1 00:00:02,400 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:11,920 --> 00:00:16,320 Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays 3 00:00:16,320 --> 00:00:19,600 Speaker 2: at seven am Eastern on applecar Player or Android Auto 4 00:00:19,720 --> 00:00:23,080 Speaker 2: with the Bloomberg Business app. Listen on demand wherever you 5 00:00:23,120 --> 00:00:26,360 Speaker 2: get your podcasts, or watch us live on YouTube. 6 00:00:26,680 --> 00:00:29,200 Speaker 3: It's always important to have a worse weather in Milwaukee. 7 00:00:29,440 --> 00:00:33,160 Speaker 3: We do that now. They have Maleetti of Allspring Global Investments, 8 00:00:33,240 --> 00:00:37,360 Speaker 3: head of Equity where winter is really winter, and I 9 00:00:37,440 --> 00:00:42,000 Speaker 3: really want to talk about the future of value investing. 10 00:00:42,120 --> 00:00:45,200 Speaker 3: I know Allspring is a venerable I think of John 11 00:00:45,320 --> 00:00:49,440 Speaker 3: Carriet pioneer, or I mentioned John Templeton earlier with this 12 00:00:49,640 --> 00:00:54,040 Speaker 3: measurement of the Templeton Global Growth Fund years ago. What's 13 00:00:54,120 --> 00:00:58,280 Speaker 3: the future look like of value investing for Ann Maleetti? 14 00:00:58,920 --> 00:01:01,280 Speaker 3: Is you shift the ETF world? 15 00:01:02,840 --> 00:01:05,520 Speaker 1: It's a great question, Tom, thanks for having me on 16 00:01:05,600 --> 00:01:09,360 Speaker 1: and Merry Christmas to you and Paul. Look, I think 17 00:01:09,400 --> 00:01:14,720 Speaker 1: that I like underdogs, not just the Green Bay packers. 18 00:01:14,840 --> 00:01:18,800 Speaker 1: I also I also like a small and mid cap 19 00:01:18,880 --> 00:01:22,520 Speaker 1: here and I think when we look toward the future, 20 00:01:23,080 --> 00:01:26,800 Speaker 1: that's where I really see the most value. Certainly those 21 00:01:26,840 --> 00:01:31,360 Speaker 1: indexes have more financials in them and more you know, 22 00:01:31,440 --> 00:01:35,560 Speaker 1: cyclical names, but they also have some very profitable companies 23 00:01:35,840 --> 00:01:38,520 Speaker 1: that have been kind of just ignored by the rest 24 00:01:38,560 --> 00:01:39,240 Speaker 1: of the market. 25 00:01:39,080 --> 00:01:41,479 Speaker 4: As the Meg seven areas really taken off. 26 00:01:41,720 --> 00:01:45,000 Speaker 3: I mentioned John Carrey and back at Pioneer of Boston 27 00:01:45,040 --> 00:01:48,559 Speaker 3: to the Phil creat Or, you'd have a value fund 28 00:01:48,600 --> 00:01:50,680 Speaker 3: with one hundred and one hundred and fifty dare I 29 00:01:50,760 --> 00:01:56,760 Speaker 3: say two hundred stocks? Are you less diversified now in 30 00:01:56,880 --> 00:02:01,640 Speaker 3: trying to succeed at value versus zoning for growth stocks? 31 00:02:02,400 --> 00:02:07,280 Speaker 1: Yeah, I think we're focused on trying to get investors 32 00:02:07,280 --> 00:02:10,160 Speaker 1: to think more about diversification now. 33 00:02:10,600 --> 00:02:12,200 Speaker 4: We still are really cautious. 34 00:02:12,280 --> 00:02:15,000 Speaker 1: You don't want to be everywhere in this market, but 35 00:02:15,040 --> 00:02:17,880 Speaker 1: there are some really high quality companies out there. And 36 00:02:18,320 --> 00:02:20,200 Speaker 1: one of the things, you know, I followed small and 37 00:02:20,280 --> 00:02:23,440 Speaker 1: mid cap stocks for most of my career, which is 38 00:02:23,680 --> 00:02:26,040 Speaker 1: dating me much longer than I want right now. But 39 00:02:27,480 --> 00:02:30,520 Speaker 1: what people will often associate what small cap companies with 40 00:02:30,800 --> 00:02:32,480 Speaker 1: is that they're unprofitable. 41 00:02:32,760 --> 00:02:34,120 Speaker 4: But there's a lot of. 42 00:02:34,040 --> 00:02:37,480 Speaker 1: Small and mid cap companies that are quite profitable. And 43 00:02:37,520 --> 00:02:41,120 Speaker 1: when you look at the earnings multiples of those companies 44 00:02:41,240 --> 00:02:45,280 Speaker 1: versus the SMP five hundred, they are almost at trough 45 00:02:45,440 --> 00:02:49,720 Speaker 1: levels and So it's those types of companies tom cash 46 00:02:49,720 --> 00:02:55,560 Speaker 1: flow positive in many cases earnings positives, really good management 47 00:02:55,600 --> 00:02:58,560 Speaker 1: teams operating these companies, but just can't get out of 48 00:02:58,600 --> 00:03:02,720 Speaker 1: their own way. So diversific, but looking for high quality still. 49 00:03:03,080 --> 00:03:05,760 Speaker 5: And I know you and your teams at all Spring 50 00:03:05,840 --> 00:03:09,480 Speaker 5: you do a lot of real bottoms up research analysis. 51 00:03:09,480 --> 00:03:12,960 Speaker 5: Are there sectors that screen well for you guys in 52 00:03:13,000 --> 00:03:14,320 Speaker 5: that small to mid cap world? 53 00:03:15,440 --> 00:03:19,000 Speaker 1: There definitely are, Paul, And we have seen financials start 54 00:03:19,080 --> 00:03:22,320 Speaker 1: to outperform. That is one of the areas that our 55 00:03:22,360 --> 00:03:28,079 Speaker 1: managers were highlighting earlier, certainly with rates coming down, other 56 00:03:28,120 --> 00:03:31,080 Speaker 1: pressures coming off that area, and not just the banks, 57 00:03:31,080 --> 00:03:33,560 Speaker 1: but more broadly other financials as well. 58 00:03:34,200 --> 00:03:35,640 Speaker 4: But I would also. 59 00:03:35,440 --> 00:03:38,240 Speaker 1: Say healthcare, and this is an area that a lot 60 00:03:38,280 --> 00:03:40,480 Speaker 1: of the market has been kind of scared away from. 61 00:03:40,840 --> 00:03:44,960 Speaker 1: But the tools in diagnostic space in particular is an 62 00:03:45,040 --> 00:03:49,280 Speaker 1: area that has been underutilized. Where you see earnings expected 63 00:03:49,320 --> 00:03:52,320 Speaker 1: to really ramp in twenty five and twenty six, and 64 00:03:52,360 --> 00:03:55,800 Speaker 1: so where you see that earnings acceleration that can actually 65 00:03:56,080 --> 00:03:58,760 Speaker 1: bring really good returns for shareholders as well. 66 00:03:58,880 --> 00:04:01,320 Speaker 3: We get lucky, as we did yesterday with Dana Telsey 67 00:04:01,480 --> 00:04:04,120 Speaker 3: on Nordstrom's going private. We have a Malletti with us 68 00:04:04,200 --> 00:04:07,760 Speaker 3: from all Spring and Strong and Milwaukee, and this is 69 00:04:07,840 --> 00:04:12,360 Speaker 3: Joshua Franklin in the Financial Times. Pretty much moments ago 70 00:04:12,560 --> 00:04:16,240 Speaker 3: this was rumored and now the ft reports. The US 71 00:04:16,279 --> 00:04:21,240 Speaker 3: Banking Lobby Group has said they filed a lawsuit against 72 00:04:21,320 --> 00:04:26,359 Speaker 3: the FED over the Central banks stress testing, and of 73 00:04:26,400 --> 00:04:29,400 Speaker 3: course the quote here from Greg Bear. We appreciate the 74 00:04:29,400 --> 00:04:34,039 Speaker 3: board's announcement is a first step towards transparency. Are we 75 00:04:34,200 --> 00:04:36,320 Speaker 3: beyond stress tests and Malletti? 76 00:04:36,360 --> 00:04:36,800 Speaker 6: When you look? 77 00:04:36,839 --> 00:04:39,320 Speaker 3: I mean, I get JP Morgan's wonderful, but come on, 78 00:04:39,800 --> 00:04:41,919 Speaker 3: if you look at the top twenty banks after what 79 00:04:42,040 --> 00:04:46,440 Speaker 3: we went through eighteen months ago, can we really get 80 00:04:46,440 --> 00:04:51,479 Speaker 3: beyond stress tests? Stress tests? That's a mouthful. Stress tests 81 00:04:51,520 --> 00:04:52,719 Speaker 3: of our banking lobby? 