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Speaker 2: We start strong hair. One of my favorite people on
Speaker 2: wall stream Lindsay Rosters with Goldman Sachs Multisector Investing. I
Speaker 2: have no idea what that means. All I want to
Speaker 2: know is in the Lindsay Roster world, we've had at
Speaker 2: least a shift, if not a jump conditioning yield. How
Speaker 2: does that change a multisector view.
Speaker 3: Yeah, no, We've definitely had a big move in yields
Speaker 3: and it's happened in the past month and a half.
Speaker 3: To move forty basis points in the back end of
Speaker 3: the curve is no small thing. How does it affect
Speaker 3: our view? We've got to think about what's what's happened
Speaker 3: in the world, why do we get here? And big
Speaker 3: picture is the economy is still really strong. We have
Speaker 3: maybe slightly below trend growth in the US. We've just
Speaker 3: had a gamebuster burning season. Ten out of eleven sectors,
Speaker 3: just crushing it. Looking really good. But why are yields higher?
Speaker 3: Yields are higher because we continue to have this war conflict,
Speaker 3: questions about oil and long term inflation. We've got a
Speaker 3: FED reaction function that the market is telling the Fed.
Speaker 3: We don't know what it is, please please tell us.
Speaker 3: And you've got a lot of supply in the markets.
Speaker 3: And that's what's happened in the back end. In terms
Speaker 3: of how we're investing in our portfolio, we really aren't
Speaker 3: changing much. We haven't had any kind of large duration
Speaker 3: overweight all year. That hasn't seemed to be a place
Speaker 3: that we felt could win. Instead, we've got some structured
Speaker 3: product and a little bit of high quality, high yield,
Speaker 3: and that's where we want to be, and there's nothing
Speaker 3: that's telling us so far that we shouldn't be.
Speaker 4: How much credits do you want to be taking because
Speaker 4: and sit there at the tenure and clip a four
Speaker 4: seventy coupon, that's a decent living right there.
Speaker 3: Yeah, you don't necessarily have to do more than that
Speaker 3: if that satisfies your needs and your liabilities, for example.
Speaker 3: But when we think about the incremental spread that you
Speaker 3: can pick up in certain names that we fundamentally like,
Speaker 3: we feel confident doing that. This isn't a market though
Speaker 3: that you want to be all in, all chips on
Speaker 3: the table. You want to be, you know, slightly defensive.
Speaker 3: But we do have a posture of more risk than
Speaker 3: our benchmarks.
Speaker 4: You mentioned the FED and the market saying, you know,
Speaker 4: we need some guidance here. Do you think we'll get anything?
Speaker 2: Next week?
Speaker 4: In Jackson Hall? We'll have Tom knout there asking the
Speaker 4: tough questions. But maybe in the Q and A with
Speaker 4: Tom Okay.
Speaker 3: We got a chance there in what is the planned remarks?
Speaker 3: I don't think so. I think we're going to hear
Speaker 3: more about what these task forces are supposed to do,
Speaker 3: and the market is saying we don't.
Speaker 2: Need to hear. Can you imagine Haunts is on a
Speaker 2: task force? He sit, there's stone quiet like and then
Speaker 2: weigh in, right, where's Hatzi is now dovetailed into your view?
Speaker 2: He's you know, he's always been a realist, I'd say
Speaker 2: on GDP, does they see a pullback in real phenomenal GDP?
Speaker 2: Dovetail that into what you're doing?
Speaker 3: Lindsay, sure, so there has been predicted by Yan and team,
Speaker 3: who we obviously listen to, and is the best out
Speaker 3: there thinking that the second half will be softer. So
Speaker 3: when we're getting these prints coming in and they are
Speaker 3: softer for GDP, we are not surprised. That's been part
Speaker 3: of the forecast. Additionally, Yan and team believe that the
Speaker 3: FED will be on hold for this year. Okay, that
Speaker 3: sounds right. And the other thing that's important that he's
Speaker 3: pointed out is that inflation is coming in more benign
Speaker 3: and in fact we've seen that, which can mean that
Speaker 3: the FED can I didn't.
