WEBVTT - Trump Postpones Iran Energy Strikes 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.880 Surveillance podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.080 us live on YouTube. 0:00:27.120 --> 0:00:31.160 Well timed. This is a gentleman driving forward all of 0:00:31.200 --> 0:00:35.720 our levant and Eastern Mediterranean coverage. Ownerant started out at 0:00:35.720 --> 0:00:39.600 a nineteen years old as an Associated Press intern in 0:00:39.680 --> 0:00:42.879 the Middle East, has all sorts of positions, including his 0:00:43.000 --> 0:00:46.800 leadership at Bloomberg News and joins us from Istanbul This 0:00:46.960 --> 0:00:52.080 morning on our when Tom Keene sees news agency headlines 0:00:52.159 --> 0:00:57.480 some fars or tasmum, are they reliable to a grizzled 0:00:57.520 --> 0:01:01.440 pro like you are? The Iranian news news agency is 0:01:01.480 --> 0:01:03.360 something more than propaganda. 0:01:07.120 --> 0:01:11.319 They are something of a propaganda. But on the other hand, 0:01:11.800 --> 0:01:14.280 in the last half hour or so, there have been 0:01:15.120 --> 0:01:19.600 our sole source of information when it comes to Iran's 0:01:19.640 --> 0:01:24.720 reaction to Present Trump's social media postings, which came about 0:01:25.240 --> 0:01:28.160 just less than an hour ago. I think I understand 0:01:28.200 --> 0:01:30.240 where the question is coming from. How much can we 0:01:30.319 --> 0:01:33.520 really rely on them? To a certain extent we can, 0:01:33.640 --> 0:01:37.920 especially in the current situation because so far there has 0:01:37.959 --> 0:01:42.720 been a very concerted effort in Iran, judging by, as 0:01:42.720 --> 0:01:46.120 you said, the number of news agencies that we're seeing 0:01:46.160 --> 0:01:50.720 the same headline coming from. And that's the fact that 0:01:50.880 --> 0:01:54.480 Iranians claim that there has been no talk between the 0:01:54.600 --> 0:01:58.280 US and Iran about how to end the war, and 0:01:58.320 --> 0:02:04.000 the fact that present Trump has avoided or has walked 0:02:04.040 --> 0:02:07.640 back from his earlier pledge to start attacking Iranian energy 0:02:07.640 --> 0:02:11.160 sites is down to the fact that Iran's reaction to 0:02:11.240 --> 0:02:13.960 his comments over the week Over the weekend has been 0:02:14.000 --> 0:02:17.520 so strong that Trump has decided to sort of de 0:02:17.680 --> 0:02:20.480 escalate himself without actually talking to the Iranians. 0:02:20.960 --> 0:02:23.880 So, approximately ninety minutes ago, we got the tweet from 0:02:23.880 --> 0:02:28.760 President Trump about, you know, standing down some military actions 0:02:28.800 --> 0:02:33.000 against some other energy infrastructure here. How do you think 0:02:33.040 --> 0:02:35.919 that came about? Is there a policy shift here, is 0:02:36.000 --> 0:02:39.040 there a strategy here, or is it simply a tweet? 0:02:39.080 --> 0:02:40.080 How do you think that came about? 0:02:43.520 --> 0:02:47.240 Well, we were all under the impression that Trump really 0:02:47.280 --> 0:02:50.120 meant when he gave that forty eight hour deadline to 0:02:50.200 --> 0:02:53.959 Iran to reopen Hormus, and everyone in the region, from 0:02:54.040 --> 0:02:58.480 journalists to government officials who were operating under the same 0:02:58.560 --> 0:03:03.000 assumption that there could be an impasse at about seven 0:03:03.200 --> 0:03:07.000 forty four pm in Eastern Standard time later today, and 0:03:07.160 --> 0:03:10.160 it would be followed by mutual strikes, much like what 0:03:10.200 --> 0:03:14.320 we saw last week when Israel first started South Parts 0:03:14.480 --> 0:03:17.920 Gas Field in Iran, a price energy asset, followed by 0:03:18.080 --> 0:03:23.480 massive Iranian retaliatory strikes on the Gulf, especially in Qatar, 0:03:23.800 --> 0:03:27.160 where Katargas seems to have lost about a fifth of 0:03:27.200 --> 0:03:32.000 its allergy capacity production capacity for as many as five 