60 00:02:55,440 --> 00:02:58,520 Speaker 3: everybody always says by low, sell high. The reality of 61 00:02:58,560 --> 00:03:02,120 Speaker 3: markets is by high, sell higher. If you look at 62 00:03:02,120 --> 00:03:05,640 Speaker 3: broad markets, you're hitting new all time highs pretty much 63 00:03:05,800 --> 00:03:10,200 Speaker 3: once once every fifteen sixteen days, going back to nineteen 64 00:03:10,280 --> 00:03:14,840 Speaker 3: fifty seven. So that's the way markets historically move, typically 65 00:03:14,840 --> 00:03:16,760 Speaker 3: seventy five to eighty five percent of the time. You 66 00:03:16,800 --> 00:03:21,360 Speaker 3: should be positive on markets unless the economy is meaningfully deteriorating, 67 00:03:21,639 --> 00:03:22,680 Speaker 3: or central banks. 68 00:03:22,480 --> 00:03:24,480 Speaker 2: Or raising rates significantly. 69 00:03:24,919 --> 00:03:27,560 Speaker 3: We've actually tom had a little bit of a momentum 70 00:03:27,800 --> 00:03:32,200 Speaker 3: sell off since June twenty second momentum high beta down 71 00:03:32,320 --> 00:03:33,799 Speaker 3: sixteen seventeen percent. 72 00:03:33,840 --> 00:03:35,760 Speaker 2: That's pretty big. See how he does that. If you 73 00:03:35,760 --> 00:03:38,680 Speaker 2: go to Michigan, you just throw around elphas in Bata 74 00:03:40,520 --> 00:03:42,400 Speaker 2: and my daughter's joining in August. 75 00:03:42,480 --> 00:03:43,000 Speaker 5: Oh is that right? 76 00:03:43,080 --> 00:03:43,240 Speaker 4: Yeah? 77 00:03:43,240 --> 00:03:43,760 Speaker 5: That's awesome? 78 00:03:44,040 --> 00:03:45,600 Speaker 2: Next generation for next generation? 79 00:03:46,680 --> 00:03:48,280 Speaker 5: All right, Brian? So what are we doing here? 80 00:03:49,000 --> 00:03:49,320 Speaker 2: US? 81 00:03:49,960 --> 00:03:50,040 Speaker 7: WRO? 82 00:03:50,240 --> 00:03:52,400 Speaker 2: You miss a punchl is she getting name image like 83 00:03:52,440 --> 00:03:53,400 Speaker 2: this one? 84 00:03:55,040 --> 00:03:56,280 Speaker 5: For the economics degree? 85 00:03:56,920 --> 00:03:58,760 Speaker 4: What are we doing US versus non US? 86 00:03:58,960 --> 00:03:59,280 Speaker 5: Brian? 87 00:04:00,440 --> 00:04:04,440 Speaker 3: I would be still favoring the US here because of 88 00:04:04,480 --> 00:04:07,760 Speaker 3: some weakness, because of some slowdown here. You're still a 89 00:04:07,760 --> 00:04:10,800 Speaker 3: little bit of strong dollar on the macro side. So 90 00:04:10,920 --> 00:04:15,080 Speaker 3: that's a short term view. Ultimately, I think the dollar 91 00:04:15,360 --> 00:04:20,479 Speaker 3: is going to moderate. Investors are still overweight the US. 92 00:04:20,760 --> 00:04:24,520 Speaker 3: What really stopped that dollar weakness story was the war 93 00:04:24,600 --> 00:04:27,720 Speaker 3: in Iran. If you get the FED back on its 94 00:04:27,920 --> 00:04:32,240 Speaker 3: easing path, I think the dollar can moderate. What that 95 00:04:32,360 --> 00:04:35,000 Speaker 3: starts to do is unlock more of the value outside 96 00:04:35,040 --> 00:04:35,440 Speaker 3: the US. 97 00:04:35,560 --> 00:04:38,520 Speaker 2: Right now, that's a little bit challenged in here, but 98 00:04:38,640 --> 00:04:40,920 Speaker 2: ultimately I think we're back on that path. Brian. Thank 99 00:04:40,960 --> 00:04:43,520 Speaker 2: you so much. Brian. Let it investco with us today. 100 00:04:43,640 --> 00:04:47,560 Speaker 2: Your daughter's in Michigan, thank you. She in coming freshmen. 101 00:04:47,800 --> 00:04:50,440 Speaker 6: And what's the major we're going to do broadcast journalism. 102 00:04:50,520 --> 00:04:55,400 Speaker 2: You're looking for someone always four years I'll ask you, 103 00:04:57,680 --> 00:05:00,840 Speaker 2: he said. Okay, everybody has have a dream. She got 104 00:05:00,960 --> 00:05:02,719 Speaker 2: to do a double minor. Come on, you gotta get her, 105 00:05:02,760 --> 00:05:04,840 Speaker 2: and like you'll get her in marketing or something. Yeah, 106 00:05:04,880 --> 00:05:09,640 Speaker 2: you know, yeah, I remember when the middle child took microeconomics. Dad, 107 00:05:09,680 --> 00:05:12,320 Speaker 2: this is really hard. It is really hard. I like 108 00:05:12,320 --> 00:05:14,559 Speaker 2: when people ask me to tutor, they are I haven't 109 00:05:14,800 --> 00:05:18,919 Speaker 2: nailed it. Stay with us. More from Bloomberg Surveillance coming 110 00:05:19,000 --> 00:05:19,960 Speaker 2: up after this. 111 00:05:27,240 --> 00:05:30,800 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 112 00:05:30,880 --> 00:05:34,039 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 113 00:05:34,120 --> 00:05:37,760 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 114 00:05:37,920 --> 00:05:39,440 Speaker 1: watch us Live on YouTube. 115 00:05:39,600 --> 00:05:41,720 Speaker 2: It's a lot of good conversations today, but I saw 116 00:05:41,760 --> 00:05:44,000 Speaker 2: that this may be the most important one. She has 117 00:05:44,040 --> 00:05:47,640 Speaker 2: a psychology degree from the University of Damien sass Hour yep, 118 00:05:47,839 --> 00:05:49,240 Speaker 2: I mean, that's just it's incredible. 119 00:05:49,240 --> 00:05:51,800 Speaker 5: I was on campus for the first time about a 120 00:05:51,920 --> 00:05:52,280 Speaker 5: year ago. 121 00:05:53,240 --> 00:05:56,040 Speaker 2: It's unbelievable. Book so no one does not have a 122 00:05:56,080 --> 00:05:59,080 Speaker 2: BMW yet. That's on. Look at Ryan Mitchell and Jones's 123 00:05:59,320 --> 00:06:03,440 Speaker 2: now call family office down in West Palm something or other. 124 00:06:04,080 --> 00:06:08,520 Speaker 2: If I read Justin Beer's Fidelity House of Fidelity, it's fabulous. 125 00:06:08,640 --> 00:06:11,960 Speaker 2: No one sees the next bear market coming. How all 126 00:06:12,080 --> 00:06:15,800 Speaker 2: in are your clients on the Great American bull market? 127 00:06:16,760 --> 00:06:21,520 Speaker 8: Good morning. It's been obviously a great last few years, 128 00:06:21,640 --> 00:06:24,039 Speaker 8: and there are a lot of reasons why it can continue. 129 00:06:24,080 --> 00:06:26,200 Speaker 8: But there are also parts of the market that, do 130 00:06:26,200 --> 00:06:29,800 Speaker 8: you look a little bit frothy, have been extended. So 131 00:06:29,839 --> 00:06:32,440 Speaker 8: our clients are having some of those concerns. We are 132 00:06:32,440 --> 00:06:35,440 Speaker 8: having those conversations around what can we be doing, how 133 00:06:35,480 --> 00:06:38,920 Speaker 8: can we protect But overall we're still pretty optimistic. 134 00:06:39,000 --> 00:06:42,320 Speaker 2: Do you light nump on those or do you outright hedge, 135 00:06:42,360 --> 00:06:44,920 Speaker 2: because what I see in Bear's book is nobody's hedging. 136 00:06:45,320 --> 00:06:47,200 Speaker 2: It's all in the bull market. It's great, let's go, 137 00:06:47,279 --> 00:06:51,320 Speaker 2: let's go. Are you hedging into a slowdown? 