Speaker 2: Read it, but I knew the answer because you know,
Speaker 2: that's been yon for thirty years and that's why world class.
Speaker 2: If that's the case, can you bet yield down, price
Speaker 2: up and fixed income? That's the arch question right now.
Speaker 3: Yeah, I don't think you necessarily need yield down price up.
Speaker 3: You can earn the carry and I think that's it.
Speaker 3: You've got really attractive yields. And to just sit here
Speaker 3: and clip those couple.
Speaker 2: I mean for the listeners and viewers and where it's
Speaker 2: you know they're going to two year CDs, five year
Speaker 2: cd which do you extend duration?
Speaker 1: Yeah?
Speaker 3: I think you can extend duration into the belly of
Speaker 3: the curve. But we are not making a recommendation to
Speaker 3: go all the way out into the thirty year point.
Speaker 3: I get, but you can't extend.
Speaker 2: I'm putting Bloomberg Money Show together for Friday, and I
Speaker 2: did the TLTs out twenty years. Yep, you really, folks.
Speaker 2: Just so I can explain this to retail America, when
Speaker 2: you go out past the Lindsay Rosner duration, there's some
Speaker 2: price change you can have, but sometimes it's it's.
Speaker 3: Op that's that's exactly right. You have more volatility in
Speaker 3: the kid. So what do you need that?
Speaker 4: What do you make of all this new supply of technology,
Speaker 4: investment grade debt into your marketings? These are issues we
Speaker 4: typically don't see, and the total dollar mounts are just huge.
Speaker 4: How's that impacting your market?
Speaker 2: Yeah?
Speaker 3: So I think the market is handling it very orderly.
Speaker 3: Just to get some numbers, we've seen one point six
Speaker 3: trillion in ig issuance this year. That's up thirty four
Speaker 3: percent from where we were last year. So yes, is
Speaker 3: there more supply. Sure? When it comes to the hyperscalers,
Speaker 3: we've seen close to two hundred billion. If you think
Speaker 3: about the total AI complex, that number is more like
Speaker 3: four hundred billion. These are big numbers, but the market
Speaker 3: is taking it in stride. These deals are still over subscribed,
Speaker 3: but you are finding for this bucket of issuers that
Speaker 3: spreads are typically trading wider than like credits or like
Speaker 3: credit quality names. So I would say the market's orderly
Speaker 3: and people are excited about the story. But obviously buying
Speaker 3: the bombs of these issuers is very different than owning
Speaker 3: the equity.
Speaker 4: So I mean, I'm just assuming when people come back
Speaker 4: from labor day the summer season, they're going to be
Speaker 4: calling you guys up again and saying, hey, we've got
Speaker 4: more issues to come. I mean, and what are the
Speaker 4: questions you asked? Are they different now than maybe six
Speaker 4: months ago?
Speaker 3: Well, I think six months ago there was really a
Speaker 3: question on what is this Capex story and is it
Speaker 3: just a runaway train? And there was concerns that Capex
Speaker 3: could be something like one point seven trillion. For this group,
Speaker 3: I think we feel more confident that the numbers near
Speaker 3: one and this is again trillion with the Tea, so
Speaker 3: that much less and feeling more confident about it I
Speaker 3: think makes it more enticing to own this. But we
Speaker 3: very much think that there's going to be a lot
Speaker 3: of issuance and in our particular portfolios. We are underweight
Speaker 3: the hyperscalers and investment grade and finding ways to play
Speaker 3: AI and this space instructuring product and in high yelth
Speaker 3: okay hyperscaler.
Speaker 2: Like every single conversation, folks, there's two conversations. The mag
Speaker 2: seven equity stocks, markets should buy more Amazon and the
Speaker 2: pros are all looking at the debt build up. You
Speaker 2: have the advantage of one A line them Amanda line
Speaker 2: them at Goldman Exacts. Where's Amanda right now on the
Speaker 2: next margin kangaroo ban that these people are going to issue.