82 00:04:54,160 --> 00:04:58,680 Speaker 1: You know, Thomas is a really interesting article in a 83 00:04:58,760 --> 00:05:02,720 Speaker 1: comment as well as you know, where have we seen 84 00:05:02,760 --> 00:05:08,119 Speaker 1: concentration grow. It's with banks, and there may be more 85 00:05:08,240 --> 00:05:13,400 Speaker 1: risk out there longer term than less. But I think 86 00:05:13,440 --> 00:05:17,680 Speaker 1: others would point to private credit and private equity soaking 87 00:05:17,760 --> 00:05:19,960 Speaker 1: up some of the slack on the other ends, and 88 00:05:20,040 --> 00:05:23,080 Speaker 1: those areas also funding many businesses. 89 00:05:23,200 --> 00:05:26,719 Speaker 4: But I don't know. We'll have to see what happens 90 00:05:26,760 --> 00:05:27,960 Speaker 4: with that lawsuit. 91 00:05:28,279 --> 00:05:30,720 Speaker 5: Hey, and a lot of folks with the new Trump 92 00:05:30,720 --> 00:05:34,440 Speaker 5: administration coming and are expecting mn A to really pick up. 93 00:05:34,880 --> 00:05:38,840 Speaker 5: Is that something you guys thematically think about for twenty 94 00:05:38,920 --> 00:05:40,279 Speaker 5: twenty five maybe beyond. 95 00:05:41,080 --> 00:05:44,440 Speaker 1: Absolutely, I think we're already starting to see it. You know, 96 00:05:44,480 --> 00:05:47,880 Speaker 1: the IPO market is starting to show signs of opening up. 97 00:05:48,240 --> 00:05:50,880 Speaker 1: But I think M and A is real there. You know, 98 00:05:51,000 --> 00:05:54,560 Speaker 1: as you both know, company balance sheets are strong, there's 99 00:05:54,600 --> 00:05:56,720 Speaker 1: a lot of cash on the sidelines when it comes 100 00:05:56,800 --> 00:06:00,599 Speaker 1: to what companies have been kind of holding out, waiting 101 00:06:00,640 --> 00:06:02,920 Speaker 1: to do, waiting to see what the future looks like. 102 00:06:03,400 --> 00:06:07,880 Speaker 1: With A with a lower regulatory environment, with rates continuing 103 00:06:07,920 --> 00:06:10,400 Speaker 1: to come down, maybe not as low as people expect it, 104 00:06:10,680 --> 00:06:13,120 Speaker 1: that's a good environment for M and A. It's another 105 00:06:13,240 --> 00:06:16,159 Speaker 1: reason we like that small and mid cap space. You know, 106 00:06:16,279 --> 00:06:20,360 Speaker 1: these names are kind of ripe and valuations are attractive, 107 00:06:20,440 --> 00:06:22,719 Speaker 1: and so I think M and A will heat up. 108 00:06:22,760 --> 00:06:25,279 Speaker 4: It will be being into twenty five. 109 00:06:25,440 --> 00:06:28,359 Speaker 3: You Paul Sweeney, I look at we mentioned Ben Laidler 110 00:06:28,400 --> 00:06:31,560 Speaker 3: and Christmas Eve twenty eighteen with this great bullmarket call 111 00:06:31,960 --> 00:06:34,160 Speaker 3: at the time at HSBC. I think I set up 112 00:06:34,160 --> 00:06:37,560 Speaker 3: one hundred and fifty four percent. I can't remember the number, folks, 113 00:06:37,800 --> 00:06:41,719 Speaker 3: but I got JP Morgan from that same holiday season 114 00:06:41,880 --> 00:06:46,040 Speaker 3: six years ago. Fortress Diamond is up one hundred and 115 00:06:46,040 --> 00:06:50,080 Speaker 3: sixty one percent, seventeen percent per year. I thought banks 116 00:06:50,120 --> 00:06:52,200 Speaker 3: made nominal GDP and you went home. 117 00:06:52,480 --> 00:06:56,120 Speaker 5: Now great returns and they're building a phenomenal headquarters on 118 00:06:56,160 --> 00:06:58,240 Speaker 5: Park Avenue, which I can't wait to see. Hey, And 119 00:06:58,440 --> 00:07:00,640 Speaker 5: one of the things I'm trying to figure out where 120 00:07:00,640 --> 00:07:02,839 Speaker 5: the performance in twenty twenty five could come from. After 121 00:07:03,000 --> 00:07:06,400 Speaker 5: two just stellar years of north with twenty percent returns, 122 00:07:06,440 --> 00:07:08,440 Speaker 5: I feel like it's got to be driven by earnings. 123 00:07:08,440 --> 00:07:10,520 Speaker 5: And sure enough, you know, the earnings growth out there 124 00:07:10,600 --> 00:07:12,560 Speaker 5: is twelve to fourteen percent. 125 00:07:12,600 --> 00:07:14,880 Speaker 7: But boy, that seems yeah, pretty high? 126 00:07:14,920 --> 00:07:16,800 Speaker 5: Is Is there earnings risk out there for you guys? 127 00:07:16,840 --> 00:07:17,640 Speaker 5: Are you thinking about that? 128 00:07:18,600 --> 00:07:18,840 Speaker 6: Paul? 129 00:07:18,880 --> 00:07:20,840 Speaker 4: I agree with you, it seems high. 130 00:07:20,960 --> 00:07:21,120 Speaker 8: It. 131 00:07:21,920 --> 00:07:24,880 Speaker 1: I would have probably said that coming into last year 132 00:07:25,320 --> 00:07:28,640 Speaker 1: although or this past year, but we didn't see tremendous 133 00:07:28,640 --> 00:07:33,000 Speaker 1: earnings growth outside of you know, a real concentrated number of. 134 00:07:33,000 --> 00:07:34,720 Speaker 4: Names this year. 135 00:07:34,760 --> 00:07:37,040 Speaker 1: I think we need to see real earnings growth in 136 00:07:37,120 --> 00:07:39,840 Speaker 1: order to get the market to accelerate. But you know, 137 00:07:40,160 --> 00:07:43,200 Speaker 1: the equity market will continue to surprise. I looked at 138 00:07:43,200 --> 00:07:46,480 Speaker 1: some data going back to nineteen twenty six, so ninety 139 00:07:46,560 --> 00:07:50,640 Speaker 1: nine years. Seventy one of those years, if we can 140 00:07:50,680 --> 00:07:54,800 Speaker 1: count this year, which hopefully we can, have produced positive returns, 141 00:07:54,800 --> 00:07:59,520 Speaker 1: seventy one of ninety six years and thirty two of 142 00:07:59,560 --> 00:08:03,080 Speaker 1: those years have produced returns of over twenty percent. Five 143 00:08:03,160 --> 00:08:06,200 Speaker 1: years in a row of twenty percent. Ernian's Paul, you 144 00:08:06,240 --> 00:08:09,040 Speaker 1: will remember this. This was in the fun times of 145 00:08:09,120 --> 00:08:12,480 Speaker 1: TMT for both of us. Ninety five, ninety six, ninety seven, 146 00:08:12,640 --> 00:08:16,640 Speaker 1: ninety eight, and ninety nine were all plus twenty percent, 147 00:08:17,040 --> 00:08:20,000 Speaker 1: So you know, you'll never know. Maybe we can get 148 00:08:20,000 --> 00:08:21,000 Speaker 1: three this time around. 149 00:08:21,280 --> 00:08:26,080 Speaker 3: Emlodious Apple of value stuck, you know, Tom. 150 00:08:26,200 --> 00:08:28,880 Speaker 1: The way I love to think about this is value 151 00:08:29,240 --> 00:08:32,240 Speaker 1: is what you gain, not what you pay. And so 152 00:08:32,480 --> 00:08:34,920 Speaker 1: I think it all depends on what you paid for 153 00:08:35,000 --> 00:08:37,320 Speaker 1: Apple and how much more game we can get. 154 00:08:37,360 --> 00:08:39,600 Speaker 4: I'm going to use the old buffet phrase for that one. 155 00:08:39,960 --> 00:08:43,400 Speaker 3: Didn't you mention, Paul, like this year, I still I 156 00:08:43,440 --> 00:08:46,120 Speaker 3: need to buy my first year thirty three percent, thirty 157 00:08:46,160 --> 00:08:48,640 Speaker 3: three percent This year I thought they were doing terrible. 158 00:08:48,679 --> 00:08:52,000 Speaker 3: It's like tim kone, you know, it's terrible. Stop the 159 00:08:52,040 --> 00:08:54,800 Speaker 3: road show? Remember those, Yeah, the developer shows. 160 00:08:54,920 --> 00:08:57,880 Speaker 7: Yeah, they still haven't. They're still big, big, big events. 