138 00:06:51,600 --> 00:06:54,440 Speaker 8: We're not necessarily hedging. We are view is we don't 139 00:06:54,480 --> 00:06:57,320 Speaker 8: see a slowdown coming, So we do see the broadening 140 00:06:57,360 --> 00:07:01,479 Speaker 8: out to potentially continue. Expect that other parts of the 141 00:07:01,520 --> 00:07:04,680 Speaker 8: market could do better going forward. Rather than the tech 142 00:07:04,760 --> 00:07:08,080 Speaker 8: that we've seen really really leading the market recently. So 143 00:07:08,120 --> 00:07:11,840 Speaker 8: we're moving into areas like small caps, emerging markets, shifting 144 00:07:11,880 --> 00:07:15,000 Speaker 8: into value. I mean, looking across sectors, there's more of 145 00:07:15,040 --> 00:07:17,840 Speaker 8: a than a thirty percent differential between the best performing 146 00:07:17,880 --> 00:07:19,760 Speaker 8: sector and the SMP and the worst right now. 147 00:07:20,040 --> 00:07:21,560 Speaker 4: So there are a lot of parts of the market that. 148 00:07:21,520 --> 00:07:24,080 Speaker 8: Are high quality companies that have really been left behind, 149 00:07:24,440 --> 00:07:26,600 Speaker 8: and we do think there's opportunity for some of that 150 00:07:26,720 --> 00:07:28,080 Speaker 8: rotation to continue. 151 00:07:28,680 --> 00:07:30,600 Speaker 4: What's your I don't know if you have a model 152 00:07:30,720 --> 00:07:33,000 Speaker 4: asset allocation or something you kind of start with when 153 00:07:33,040 --> 00:07:33,840 Speaker 4: you sit down with a client. 154 00:07:33,880 --> 00:07:35,520 Speaker 5: How do you think that asset allocation these days? 155 00:07:35,560 --> 00:07:37,640 Speaker 8: Yeah, a lot of it starts with risk tolerance and 156 00:07:37,680 --> 00:07:41,280 Speaker 8: really having conversations. Every client has a different circumstance, so 157 00:07:41,320 --> 00:07:42,440 Speaker 8: everything's customized. 158 00:07:42,760 --> 00:07:43,880 Speaker 6: But we do like to. 159 00:07:43,800 --> 00:07:47,000 Speaker 8: Have a broad, diversified portfolio, and so if you come 160 00:07:47,000 --> 00:07:50,320 Speaker 8: in and have maybe a moderate aggressive profile, we'll have 161 00:07:50,360 --> 00:07:53,520 Speaker 8: a good portion in public equities that we have a 162 00:07:53,640 --> 00:07:57,600 Speaker 8: tax efficient overlay too, as well as pairing that with 163 00:07:57,720 --> 00:08:01,080 Speaker 8: fixed income with a lot in private markets and other alternatives, 164 00:08:01,880 --> 00:08:04,200 Speaker 8: and really just kind of building that out so that 165 00:08:04,640 --> 00:08:06,600 Speaker 8: we have a diverse fied portfolio. 166 00:08:06,640 --> 00:08:09,320 Speaker 5: I'm moly surprised that alternatives. 167 00:08:09,760 --> 00:08:11,720 Speaker 4: I would think the allocation I kind of grew up 168 00:08:11,720 --> 00:08:14,480 Speaker 4: in the allocation of kind of five percent, maybe ten, 169 00:08:14,920 --> 00:08:17,120 Speaker 4: But I hear a lot of registered nuts advisors take 170 00:08:17,160 --> 00:08:18,000 Speaker 4: that much higher. 171 00:08:18,000 --> 00:08:19,000 Speaker 5: How do you guys think about. 172 00:08:18,840 --> 00:08:21,000 Speaker 4: Alternatives in terms of a portfolio? 173 00:08:21,360 --> 00:08:24,239 Speaker 8: Yeah, so our client base is primarily ultra high networth, 174 00:08:24,280 --> 00:08:26,760 Speaker 8: so we work with ultra high net worth, multi generational 175 00:08:26,800 --> 00:08:30,200 Speaker 8: type time horizons, so you're able to really dial that 176 00:08:30,320 --> 00:08:34,120 Speaker 8: up a little bit and benefit from the return premiums 177 00:08:34,120 --> 00:08:36,480 Speaker 8: that you can get in those illoquoid markets. So we do, 178 00:08:36,800 --> 00:08:39,319 Speaker 8: in a lot of cases have maybe twenty to thirty 179 00:08:39,360 --> 00:08:41,800 Speaker 8: percent in alternatives for the right clients. 180 00:08:42,080 --> 00:08:42,800 Speaker 5: Yep, that's all right. 181 00:08:43,080 --> 00:08:47,160 Speaker 2: Are people over diversified? I mean I just see everybody 182 00:08:47,160 --> 00:08:49,559 Speaker 2: and all the wealth managers in that and they're doing 183 00:08:49,600 --> 00:08:51,560 Speaker 2: do this, do this, do this. Shouldn't we just be 184 00:08:51,600 --> 00:08:55,080 Speaker 2: a little more concentrated and have confidence in our bets. 185 00:08:55,440 --> 00:08:58,120 Speaker 8: I mean, hindsight's twenty twenty. If you've been concentrated the 186 00:08:58,200 --> 00:09:00,200 Speaker 8: last few years, obviously that would have been in a 187 00:09:00,200 --> 00:09:03,080 Speaker 8: better place to be. It's the problem of being concentrated 188 00:09:03,120 --> 00:09:04,960 Speaker 8: is you have to make the right bets. So the 189 00:09:05,000 --> 00:09:07,520 Speaker 8: way we like to play it on the equity side 190 00:09:07,559 --> 00:09:12,400 Speaker 8: is pair of tax efficient, low cost passive allocation with 191 00:09:12,880 --> 00:09:17,080 Speaker 8: some concentrated active satellite managers that are investing in a 192 00:09:17,120 --> 00:09:19,680 Speaker 8: portfolio of maybe twenty to thirty companies that they. 193 00:09:19,600 --> 00:09:23,360 Speaker 2: Do have work. God, is that an active approach beating passive? 194 00:09:23,960 --> 00:09:28,480 Speaker 8: Not recently. Quality has certainly been underperforming, so we're seeing 195 00:09:28,520 --> 00:09:31,400 Speaker 8: a little bit of the rotation and broadening out could 196 00:09:31,440 --> 00:09:33,320 Speaker 8: help that, and it's been difficult. 197 00:09:33,640 --> 00:09:35,720 Speaker 2: In the Justin Baier book, guess who shows up like 198 00:09:35,800 --> 00:09:39,480 Speaker 2: page forty two? Is that Jeck Bogel's right? 199 00:09:40,520 --> 00:09:40,679 Speaker 7: Oh? 200 00:09:40,800 --> 00:09:44,560 Speaker 2: Hello, yeah, exactly there it is passive. 201 00:09:45,120 --> 00:09:46,400 Speaker 6: What are you doing in the. 202 00:09:46,240 --> 00:09:47,200 Speaker 5: Fixingcome market here? 203 00:09:47,200 --> 00:09:49,280 Speaker 4: Are you taking credit risk to your are you suggesting 204 00:09:49,320 --> 00:09:51,120 Speaker 4: your clients take credit risk here? Or do you just 205 00:09:51,160 --> 00:09:54,160 Speaker 4: sit and clip those treasury coupons, which is they've been 206 00:09:54,200 --> 00:09:55,679 Speaker 4: as good as they've been in a long time. 207 00:09:56,080 --> 00:09:56,320 Speaker 2: Yeah. 208 00:09:56,679 --> 00:09:59,760 Speaker 8: Most of our fixed income allocations on the traditional side 209 00:09:59,760 --> 00:10:02,480 Speaker 8: really our high quality investment grade. A lot of it's 210 00:10:02,520 --> 00:10:05,760 Speaker 8: in unibonds. Given that we work with taxable investors, we 211 00:10:05,840 --> 00:10:08,640 Speaker 8: do have some exposure in the high yield within that space, 212 00:10:09,040 --> 00:10:11,679 Speaker 8: and then we do pairt some with private credit opportunities 213 00:10:11,679 --> 00:10:15,400 Speaker 8: where we think we can get an incremental benefit and 214 00:10:15,480 --> 00:10:17,080 Speaker 8: get some diverse fied exposure there. 