0:03:32.160 --> 0:03:35.080 years now. Having said that, and this can be said 0:03:35.200 --> 0:03:38.840 both about Trump's policy or stance since the beginning of 0:03:38.880 --> 0:03:42.840 the war from February twenty eight to anything else, including 0:03:43.280 --> 0:03:47.200 the war in Ukraine, Trump has always conducted pursued a 0:03:47.360 --> 0:03:51.080 very vague and unpredictable type of diplomacy. Sometimes he says 0:03:51.080 --> 0:03:54.680 it works, sometimes it doesn't. So I think this is 0:03:55.520 --> 0:03:57.840 the kind of light under which that we should treat 0:03:57.880 --> 0:04:01.520 the latest US if I may call it that. And 0:04:02.080 --> 0:04:04.320 also one thing I think to keep in mind is 0:04:04.360 --> 0:04:07.240 the fact that he did this right before markets in 0:04:07.240 --> 0:04:09.520 the US or right around time marks in the US 0:04:09.600 --> 0:04:11.760 work closing and now the new deadline, if we can 0:04:11.800 --> 0:04:14.120 call it, that is going to be over the weekend, 0:04:14.160 --> 0:04:17.360 and that shows that there must have been some kind 0:04:17.360 --> 0:04:20.719 of market consideration that went into the thinking behind the 0:04:20.800 --> 0:04:24.039 latest social media post by President Trump, Honor. 0:04:24.120 --> 0:04:27.080 I know there's some concern in the Golf region that 0:04:28.200 --> 0:04:31.240 the US may walk away from the Straight of Foremus 0:04:31.800 --> 0:04:36.640 when if it disengages with Iran, leaving that part of 0:04:36.680 --> 0:04:37.280 the world too. 0:04:37.400 --> 0:04:41.960 I guess local actors to deal with Iran. What's the 0:04:42.000 --> 0:04:43.039 reporting on that. 0:04:45.240 --> 0:04:49.320 Well, this is an extremely important point. Golf states that 0:04:49.400 --> 0:04:52.640 these publicly and even in privately they have said, they 0:04:52.680 --> 0:04:54.880 have maintained that they have been trying very hard or 0:04:54.880 --> 0:04:59.840 they have tried very hard to convince the US against 0:05:00.040 --> 0:05:04.080 attacking Iran before the war actually happens. But now that 0:05:04.160 --> 0:05:08.680 the war has begun, there has been a divergence in 0:05:09.440 --> 0:05:12.200 policies across the Gulf, the Persian Golf, especially Arab states 0:05:12.240 --> 0:05:15.279 of the Persian Gulf. So once school of thoughts says, well, 0:05:15.320 --> 0:05:17.880 now that the war has started, it needs to be 0:05:17.960 --> 0:05:21.880 concluded in a definitive way, so to speak, which means 0:05:21.920 --> 0:05:26.480 that Iran would be left in no position to basically 0:05:26.520 --> 0:05:29.480 be source of a threat anymore. But on the other hand, 0:05:29.720 --> 0:05:32.880 there have been there have been countries in the Gulf 0:05:33.360 --> 0:05:38.479 that have basically been pushing for an actual solution to 0:05:38.520 --> 0:05:41.760 the problem. They're not left alone in this shit opened 0:05:41.800 --> 0:05:42.760 the hormus. 0:05:42.520 --> 0:05:46.599 In the shades of mister Irdawan over gone a span 0:05:46.680 --> 0:05:50.240 of two decades, Where does he fit in to the 0:05:50.279 --> 0:05:54.640 Eastern Mediterranean calculus? Like the simple question owner around is 0:05:54.920 --> 0:05:58.440 whose side is he on? But to be more sophisticated 0:05:58.560 --> 0:06:02.400 than that, what have you said from mister Airdawan? Is 0:06:02.440 --> 0:06:04.280 he looks south to this war? 0:06:07.920 --> 0:06:10.640 The answer to first question is no one. He is 0:06:10.680 --> 0:06:13.320 on the side of no one. He definitely does not 0:06:13.520 --> 0:06:18.080 want to be seen as participating in a war that 0:06:18.320 --> 0:06:22.640 was initiated by a US Israeli alliance. He is definitely 0:06:22.680 --> 0:06:24.919 allergic to the idea of being seen as part of 0:06:24.920 --> 0:06:28.279 that alliance, the Israeli because of the Israeli part of 0:06:28.279 --> 0:06:32.080 the alliance. And secondly, we should not forget that you well. 0:06:32.120 --> 0:06:34.680 Iran is a massive neighbor for Turkey. It's been there 0:06:34.720 --> 0:06:37.360 for the last few million years as a nation state 0:06:37.440 --> 0:06:40.080 or as an empire for the last thousand years or so, 0:06:40.440 --> 0:06:44.360 and it is the country with which Turkey or its 0:06:44.400 --> 0:06:47.280 predecessors have not had a war for the last four 0:06:47.360 --> 0:06:50.880 hundred years. In fact, yeah, almost four hundred years. The 0:06:51.080 --> 0:06:54.880 Turkish Araanan border is the oldest unchanged border that Turkey has. 0:06:55.160 --> 0:07:00.560 It's been unchanged since sixteen thirty nine. The second when 0:07:00.600 --> 0:07:02.359 he looks down to the south, I think, you know, 0:07:02.520 --> 0:07:05.520 we've seen from the beginning of the war that he 0:07:05.640 --> 0:07:09.320 has been genuinely pushing for an actual end to the 0:07:09.320 --> 0:07:13.560 hostilities because he knows the longer it lasts, the worse 0:07:13.800 --> 0:07:17.720 Turkish economy will be through the various disruptions to the 0:07:18.040 --> 0:07:21.560 global supply chains and oil prices. So yeah, he definitely 0:07:21.640 --> 0:07:24.000 does want this to come to an end as soon 0:07:24.040 --> 0:07:24.720 as possible. 0:07:24.800 --> 0:07:26.880 And I thank you so much for your precious time 0:07:27.040 --> 0:07:32.360 around driving all of our Eastern Mediterranean coverage out of Istanbul. 0:07:33.760 --> 0:07:37.960 Stay with us. More from Bloomberg Surveillance coming up after this. 0:07:45.200 --> 0:07:48.800 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:07:48.840 --> 0:07:52.040 weekday afternoons from seven to ten am Eastern Listen on 0:07:52.080 --> 0:07:55.760 Applecarplay and Android Otto with the Bloomberg Business app, or 0:07:55.920 --> 0:07:57.480 watch us live on YouTube. 0:07:57.560 --> 0:08:00.000 This is the best time ever to speak to Nelson. 0:08:00.200 --> 0:08:04.320 You he's with the Lions Bernstein. He has a title 0:08:04.360 --> 0:08:07.920 called Head of Equities it's very impressive. Where it's really 0:08:07.960 --> 0:08:11.800 go join us today, but it really matters is at 0:08:11.840 --> 0:08:17.360 the University of Pennsylvania Systems Engineering memo pro tip the 0:08:17.440 --> 0:08:23.640 hardest engineering major. Okay, someone that knew its systems analysis, 0:08:23.680 --> 0:08:29.320 you're kidding me. Ah, easy, A right. And there's linear 0:08:29.600 --> 0:08:34.520 systems theory, there's signal and information processing. But the dreaded 0:08:34.600 --> 0:08:39.920 course was e S thirty ten probability and that's where 0:08:39.920 --> 0:08:43.600 we are right now. Define I'd say this with great 0:08:43.679 --> 0:08:47.760 respect for your parchment. Define the difference now between the 0:08:47.920 --> 0:08:51.160 risk and the uncertainty in the markets. 0:08:51.880 --> 0:08:56.160 Risk is really difficult to manage right now. The as 0:08:56.160 --> 0:08:58.800 you just see this morning. You know, one tweet can 0:08:58.920 --> 0:09:01.680 turn it all around. But I think what it's really 0:09:01.720 --> 0:09:04.400 getting at is just the fragility that we do see 0:09:04.440 --> 0:09:08.440 in the markets. And we're dealing with really three main issues. 0:09:08.800 --> 0:09:12.480 One is obviously geopolitics, and we're getting close to a 0:09:12.480 --> 0:09:16.319 point where the longer this goes on, the more things 0:09:16.360 --> 0:09:19.840 have to shut down. So just the different commodities that 0:09:19.880 --> 0:09:22.240 get produced out of the Middle East. You can take 0:09:22.280 --> 0:09:25.200 months to restart some of these things, but then layer 0:09:25.240 --> 0:09:27.240 on top of that some of the existing fragility that's 0:09:27.240 --> 0:09:30.280 already been in place, which is that equity portfolios were 0:09:30.320 --> 0:09:34.760 already highly concentrated to start with, and then AI is 0:09:35.120 --> 0:09:39.199 increasing winners and losers, and