161 00:08:58,000 --> 00:08:59,840 Speaker 3: So is this like a home run for Dan and I? 162 00:09:00,720 --> 00:09:02,199 Speaker 7: He's had a lot of home runs this year. 163 00:09:02,200 --> 00:09:04,760 Speaker 5: He can be sitting back in this ugly clothing that 164 00:09:04,840 --> 00:09:07,319 Speaker 5: he tends to wear, or loud clothing that he. 165 00:09:07,280 --> 00:09:08,920 Speaker 7: Tends to wear for him. 166 00:09:08,920 --> 00:09:10,480 Speaker 5: I know I'm all over him on that, but he's 167 00:09:10,520 --> 00:09:13,120 Speaker 5: a Penn State fan, So okay, we forgive him. 168 00:09:13,400 --> 00:09:16,360 Speaker 3: Okay, So there you go, am Melodia on value, Let 169 00:09:16,440 --> 00:09:19,360 Speaker 3: us continue a couple more questions here on television and 170 00:09:19,480 --> 00:09:23,840 Speaker 3: radio worldwide, Emilidi, I go back to value, and on 171 00:09:23,880 --> 00:09:27,360 Speaker 3: an international basis, the number one failure has been strong dollar, 172 00:09:27,400 --> 00:09:32,200 Speaker 3: resilient dollar international stocks. At some point it's going to 173 00:09:32,200 --> 00:09:33,880 Speaker 3: be a moonshot. When is that? 174 00:09:34,960 --> 00:09:36,240 Speaker 4: You know? Tom? 175 00:09:36,320 --> 00:09:38,640 Speaker 1: I think if we had to pick a dark horse 176 00:09:38,760 --> 00:09:42,440 Speaker 1: going into twenty five and twenty six, we'd probably take 177 00:09:42,480 --> 00:09:46,719 Speaker 1: a shot at having some allocation toward emerging markets. And 178 00:09:46,880 --> 00:09:50,080 Speaker 1: it's exactly you know what you're pointing out. The dollar 179 00:09:50,120 --> 00:09:55,319 Speaker 1: has been so strong it's really pushed back ourmerging markets. 180 00:09:55,040 --> 00:09:56,880 Speaker 4: You know, on top of other things. 181 00:09:57,360 --> 00:10:01,200 Speaker 1: But you know, I think there is real value to 182 00:10:01,240 --> 00:10:04,440 Speaker 1: be had when you look at the MSCI em and 183 00:10:05,360 --> 00:10:07,600 Speaker 1: index versus the S and P five hundred. We're at 184 00:10:07,640 --> 00:10:11,760 Speaker 1: a twenty year trough, and so any kind of positive 185 00:10:11,800 --> 00:10:15,200 Speaker 1: surprise or weakness in the dollar could really cause that 186 00:10:15,320 --> 00:10:16,760 Speaker 1: area of the marketing surge. 187 00:10:17,240 --> 00:10:19,160 Speaker 3: Okay, im Altdi, thank you so much. You have a 188 00:10:19,200 --> 00:10:22,520 Speaker 3: wonderful season. Merry Christmas. Q m Aletti. Is it all 189 00:10:22,559 --> 00:10:28,640 Speaker 3: spring in Milwaukee? 190 00:10:29,760 --> 00:10:33,640 Speaker 2: You're listening to the Bloomberg Surveillance podcast. Catch us Live 191 00:10:33,720 --> 00:10:37,040 Speaker 2: weekday afternoons from seven to ten am. Easter. Listen on 192 00:10:37,080 --> 00:10:40,319 Speaker 2: Apple car Play and Android Auto with a Bloomberg Business app, 193 00:10:40,440 --> 00:10:42,199 Speaker 2: or watch US live on YouTube. 194 00:10:42,840 --> 00:10:45,480 Speaker 3: Joining us now, someone who has tried many agnes. Stuart 195 00:10:45,520 --> 00:10:49,400 Speaker 3: Kaiser joins Uskin American Airlines down four percent is well, 196 00:10:49,440 --> 00:10:51,640 Speaker 3: thank you so much for joining us in study on Christmas. 197 00:10:51,880 --> 00:10:54,240 Speaker 3: Really really appreciate it. 198 00:10:54,360 --> 00:10:54,840 Speaker 6: Good morning. 199 00:10:55,000 --> 00:10:59,480 Speaker 3: The number one thing we got wrong was growthiness. You 200 00:10:59,520 --> 00:11:04,319 Speaker 3: had the image of Andrew Hollenhorst saying we will have growthiness, 201 00:11:04,400 --> 00:11:09,679 Speaker 3: we will have higher rates. Does the growthiness continue and 202 00:11:09,760 --> 00:11:11,920 Speaker 3: make your life in equity markets better? 203 00:11:12,840 --> 00:11:13,600 Speaker 6: I certainly hope so. 204 00:11:13,720 --> 00:11:15,560 Speaker 9: The Fed seems to think so too, which I think 205 00:11:15,720 --> 00:11:19,480 Speaker 9: was was, you know, a friendly reminder from the SEP 206 00:11:19,679 --> 00:11:21,720 Speaker 9: that it wasn't all about inflation risks that they also 207 00:11:21,720 --> 00:11:23,319 Speaker 9: think the unemployment ra is going to calm down and 208 00:11:23,360 --> 00:11:24,640 Speaker 9: growth is going to remain solid. 209 00:11:24,640 --> 00:11:27,000 Speaker 6: But to be honest, I think that's the biggest risk. 210 00:11:27,080 --> 00:11:31,120 Speaker 9: Early next year with that unemployment report on January tenth, 211 00:11:31,280 --> 00:11:33,320 Speaker 9: we're going to get a very quick test of whether 212 00:11:33,360 --> 00:11:35,960 Speaker 9: the Fed's view of flattening out of unemployment. 213 00:11:35,440 --> 00:11:36,760 Speaker 6: Is the case or not. 214 00:11:37,160 --> 00:11:39,559 Speaker 9: If we do get it, then look, I think equity 215 00:11:39,559 --> 00:11:41,880 Speaker 9: markets are in good shape. If we get an inflection 216 00:11:41,920 --> 00:11:43,959 Speaker 9: point higher, it's going to be a tough start of 217 00:11:43,960 --> 00:11:44,199 Speaker 9: the year. 218 00:11:44,200 --> 00:11:44,560 Speaker 6: I think. 219 00:11:45,080 --> 00:11:48,200 Speaker 5: So what is the twenty twenty five call? Here, we 220 00:11:48,240 --> 00:11:51,600 Speaker 5: had twenty twenty three, twenty twenty four, twenty percent plus 221 00:11:51,640 --> 00:11:52,480 Speaker 5: gains in each. 222 00:11:52,360 --> 00:11:53,240 Speaker 7: Of those years. 223 00:11:54,559 --> 00:11:56,280 Speaker 10: How often do we get a thirty year of a 224 00:11:56,440 --> 00:11:57,800 Speaker 10: performance after that. 225 00:11:58,200 --> 00:12:00,880 Speaker 9: I've seen people say it's only happened once, that doesn't 226 00:12:00,920 --> 00:12:01,840 Speaker 9: mean it can't happen again. 227 00:12:02,120 --> 00:12:04,640 Speaker 6: But look, I think I think the issue is. 228 00:12:04,880 --> 00:12:07,240 Speaker 9: You have about call it fifteen fourteen to fifteen percent 229 00:12:07,280 --> 00:12:09,240 Speaker 9: EPs growth price for next year, which is a pretty 230 00:12:09,240 --> 00:12:09,800 Speaker 9: solid number. 231 00:12:10,120 --> 00:12:12,440 Speaker 10: Is that seems almost aggressive to me? 232 00:12:12,559 --> 00:12:14,400 Speaker 9: But yeah, you're gonna need to see a broadening out. 233 00:12:14,440 --> 00:12:16,959 Speaker 9: I think for that to happen, you've got valuation that's 234 00:12:16,960 --> 00:12:18,960 Speaker 9: obviously quite extended. So I think if you take those 235 00:12:18,960 --> 00:12:21,320 Speaker 9: two things together, you're gonna say, yes, I might have 236 00:12:21,360 --> 00:12:24,000 Speaker 9: another double digit year. But the risk reward around that 237 00:12:24,040 --> 00:12:27,560 Speaker 9: forecast is really really tricky here going into going into 238 00:12:27,600 --> 00:12:28,520 Speaker 9: twenty twenty five. 239 00:12:28,679 --> 00:12:30,360 Speaker 10: What are some of the sectors? How are you playing it? 240 00:12:30,400 --> 00:12:35,080 Speaker 10: Either from sector perspective a factor perspective. Are we looking 241 00:12:35,120 --> 00:12:37,360 Speaker 10: for broadening out of performance in twenty twenty five? 242 00:12:37,960 --> 00:12:40,319 Speaker 9: I think sector wise, the area we've seen the most 243 00:12:40,360 --> 00:12:43,560 Speaker 9: consistent sponsorship is in financials and banks, so that seems 244 00:12:43,559 --> 00:12:46,560 Speaker 9: to be the easier trade. You know, obviously tech, you 245 00:12:46,640 --> 00:12:49,080 Speaker 9: need to be in tech. Then you've got things like 246 00:12:49,080 --> 00:12:51,160 Speaker 9: healthcare and energy, which I think have a lot more 247 00:12:51,240 --> 00:12:52,800 Speaker 9: moving parts and are a lot more tricky and you 248 00:12:52,840 --> 00:12:54,280 Speaker 9: need to be nuanced about it. 249 00:12:54,320 --> 00:12:55,559 Speaker 6: From a factor perspective. 