215 00:10:17,920 --> 00:10:20,079 Speaker 4: So what's the what's the number one top of your 216 00:10:20,080 --> 00:10:23,560 Speaker 4: clients call you about? You don't call them, they call 217 00:10:23,640 --> 00:10:24,960 Speaker 4: you right now. 218 00:10:25,000 --> 00:10:27,839 Speaker 8: A lot of it really is talking about the momentum 219 00:10:27,880 --> 00:10:30,960 Speaker 8: trade and like should we be concerned about these these 220 00:10:31,080 --> 00:10:33,920 Speaker 8: chip stocks and the tech exposure, and should we be 221 00:10:33,960 --> 00:10:37,200 Speaker 8: rebalancing our portfolios, which we have been doing, but there's 222 00:10:37,240 --> 00:10:39,319 Speaker 8: still some concern about how much more room there is 223 00:10:39,360 --> 00:10:40,240 Speaker 8: to run in that space. 224 00:10:40,360 --> 00:10:42,559 Speaker 2: How often do you rebalance? Do you do it formulaic 225 00:10:42,679 --> 00:10:44,040 Speaker 2: or is it at hoc? 226 00:10:44,240 --> 00:10:47,240 Speaker 8: No, it's it's really I mean we do do it periodically, 227 00:10:47,280 --> 00:10:50,080 Speaker 8: I'd say probably once a quarter, but it's not formulaic. 228 00:10:50,200 --> 00:10:52,160 Speaker 8: So's we take into account a lot of the tax 229 00:10:52,200 --> 00:10:55,960 Speaker 8: consequences and the benefits from doing it and each individual client. 230 00:10:56,720 --> 00:10:58,640 Speaker 8: So a lot of it really is done with the tax. 231 00:10:59,080 --> 00:11:01,360 Speaker 2: The media is a Floorida booms off. Come on, you're 232 00:11:01,400 --> 00:11:03,400 Speaker 2: in the heart of it. Okay, here, I mean she 233 00:11:03,480 --> 00:11:06,760 Speaker 2: were when she's not here, she's wearing Lily Poulitzer. Yeah, 234 00:11:06,800 --> 00:11:08,439 Speaker 2: but is the Florida boom off? 235 00:11:09,120 --> 00:11:12,800 Speaker 6: It's tapering off. I'd say it's still crowded down there. 236 00:11:12,840 --> 00:11:14,680 Speaker 8: We still have a lot of businesses there, but we're 237 00:11:14,720 --> 00:11:17,160 Speaker 8: seeing it's definitely been slowing down. 238 00:11:17,600 --> 00:11:19,600 Speaker 2: Okay, this has been great. Don't be a stranger, Rayham, 239 00:11:19,640 --> 00:11:21,880 Speaker 2: Mitrid and thank you so much. Kell on Family and 240 00:11:21,920 --> 00:11:25,439 Speaker 2: Office in our studios. Stay with us. More from Bloomberg 241 00:11:25,559 --> 00:11:27,600 Speaker 2: Surveillance coming up after this. 242 00:11:34,840 --> 00:11:38,440 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 243 00:11:38,520 --> 00:11:41,640 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 244 00:11:41,760 --> 00:11:45,400 Speaker 1: Applecarplay and Android Atto with the Bloomberg Business app, or 245 00:11:45,559 --> 00:11:47,160 Speaker 1: watch us live on YouTube. 246 00:11:47,640 --> 00:11:50,000 Speaker 2: This is a great joy to have Dan Eaves with 247 00:11:50,120 --> 00:11:52,760 Speaker 2: us with all he's done in this huge bull market 248 00:11:52,840 --> 00:11:57,760 Speaker 2: and technology, and Brian Belski with an incredibly terse, superior note. 249 00:11:58,040 --> 00:11:59,880 Speaker 2: I'm courage to be in the market. To have them 250 00:11:59,880 --> 00:12:03,080 Speaker 2: in you're together is wonderful. Dan. I gotta start with you. 251 00:12:03,200 --> 00:12:07,120 Speaker 2: George Steer going after you last night in the Financial Times. 252 00:12:07,160 --> 00:12:10,880 Speaker 2: It was a love note about your New Yorkville Ives 253 00:12:11,520 --> 00:12:14,360 Speaker 2: investment company. Two questions to get that out of the way. 254 00:12:14,559 --> 00:12:17,000 Speaker 2: Are you going to do only research at this company? 255 00:12:17,280 --> 00:12:19,800 Speaker 2: Are you going to be involved in merchant banking. Oh no, 256 00:12:20,080 --> 00:12:20,800 Speaker 2: just in research. 257 00:12:20,800 --> 00:12:22,920 Speaker 9: I mean, like my role is going to be as 258 00:12:23,080 --> 00:12:26,360 Speaker 9: head of tech research doing what I've done. 259 00:12:26,160 --> 00:12:28,440 Speaker 2: You know what you've done my whole career. 260 00:12:28,679 --> 00:12:31,160 Speaker 9: And again, as we always say, look, haters hate, you know, 261 00:12:31,320 --> 00:12:33,400 Speaker 9: you're gonna have the hall hate, You're gonna have the 262 00:12:33,400 --> 00:12:36,680 Speaker 9: Hallmark cards. They but the reality that for me, my 263 00:12:36,920 --> 00:12:39,840 Speaker 9: role is essentially unchanged in terms of what we'll do 264 00:12:39,880 --> 00:12:40,480 Speaker 9: as research. 265 00:12:40,800 --> 00:12:43,400 Speaker 2: I gotta get this final question because Sweeney's dying to 266 00:12:43,440 --> 00:12:47,440 Speaker 2: talk to Belski about the market. Dan, what's so important 267 00:12:47,480 --> 00:12:52,880 Speaker 2: here is George correctly looks if the manufactured moonshot of memes, 268 00:12:52,960 --> 00:12:56,600 Speaker 2: stocks and specs they go up and then they come down, 269 00:12:57,000 --> 00:12:59,520 Speaker 2: how do our listeners avoid that madness? 270 00:13:00,280 --> 00:13:02,560 Speaker 9: To me, it's like, and it's really what we're going 271 00:13:02,640 --> 00:13:06,000 Speaker 9: to build as a modern merchant bank. It's looking at 272 00:13:06,120 --> 00:13:10,240 Speaker 9: companies that are growth and it's separating the ones that 273 00:13:10,400 --> 00:13:12,880 Speaker 9: ultimately say their AI from ones that. 274 00:13:12,920 --> 00:13:14,080 Speaker 2: Really have the products. 275 00:13:14,080 --> 00:13:16,160 Speaker 9: And I think in terms of Memestocks and some of 276 00:13:16,200 --> 00:13:18,400 Speaker 9: the stuff that we've seen in the market, look at 277 00:13:18,400 --> 00:13:21,760 Speaker 9: everything we've talked about for years. It's trying to understand 278 00:13:22,080 --> 00:13:24,640 Speaker 9: where the trends are, what the themes are, and to 279 00:13:24,720 --> 00:13:27,280 Speaker 9: make sure our clients are investors, are the ones that 280 00:13:27,280 --> 00:13:29,720 Speaker 9: they're in the right the winners in this AI regu. 281 00:13:29,800 --> 00:13:31,760 Speaker 2: One final news question I've got to ask, have you 282 00:13:31,800 --> 00:13:35,920 Speaker 2: and your pieces together have you done any discussions with 283 00:13:36,000 --> 00:13:38,640 Speaker 2: any of the Trump family or their business interests. Are 284 00:13:38,640 --> 00:13:41,839 Speaker 2: they separate from this or are they intimately involved? No. 285 00:13:42,280 --> 00:13:44,360 Speaker 9: First of all, if you look at Yorkville, I think 286 00:13:44,360 --> 00:13:47,520 Speaker 9: it's six percent of deals that they've done since inception 287 00:13:47,720 --> 00:13:49,439 Speaker 9: or related in some ways to Trump. 288 00:13:49,559 --> 00:13:49,800 Speaker 2: There. 