Speaker 3: Yeah, so very lucky to work with Amanda. Now, as
Speaker 3: I said, actually, last time I was on this.
Speaker 2: Show, did you I don't remember, Yeah, you brought it up.
Speaker 3: I think we talked about we are blonds and bonds?
Speaker 3: What could be better? That's our tagline podcast coming soon.
Speaker 3: Stay exactly, it's not the works, But what she said,
Speaker 3: I think what's been really helpful is contextualizing who's going
Speaker 3: to buy the paper and where is it going to go?
Speaker 3: And what she's been pointing out is there is a
Speaker 3: limit to how much the US regular way investment grade
Speaker 3: market can take and that she thinks the next shift
Speaker 3: will be that USIG gets saturated and had enough, it
Speaker 3: will go to private credit where there's four and a
Speaker 3: half trillion of dry powder waiting.
Speaker 2: And even it can go international and.
Speaker 3: It has actually true, that's right, right, But those are
Speaker 3: smaller markets. So it sounds like private credit is probably
Speaker 3: the next set of strong hands to take down some
Speaker 3: of this paper, which means we're not worried about the supply.
Speaker 2: Okay, Lindsay, and thank you so much with with sex
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.
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Speaker 2: Joining US now with an important update pre Jackson Hall
Speaker 2: of Kathleen bus Johnsick, chief economists at Nationwide to meet Kathy.
Speaker 2: The arch question is this ginormous nominal GDP into Q
Speaker 2: four and into twenty twenty seven does the animal spirit
Speaker 2: of five percent plus? Does that sustain? Yeah?
Speaker 5: Good morning, Tom. You know so our view is that
Speaker 5: both real and amal GDP going into the third quarter
Speaker 5: looks pretty solid and actually makes the prize. On the upside,
Speaker 5: we would say it's running somewhere between two and a
Speaker 5: half to three percent, mainly because we just had a
Speaker 5: lot of momentum coming out of the second quarter with
Speaker 5: the consumer and we continue to have very strong AI
Speaker 5: capex as you know. Then going towards the fourth quarter,
Speaker 5: it could get a little bit softer depending on where
Speaker 5: energy prices are. Inflation, but our view has been that
Speaker 5: inflation eases as we go through the end of the year. Now,
Speaker 5: obviously big wild card is what happens in the Middle East.
Speaker 5: But I think if you look at some of the
Speaker 5: core inflation readings, even though there's some upper pressure from
Speaker 5: AI spinning, overall, we think the tariffs start to fade,
Speaker 5: and other categories to us look rather well behaved.
Speaker 6: So, Kathy, I guess.
Speaker 4: One of the issues for the FED is they think
Speaker 4: about what to do next? Is this inflation And again
Speaker 4: we do have the energy swings that are kind of
Speaker 4: you know, hitting people in the pocketbook. But how do
Speaker 4: you guys view the underlying inflation out there in this economy?
Speaker 5: Yeah, I mean no doubt, you know, gasoline prices, oil prices,
Speaker 5: diesel prices stay high, and elevated. It's a tax on
Speaker 5: the economy, right, So businesses, consumers, and the agricultural sector
Speaker 5: all of them feel that that tax from higher energy prices.
Speaker 5: But in terms of inflation, right, you'd actually have to
Speaker 5: see those readings keep going up at a big rate
Speaker 5: to see inflation. If they just leveled off, you're actually
Speaker 5: getting zero inflation imputus from energy. And I think aside
Speaker 5: from energy and aside from the AI build out, we're
Speaker 5: actually seeing signs of disinflation both in the service sector
Speaker 5: and the goods sector. And you know, tying that back,
Speaker 5: you know Tom's question about you know, can this all persist,
Speaker 5: like economic growth with five percent and long term yields.