250 00:12:56,160 --> 00:12:58,240 Speaker 9: If you believe the Fed's forecast, which is kind of 251 00:12:58,240 --> 00:13:01,040 Speaker 9: a higher for longer profile did well in the first 252 00:13:01,040 --> 00:13:03,600 Speaker 9: half of twenty twenty four. When we traded higher for longer, 253 00:13:03,640 --> 00:13:05,760 Speaker 9: it was large cap, it was tech, and it was growth. 254 00:13:05,920 --> 00:13:07,880 Speaker 9: So I think that has to be your base case 255 00:13:07,920 --> 00:13:10,480 Speaker 9: to start the year, and to get the broadening, you're 256 00:13:10,480 --> 00:13:12,439 Speaker 9: gonna need to see that in earnings like we did 257 00:13:12,440 --> 00:13:13,280 Speaker 9: back in the third quarter. 258 00:13:13,440 --> 00:13:15,960 Speaker 3: My tweet of the day here, everybody's working on Christmas Eve. 259 00:13:16,000 --> 00:13:19,199 Speaker 3: They're all at home having their Kirklin eggnug with a 260 00:13:19,280 --> 00:13:24,000 Speaker 3: twenty nine proof. According to Lisa Mateo's reporting, Lawrence McDonald, 261 00:13:24,040 --> 00:13:27,839 Speaker 3: who had my essay two years ago walking through the 262 00:13:27,880 --> 00:13:30,280 Speaker 3: wall of money that's out there, the six trillion, whatever 263 00:13:30,320 --> 00:13:33,320 Speaker 3: the number is, I can't remember. He lists over the 264 00:13:33,400 --> 00:13:37,880 Speaker 3: last ten years the thirty year bond two point seven, 265 00:13:38,760 --> 00:13:42,840 Speaker 3: mid point two point three, down, COVID one point nine, 266 00:13:43,280 --> 00:13:45,199 Speaker 3: and we're back out to like a four point eight 267 00:13:45,240 --> 00:13:48,559 Speaker 3: percent in the thirty year bond. Have you been surprised 268 00:13:48,600 --> 00:13:51,920 Speaker 3: we've had this great bull market with a migration up 269 00:13:51,960 --> 00:13:52,440 Speaker 3: and yield. 270 00:13:53,160 --> 00:13:54,600 Speaker 6: Yeah, we have been a little bit. 271 00:13:54,600 --> 00:13:57,080 Speaker 9: And I do think the term premium, particularly that thirty 272 00:13:57,120 --> 00:13:58,079 Speaker 9: year point in the yield. 273 00:13:57,920 --> 00:14:00,880 Speaker 3: To find that for people like Lisa Mantaeo having your 274 00:14:00,960 --> 00:14:04,480 Speaker 3: third Kirkland Egnie, what God's name. 275 00:14:04,400 --> 00:14:07,840 Speaker 9: Is term previous term premium, just how steep the bond 276 00:14:07,920 --> 00:14:10,320 Speaker 9: term structure is. So in this case, a steepening of 277 00:14:10,320 --> 00:14:12,240 Speaker 9: the term structure, and our view would mean the thirty 278 00:14:12,320 --> 00:14:15,880 Speaker 9: year yield is rising substantially. I think if that happens, 279 00:14:15,600 --> 00:14:18,680 Speaker 9: it's a significant risk for US equity markets. And the 280 00:14:18,720 --> 00:14:21,280 Speaker 9: reason is this. We could talk about the ten year yield, 281 00:14:21,280 --> 00:14:23,080 Speaker 9: which you mentioned at four point six percent. We can 282 00:14:23,120 --> 00:14:25,160 Speaker 9: come up with a good reason the ten year yield 283 00:14:25,240 --> 00:14:26,640 Speaker 9: might go to five or five and a half if 284 00:14:26,680 --> 00:14:28,600 Speaker 9: we've got a very positive growth impulse. 285 00:14:28,800 --> 00:14:29,840 Speaker 6: It's very hard to come up. 286 00:14:29,720 --> 00:14:32,360 Speaker 9: With a positive reason the thirty year yield would really 287 00:14:32,400 --> 00:14:34,680 Speaker 9: move higher. So that is probably going to come from 288 00:14:34,680 --> 00:14:37,720 Speaker 9: inflation and deficit spending and things of that nature. So 289 00:14:37,960 --> 00:14:39,680 Speaker 9: if there's a part of the yield curve that we 290 00:14:39,720 --> 00:14:42,080 Speaker 9: are concerned about, it would definitely be really at the 291 00:14:42,480 --> 00:14:43,480 Speaker 9: very long end of things. 292 00:14:43,840 --> 00:14:47,040 Speaker 5: What are your clients telling you about this new Trump 293 00:14:47,080 --> 00:14:49,880 Speaker 5: administration coming in later in January? 294 00:14:49,920 --> 00:14:51,440 Speaker 10: Are they positioning around that? 295 00:14:51,680 --> 00:14:54,240 Speaker 5: Are they treating it as a non event or are 296 00:14:54,240 --> 00:14:56,320 Speaker 5: they becoming more bullish on the margin. 297 00:14:56,360 --> 00:14:57,520 Speaker 7: What are you hearing from your clients. 298 00:14:57,720 --> 00:14:59,960 Speaker 6: I would say definitely not treating it some non event. 299 00:15:00,360 --> 00:15:00,520 Speaker 3: You know. 300 00:15:00,520 --> 00:15:02,040 Speaker 9: I would say, if you think of the election, you 301 00:15:02,080 --> 00:15:05,240 Speaker 9: had a sentiment response early, then you had a response 302 00:15:05,280 --> 00:15:09,520 Speaker 9: to kind of policy proposals next year is implementation, and 303 00:15:09,920 --> 00:15:11,760 Speaker 9: the implementation part I think carris a. 304 00:15:11,720 --> 00:15:12,360 Speaker 7: Lot of risk to it. 305 00:15:12,440 --> 00:15:12,560 Speaker 3: Right. 306 00:15:12,600 --> 00:15:14,400 Speaker 9: You know, it's easy to talk about tariffs, but now 307 00:15:14,440 --> 00:15:16,760 Speaker 9: let's implement tariffs. It's easy to talk about, you know, 308 00:15:16,880 --> 00:15:20,600 Speaker 9: reigning and government spending. We saw with the Continuing Resolution 309 00:15:20,720 --> 00:15:22,440 Speaker 9: the market got a little bit concerned with that, and 310 00:15:22,440 --> 00:15:25,720 Speaker 9: I think I think the market's response to that Continuing 311 00:15:25,760 --> 00:15:28,840 Speaker 9: Resolution is a shot across the bow that when you 312 00:15:28,920 --> 00:15:32,280 Speaker 9: actually go to implement these policies, it can create volatility. 313 00:15:32,480 --> 00:15:34,560 Speaker 9: I actually think a lot of clients are holding trades 314 00:15:34,680 --> 00:15:37,720 Speaker 9: like let's say, long dollar long US equities, and as 315 00:15:37,760 --> 00:15:40,400 Speaker 9: we get closer to that January twentieth, it wouldn't surprise 316 00:15:40,520 --> 00:15:42,200 Speaker 9: me to see some of that risk kind of trimmed 317 00:15:42,200 --> 00:15:45,120 Speaker 9: a little bit, whether as the uncertainty or slash the 318 00:15:45,160 --> 00:15:48,480 Speaker 9: reality of policy implementation really really hits them in the face. 319 00:15:49,400 --> 00:15:51,760 Speaker 5: Is there anything that concerns you in terms of valuation here? 320 00:15:51,800 --> 00:15:53,720 Speaker 5: I'm just not sure how to get comfortable with evaluation. 321 00:15:54,080 --> 00:15:56,280 Speaker 5: Maybe I can pull out the mag seven get a 322 00:15:56,320 --> 00:15:58,960 Speaker 5: little bit more comfortable there. I mean, what are you 323 00:15:58,960 --> 00:16:01,720 Speaker 5: guys doing on your desk, your clients thinking about, you. 324 00:16:01,680 --> 00:16:04,200 Speaker 6: Know, valuation? That we think of that as potential energy. 