289 00:13:49,800 --> 00:13:52,000 Speaker 9: On the other hand, look at hydrogen themes like plug 290 00:13:52,080 --> 00:13:54,360 Speaker 9: power four hundred million in terms of what they're on 291 00:13:54,400 --> 00:13:57,480 Speaker 9: the other side of it. Look, we're capitalistic. You know 292 00:13:57,520 --> 00:14:01,520 Speaker 9: that that's separate from from ultimately Yorkville lives, right, But 293 00:14:01,679 --> 00:14:04,880 Speaker 9: but it speaks to our view like we're apolitical. We're 294 00:14:04,920 --> 00:14:08,520 Speaker 9: going to go after deals across the board. And to me, 295 00:14:08,760 --> 00:14:12,319 Speaker 9: it's one where I'm doing this with partners that I've 296 00:14:12,440 --> 00:14:16,000 Speaker 9: known for decades to create what I believe is going 297 00:14:16,080 --> 00:14:18,240 Speaker 9: to be a modern merchant bank that's going to change 298 00:14:18,240 --> 00:14:19,960 Speaker 9: Wall Street ran on. 299 00:14:19,960 --> 00:14:23,040 Speaker 4: These markets here. What are we doing here? Are we 300 00:14:23,120 --> 00:14:24,520 Speaker 4: brought this this thing out? 301 00:14:24,560 --> 00:14:24,800 Speaker 2: Here? 302 00:14:24,880 --> 00:14:27,600 Speaker 4: Are we focusing on a handful of chip names? What 303 00:14:27,600 --> 00:14:29,240 Speaker 4: are we doing here in the back half of the year. 304 00:14:30,000 --> 00:14:32,960 Speaker 7: Uh, we're investing. And I think that's the difference between 305 00:14:33,000 --> 00:14:33,640 Speaker 7: what we've seen. 306 00:14:34,000 --> 00:14:34,280 Speaker 2: Really. 307 00:14:34,320 --> 00:14:36,840 Speaker 7: You know, if you think about the month of June, 308 00:14:37,400 --> 00:14:40,160 Speaker 7: let's go chase up, let's chase up memory, and then 309 00:14:40,360 --> 00:14:43,360 Speaker 7: then July opens up, let's sell memory, and that's not 310 00:14:43,400 --> 00:14:45,680 Speaker 7: investing to us. I think that you don't have to 311 00:14:45,720 --> 00:14:49,080 Speaker 7: own everything. That's the key thing in tech especially, you 312 00:14:49,080 --> 00:14:50,960 Speaker 7: got to be selective. And when we've had the very 313 00:14:51,000 --> 00:14:53,080 Speaker 7: good fortune of all performing in our S and P 314 00:14:53,160 --> 00:14:56,080 Speaker 7: five hundred focused portfolio, is that because we don't own 315 00:14:56,200 --> 00:14:58,840 Speaker 7: everything number one, number two, we are broadening out. That's 316 00:14:58,880 --> 00:15:01,440 Speaker 7: the answer your question. We are a small cap stocks 317 00:15:01,440 --> 00:15:02,120 Speaker 7: are for real. 318 00:15:02,560 --> 00:15:02,680 Speaker 2: Uh. 319 00:15:02,880 --> 00:15:05,240 Speaker 6: If you take a look at inherent fundamentals with respect to. 320 00:15:05,320 --> 00:15:09,080 Speaker 7: Cash flow, in earnings, in earnings discernibility, in terms of 321 00:15:09,080 --> 00:15:11,600 Speaker 7: how consistent they are, Paul, it's amazing. They look amazing 322 00:15:11,640 --> 00:15:14,080 Speaker 7: still and there's still a long runway to go. 323 00:15:14,320 --> 00:15:17,440 Speaker 2: Well, let me interrupt. Oil lifts fractionally up to eighty 324 00:15:17,480 --> 00:15:20,880 Speaker 2: five oh four. The headline Iran and so who these 325 00:15:20,880 --> 00:15:24,600 Speaker 2: of Yemen to shut Red Sea? Distant west from the 326 00:15:24,640 --> 00:15:29,040 Speaker 2: Persian Gulf to shut Red Sea? If us hits power 327 00:15:29,440 --> 00:15:32,480 Speaker 2: network that from Royers this morning, back and forth, back 328 00:15:32,480 --> 00:15:32,960 Speaker 2: and forth. 329 00:15:33,240 --> 00:15:36,480 Speaker 4: All right, so again Brian here we're getting into the 330 00:15:36,560 --> 00:15:39,400 Speaker 4: teeth of earnings here. Yeah, that's a tough The first 331 00:15:39,440 --> 00:15:42,440 Speaker 4: quarter is a tough bar to exceed. I mean, earnings 332 00:15:42,480 --> 00:15:44,120 Speaker 4: in the first quarter at guess me five D were 333 00:15:44,120 --> 00:15:45,280 Speaker 4: so strong anything about this. 334 00:15:46,080 --> 00:15:46,920 Speaker 6: It is a tough bar. 335 00:15:47,120 --> 00:15:49,680 Speaker 7: And there was many people talking about that potentially being 336 00:15:49,680 --> 00:15:51,760 Speaker 7: in earnings peak and then the next move in earnings 337 00:15:51,800 --> 00:15:54,040 Speaker 7: would be the second drivative, less positive. I think that 338 00:15:54,120 --> 00:15:56,080 Speaker 7: still could be the case in terms of having this 339 00:15:56,480 --> 00:15:59,440 Speaker 7: trend of less positive but positive, still positive, double digit 340 00:15:59,480 --> 00:16:02,560 Speaker 7: earnings grow, still double digit earnings growth. And what we've 341 00:16:02,600 --> 00:16:05,680 Speaker 7: shown in our history in terms of studying markets, we 342 00:16:05,720 --> 00:16:08,120 Speaker 7: have a double digit we have a double digit performance 343 00:16:08,120 --> 00:16:10,480 Speaker 7: in the market coming following this type of move. 344 00:16:10,320 --> 00:16:14,520 Speaker 9: In Earningsski's it comes down to it's about the second, third, 345 00:16:14,600 --> 00:16:17,240 Speaker 9: fourth riders of AI now playing out in the market. 346 00:16:17,600 --> 00:16:21,480 Speaker 2: Tech is ultimately going to lead in two kids, you know, 347 00:16:21,520 --> 00:16:23,400 Speaker 2: the two of them, the way they go after calculus. 348 00:16:23,960 --> 00:16:25,240 Speaker 2: Butki is a better dresser. 349 00:16:25,320 --> 00:16:26,880 Speaker 4: Okay, it just. 350 00:16:27,480 --> 00:16:31,520 Speaker 2: Help me here with my buying SpaceX. I loaded the 351 00:16:31,520 --> 00:16:34,520 Speaker 2: boat at two oh eight. Okay, help me here with 352 00:16:34,600 --> 00:16:38,720 Speaker 2: a round trip on IPO, SpaceX damnives. 353 00:16:38,640 --> 00:16:42,720 Speaker 9: You look when Amazon when public, look when Facebook when public. 354 00:16:43,240 --> 00:16:46,120 Speaker 9: It's my view that if you take the narrow view 355 00:16:46,280 --> 00:16:49,920 Speaker 9: over months or six months or nine, these are names 356 00:16:50,080 --> 00:16:53,040 Speaker 9: that are transformational names that are gonna be a huge 357 00:16:53,040 --> 00:16:55,600 Speaker 9: part of the fourth nutional revolution. When you look at 358 00:16:55,600 --> 00:16:59,120 Speaker 9: space X, I get the volatility and what obviously what 359 00:16:59,120 --> 00:17:01,720 Speaker 9: we've seen in terms of the headwinds. The reality is 360 00:17:01,880 --> 00:17:04,480 Speaker 9: longer term investors that own this, they own it for 361 00:17:05,040 --> 00:17:07,760 Speaker 9: what's going to be AI data, They own it for 362 00:17:07,840 --> 00:17:10,719 Speaker 9: what's really going to be in terms of starlink and 363 00:17:10,920 --> 00:17:13,720 Speaker 9: to really what must broader vision we've said, I mean 364 00:17:13,760 --> 00:17:16,560 Speaker 9: there's an over an eight percent chance that they ultimately 365 00:17:16,560 --> 00:17:17,400 Speaker 9: acquired Tessa. 