those motes that had been 0:09:39.320 --> 0:09:42.240 there in place for so long, we're starting to question 0:09:42.320 --> 0:09:43.160 how durable they are. 0:09:44.320 --> 0:09:46.439 Aside from the geopolitics, so we can put that side 0:09:46.480 --> 0:09:48.839 just for a moment. How do you think about the 0:09:49.480 --> 0:09:52.240 US equity markets versus the rest of the world. Here 0:09:52.240 --> 0:09:55.240 we did have some outperformance in twenty twenty five outside 0:09:55.280 --> 0:09:55.640 the US. 0:09:55.720 --> 0:09:56.800 Is that still play here? 0:09:57.679 --> 0:10:00.680 I think it should be. The U is getting a 0:10:00.679 --> 0:10:04.440 bid right now. It could be because of what's going 0:10:04.440 --> 0:10:07.280 on with oil, but it also could be because that's 0:10:07.360 --> 0:10:11.560 where as investors are taking in risk, that's where passive 0:10:11.559 --> 0:10:15.520 investing is. But I think there's a great opportunity to 0:10:15.559 --> 0:10:19.199 continue to diversify. With the US, you have this issue 0:10:19.200 --> 0:10:22.440 of concentration. Fifty percent of the US market is in technology. 0:10:22.720 --> 0:10:24.880 You go outside of the US, you get to exposures 0:10:25.080 --> 0:10:27.960 with different themes in financials, industrial, as consumer. 0:10:28.360 --> 0:10:31.920 But all of this, what's it, you know tomorrow from 0:10:31.960 --> 0:10:36.320 the wonderful Arthur Levit so so influential to me From 0:10:36.440 --> 0:10:40.199 Arthur Levit, what's it mean for Microsoft, I mean March 0:10:40.240 --> 0:10:41.360 thirty one is going to end. 0:10:41.720 --> 0:10:45.080 They're doing AI. They're still going to make revenue, They're 0:10:45.080 --> 0:10:48.600 going to still make thirty forty sixty percent margins. What's 0:10:48.679 --> 0:10:52.920 the feature of life goes on here? For the growth winners. 0:10:54.520 --> 0:10:58.840 What you have to really think about with these growth 0:10:58.880 --> 0:11:03.680 winners is how are things changing for them? So we 0:11:03.760 --> 0:11:07.000 talked about this before in previous sessions. How much cash 0:11:07.040 --> 0:11:10.760 flow is plateauing now for these big growth winners because 0:11:11.120 --> 0:11:13.640 the amount of capex that they need to invest to 0:11:13.800 --> 0:11:17.160 keep the to keep the hyperscalters going and investing in 0:11:17.240 --> 0:11:20.760 data centers, that changes the dynamic of what they've had 0:11:20.800 --> 0:11:23.960 in the past. On top of that, these modes that 0:11:24.080 --> 0:11:27.000 some of these growth winners had is now in question. 0:11:27.760 --> 0:11:32.280 You know, can AI disrupt their ability to grow revenue 0:11:32.320 --> 0:11:34.320 without reinvesting in the business. 0:11:35.080 --> 0:11:38.400 So that was a big, big trade just over the 0:11:38.480 --> 0:11:41.680 last several months. Kind of some of these software names, 0:11:41.679 --> 0:11:45.600 in particular software as and service names really in focus. 0:11:46.880 --> 0:11:49.679 But it just feels like it's Tom mentioned Microsoft Salesforce. 0:11:49.720 --> 0:11:54.000 These are they're so entrenched in the overall economy, it 0:11:54.040 --> 0:11:56.400 doesn't seem like they could be at risk yet the 0:11:56.440 --> 0:11:58.280 market's not too discerning at this point. 0:11:58.679 --> 0:12:01.200 You know, I think what we need to think about 0:12:01.840 --> 0:12:06.760 really are three three ways of managing risks today. First 0:12:06.800 --> 0:12:10.040 of all, if you think about AI disruption and you 0:12:10.040 --> 0:12:13.160 think about inflation, what that does is it really focuses 0:12:13.200 --> 0:12:16.719 you on shortening your duration of cashloads. If you want 0:12:16.760 --> 0:12:20.479 to get to things that have more visibility around those cashloads, 0:12:20.920 --> 0:12:23.439 you need to think more critically about where to find defense. 0:12:24.160 --> 0:12:27.439 And then you need to be more intentional about diversification. 