325 00:16:04,320 --> 00:16:06,360 Speaker 9: So yeah, there is a risk you can sell off 326 00:16:06,400 --> 00:16:08,560 Speaker 9: from a high valuation point, but you need a catalyst 327 00:16:08,560 --> 00:16:08,920 Speaker 9: to do it. 328 00:16:09,520 --> 00:16:09,640 Speaker 1: You know. 329 00:16:09,720 --> 00:16:11,840 Speaker 9: The other thing about valuation is unless you have a 330 00:16:11,880 --> 00:16:15,800 Speaker 9: holding period of twenty four months or beyond, valuation probably 331 00:16:15,800 --> 00:16:18,320 Speaker 9: shouldn't be your number one consideration. So I would say 332 00:16:18,400 --> 00:16:20,720 Speaker 9: right here, if you get the earnings growth that the 333 00:16:20,760 --> 00:16:24,160 Speaker 9: market's forecasting, the valuation is going to be fine. If 334 00:16:24,200 --> 00:16:28,160 Speaker 9: you start to get Ernie's growth decelerated, unemployment rate rising 335 00:16:28,240 --> 00:16:30,040 Speaker 9: all of a sudden, now you're selling off from a 336 00:16:30,080 --> 00:16:33,160 Speaker 9: much higher level. So I think it's a risk reward discussion. 337 00:16:33,440 --> 00:16:35,520 Speaker 9: So we're very aware of it, but we're kind of 338 00:16:35,520 --> 00:16:37,280 Speaker 9: looking for what could activate that risk. 339 00:16:37,320 --> 00:16:39,720 Speaker 3: And Stuart, thank you so much for coming in. I 340 00:16:39,760 --> 00:16:42,360 Speaker 3: love your segments on industry. I just think they're really 341 00:16:42,400 --> 00:16:44,840 Speaker 3: really great when they show you in the trading before 342 00:16:44,920 --> 00:16:49,040 Speaker 3: keeping the young Turks come, mister Kaiser, is the city Grilled? 343 00:16:53,520 --> 00:16:57,800 Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday 344 00:16:57,920 --> 00:17:01,400 Speaker 2: starting at seven am Eastern Our play in Android Auto 345 00:17:01,520 --> 00:17:04,359 Speaker 2: with the Bloomberg Business app. You can also listen live 346 00:17:04,480 --> 00:17:07,639 Speaker 2: on Amazon Alexa from our flagship New York station. Just 347 00:17:07,720 --> 00:17:10,320 Speaker 2: say Alexa playing Bloomberg eleven thirty. 348 00:17:10,800 --> 00:17:13,159 Speaker 3: We're going to spend some time here on the politics 349 00:17:13,160 --> 00:17:14,840 Speaker 3: of the moment. There's no one better to do that 350 00:17:14,880 --> 00:17:19,280 Speaker 3: with a Gautamcunda, yes, a professor at Yale's School of Management, 351 00:17:19,320 --> 00:17:23,399 Speaker 3: but far more his book Picking Presidents really alludes to 352 00:17:23,480 --> 00:17:27,560 Speaker 3: the follow up I'm kidding in jest picking Billionaires. Gotta 353 00:17:27,640 --> 00:17:34,280 Speaker 3: mccundan now on Elon Musk into twenty twenty five. Professor, 354 00:17:34,359 --> 00:17:36,200 Speaker 3: thank you so much for joining in one of your 355 00:17:36,520 --> 00:17:40,280 Speaker 3: side notes. You say, the tension within the Trump administration 356 00:17:41,000 --> 00:17:45,199 Speaker 3: of Secretary of State Rubio and the newly minted Elbridge 357 00:17:45,200 --> 00:17:49,399 Speaker 3: Coldby versus business types that need to do business in 358 00:17:49,480 --> 00:17:53,160 Speaker 3: Shanghai like Musk is tangible. Is that what we need 359 00:17:53,200 --> 00:17:57,000 Speaker 3: to look forward to as a raging Chinese debate at 360 00:17:57,040 --> 00:17:59,000 Speaker 3: sixteen hundred Pennsylvania Avenue. 361 00:18:00,160 --> 00:18:01,919 Speaker 11: It's hard to see how that won't happen. 362 00:18:02,000 --> 00:18:04,240 Speaker 12: I mean, the big chunk of the Trump administration is 363 00:18:04,280 --> 00:18:08,280 Speaker 12: people who have defined their foreign policy stance around conflict 364 00:18:08,280 --> 00:18:12,000 Speaker 12: with China, hopefully not armed, but still remark levels of hostility, 365 00:18:12,000 --> 00:18:14,199 Speaker 12: though they are just a new part of the relationship, 366 00:18:14,760 --> 00:18:17,040 Speaker 12: and some of the major players in the Trump administration, 367 00:18:17,119 --> 00:18:20,560 Speaker 12: Elon Musk in particular, more than anyone else, are enormously 368 00:18:20,600 --> 00:18:23,560 Speaker 12: dependent on trade with China. Must wants to put billions 369 00:18:23,600 --> 00:18:26,040 Speaker 12: of dollars of investment into China, and most of Jesscol's 370 00:18:26,040 --> 00:18:28,680 Speaker 12: profits seem to come from China. It's hard to see 371 00:18:28,680 --> 00:18:30,320 Speaker 12: how those two won't be at loggerheads. 372 00:18:31,480 --> 00:18:33,280 Speaker 5: What do you think, how do you think this is 373 00:18:33,280 --> 00:18:34,600 Speaker 5: going to play out here? I mean, I think a 374 00:18:34,600 --> 00:18:36,400 Speaker 5: lot of folks in Washington, DC, a lot of folks 375 00:18:36,440 --> 00:18:40,880 Speaker 5: who think about policy matters for this incoming administration trying 376 00:18:40,880 --> 00:18:44,560 Speaker 5: to figure out what role Elon Musk is going to 377 00:18:44,600 --> 00:18:47,320 Speaker 5: play and for how long do you have any insight 378 00:18:47,359 --> 00:18:47,679 Speaker 5: into that? 379 00:18:48,600 --> 00:18:52,440 Speaker 12: So this is something new in American politics. There has 380 00:18:52,560 --> 00:18:56,399 Speaker 12: never been a civilian as powerful as Elon Musk. For 381 00:18:57,119 --> 00:18:59,280 Speaker 12: in American history. It's hard to find anyone in sort 382 00:18:59,280 --> 00:19:02,320 Speaker 12: of like British history or who's most comparable. If we 383 00:19:02,359 --> 00:19:04,199 Speaker 12: go through he's not just the wealthiest person in the 384 00:19:04,200 --> 00:19:08,320 Speaker 12: world and maybe the single most important media figure, he's 385 00:19:08,480 --> 00:19:13,440 Speaker 12: also America's single most irreplaceable defense contractor. Right, you could 386 00:19:13,920 --> 00:19:16,240 Speaker 12: swap out going for Locke Martin, You couldn't swap out 387 00:19:16,240 --> 00:19:20,520 Speaker 12: SpaceX for anyone. So that level of stature is just 388 00:19:20,640 --> 00:19:24,520 Speaker 12: astonishing and hard to I mean any He would be 389 00:19:24,560 --> 00:19:26,640 Speaker 12: a major player in any government. 390 00:19:27,320 --> 00:19:27,920 Speaker 11: But at the. 391 00:19:27,920 --> 00:19:30,200 Speaker 12: Same time, at the same time, he's sort of showed 392 00:19:30,240 --> 00:19:33,280 Speaker 12: a willingness to kind of conduct his own foreign policy. 393 00:19:33,400 --> 00:19:34,639 Speaker 11: He's you know, he had pair. 394 00:19:34,560 --> 00:19:36,760 Speaker 12: Peers to speak with Vladimir Putin on a regular basis 395 00:19:37,040 --> 00:19:39,359 Speaker 12: and then turns around and kind of tweets out stuff 396 00:19:39,359 --> 00:19:42,600 Speaker 12: that looks a lot like Russian propaganda. He has enormous 397 00:19:42,640 --> 00:19:45,480 Speaker 12: financial interests in China that swamp. You know, they may 398 00:19:45,480 --> 00:19:48,359 Speaker 12: be larger financial interests in China than those of any 399 00:19:48,400 --> 00:19:49,840 Speaker 12: other person in the United States. 400 00:19:50,000 --> 00:19:50,200 Speaker 3: Yep. 401 00:19:50,600 --> 00:19:53,919 Speaker 12: And so at the same time, if you're Marco Rubio 402 00:19:54,000 --> 00:19:57,040 Speaker 12: or Bridge Bolby, I mean, what you've been talking about 403 00:19:57,080 --> 00:19:59,800 Speaker 12: for ten years is we need to prepare against China. 404 00:19:59,840 --> 00:20:02,800 Speaker 12: And I'll just note right now, in the sort of 405 00:20:02,840 --> 00:20:05,360 Speaker 12: the conflict over the government shutdown, the most interesting thing 406 00:20:05,440 --> 00:20:10,280 Speaker 12: that happened was the initial bill was killed because of Mosque. 