366 00:17:18,400 --> 00:17:21,479 Speaker 4: So Brian, what are we doing here just in terms of, 367 00:17:22,160 --> 00:17:25,280 Speaker 4: you know, thinking about opportunities out of AI? Can we 368 00:17:25,320 --> 00:17:27,359 Speaker 4: even think about opportunities out of AI? Do I go 369 00:17:27,400 --> 00:17:29,960 Speaker 4: out and buy healthcare banks? I mean the banks put 370 00:17:30,040 --> 00:17:32,240 Speaker 4: up some monster numbers or else in this market? 371 00:17:32,240 --> 00:17:32,600 Speaker 2: Do we look? 372 00:17:32,640 --> 00:17:33,879 Speaker 7: You know, you think about a day like today or 373 00:17:33,880 --> 00:17:36,560 Speaker 7: the United Healthcare right, everybody thought United Healthcare was was 374 00:17:36,680 --> 00:17:39,600 Speaker 7: done and we were very patient in fact, I think 375 00:17:39,600 --> 00:17:41,480 Speaker 7: it was on your broadcast talking about the new CEO 376 00:17:41,560 --> 00:17:44,879 Speaker 7: coming in and bringing more discipline, and that's exactly what happened. 377 00:17:44,920 --> 00:17:46,919 Speaker 7: So United Healthcare would be one of them that we 378 00:17:46,960 --> 00:17:49,600 Speaker 7: stuck with and we're a long term investor and kind 379 00:17:49,600 --> 00:17:51,240 Speaker 7: of like what Dan talks about, you got to believe 380 00:17:51,280 --> 00:17:55,440 Speaker 7: in the stories and proceed with your fundamentals. Healthcare is 381 00:17:55,480 --> 00:17:58,200 Speaker 7: going to think be pockets of their financials look amazing. 382 00:17:58,200 --> 00:18:02,440 Speaker 7: You don't need a direct for AI for financials. But 383 00:18:02,440 --> 00:18:03,680 Speaker 7: I think you're going to see a broadening out of 384 00:18:03,720 --> 00:18:06,480 Speaker 7: financials into the small banks and insurance companies and the 385 00:18:06,480 --> 00:18:10,920 Speaker 7: asset managers. This financial move is still very very early. 386 00:18:10,960 --> 00:18:12,840 Speaker 7: We're talking the next several years financially. 387 00:18:12,880 --> 00:18:14,720 Speaker 2: Let's I wanted to go. Let me go to you, 388 00:18:14,760 --> 00:18:17,800 Speaker 2: Brian Belski first on this, and we've all experienced this. 389 00:18:18,480 --> 00:18:21,719 Speaker 2: It's a party, it's great, and then it ends. I 390 00:18:21,760 --> 00:18:25,280 Speaker 2: don't see the framework where it ends for Wall Street 391 00:18:25,760 --> 00:18:29,240 Speaker 2: other than the Feds screwing up. I mean, other than 392 00:18:29,400 --> 00:18:32,640 Speaker 2: a high interest rate regime or as you mentioned, calculus 393 00:18:32,640 --> 00:18:35,679 Speaker 2: the first derivative of the real yield. I mean, this 394 00:18:35,960 --> 00:18:37,400 Speaker 2: just keeps on going right. 395 00:18:37,440 --> 00:18:39,600 Speaker 9: Br in A's eleven PM at the party that goes 396 00:18:39,640 --> 00:18:40,240 Speaker 9: to four am. 397 00:18:40,520 --> 00:18:42,440 Speaker 7: That that goes to four am, and everyone's waiting for 398 00:18:42,480 --> 00:18:47,040 Speaker 7: the last shot at three. But everyone's going to look 399 00:18:47,680 --> 00:18:49,840 Speaker 7: teeing this up, Tommy to blame the Fed. 400 00:18:50,200 --> 00:18:52,960 Speaker 6: It's easy to blame the Fed. Everyone's waiting for it. 401 00:18:53,160 --> 00:18:56,760 Speaker 2: Wait the Fed. The Dow futures are popping fifty three. 402 00:18:57,920 --> 00:18:59,720 Speaker 6: That's what I'm talking about. That's what I'm talking about. 403 00:19:00,080 --> 00:19:04,760 Speaker 7: Guess what, this bullmarket, this big giant, secular bullmarket that 404 00:19:04,760 --> 00:19:07,200 Speaker 7: we've been talking about since two thousand and nine, is 405 00:19:07,240 --> 00:19:09,080 Speaker 7: not going to be is not going to be ended 406 00:19:09,080 --> 00:19:09,919 Speaker 7: by AI bubble. 407 00:19:09,960 --> 00:19:12,080 Speaker 6: It's not. It's going to be something else, And I 408 00:19:12,080 --> 00:19:12,440 Speaker 6: don't know. 409 00:19:12,400 --> 00:19:12,840 Speaker 2: What it is. 410 00:19:12,840 --> 00:19:14,200 Speaker 6: Gonna be a new emerging market. 411 00:19:14,440 --> 00:19:17,520 Speaker 7: It's going to be a commodity supercycle, something that we're 412 00:19:17,560 --> 00:19:18,320 Speaker 7: not expecting. 413 00:19:18,760 --> 00:19:21,800 Speaker 2: What you just heard their folks bronze it. I forget 414 00:19:21,800 --> 00:19:25,480 Speaker 2: about Ives what Belski just said, you never know what 415 00:19:25,560 --> 00:19:28,320 Speaker 2: it's going to be. Boy, is that just the truth? 416 00:19:28,480 --> 00:19:29,879 Speaker 2: Paul Sweeting with Dan Ives. 417 00:19:30,040 --> 00:19:30,240 Speaker 5: Dan. 418 00:19:30,359 --> 00:19:32,399 Speaker 4: One of the names in your space that just fascinates 419 00:19:32,440 --> 00:19:34,520 Speaker 4: me is a kind of an old born one, which 420 00:19:34,560 --> 00:19:37,160 Speaker 4: is Microsoft. This seems sold off hard with a lot 421 00:19:37,160 --> 00:19:40,000 Speaker 4: of the other software stocks. I've noticed it's kind of 422 00:19:40,000 --> 00:19:42,240 Speaker 4: climbing its way back here, up thirteen to fourteen percent 423 00:19:42,280 --> 00:19:43,640 Speaker 4: off of that June low here. 424 00:19:44,000 --> 00:19:45,600 Speaker 5: What's the story of the Microsoft. 425 00:19:45,640 --> 00:19:48,359 Speaker 9: We and we've talked about it, you know, for really 426 00:19:48,400 --> 00:19:51,320 Speaker 9: for months. This is one major penalty box stock. I 427 00:19:51,359 --> 00:19:54,280 Speaker 9: think investor have viewed it, you know, the relationship with 428 00:19:54,320 --> 00:19:57,440 Speaker 9: the open AI competition from Google and everyone else in 429 00:19:57,560 --> 00:20:00,480 Speaker 9: terms of the hyper scours. The reality is is the 430 00:20:00,560 --> 00:20:04,719 Speaker 9: AI revolution doesn't happen without Microsoft with Nedella, because if 431 00:20:04,760 --> 00:20:08,240 Speaker 9: you look at it, it's their core backyard as enterprises 432 00:20:08,320 --> 00:20:10,280 Speaker 9: move to AI deployments. And I just think a big 433 00:20:10,320 --> 00:20:12,560 Speaker 9: focus in this earning season is going to be the 434 00:20:12,600 --> 00:20:16,560 Speaker 9: hyperscaler growth that we see from Amazon, Google and Microsoft 435 00:20:16,880 --> 00:20:19,560 Speaker 9: because right now, look the New York City cab drivers, 436 00:20:19,560 --> 00:20:20,960 Speaker 9: Parish and the hyperscalers. 437 00:20:21,000 --> 00:20:23,359 Speaker 2: But that it comes down to earnings, and. 438 00:20:23,320 --> 00:20:26,320 Speaker 6: They're Jason Micron still right exactly. 439 00:20:26,320 --> 00:20:28,840 Speaker 9: Look, and I think to that point, memory stocks are 440 00:20:28,880 --> 00:20:31,640 Speaker 9: the golden childs. But it spread to the second, third, 441 00:20:31,720 --> 00:20:34,120 Speaker 9: fourth derivative and it goes to what me and you've talked. 