Speaker 5: You know, we've been there before on the tenure yield, Like,
Speaker 5: I'm not sure that that's enough to kind of really
Speaker 5: derail us obviously, you know, we'd like to see lower
Speaker 5: rates to support the economy, but what gets hurt most
Speaker 5: from on the consumer side is higher mortgage rates. But
Speaker 5: housing has been installed anyhow, I mean, we really haven't
Speaker 5: had the housing sector participating in this economy at all.
Speaker 2: So what is your surprise is you're writing in the
Speaker 2: labor day, are we there already close I'm rushing it.
Speaker 2: I think I'm rushing it. Kathy Is, you're right into
Speaker 2: that big nationwide Labor Day report. What's your greatest mystery
Speaker 2: about the American economy? Is it like business investment?
Speaker 5: Well, business investment has really been mostly comprised by the
Speaker 5: AI build out capex, so it's just been assumed by that, right,
Speaker 5: So then it's what happens outside of that, how does
Speaker 5: the labor market fare and the consumer? Because what's going
Speaker 5: to really dictate things for the consumer is the labor market.
Speaker 5: As long as the labor market remains good enough and
Speaker 5: we're getting you know, income gains, and especially if those
Speaker 5: gains are higher than inflation, so it is key for
Speaker 5: inflation to come down because there's a point where consumer
Speaker 5: is going to have hard time just dipping into their savings.
Speaker 6: That's what we start earlier this year.
Speaker 5: That can continue a little bit.
Speaker 2: But not forever.
Speaker 5: So to me, it's it's the labor market.
Speaker 6: But also I would say, you know jackson.
Speaker 5: Whole speech with chair wars, what does he say and
Speaker 5: get any type of insight on the reaction function?
Speaker 2: It sounds like a total mystery. Kathleen bus Jhonson, thank
Speaker 2: you so much. For the quick brief. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am. He's durn Listen
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Speaker 2: I want to give your window to this. So Ian
Speaker 2: Lincoln is definitive on Wall Street. He's the kind of
Speaker 2: research probably more Bank of Montreal research gets stolen off
Speaker 2: Ian Lncoln's desk and anyone I know's it's sort of
Speaker 2: like a papal blessing. I mean, Ian sort of looks
Speaker 2: at it. Veil Hartman's doing all the work. How do
Speaker 2: you create your acclaimed wicked, dense eight paragraph I've got
Speaker 2: to read it twice note. How do you and Veil
Speaker 2: put that note together every day?
Speaker 7: Well, that's interesting. We do start early. That's one of
Speaker 7: the keys. We are usually on the desk by five
Speaker 7: am and we put it together over there. We'd like
Speaker 7: to get an early start. You know, what I always
Speaker 7: say is, if you're going to make a living stating
Speaker 7: the obvious, you got to be the first person to
Speaker 7: say it.
Speaker 2: Okay, but how do you put it together? I mean,
Speaker 2: do you guys sit around a desk and do it
Speaker 2: or it does like Veil write it up and you
Speaker 2: prof freedom mean.
Speaker 7: What's like Veil has all the good ideas because he's
Speaker 7: a smart one. Yeah, we'll sit there side by side
Speaker 7: and collaborate on what we think is going on and
Speaker 7: then bounce the narrative off one another. Does this make sense?
Speaker 2: What's going on with oil?
Speaker 7: This dovetail show was seen in other markets, so it's
Speaker 7: a It's collaborative for sure.
Speaker 2: I can't say enough about this research. Note and you
Speaker 2: model out in a paragraph this morning, the technical upside
Speaker 2: and yield. Explain them ramification. You say, five point fifty
Speaker 2: obviously is psychological. What happens to the other classes of
Speaker 2: assets if we get a five point fifty thirty year bond.
Speaker 7: One of the most surprising aspects of this current move
Speaker 7: is the fact that stocks still continue to set fresh
Speaker 7: record highs even with thirty year yields above let's call
Speaker 7: it five twenty five, five thirty. And more importantly, perhaps,
Speaker 7: is the fact that thirty year real rates are above
Speaker 7: three percent, and everyone seems content with this across most
Speaker 7: asset classes. I would have otherwise expected some significant pairing
Speaker 7: back of the gains it stocks because that's important to
Speaker 7: the wealth effect, and that's important.