407 00:20:10,560 --> 00:20:14,679 Speaker 12: The bill that finally passed did not address any of 408 00:20:14,760 --> 00:20:17,320 Speaker 12: Musk's confirmed with the original bill. If anything, it was 409 00:20:17,480 --> 00:20:19,840 Speaker 12: worse by his standard que measure. He was by the 410 00:20:19,880 --> 00:20:22,600 Speaker 12: ways he was measuring it. But the big change was 411 00:20:22,840 --> 00:20:27,000 Speaker 12: it stripped out the cause that prevented Americans from making 412 00:20:27,000 --> 00:20:30,400 Speaker 12: significant investments in China and and sort of advanced Chinese manufacturer. 413 00:20:30,800 --> 00:20:31,840 Speaker 11: That was gone, and. 414 00:20:31,760 --> 00:20:34,280 Speaker 12: Somehow the bill passed the second time, which suggests that 415 00:20:34,320 --> 00:20:35,879 Speaker 12: maybe must go exactly what he wanted. 416 00:20:36,560 --> 00:20:39,680 Speaker 5: So what are some of the takeaways from that funding 417 00:20:39,840 --> 00:20:43,240 Speaker 5: bill practice that we saw a week or so ago. 418 00:20:43,320 --> 00:20:47,160 Speaker 5: It seems like maybe Congress, in particular the Senate, kind 419 00:20:47,160 --> 00:20:51,040 Speaker 5: of trying to assert its independence of its branch of government. 420 00:20:51,080 --> 00:20:54,120 Speaker 5: Does that suggests how maybe these first one hundred days 421 00:20:54,119 --> 00:20:55,640 Speaker 5: will go for the Trump administration. 422 00:20:56,400 --> 00:20:56,879 Speaker 11: It doesn't. 423 00:20:56,920 --> 00:20:59,680 Speaker 12: I think what it suggests is that senators and congressmen 424 00:20:59,680 --> 00:21:03,800 Speaker 12: are realizing that, however much Americans might admire Elon Musk's. 425 00:21:03,480 --> 00:21:06,680 Speaker 11: Business success, they didn't elect him to run the country. 426 00:21:06,760 --> 00:21:09,320 Speaker 12: And you know, no matter how that, there's been some 427 00:21:09,359 --> 00:21:12,439 Speaker 12: focus groups where even hardcore Trump supporters are sort of 428 00:21:12,440 --> 00:21:15,120 Speaker 12: looking at Musk's role and going, we did not vote 429 00:21:15,160 --> 00:21:17,560 Speaker 12: for this guy. So it's not clear what's going on here. 430 00:21:18,040 --> 00:21:18,760 Speaker 6: But what I. 431 00:21:18,720 --> 00:21:21,560 Speaker 12: Would draw back on is I think we should American 432 00:21:21,560 --> 00:21:24,320 Speaker 12: politics look more like court politics right now than they 433 00:21:24,320 --> 00:21:25,560 Speaker 12: do traditional politics. 434 00:21:25,760 --> 00:21:27,880 Speaker 11: I keep drawing on sort of stuff from the Roman. 435 00:21:27,680 --> 00:21:32,080 Speaker 12: Empire and the Byzantine Empire, because there's this clashes of personalities. 436 00:21:32,359 --> 00:21:34,159 Speaker 12: So the person who springs to mind for me, for 437 00:21:34,240 --> 00:21:37,560 Speaker 12: Elon Musk is Crassus, the richest of all the Romans, 438 00:21:38,280 --> 00:21:41,360 Speaker 12: the figure who was in the first Triumvirate with Pompey 439 00:21:41,440 --> 00:21:45,240 Speaker 12: and Caesar. I mean, he was a crucial figure in 440 00:21:45,280 --> 00:21:47,640 Speaker 12: the transition of the Roman Republic to the Roman Empire. 441 00:21:48,640 --> 00:21:52,720 Speaker 12: And Crassus sort of he bankrolled other people until and 442 00:21:52,800 --> 00:21:54,399 Speaker 12: he played an the North role behind the scenes. It 443 00:21:54,480 --> 00:21:57,320 Speaker 12: was incredibly powerful until he decided that he wanted to 444 00:21:57,400 --> 00:22:01,760 Speaker 12: rule himself directly. And while he had incredible financial skills 445 00:22:01,800 --> 00:22:04,520 Speaker 12: and incredible sort of back back room that you bring skills, 446 00:22:05,119 --> 00:22:06,960 Speaker 12: that was not his skill set. He did not. He 447 00:22:07,040 --> 00:22:09,639 Speaker 12: was not a successful He was not successful politician. And 448 00:22:09,680 --> 00:22:12,040 Speaker 12: it ended very differ cross. 449 00:22:11,560 --> 00:22:15,000 Speaker 3: Professor were weaned on. You know, you get to city history. 450 00:22:15,480 --> 00:22:21,000 Speaker 3: March second, eighteen sixty one, Lincoln's first inauguration, and I'm 451 00:22:21,000 --> 00:22:23,720 Speaker 3: sure they had a whole frenzy about pecking order, about 452 00:22:23,720 --> 00:22:27,680 Speaker 3: who would sit where and all that. Where should Elon 453 00:22:27,840 --> 00:22:32,920 Speaker 3: Musk sit at the second inauguration of Donald Trump? 454 00:22:34,920 --> 00:22:38,920 Speaker 12: I mean, judging by his level of influence, he should 455 00:22:38,960 --> 00:22:40,800 Speaker 12: be right up on stage, hold on. 456 00:22:40,760 --> 00:22:42,080 Speaker 3: The Bible, the Trump. 457 00:22:43,480 --> 00:22:45,679 Speaker 12: Right, but I mean with his hand right on Trump's 458 00:22:45,640 --> 00:22:48,720 Speaker 12: shoulders as the as the oh come on, It's going to. 459 00:22:48,720 --> 00:22:51,680 Speaker 3: Be seriously like, is he on stage? Does he sit 460 00:22:51,720 --> 00:22:55,240 Speaker 3: two rows behind President Biden? Is he out in the 461 00:22:55,320 --> 00:22:58,760 Speaker 3: cheap seats, you know, halfway back to the Lincoln Memorial? 462 00:22:58,800 --> 00:22:59,560 Speaker 3: Which is it. 463 00:23:01,040 --> 00:23:01,560 Speaker 6: So his thing? 464 00:23:01,640 --> 00:23:05,080 Speaker 12: I would never underestimate Musk savvy, right like he has. 465 00:23:05,160 --> 00:23:06,960 Speaker 12: He spent two hundred and fifty million dollars to make 466 00:23:07,040 --> 00:23:09,320 Speaker 12: himself the second most powerful person in the United States. 467 00:23:09,800 --> 00:23:12,840 Speaker 12: So if I were giving Musk advice, I would tell 468 00:23:12,880 --> 00:23:14,920 Speaker 12: him he should be so far away the cameras can't 469 00:23:14,960 --> 00:23:18,520 Speaker 12: find him on the zoo. That was a smart play 470 00:23:18,560 --> 00:23:20,959 Speaker 12: for him, is to be as slow he as possible, 471 00:23:20,960 --> 00:23:23,159 Speaker 12: and the Trump people should think the same thing. But 472 00:23:23,480 --> 00:23:26,879 Speaker 12: I wonder Trump must like Trump likes to be the 473 00:23:26,920 --> 00:23:28,879 Speaker 12: main character, and it's a little hard for me to 474 00:23:28,920 --> 00:23:31,240 Speaker 12: imagine him yielding focus to quite that extent. 475 00:23:31,720 --> 00:23:33,880 Speaker 3: Professor, thank you so much. Scott A. McCunn has been 476 00:23:33,880 --> 00:23:37,760 Speaker 3: a huge, huge advantage for Bloomberg Surveillance this year. We 477 00:23:37,800 --> 00:23:43,040 Speaker 3: greatly appreciate his efforts readable and advanced picking presidents. Is 478 00:23:43,080 --> 00:23:47,160 Speaker 3: the book really really quite something? As well? 479 00:23:51,840 --> 00:23:56,160 Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday 480 00:23:56,240 --> 00:23:59,440 Speaker 2: starting at seven am Eastern on applecar Play and Android 481 00:23:59,440 --> 00:24:02,640 Speaker 2: Auto with Bloomberg Business App. You can also watch us 482 00:24:02,720 --> 00:24:06,760 Speaker 2: live every weekday on YouTube and always on the Bloomberg Terminal. 483 00:24:07,760 --> 00:24:10,720 Speaker 3: Your daily look at the front pages the Christmas Eve edition. 