442 00:20:34,160 --> 00:20:36,200 Speaker 2: I got to wrap up with two key questions, one 443 00:20:36,240 --> 00:20:38,560 Speaker 2: to mister Ice. One to mister Belski, when are you 444 00:20:38,600 --> 00:20:42,040 Speaker 2: going to publish at your new affair everybody? Are you 445 00:20:42,119 --> 00:20:45,640 Speaker 2: going to be like normal Cell Side publications, normal cell Side? 446 00:20:45,720 --> 00:20:47,160 Speaker 2: When do we see that over the. 447 00:20:47,119 --> 00:20:49,920 Speaker 9: Time months, you know, as as I ultimately launch and 448 00:20:50,000 --> 00:20:50,560 Speaker 9: all the names? 449 00:20:50,680 --> 00:20:51,200 Speaker 7: Are you going to have? 450 00:20:51,240 --> 00:20:52,520 Speaker 2: People? Have hired people? 451 00:20:52,640 --> 00:20:55,560 Speaker 9: Yeah, we've already We've already hired a handful of people. Obviously, 452 00:20:55,560 --> 00:20:58,720 Speaker 9: the inbound interest is, you know, is insane in terms 453 00:20:58,720 --> 00:21:01,520 Speaker 9: of great because what we're trying to you know, I 454 00:21:01,560 --> 00:21:04,080 Speaker 9: try to get Boalski one come, you know whatever, but 455 00:21:04,520 --> 00:21:06,320 Speaker 9: to read. But the reality is we want to build 456 00:21:06,320 --> 00:21:08,560 Speaker 9: a modern merge by I found great partners to do 457 00:21:08,680 --> 00:21:11,560 Speaker 9: with and it's something we're in twenty five plus years 458 00:21:11,600 --> 00:21:14,359 Speaker 9: on Wall Street to create and I think it's gonna 459 00:21:14,640 --> 00:21:17,720 Speaker 9: transform in terms of the research bang into everything else. 460 00:21:18,280 --> 00:21:20,239 Speaker 2: Okay, So I got I got the kid over there. 461 00:21:20,840 --> 00:21:23,440 Speaker 2: Here's eight year old kid, and I go, you gotta 462 00:21:23,440 --> 00:21:25,720 Speaker 2: go to the Yankees. So we're sitting by the dugout 463 00:21:25,720 --> 00:21:26,960 Speaker 2: of the Minnesota Twins. 464 00:21:27,119 --> 00:21:30,960 Speaker 10: Oh yeah, and they was they won this series and 465 00:21:31,000 --> 00:21:33,399 Speaker 10: they're rocking, and like now we're going to the aulstar 466 00:21:33,440 --> 00:21:35,560 Speaker 10: Break and theyre where the Red Sox are they're like 467 00:21:35,560 --> 00:21:37,320 Speaker 10: one or two games bull of five hundred. 468 00:21:37,440 --> 00:21:39,760 Speaker 2: You gotta play to win. You're not gonna trade it 469 00:21:39,760 --> 00:21:40,560 Speaker 2: away totally. 470 00:21:41,160 --> 00:21:43,399 Speaker 6: Here's the speculation. I'll be at the target field next 471 00:21:43,440 --> 00:21:43,840 Speaker 6: Friday night. 472 00:21:43,840 --> 00:21:44,680 Speaker 2: I have to watch the game. 473 00:21:44,920 --> 00:21:49,280 Speaker 11: But are they gonna buy because they need they need 474 00:21:49,320 --> 00:21:51,960 Speaker 11: to have room in the bullpen. They traded everybody away 475 00:21:52,040 --> 00:21:54,600 Speaker 11: last year in the bullpen, and they've got this beautiful 476 00:21:54,680 --> 00:21:58,480 Speaker 11: core of of great young players akin to the early 477 00:21:58,560 --> 00:22:01,240 Speaker 11: two thousands, I would say, and they've got a shot. 478 00:22:01,320 --> 00:22:02,640 Speaker 6: They've got a shot, but they need something. 479 00:22:05,960 --> 00:22:10,160 Speaker 9: Belski's Belski's Minnesota to what you wear to the games. 480 00:22:10,280 --> 00:22:12,359 Speaker 9: I think we can do an instagram. 481 00:22:11,920 --> 00:22:14,280 Speaker 6: On yeah, home opener. 482 00:22:14,880 --> 00:22:16,840 Speaker 9: Unbelievable. He's a fashion icon. 483 00:22:17,160 --> 00:22:19,840 Speaker 2: I have to say, folks, for those of you worldwide, 484 00:22:20,320 --> 00:22:24,600 Speaker 2: there's stars in their stars. Josh Bell comes out of 485 00:22:24,600 --> 00:22:29,320 Speaker 2: the dugout and he's just spectacular. Can he carry them 486 00:22:29,359 --> 00:22:29,960 Speaker 2: when he swings? 487 00:22:30,080 --> 00:22:32,040 Speaker 6: I think it's probably. I think it's going to be 488 00:22:32,320 --> 00:22:33,160 Speaker 6: Buckston Bucks. 489 00:22:33,240 --> 00:22:35,560 Speaker 7: And when he comes back, he is reaffirmed that he 490 00:22:35,640 --> 00:22:37,800 Speaker 7: never wants to be traded. He said, I want to 491 00:22:37,800 --> 00:22:40,600 Speaker 7: be Joe Mauer. I want to be Derek Jeter. I 492 00:22:40,600 --> 00:22:42,960 Speaker 7: want to stay with one ball club. He's the true 493 00:22:43,000 --> 00:22:45,480 Speaker 7: leader of that club. And now with Correagan obviously the 494 00:22:45,560 --> 00:22:47,359 Speaker 7: trade him last year. He is the true leader. So 495 00:22:47,359 --> 00:22:49,880 Speaker 7: you get bucks and back and you get this Luke 496 00:22:49,960 --> 00:22:52,480 Speaker 7: Keyshaw guy. Watch him because they moved him out of 497 00:22:52,480 --> 00:22:53,720 Speaker 7: the infield put him in the outfield. 498 00:22:54,119 --> 00:22:55,280 Speaker 6: He is going to be a player. 499 00:22:55,320 --> 00:22:55,920 Speaker 7: He can hit the ball. 500 00:22:55,960 --> 00:22:59,679 Speaker 2: It's like MLB work listening to you. Yes, it's fascinating. 501 00:23:00,040 --> 00:23:00,680 Speaker 2: It's Swiss harmon. 502 00:23:00,720 --> 00:23:02,800 Speaker 4: All right, Sis, we're talking sports. It's it's July. 503 00:23:03,359 --> 00:23:03,639 Speaker 5: Summer. 504 00:23:03,680 --> 00:23:05,360 Speaker 4: Camps are going to be opening up for football. Talk 505 00:23:05,400 --> 00:23:06,760 Speaker 4: to Penn State gives thirty seconds. 506 00:23:06,760 --> 00:23:09,280 Speaker 9: Look, I was there last week, you know. I mean, 507 00:23:09,320 --> 00:23:11,920 Speaker 9: I just love what Campbell and the staff have done. 508 00:23:12,240 --> 00:23:15,600 Speaker 9: And I think we are going to shock college football 509 00:23:15,640 --> 00:23:19,040 Speaker 9: world because these are guys that are phenomenal evaluators of talent. 510 00:23:19,320 --> 00:23:21,280 Speaker 9: I think we're going to actually contend for Big Ten 511 00:23:21,400 --> 00:23:24,879 Speaker 9: championship this year. They will like and then when Belski's 512 00:23:24,880 --> 00:23:27,360 Speaker 9: at a game for the white out usc be we'll 513 00:23:27,359 --> 00:23:31,600 Speaker 9: be stelling I remember, not official. 514 00:23:31,280 --> 00:23:34,720 Speaker 6: But I believe that will maybe kind of sort of We're. 515 00:23:34,560 --> 00:23:37,560 Speaker 2: Gonna go to Scott Kirby here of United era. It's great, 516 00:23:37,600 --> 00:23:41,520 Speaker 2: he's a pilot, you know, a bastion on the other Jay, 517 00:23:41,760 --> 00:23:46,160 Speaker 2: the airlines is something that everybody in America is repped into. 518 00:23:46,240 --> 00:23:48,719 Speaker 2: I remember the day they took Northwest out of Minneapolis. 519 00:23:48,720 --> 00:23:51,199 Speaker 2: I can't remember the exact story, but you know the 520 00:23:51,280 --> 00:23:52,800 Speaker 2: airlines are they investible? 