Speaker 4: To the fac that is and I mean it's I
Speaker 4: guess the question is, have you guys identified a level
Speaker 4: of rates out there, because we've seen raps rise across
Speaker 4: the globe, not just here in the US, where that
Speaker 4: does become a problem for broader markets, or how do
Speaker 4: you guys think about that.
Speaker 7: It is a process of trial and error. It's one
Speaker 7: of those things that you'll know it once you've passed it.
Speaker 7: And that's what is So that is what's so challenging
Speaker 7: for the market at the moment. I would have thought
Speaker 7: it was five percent thirties clearly hasn't been.
Speaker 2: And just brought up folks. You know the thirty year
Speaker 2: inflation adjust at rate. What is the ramification if that
Speaker 2: shoots through the Great Financial Crisis three point four zero.
Speaker 7: If let's say we get to three point fifty, I
Speaker 7: suspect that that's when you start to see some ramifications
Speaker 7: for the equity.
Speaker 2: Market, like Dow down three thousand. I'm just making it
Speaker 2: a folks.
Speaker 6: Shocks, yes, shocks.
Speaker 7: We should be we should be back to where we
Speaker 7: are starting the year, at least in terms of the
Speaker 7: S and P five hundred taking off some of those gains.
Speaker 7: But we haven't seen that flow through, and we haven't
Speaker 7: seen the concern.
Speaker 2: So when you go into Francois, Francois has the Mondral tickets.
Speaker 2: By the way, when you go into France, what's trying
Speaker 2: and you say this, how does the respond?
Speaker 7: So he is taking the approach that the most important
Speaker 7: thing in the market at the moment is inflation. And
Speaker 7: I'll say that inflation has been relatively benign for the
Speaker 7: last couple of months. And so if in fact inflation
Speaker 7: is the concern and it comes back in the second
Speaker 7: half of the year, I think that's becomes a monetary
Speaker 7: policy issue, which then becomes a equity valuation problem.
Speaker 4: So next week the smart folks are going to head
Speaker 4: out that Jackson hole, Wyoming. What do you expect to
Speaker 4: hear from FED Chairman Wash If anything, I guess.
Speaker 7: I'm certainly not expecting to hear any forward guidance. I
Speaker 7: think he I think the decision to participate was in
Speaker 7: part to make the point that he is not going
Speaker 7: to offer any concrete forward guidance. But there will be
Speaker 7: conversations around the event itself. We will have some FED speakers,
Speaker 7: we will be able to get a broader sense of
Speaker 7: how the policy, assuming how policy makers are approaching the
Speaker 7: September meeting. And right now, given the economic data that
Speaker 7: we have seen, the path of least resistance is for
Speaker 7: no hike, but we still have the August data series.
Speaker 4: Is the move higher in global rates is that reflecting
Speaker 4: the fact that there is no real forward guidance from
Speaker 4: the FED and the market's just going where the market
Speaker 4: thinks it should be and maybe doing the work for
Speaker 4: the FED.
Speaker 2: Well.
Speaker 7: Worsh certainly believes that the market is doing some of
Speaker 7: the heavy lifting for monetary policy makers, which frankly I
Speaker 7: worry about because that argument is somewhat circular. Eventually the
Speaker 7: FED will need to hike rates if the argument is
Speaker 7: that the market is doing the heavy lifting. Now, the
Speaker 7: idea that taking away forward guidance adds uncertainty, uncertainty puts
Speaker 7: a floor in forh nominal rates. That makes sense, That resonates,
Speaker 7: But there's also the global fiscal issues, whereas what's going
Speaker 7: on in Japan, there's what's going on in Europe. So
Speaker 7: I do think higher auction sizes or larger auction sizes
Speaker 7: going forward is a baseline assumption that's underpinning some of
Speaker 7: the barishness.