484 00:24:10,800 --> 00:24:16,000 Speaker 3: It's brought to you by IBKR Financial Advisor. Switch to 485 00:24:16,160 --> 00:24:20,040 Speaker 3: interact to brokers for lowest cost global trading and turnkey 486 00:24:20,240 --> 00:24:24,920 Speaker 3: custody solutions. No ticket charges, no conflicts of your interests 487 00:24:25,359 --> 00:24:31,119 Speaker 3: at ibkr dot com. Slasha, IBKR, Thank you for you 488 00:24:31,200 --> 00:24:35,600 Speaker 3: many gifts to us this year. Put the Kirklan egg 489 00:24:35,800 --> 00:24:36,399 Speaker 3: bag down. 490 00:24:36,840 --> 00:24:39,199 Speaker 6: Please, what do you got? I got it. 491 00:24:39,640 --> 00:24:42,119 Speaker 8: We'll start at the financial time. So they're saying this 492 00:24:42,160 --> 00:24:46,080 Speaker 8: is interesting. Chief executives publicly traded US companies they're leaving 493 00:24:46,240 --> 00:24:49,520 Speaker 8: in record numbers. This is despite different paint bonuses that 494 00:24:49,560 --> 00:24:52,359 Speaker 8: they're getting. The reason why they have this fear of 495 00:24:52,400 --> 00:24:54,639 Speaker 8: turmoil in twenty twenty five. They're looking ahead to the 496 00:24:54,680 --> 00:24:57,479 Speaker 8: next year. This is according to Challenger Gray. So here 497 00:24:57,480 --> 00:25:00,240 Speaker 8: are the numbers. So in the year to November, three 498 00:25:00,359 --> 00:25:03,280 Speaker 8: hundred and twenty seven chief executives at US public companies 499 00:25:03,320 --> 00:25:05,600 Speaker 8: announced that they were leaving, And if you compare that 500 00:25:05,640 --> 00:25:08,560 Speaker 8: to three hundred and twelve that left in twenty nineteen, 501 00:25:09,040 --> 00:25:11,000 Speaker 8: they say, a big part of it. You've heard about it, right, 502 00:25:11,000 --> 00:25:14,000 Speaker 8: the blue chip companies Boeing, Nike, the leaders at Intel, 503 00:25:14,080 --> 00:25:16,679 Speaker 8: they step down this year. Sinking share prices one of 504 00:25:16,680 --> 00:25:19,800 Speaker 8: the reasons. But another concern they say they have is 505 00:25:20,040 --> 00:25:24,000 Speaker 8: President like Trump, Donald Trump's tariffs. So you have the 506 00:25:24,000 --> 00:25:27,880 Speaker 8: CEOs overseeing global supply chains they are thinking of retiring, 507 00:25:27,960 --> 00:25:30,399 Speaker 8: considering it because they just don't want to deal with 508 00:25:30,480 --> 00:25:31,439 Speaker 8: the headache of it all. 509 00:25:31,680 --> 00:25:34,120 Speaker 5: Let's also think it's probably the fact that we've had 510 00:25:34,160 --> 00:25:37,600 Speaker 5: two monster years in the stock market where their stockholdings, 511 00:25:37,680 --> 00:25:40,680 Speaker 5: their personal stockholdings are probably at all time highs, and 512 00:25:40,720 --> 00:25:43,280 Speaker 5: they're like, I'm done, you know what, I want to 513 00:25:43,280 --> 00:25:45,600 Speaker 5: deal with this stuff anymore. My stock is worth a 514 00:25:45,800 --> 00:25:48,359 Speaker 5: jillion dollars. I'm going to just step aside and go 515 00:25:48,440 --> 00:25:49,320 Speaker 5: down to Boca. 516 00:25:49,400 --> 00:25:53,159 Speaker 3: I love the phrase we heard yesterday going back to 517 00:25:53,200 --> 00:25:57,080 Speaker 3: Harvey Schwartz, who they talked about protail, which is professional 518 00:25:57,119 --> 00:26:01,119 Speaker 3: retail YEP, protail exactly know there it is, what do 519 00:26:01,119 --> 00:26:01,680 Speaker 3: you got next? 520 00:26:01,880 --> 00:26:04,360 Speaker 8: The next is about Apple that they could be Uh, 521 00:26:04,400 --> 00:26:06,199 Speaker 8: it could be means some big money for Apple. This 522 00:26:06,240 --> 00:26:09,120 Speaker 8: is from web Bush, you know, Dan ives yes. Estimates 523 00:26:09,160 --> 00:26:12,119 Speaker 8: three hundred million iPhones are over four years old, so 524 00:26:12,160 --> 00:26:14,520 Speaker 8: that means it could lead to record upgrade, so more 525 00:26:14,560 --> 00:26:16,520 Speaker 8: people are gonna need the new one and that's gonna 526 00:26:16,520 --> 00:26:19,560 Speaker 8: help push Apple to a four trillion dollar market cap 527 00:26:19,600 --> 00:26:23,240 Speaker 8: by early twenty twenty five. He also told clients they're 528 00:26:23,240 --> 00:26:26,560 Speaker 8: headed for a strong holiday season because all those hundreds 529 00:26:26,600 --> 00:26:29,120 Speaker 8: of millions of people worldwide they're gonna need to upgrade 530 00:26:29,440 --> 00:26:32,199 Speaker 8: to those AI capabilities that the iPhones are coming with, 531 00:26:32,320 --> 00:26:35,160 Speaker 8: and also big key sales in the China market, which 532 00:26:35,160 --> 00:26:36,919 Speaker 8: he says is the key to all. 533 00:26:37,440 --> 00:26:41,199 Speaker 3: Is anybody here used AI capabilities? I wouldn't know what 534 00:26:41,240 --> 00:26:42,200 Speaker 3: if it was looking at. 535 00:26:42,119 --> 00:26:44,200 Speaker 10: It pops up on your on your Google search. 536 00:26:44,240 --> 00:26:46,800 Speaker 5: Now is that before you kind of get to like 537 00:26:47,160 --> 00:26:51,040 Speaker 5: the generic Wikipedia answer to whatever you're acquering, it'll it'll 538 00:26:51,080 --> 00:26:53,560 Speaker 5: pop up there. So they're they're force feeding you it 539 00:26:53,800 --> 00:26:56,280 Speaker 5: and it's it's helpful. I mean it's it's helpful, but 540 00:26:56,480 --> 00:26:58,639 Speaker 5: I'm not fully engaging with it. 541 00:26:58,720 --> 00:27:00,680 Speaker 7: That's something that's going to take time. 542 00:27:00,760 --> 00:27:02,680 Speaker 5: But I'm looking at you know, Apple, It's got a 543 00:27:02,680 --> 00:27:05,800 Speaker 5: market cap in three point eighty six billion dollars right now. 544 00:27:05,720 --> 00:27:09,200 Speaker 7: So just to whisper away from four trillion. 545 00:27:09,280 --> 00:27:11,920 Speaker 5: Yeah, a three point eight six trillion market cap, close 546 00:27:11,960 --> 00:27:12,600 Speaker 5: to Fortullion. 547 00:27:12,640 --> 00:27:17,160 Speaker 3: I just googled American Air grounded and I got no way. 548 00:27:17,240 --> 00:27:19,439 Speaker 10: I forgot no, I didn't have anything. 549 00:27:20,400 --> 00:27:23,480 Speaker 4: I'm still very this morning. 550 00:27:23,640 --> 00:27:28,200 Speaker 8: Next good point, Okay, are you ready for football on Christmas? 551 00:27:28,240 --> 00:27:29,040 Speaker 10: With Netflix? 552 00:27:29,400 --> 00:27:32,240 Speaker 3: A huge steal? Well, it went wrong a couple of 553 00:27:32,320 --> 00:27:35,560 Speaker 3: days ago. Somebody had out it was. It was not successful. 554 00:27:35,960 --> 00:27:38,920 Speaker 8: It's not okay, So hopefully you have the Netflix subscription 555 00:27:39,000 --> 00:27:41,280 Speaker 8: stand will bring that for you. Two NFL games, right, 556 00:27:41,280 --> 00:27:43,280 Speaker 8: you got the Chiefs and the Steelers one pm, Eastern 557 00:27:43,600 --> 00:27:47,000 Speaker 8: Ravens at the Texans four thirty pm. You can though, 558 00:27:47,040 --> 00:27:48,639 Speaker 8: you know, watch it for you over the AIRTV and 559 00:27:48,680 --> 00:27:50,280 Speaker 8: the whole markets for the team. So just want to 560 00:27:50,280 --> 00:27:54,000 Speaker 8: put that out there. But two questions, is it okay 561 00:27:54,040 --> 00:27:57,000 Speaker 8: to watch seven hours of football on TV on Christmas? 562 00:27:57,080 --> 00:27:59,080 Speaker 8: And the second one, you know you had the glitches 563 00:27:59,119 --> 00:28:01,880 Speaker 8: when you had that Jake All Mike Tyson fight. Football 564 00:28:01,920 --> 00:28:03,120 Speaker 8: fans are are just. 565 00:28:03,119 --> 00:28:04,160 Speaker 4: Not as forgiving. 