521 00:23:52,840 --> 00:23:56,959 Speaker 7: Brian Belski Man, it's really hard not to say it's 522 00:23:57,000 --> 00:23:59,320 Speaker 7: different this time, but you think about the structural changes 523 00:23:59,320 --> 00:24:01,399 Speaker 7: that the airlines have made. Number one, number two, like 524 00:24:01,480 --> 00:24:04,760 Speaker 7: Delta for instance, Bottter Refiner over a decade ago. United 525 00:24:04,840 --> 00:24:07,160 Speaker 7: has done an amazing job. Kirby's done an amazing job 526 00:24:07,560 --> 00:24:10,680 Speaker 7: with that. Delta's number one, the United it's a close 527 00:24:10,760 --> 00:24:13,040 Speaker 7: number two. They've done great. Now what's gonna happen with 528 00:24:13,080 --> 00:24:13,960 Speaker 7: American will be interesting. 529 00:24:14,800 --> 00:24:17,360 Speaker 2: I mentioned this yesterday and I thought of you are 530 00:24:17,400 --> 00:24:21,119 Speaker 2: the big banks basically technology companies that happen to have 531 00:24:21,200 --> 00:24:25,400 Speaker 2: Christmas Club accountsil I mean, they're winning on technology. 532 00:24:24,800 --> 00:24:27,160 Speaker 9: Right And I think that's the thing that I think 533 00:24:27,200 --> 00:24:30,359 Speaker 9: a lot of investors have really overlooked is in terms 534 00:24:30,400 --> 00:24:33,240 Speaker 9: of what they're doing. When you talk about AI revolution, 535 00:24:33,560 --> 00:24:37,159 Speaker 9: about this fourth industrial everything, it's really financials that are 536 00:24:37,240 --> 00:24:40,200 Speaker 9: leading and you're seeing across the board it's just to start. 537 00:24:40,240 --> 00:24:41,760 Speaker 2: And for the first time in thirty years, the. 538 00:24:41,840 --> 00:24:44,280 Speaker 9: US has headed China when it comes to tech. 539 00:24:45,359 --> 00:24:47,640 Speaker 2: Gay, this has been wonderful. Data I thank you so much. 540 00:24:47,680 --> 00:24:51,600 Speaker 2: Congratulations on your new if. Ryan Belski, thank you so much. 541 00:24:51,640 --> 00:24:53,480 Speaker 2: To have the two of you together's great. Can we 542 00:24:53,560 --> 00:24:55,919 Speaker 2: be sure, Eric, can you be sure that we have 543 00:24:56,000 --> 00:24:58,160 Speaker 2: the Bloomberg of the official photo, the one that has 544 00:24:58,160 --> 00:25:01,720 Speaker 2: a hassleblaed you know media this format, so the lens, 545 00:25:01,800 --> 00:25:03,639 Speaker 2: you know, the only one with the lens won't break 546 00:25:03,640 --> 00:25:07,240 Speaker 2: with ives. Maybe we get a photo opportunity, he says. 547 00:25:07,400 --> 00:25:12,240 Speaker 2: It'll be like Ives pale, pasty, white, Belski, canned and rested. 548 00:25:12,280 --> 00:25:13,400 Speaker 2: It'll be a great photo. 549 00:25:13,440 --> 00:25:16,720 Speaker 9: We'll see the Naples head, the Nieples Belski ten. 550 00:25:16,920 --> 00:25:21,240 Speaker 2: That's right, Enabled, Thank you so much. Thank you. Stay 551 00:25:21,280 --> 00:25:25,120 Speaker 2: with us. More from Bloomberg Surveillance coming up after this. 552 00:25:32,400 --> 00:25:35,960 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 553 00:25:36,040 --> 00:25:39,199 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 554 00:25:39,280 --> 00:25:42,919 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 555 00:25:43,080 --> 00:25:44,560 Speaker 1: watch us live on YouTube. 556 00:25:44,760 --> 00:25:47,440 Speaker 2: Love having her in the studio. ETSI Chef joins chief 557 00:25:47,440 --> 00:25:51,840 Speaker 2: credit Officer Moody's here right now. When you guys look 558 00:25:51,960 --> 00:25:55,399 Speaker 2: at the social security angst or just simply the debt 559 00:25:55,520 --> 00:25:59,320 Speaker 2: and deficit angst, how do you process that? Well? 560 00:25:59,520 --> 00:26:01,760 Speaker 12: Two ways is one we look at it from the 561 00:26:01,840 --> 00:26:04,840 Speaker 12: sertifiscal perspective and what it means for the US government, 562 00:26:05,280 --> 00:26:08,080 Speaker 12: And what it means is that the US government is 563 00:26:08,400 --> 00:26:11,760 Speaker 12: on the hook for payments to people that were promised 564 00:26:12,200 --> 00:26:14,800 Speaker 12: and does not have all the funding that it needs 565 00:26:14,840 --> 00:26:16,520 Speaker 12: to do that. So that's one way to look at it. 566 00:26:16,760 --> 00:26:18,560 Speaker 12: The other way to look at it is from the 567 00:26:18,600 --> 00:26:22,280 Speaker 12: perspective of people who are today eligible for Social Security 568 00:26:22,320 --> 00:26:24,680 Speaker 12: and are getting the payments, but the ones who will 569 00:26:24,720 --> 00:26:27,879 Speaker 12: be eligible a decade from now, and that's where the 570 00:26:27,920 --> 00:26:31,359 Speaker 12: real angst is that if the funding isn't there, will 571 00:26:31,359 --> 00:26:32,760 Speaker 12: the payments actually come. 572 00:26:33,760 --> 00:26:36,920 Speaker 4: How do you and your colleagues and Moodies view this 573 00:26:37,040 --> 00:26:39,960 Speaker 4: technology wave of new issuance because there's a lot of 574 00:26:39,960 --> 00:26:43,399 Speaker 4: companies that historically have not accessed the debt markets, or 575 00:26:43,440 --> 00:26:46,000 Speaker 4: if they did it, they did it just because they could. 576 00:26:46,359 --> 00:26:48,359 Speaker 4: Now they need to, so it's a little bit different 577 00:26:48,880 --> 00:26:51,920 Speaker 4: metric there. How do you guys view that, Yeah. 578 00:26:51,560 --> 00:26:53,960 Speaker 12: This is and we're seeing this that On the one side, 579 00:26:54,040 --> 00:26:57,560 Speaker 12: there is the demand from the hyperscalers and the issuers 580 00:26:57,600 --> 00:27:00,520 Speaker 12: of this debt, but on the supply side, the market 581 00:27:00,560 --> 00:27:03,320 Speaker 12: is willing to fund this. So I think the underlying 582 00:27:03,359 --> 00:27:06,080 Speaker 12: story here is that both those who are issuing the 583 00:27:06,119 --> 00:27:08,800 Speaker 12: debt and those who are buying it really believe in 584 00:27:08,840 --> 00:27:12,560 Speaker 12: this technology. They believe that this kind of capex, which 585 00:27:12,600 --> 00:27:16,239 Speaker 12: is billions moving to trillions, will generate the kind of 586 00:27:16,280 --> 00:27:20,359 Speaker 12: productivity and revenue needed to repay that debt and justify 587 00:27:20,400 --> 00:27:23,639 Speaker 12: that capex. We think that's a chance it will, but 588 00:27:23,720 --> 00:27:25,679 Speaker 12: we don't know for sure that it will. So that's 589 00:27:25,720 --> 00:27:27,640 Speaker 12: how we're looking at it, and we're monitoring very closely. 