Speaker 2: You got to go, Ian lingoening are quickly on hyperscalars.
Speaker 2: It's away from your remit, but do you have a
Speaker 2: thought there on when enough is enough?
Speaker 7: Well, they've certainly been having an impact in the treasury
Speaker 7: market because I do think that one of the reasons
Speaker 7: rates are where they are for the curve is a
Speaker 7: bit of substitution. I accommodation for this duration heavy supply.
Speaker 7: Eventually they're going to run out of need to borrow,
Speaker 7: but right now I don't see the end in sight,
Speaker 7: so it's probably going to be a factor with us
Speaker 7: going forward.
Speaker 2: Ian Lincoln, thank you so much. Really appreciate your time
Speaker 2: to come and bring it. I'd love to get you
Speaker 2: and veiled together. I think that would be so cool,
Speaker 2: smarty Are you and Franzois together? That it'd be great?
Speaker 2: Ian Lincoln is the Bank of Montreal. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern listen on
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Speaker 2: John Stolfus joins US chief investment strategist at Oppenheimer. We
Speaker 2: just hit on Margie Patel, whose equity performance at All
Speaker 2: String is ninety nine percentile, and she said something John
Speaker 2: that totally dovetails with John Stolfitz. If you wake up
Speaker 2: glass half full, if you wake up optimistic about the
Speaker 2: American experiment, just like half the battle's done, isn't it.
Speaker 6: I think so I'd say amen to that. I really would.
Speaker 8: You know, when you look at the situation, the negative
Speaker 8: pitch book really is not the winning one across the
Speaker 8: across the cycle that we've seen since two thousand and
Speaker 8: eight with some of the greatest challenges that we could
Speaker 8: have expected.
Speaker 2: Your Denny's extrapolating out, how are you extrapolating it out
Speaker 2: into twenty twenty eight?
Speaker 8: Yeah, that one that came across there's somebody was it ISSI,
Speaker 8: a guy at ISI. It came out with a nine
Speaker 8: thousand for next year somewhere in that range.
Speaker 6: And I started to see that and I said, oh
Speaker 6: my gosh.
Speaker 8: You know it's when you consider that where you've got
Speaker 8: to realize where we are because we're closed so much
Speaker 8: to knock it on Heaven's door, on that eighty one
Speaker 8: hundred target that we put in last December. With all
Speaker 8: the turbulence that comes intermittently through these markets, we could
Speaker 8: easily see something like that next year. But I'm not
Speaker 8: predicting what we're going to say later on this year
Speaker 8: for next year.
Speaker 4: So, John, the earning story has been so strong really
Speaker 4: first quarter and then second quarter even stronger. Here, I
Speaker 4: guess people starting to ask the question, all right, twenty seven,
Speaker 4: how much are earning's going to earnings growth going to moderate?
Speaker 4: How are you guys thinking about twenty seven? Is that
Speaker 4: could be tough comps?
Speaker 6: You know, we think it'll be more of a question
Speaker 6: of context.
Speaker 8: And I think if you look at it and think
Speaker 8: that this is so exceptional, you've got a figure and
Speaker 8: right size expectations that it may not be quite a
Speaker 8: spectacular this going into next year. But I think through
Speaker 8: the end of this year, I think we may still
Speaker 8: be rocking on a rolling rolling and a reeling to
Speaker 8: the hot.
Speaker 4: So what are some of the I mean, we saw
Speaker 4: earnings growth, ten and eleven sectors are seeing earnings growth here.
Speaker 4: I mean, where are you seeing? Are you looking for value?
Speaker 4: Are you writing the momentum with names and sectors? How
Speaker 4: are you guys approaching it well?
Speaker 8: In the money, we manage in a dividend growth portfolio,
Speaker 8: which is doing great this year double digits up year
Speaker 8: to date.
Speaker 6: Last year was double digits up.