566 00:28:04,880 --> 00:28:06,639 Speaker 8: So we'll see if that can stand up to the 567 00:28:07,000 --> 00:28:09,240 Speaker 8: test there. And then you have the debate too, because 568 00:28:09,240 --> 00:28:11,880 Speaker 8: it's kind of taking the spotlight off the NBA, which 569 00:28:11,960 --> 00:28:16,280 Speaker 8: is really you know, had their whole Christmas summary. So 570 00:28:16,640 --> 00:28:19,000 Speaker 8: there's that debate too. And then the players, I mean, 571 00:28:19,040 --> 00:28:21,600 Speaker 8: now they got to play four teams. They're going to 572 00:28:21,640 --> 00:28:23,800 Speaker 8: play three games in eleven days, so that means they're 573 00:28:23,840 --> 00:28:25,840 Speaker 8: playing more real injury. 574 00:28:27,280 --> 00:28:29,760 Speaker 5: Yeah, I mean, and this is the biggest thing for 575 00:28:29,800 --> 00:28:34,000 Speaker 5: Netflix here is to from a technical perspective, no glitches. 576 00:28:34,720 --> 00:28:36,560 Speaker 7: The bar is super high on the NFL. 577 00:28:37,200 --> 00:28:38,920 Speaker 5: It's one thing to do, you know, like a tennis 578 00:28:38,960 --> 00:28:41,240 Speaker 5: match or something, and it doesn't really work or there's 579 00:28:41,720 --> 00:28:43,280 Speaker 5: you know, technical problems. 580 00:28:43,400 --> 00:28:45,200 Speaker 7: You cannot do that with the NFL. 581 00:28:45,320 --> 00:28:47,320 Speaker 10: So this is a big, big deal. 582 00:28:47,440 --> 00:28:52,480 Speaker 3: Let's be optimistic. It succeeds what's Paul Sweeney's timeline where 583 00:28:52,600 --> 00:28:55,320 Speaker 3: CBS loses football. 584 00:28:55,560 --> 00:28:58,840 Speaker 5: You know what's gonna happen the NFL. There, there's nobody 585 00:28:58,880 --> 00:29:00,360 Speaker 5: better in the world of this. There are going to 586 00:29:00,400 --> 00:29:03,600 Speaker 5: have their product on every single distribution platform out there. 587 00:29:03,880 --> 00:29:09,520 Speaker 5: Traditional broadcasts, networks, cable networks, streaming, multiple streaming, multiple streamings, 588 00:29:09,640 --> 00:29:12,080 Speaker 5: they're gonna because why then you get more and more 589 00:29:12,120 --> 00:29:15,280 Speaker 5: people bidding on the rights for your product. And it's 590 00:29:15,360 --> 00:29:16,640 Speaker 5: up to CBS whether you want to put it on 591 00:29:16,720 --> 00:29:20,560 Speaker 5: the CBS network or paramount the streaming plus whatever that is. Uh, 592 00:29:20,880 --> 00:29:24,520 Speaker 5: nobody is better than the NFL in maximizing the value 593 00:29:24,640 --> 00:29:25,360 Speaker 5: of their game. 594 00:29:25,400 --> 00:29:27,800 Speaker 10: So I have to see it's good to squeeze one more. Okay, 595 00:29:27,800 --> 00:29:28,160 Speaker 10: one more. 596 00:29:28,360 --> 00:29:32,280 Speaker 8: This is the big social media debate. It's called gentle parenting. Okay, 597 00:29:32,320 --> 00:29:34,719 Speaker 8: this is hashtag gentle. I know you're gonna love this. 598 00:29:34,800 --> 00:29:35,120 Speaker 10: Okay. 599 00:29:35,240 --> 00:29:39,960 Speaker 8: So there's four rules. Empathy, understanding, respect, and boundaries. Okay, 600 00:29:40,200 --> 00:29:42,440 Speaker 8: you have to talk about feelings, you know, when they're 601 00:29:42,480 --> 00:29:44,960 Speaker 8: having a tantrum. You got to get down to their level, 602 00:29:45,520 --> 00:29:51,520 Speaker 8: make eye contact, validate their concerns. Say it's okay, I understand. Okay, 603 00:29:52,040 --> 00:29:54,640 Speaker 8: if they hit another kid, you say, don't hit you say, 604 00:29:54,800 --> 00:29:59,440 Speaker 8: use gentle hands. Okay, though that's the learning now, and 605 00:29:59,680 --> 00:30:01,880 Speaker 8: you're I'm not supposed to count to three. Remember that 606 00:30:02,000 --> 00:30:03,600 Speaker 8: used to be the thing, like I'm going to count 607 00:30:03,600 --> 00:30:03,960 Speaker 8: to three. 608 00:30:04,320 --> 00:30:05,080 Speaker 10: I did that. 609 00:30:05,200 --> 00:30:07,920 Speaker 4: I got to say, is this working? 610 00:30:09,000 --> 00:30:09,800 Speaker 7: I haven't done it. 611 00:30:11,200 --> 00:30:15,240 Speaker 8: I haven't done the gentle. 612 00:30:13,760 --> 00:30:17,320 Speaker 10: Her house If I know that the case. 613 00:30:18,080 --> 00:30:21,520 Speaker 3: You talk about tantrums in the kitchen. When I hear 614 00:30:21,640 --> 00:30:23,840 Speaker 3: this stuff rested, got news. 615 00:30:23,640 --> 00:30:27,320 Speaker 5: Here on the American airlines nationwide ground stop cancel, every 616 00:30:27,440 --> 00:30:29,720 Speaker 5: a says, so good. 617 00:30:29,480 --> 00:30:30,880 Speaker 7: News for everybody else. 618 00:30:31,680 --> 00:30:32,880 Speaker 3: They think they got it fixed. 619 00:30:32,920 --> 00:30:36,240 Speaker 8: Okay, good, Yes, yeah, when you have the crying kid 620 00:30:36,280 --> 00:30:38,800 Speaker 8: in the airline, yes, how do you handle that with 621 00:30:38,920 --> 00:30:40,640 Speaker 8: the gentle I'm flowing back. 622 00:30:40,440 --> 00:30:43,880 Speaker 5: In a coast to coast for twenty years with little kids, 623 00:30:43,960 --> 00:30:46,920 Speaker 5: so I have empathy for those parents, so I try 624 00:30:46,960 --> 00:30:49,400 Speaker 5: to be the you know, empathety. That's at some point 625 00:30:49,440 --> 00:30:51,680 Speaker 5: I turn around, I'm like, mom, Dad, get a hold 626 00:30:51,720 --> 00:30:52,080 Speaker 5: of your kid. 627 00:30:52,120 --> 00:30:52,280 Speaker 9: Here. 628 00:30:52,880 --> 00:30:55,640 Speaker 10: You're in charge, You're the boss, hear it. 629 00:30:57,320 --> 00:31:04,000 Speaker 3: I feel sad for it. I just really, you know, 630 00:31:04,400 --> 00:31:07,040 Speaker 3: I mean, you had all the right phrases, Lisa, of 631 00:31:07,080 --> 00:31:07,920 Speaker 3: what this thing is. 632 00:31:08,080 --> 00:31:09,600 Speaker 8: Yeah, and you know what it is. They're saying it's 633 00:31:09,640 --> 00:31:12,120 Speaker 8: bigger now because now the adults are starting to be 634 00:31:12,200 --> 00:31:15,000 Speaker 8: more aware of their mental health. So now they're passing 635 00:31:15,040 --> 00:31:17,520 Speaker 8: that down onto their kids. I mean, it wasn't a 636 00:31:17,560 --> 00:31:19,680 Speaker 8: thing when when my kids were younger, there was no 637 00:31:19,760 --> 00:31:21,040 Speaker 8: such thing as gentle parents. 638 00:31:21,120 --> 00:31:24,640 Speaker 13: If you don't next generation go to that in the 639 00:31:24,680 --> 00:31:29,400 Speaker 13: next fifteen minutes, you don't get a sip because Santa 640 00:31:29,520 --> 00:31:33,959 Speaker 13: is not showing up and I'm gonna play Andy Williams. 641 00:31:33,320 --> 00:31:36,760 Speaker 3: For the entire Christmas Day. Stay with us on this 642 00:31:36,880 --> 00:31:41,080 Speaker 3: Christmas Eve post me Tom Keen, Michael Barr, and Lisa 643 00:31:41,120 --> 00:31:45,320 Speaker 3: Matteo with that Dog. This is the Bloomberg. 644 00:31:44,840 --> 00:31:49,280 Speaker 2: Surveillance Podcast, available on Apple, Spotify, and anywhere else you 645 00:31:49,360 --> 00:31:53,160 Speaker 2: get your podcasts. Listen live each weekday, seven to ten 646 00:31:53,200 --> 00:31:57,440 Speaker 2: am Eastern on Bloomberg dot com, the iHeartRadio app, tune In, 647 00:31:57,600 --> 00:32:00,560 Speaker 2: and the Bloomberg Business app. You can also watch us 648 00:32:00,640 --> 00:32:03,960 Speaker 2: live every weekday on YouTube and always on the Bloomberg 649 00:32:04,080 --> 00:32:04,480 Speaker 2: terminal