590 00:27:27,840 --> 00:27:29,640 Speaker 4: Again, I kind of look at some of these big 591 00:27:29,680 --> 00:27:32,360 Speaker 4: technology issuers, and they did have some debt out there, 592 00:27:33,040 --> 00:27:35,399 Speaker 4: but it was just because why not, you know, they 593 00:27:35,400 --> 00:27:37,400 Speaker 4: didn't need it. They had jillions of dollars of cash 594 00:27:37,400 --> 00:27:39,960 Speaker 4: on their balance sheets. But now they're coming and they 595 00:27:40,040 --> 00:27:41,440 Speaker 4: kind of need it. So if I'm sitting on the 596 00:27:41,480 --> 00:27:43,560 Speaker 4: other side of the table, I'm like, Okay, the last 597 00:27:43,560 --> 00:27:45,000 Speaker 4: deals I did for you, those are different. 598 00:27:45,040 --> 00:27:45,200 Speaker 5: Now. 599 00:27:45,240 --> 00:27:48,280 Speaker 4: I want some covenants, I want some protections and things. 600 00:27:48,600 --> 00:27:50,960 Speaker 4: Is that happening or is it still just whatever you 601 00:27:51,000 --> 00:27:52,040 Speaker 4: guys need, here's the monthy. 602 00:27:52,080 --> 00:27:55,359 Speaker 12: Yeah, and I think it's happening in different ways. So, 603 00:27:55,400 --> 00:27:58,119 Speaker 12: first of all, you're absolutely right that the hyperscala is 604 00:27:58,560 --> 00:28:01,040 Speaker 12: very low history of CAPEX need to do it, but 605 00:28:01,560 --> 00:28:04,240 Speaker 12: very strong history of cash flow. So they are sitting 606 00:28:04,320 --> 00:28:07,000 Speaker 12: on a pile of cash. Over time, as they keep 607 00:28:07,000 --> 00:28:10,240 Speaker 12: issuing more and more, that pile of cash obviously erodes 608 00:28:10,240 --> 00:28:12,760 Speaker 12: in terms of what it's promised for. So what we're 609 00:28:12,800 --> 00:28:17,760 Speaker 12: seeing is very complex instruments being structured to your point, 610 00:28:17,920 --> 00:28:21,000 Speaker 12: to ensure that that, you know, the debt is structured 611 00:28:21,000 --> 00:28:23,800 Speaker 12: in ways that allows for the technology and the revenues 612 00:28:23,840 --> 00:28:25,800 Speaker 12: to catch up to repay that debt. 613 00:28:25,920 --> 00:28:28,280 Speaker 2: Were you in a meeting and you know, I don't 614 00:28:28,280 --> 00:28:30,480 Speaker 2: want the inside dirt. It's it's the root of me. 615 00:28:31,160 --> 00:28:35,280 Speaker 2: But I think our audience is fascinated where they shake 616 00:28:35,400 --> 00:28:38,680 Speaker 2: when Etsy Chef walks in the room and you have 617 00:28:38,760 --> 00:28:42,120 Speaker 2: to figure out what to do with SpaceX corporate paper. 618 00:28:42,520 --> 00:28:43,480 Speaker 2: How does that work? 619 00:28:44,040 --> 00:28:46,600 Speaker 12: Well, you know, it works the same way as with 620 00:28:46,800 --> 00:28:50,560 Speaker 12: any other institution. In this case, we look at the 621 00:28:50,640 --> 00:28:54,000 Speaker 12: various businesses that the company has. There is a telecom 622 00:28:54,040 --> 00:28:57,640 Speaker 12: business that is very profitable and then there's Capex that's 623 00:28:57,680 --> 00:29:02,240 Speaker 12: going into another business, the rocket business, that is expected 624 00:29:02,280 --> 00:29:05,400 Speaker 12: to generate profits in the future. So we look at 625 00:29:05,680 --> 00:29:07,920 Speaker 12: fashion hand, we look at the kind of leverage that's 626 00:29:07,960 --> 00:29:10,800 Speaker 12: being asked for, and we look at the capacity to 627 00:29:10,840 --> 00:29:11,760 Speaker 12: repay that debt. 628 00:29:12,080 --> 00:29:14,920 Speaker 2: Okay, can you respond to the price decline that we've 629 00:29:14,960 --> 00:29:18,640 Speaker 2: seen across I mean, I've been monitored day by day. 630 00:29:18,920 --> 00:29:22,160 Speaker 2: Let's just let me let me paraphrase it's ugly. How 631 00:29:22,160 --> 00:29:25,160 Speaker 2: does Moodies or any other credit team respond to there? 632 00:29:25,280 --> 00:29:27,040 Speaker 12: I'm so glad you asked that because one of the 633 00:29:27,080 --> 00:29:30,080 Speaker 12: things that we do, absolutely in every rating committee is 634 00:29:30,200 --> 00:29:32,280 Speaker 12: we don't look at things the way they are that 635 00:29:32,480 --> 00:29:35,080 Speaker 12: day or the way they were five years ago or 636 00:29:35,400 --> 00:29:38,680 Speaker 12: the last year. We run scenario analysis, and one of 637 00:29:38,680 --> 00:29:42,160 Speaker 12: the scenarios we run is volatility in the markets, and 638 00:29:42,280 --> 00:29:44,960 Speaker 12: the rating has to be able to withstand the fact 639 00:29:45,200 --> 00:29:47,200 Speaker 12: that buyers are going to choose not to buy, sellers 640 00:29:47,240 --> 00:29:48,960 Speaker 12: are going to choose to sell, and that's going to 641 00:29:48,960 --> 00:29:51,160 Speaker 12: have price impact. So absolutely, that's something we can. 642 00:29:51,080 --> 00:29:53,640 Speaker 2: Can we announce a credit downgrade for SpaceX here on 643 00:29:53,720 --> 00:29:57,560 Speaker 2: Bloomberg So we cannot, We have not, We will not. 644 00:29:57,920 --> 00:30:00,760 Speaker 2: I was taking a chance on ed a little bit 645 00:30:00,760 --> 00:30:03,400 Speaker 2: more time with the Azzi chef of Moody's here very 646 00:30:03,480 --> 00:30:07,920 Speaker 2: quickly the hyperscaler bonds moved. Do you pay attention to 647 00:30:08,120 --> 00:30:11,040 Speaker 2: the insatiable demand for a bond or is that just 648 00:30:11,120 --> 00:30:14,160 Speaker 2: like after the fact and Moodies doesn't care that it 649 00:30:14,200 --> 00:30:15,800 Speaker 2: was eight times oversubscribed. 650 00:30:16,120 --> 00:30:16,840 Speaker 5: Yeah, we don't. 651 00:30:16,920 --> 00:30:18,880 Speaker 12: You know, we don't care in terms of that's not 652 00:30:18,920 --> 00:30:21,680 Speaker 12: a fundamental metric that we look at. But we do 653 00:30:22,240 --> 00:30:25,480 Speaker 12: aim to understand the market for any particular type of instrument. 654 00:30:25,560 --> 00:30:27,160 Speaker 12: And one of the reasons why I talked about sort 655 00:30:27,160 --> 00:30:30,600 Speaker 12: of the way these instruments are being structured is because 656 00:30:30,760 --> 00:30:32,080 Speaker 12: some of them are not just being sold to the 657 00:30:32,120 --> 00:30:34,720 Speaker 12: public markets, that being sold to the private markets as well. 658 00:30:35,040 --> 00:30:38,000 Speaker 12: So this insatiable demand that you speak of is coming 659 00:30:38,040 --> 00:30:41,240 Speaker 12: from two different sources, and one is a newer sources. 660 00:30:41,600 --> 00:30:43,640 Speaker 2: Thank you so much, really really appreciate it. Don't be 661 00:30:43,640 --> 00:30:49,680 Speaker 2: a stranger, Osi Chef, Chief Credit Officer for Moody's Ratings. 662 00:30:49,720 --> 00:30:54,560 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify 663 00:30:54,680 --> 00:30:58,480 Speaker 1: and anywhere else you get your podcasts. Listen live each 664 00:30:58,520 --> 00:31:01,600 Speaker 1: week day seven to ten am. Me Stern on Bloomberg 665 00:31:01,640 --> 00:31:05,600 Speaker 1: dot com the iHeartRadio app tune In, and the Bloomberg 666 00:31:05,640 --> 00:31:09,000 Speaker 1: Business app. You can also watch us live every weekday 667 00:31:09,040 --> 00:31:12,000 Speaker 1: on YouTube and always on the Bloomberg terminal