Speaker 8: Also, it's growthier value and garpier growth. So when it
Speaker 8: comes to technology, you know, we own a couple of
Speaker 8: the big the big names in there, but we also
Speaker 8: own the second tier of the S and P five
Speaker 8: hundred type names that traders know very well and intermediate
Speaker 8: to long term investors do. So we know when to
Speaker 8: catch them when babies get thrown out with the bath water, and.
Speaker 6: We know when to ride our winners.
Speaker 8: You know, when everybody's coming on to the joining us
Speaker 8: in the upside swing.
Speaker 4: How are you positioned for this AI trade? I mean
Speaker 4: people are trying to look for as the trade kind
Speaker 4: of ripples out from the center the Nvidia. How are
Speaker 4: you guys thinking about exposure in different areas?
Speaker 6: You know, Paul, we.
Speaker 8: Think you need the big major point for us, and
Speaker 8: we like to think we coined the phrase we're all
Speaker 8: on the upgrade cycle.
Speaker 6: Whether we like it or not. And as a result
Speaker 6: of that, what we.
Speaker 8: See is inevitably both the consumer the individual for leisure
Speaker 8: as well as of course business. You get on the
Speaker 8: bus or you get left behind, and we think that
Speaker 8: the exposure you need to consider hardware is likely to
Speaker 8: have a good upgrade cycle. One of the guys on
Speaker 8: our training desk the other we were just talking and
Speaker 8: he had to upgrade his personal.
Speaker 6: Computer because he's using AI. Yeah, so you bought a
Speaker 6: new one.
Speaker 4: How about some you know one of the areas that
Speaker 4: for a short period of timing, you know, some of
Speaker 4: these software software as the service names were thrown out.
Speaker 4: We had Tom and I were just incredulous looking at
Speaker 4: Microsoft at one point down twenty five percent year to
Speaker 4: date before put up that really good earnings number, and
Speaker 4: everybody kind of said, whoa, how about how do you
Speaker 4: think about software and some of these names that are
Speaker 4: really I think being thrown out because AI is going
Speaker 4: to take their business.
Speaker 8: I think it's being done too quickly, especially with the
Speaker 8: big names that are deeply embedded in people's lives, whether
Speaker 8: their business or the consumers. And I think we also
Speaker 8: needed to consider that the competition that is coming from
Speaker 8: China is do you really want to use an open
Speaker 8: framework Chinese product that has the Communist party behind it
Speaker 8: to let let them know whenever you get in your
Speaker 8: car what their business plans are or whatever. I just, frankly,
Speaker 8: I don't think it's that friendliest relationship anymore, if it
Speaker 8: ever was, really, if.
Speaker 4: It ever was, I tell you you know, with these
Speaker 4: earnings growth, I'm not hearing a lot of pushback from
Speaker 4: folks about valuation in this market. Is that fair that
Speaker 4: this earnings growth has kind of said.
Speaker 6: Okay, this market's not too cheap.
Speaker 4: I'm not not too rich right here.
Speaker 6: You know, Paul, That's been our impression for a long
Speaker 6: time now.
Speaker 8: One of the thoughts that we have when we've looked
Speaker 8: at the market and you see the multiple has been
Speaker 8: for quite a while, twell over twenty and now around
Speaker 8: I think it's around somewhere between nineteen point five or
Speaker 8: twenty point five, depending.
Speaker 6: On which metrics you follow.
Speaker 8: In terms of the pe multiple, We've got to think
Speaker 8: that what it is is that a lot of people
Speaker 8: today are investing seriously for retirement.
Speaker 6: It's not cocktail party chatter.
Speaker 8: They may gamble on the side, but they know social
Speaker 8: security will not be the same part of helping them
Speaker 8: meet their living standards, and so they're investing like pension plans,
Speaker 8: and with today's products and a good financial advisor, we
Speaker 8: believe you can build a portfolio that's like a really
Speaker 8: good institutional investment.
Speaker 2: John Sofis, thank you so much, Chief investment strategists at
Speaker 2: Come Thrill Ditties with us.
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