WEBVTT - Single Best Idea with Tom Keene: Ira Jersey & Gene Munster

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. The single best idea,

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<v Speaker 1>the single best idea is that David Ger and I

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<v Speaker 1>will not work this weekend. That's where we're trying to

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<v Speaker 1>get to. The politics of America continues an important meeting

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<v Speaker 1>with mister Yahoo and mister Trump in Florida on this Friday.

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<v Speaker 1>Davy Girl with wonderful perspective on that Today the show

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<v Speaker 1>was wonderfully eclectic. A major thank you. Under real dress.

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<v Speaker 1>Carolyne Conan of our Paris news bureau got us started

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<v Speaker 1>on the Paris Olympics in the train. I don't know

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<v Speaker 1>what I call it sabotage. I'm trying to not make

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<v Speaker 1>news here, but I think that's appropriate where many of

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<v Speaker 1>the train tracks across France are shut down. She mentioned

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<v Speaker 1>the track out to Brittany out of Montpa perhaps is damaged,

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<v Speaker 1>as well as the trip from London to Paris. But

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<v Speaker 1>thank you to Carolyn Conan literally sitting, I believe, on

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<v Speaker 1>a train when she gave us at report on the batphone.

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<v Speaker 1>A lot of other things going on as well, but

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<v Speaker 1>the key one was the inflation data today, and so

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<v Speaker 1>we spoke to Bloomberg's surveillance philosopher Ira Jersey.

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<v Speaker 2>I mean everything's transitory. Life is transitory if you wait

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<v Speaker 2>long enough, right, Well, I love that philosophy.

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<v Speaker 1>Here he was worse than credit suitee continue.

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<v Speaker 2>So you know, obviously there's cyclicality, right, So we always

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<v Speaker 2>look at trends versus cycles, and that's one of the

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<v Speaker 2>important things. So, you know, we had this forty five

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<v Speaker 2>year downtrend in interest rates, forty year down to which

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<v Speaker 2>was subsequent to a forty year down trend in inflation.

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<v Speaker 2>And now we've broken too that to the upside. So

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<v Speaker 2>so now we're looking not only for you know, what's

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<v Speaker 2>the new trend in both inflation and therefore different markets,

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<v Speaker 2>you know, fixing come markets really yields like you're noted,

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<v Speaker 2>And then what is the cycle around that? And do

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<v Speaker 2>we have inflationary cycles now that have higher highs for

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<v Speaker 2>inflation and higher lows. The answer is probably for the

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<v Speaker 2>next cycle or two we will have that type of environment.

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<v Speaker 1>Iiraon Jersey. There was some good reporting, and of course

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<v Speaker 1>we saw in the bond market some stasis off of

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<v Speaker 1>the set of economic data today, but nevertheless equities higher

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<v Speaker 1>and fixed income yields came in. I saw a lot

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<v Speaker 1>of different voices suggesting September as we were heading to

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<v Speaker 1>But boy, we have to really keep in mind the

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<v Speaker 1>essay by William Dudley, the former New York FED President.

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<v Speaker 1>We saw that on Bloomberg Opinion, a blistering essay stop

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<v Speaker 1>screwing around and move July thirty one, that puts some

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<v Speaker 1>tension into the FED decides we'll do that next week.

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<v Speaker 1>John Fair, Lisa Bramwoitz, and myself as well on the

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<v Speaker 1>tech juggernaut to come. In the background, there's Tesla and Google,

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<v Speaker 1>but far more there's this stress us over cap X

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<v Speaker 1>every once in a while, and we talked to people

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<v Speaker 1>this this blather blather. I'm as guilty of it as anyone.

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<v Speaker 1>And then someone steps in with specificity where the show

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<v Speaker 1>just stops on AI. On Capex for Global, Wall Street,

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<v Speaker 1>Gene Munster, deep water asset.

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<v Speaker 3>Management companies are spending about fifty billion a year on CAPEX.

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<v Speaker 3>So you figure over a three year period, one hundred

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<v Speaker 3>and fifty billion. They're generating about one hundred billion a

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<v Speaker 3>year in income. Of that capex, by the way, about

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<v Speaker 3>half of it is related to AI. So said another way,

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<v Speaker 3>seventy five billion over three years. Their market caps are

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<v Speaker 3>two plus trillion dollars, and as Zuckerberg said this weekend

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<v Speaker 3>is Bloomberg Podcast, that there's just too much risk if

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<v Speaker 3>they don't pursue this, because it is the biggest changes

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<v Speaker 3>he talked about in the next ten to fifteen years.

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<v Speaker 3>I think it's the biggest change in the next fifty.

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<v Speaker 3>But the point is is that I think that if

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<v Speaker 3>one of these companies takes the approach of let's save

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<v Speaker 3>ten billion dollars here, ten billion dollars there over a

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<v Speaker 3>over a year period, I think it could be a

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<v Speaker 3>just a historic mistake. And so they get it. Google

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<v Speaker 3>said it soundar sat on their call that they have

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<v Speaker 3>to continue to embrace capex and ultimately, Dave that is

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<v Speaker 3>that's the central question of what AI investors should focus

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<v Speaker 3>in on, at least over the next year or two years,

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<v Speaker 3>is what does that capex pace look like?

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<v Speaker 1>Gene Munster bottle that that's just incredibly important comments there

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<v Speaker 1>as he breaks out the actual numbers within this Capex

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<v Speaker 1>panic over AI. We will go next week too, an

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<v Speaker 1>exceptionally important final week of July. We've got the FED meeting,

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<v Speaker 1>We've got the earnings here that we will observe from Microsoft,

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<v Speaker 1>from Amazon, from Apple and others. We're on YouTube, let's

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<v Speaker 1>forget that. Subscribe to Bloomberg podcast please. That's the best

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<v Speaker 1>way to help me drive this forward. You're subscribing to

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<v Speaker 1>Bloomberg podcasts and again on YouTube. A great live chat,

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<v Speaker 1>informative live chat as we build out that audience. On

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<v Speaker 1>Apple CarPlay worldwide and in France. If you can't get

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<v Speaker 1>on the train and see the Olympics, at least listen

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<v Speaker 1>to us on Apple CarPlay stuck in what I'm sure

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<v Speaker 1>is a lot of traffic outside Paris. And Android Auto

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<v Speaker 1>as well on Apple Podcasts. This is single best idea