0:12:27.640 --> 0:12:29.840 Did you get my scripted? One of our interns send 0:12:29.880 --> 0:12:33.120 my question script this morning? Nelson, you were us with 0:12:33.200 --> 0:12:35.280 the lions burn steem wonderful to speak to him with 0:12:35.280 --> 0:12:39.800 this acuity about risk, probability and the ambiguity out there. 0:12:39.880 --> 0:12:44.079 Dow features up two percent, exploding higher what forty minutes ago, 0:12:44.559 --> 0:12:48.400 a presidential tweet of five day delay on action from 0:12:48.480 --> 0:12:52.960 the White House in Iran, in Israel strait of hormones 0:12:53.000 --> 0:12:55.959 as well. Oil plunges a one thirteen down to a 0:12:56.000 --> 0:12:59.959 one oh four. Right now all weekend led by James 0:13:00.160 --> 0:13:03.080 Diamond on a cover of Barons was the idea of 0:13:03.240 --> 0:13:07.480 hedging up. Explain the efficacy you see with all of 0:13:07.520 --> 0:13:10.480 your work in your math of saying I want to 0:13:10.520 --> 0:13:13.800 participate in the standard of course five hundred, but I'm 0:13:13.840 --> 0:13:16.600 willing to give away some of the long term capital 0:13:16.679 --> 0:13:21.240 gain to hedge and be less volatile. It's also in 0:13:21.400 --> 0:13:22.360 right now, isn't it. 0:13:24.000 --> 0:13:28.440 Anytime you can reduce volatility, but also when you can 0:13:28.480 --> 0:13:32.240 reduce volatility and get incremental returns, that's a great trade. 0:13:32.960 --> 0:13:37.520 And if you think about international equity markets today, you 0:13:37.559 --> 0:13:39.560 have an opportunity. And I'd like to say, have your 0:13:39.640 --> 0:13:43.240 vitamins and also eat your ice cream. The You know 0:13:43.320 --> 0:13:46.719 what you can do is there are some great catalysts 0:13:46.840 --> 0:13:50.920 outside of the US that can generate returns. You've got 0:13:51.400 --> 0:13:54.559 in Korea, You've got in Japan, you've got governor's reforms 0:13:54.720 --> 0:13:57.360 where shareholder returns are really being in focus, and these 0:13:57.400 --> 0:14:00.600 companies can not only get better return earns, but also 0:14:00.679 --> 0:14:03.720 get multiple expansion. I think China could be a really 0:14:03.720 --> 0:14:07.200 interesting play here too. If you think about China, you've 0:14:07.240 --> 0:14:09.920 got a very different set of return drivers. In China, 0:14:10.920 --> 0:14:13.320 you've also got more energy resilience based off of the 0:14:13.320 --> 0:14:15.160 infrastructure investments that they've made. 0:14:15.840 --> 0:14:18.320 In the US, talk to us about the earnings in 0:14:18.360 --> 0:14:19.800 the US marketplace. 0:14:19.880 --> 0:14:23.280 Are the earnings growth forecasts enough to support this market here? 0:14:23.320 --> 0:14:23.960 Do you think. 0:14:24.920 --> 0:14:30.480 There is enough growth to support the forecast? But it 0:14:30.600 --> 0:14:34.360 is very dependent on the Fed's ability to continue to 0:14:34.360 --> 0:14:37.200 supporting that. And so I think that's why we're getting 0:14:37.200 --> 0:14:39.000 to a point where it's very tricky to understand the 0:14:39.040 --> 0:14:42.680 probabilities because the longer this lasts, we don't know if 0:14:42.720 --> 0:14:44.720 inflation would start feeding through. 0:14:45.440 --> 0:14:47.560 So what do you expect our FED to do here? 0:14:47.600 --> 0:14:49.880 I mean, it seems like they're gonna They're comfortable just 0:14:49.880 --> 0:14:52.480 to hang where they are, no need to rush. We've 0:14:52.520 --> 0:14:56.840 even had the marketplace pricing in some great hikes this year. Yeah, 0:14:56.880 --> 0:14:59.280 I mean there's a talk about you know, coin flip here. 0:14:59.560 --> 0:15:02.960 It's it's in a very fragile balance. And so that's 0:15:03.000 --> 0:15:06.560 why I think it's important to look at visibility of 0:15:06.600 --> 0:15:10.280 cash flows from these companies with real assets and uh 0:15:10.760 --> 0:15:12.600 in strong economic drivers right now. 0:15:12.760 --> 0:15:15.720 I was at the game quinnin piac event here twelve 0:15:15.800 --> 0:15:21.320 hundred college kids, and I did mention Peter Bernstein's Against 0:15:21.320 --> 0:15:25.280 the Gods on risk, uncertainty and ambiguity. I mean, it 0:15:25.360 --> 0:15:29.200 is the definitive non Matthew book. As Nelson, you knows 0:15:29.240 --> 0:15:31.960 the math cold, He's with the lions. Bernstein at Howquity's 0:15:32.000 --> 0:15:37.000 being Stay with us. More from Bloomberg Surveillance coming up 0:15:37.200 --> 0:15:37.800 after this. 0:15:45.040 --> 0:15:48.640 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:15:48.680 --> 0:15:51.840 weekday afternoons from seven to ten am Eastern Listen on 0:15:51.920 --> 0:15:55.600 Applecarplay and Android Auto with the Bloomberg Business app, or 0:15:55.760 --> 0:15:57.359 watch us live on YouTube. 0:15:57.800 --> 0:16:01.280 Calm is what we Need. Comms and Order with Nancy Tangler, 0:16:01.640 --> 0:16:04.000 who she said she's too young to have seen it all, 0:16:04.080 --> 0:16:08.760 but pretty close, CEO at Laffer Tangler and Investments. In 0:16:08.840 --> 0:16:12.840 Reminiscence of a Stock Operator, which we've all read fourteen times, 0:16:13.280 --> 0:16:17.040 there's a point where the antagonist just says enough and 0:16:17.120 --> 0:16:20.800 takes the slow train to Florida, like in nineteen twenty five. 0:16:21.120 --> 0:16:25.440 Where's the Tanglar? The laugher tanglar slow train to Florida? 0:16:25.520 --> 0:16:26.000 Right now? 0:16:26.760 --> 0:16:32.160 Good morning talk. Well, we bought calls on Friday and 0:16:32.320 --> 0:16:36.520 I felt pretty stupid this morning until we saw the 0:16:37.840 --> 0:16:40.080 rhetoric coming out of the White House. And that's what 0:16:40.120 --> 0:16:41.840 it is. We don't have anything to back it up. 0:16:41.880 --> 0:16:44.720 We don't know the algorithms, read the headlines. They drive 0:16:45.280 --> 0:16:49.680 the stock futures. Before the opening after so we've been repositioning, 0:16:50.080 --> 0:16:53.920 trimming back on oil, adding to some names in the 0:16:53.920 --> 0:16:59.200 infrastructure structure space, and particularly in software. That group bottomed 0:16:59.520 --> 0:17:01.800 just about the time the Sittrini report came out. We 0:17:01.840 --> 0:17:04.159 didn't know that. We felt like we were seeing some 0:17:04.200 --> 0:17:05.320 compelling valuations. 0:17:05.520 --> 0:17:08.080 Okay, So our laugher would sit in a couch, the 0:17:08.080 --> 0:17:12.120 same damn yellow couch. The Oval Office looked differently under 0:17:12.200 --> 0:17:15.760 Ronald Reagan, and Laugher would say, excuse me, mister president 0:17:15.880 --> 0:17:19.439 the markets. Who in the Trump administration, like in the 0:17:19.520 --> 0:17:23.800 last twelve hours or eighteen hours, is playing the art 0:17:23.880 --> 0:17:27.680 Laugher role of saying, excuse me, President Trump, we got 0:17:27.680 --> 0:17:29.040 a problem. Who is it? 0:17:29.119 --> 0:17:31.280 I think it's Scott Besson, I really do. I think 0:17:31.280 --> 0:17:35.399 he demonstrated that after Liberation Day when the bond market 0:17:35.400 --> 0:17:38.159 melted down. Remember Jamie Diamond said we were going to 0:17:38.160 --> 0:17:41.159 go into recession, and suddenly they found religion. That was 0:17:41.320 --> 0:17:45.160 what gave us confidence to at least take a dip 0:17:45.200 --> 0:17:47.960 our toes into calls on the spy just because we 0:17:48.000 --> 0:17:51.679 had some clients that were, you know, asking us to 0:17:51.760 --> 0:17:53.720 take a look at that. And I think for me, 0:17:54.119 --> 0:17:57.160 I felt like the weekend would have been more defining 0:17:57.200 --> 0:17:59.399 than it was. But then we see it again this 0:17:59.520 --> 0:18:02.280 morning that the President came out and said what he said. 0:18:02.480 --> 0:18:06.080 Nanci, We talked to you via zoom from Scottsdale. But 0:18:06.160 --> 0:18:08.679 you guys are having this crazy heat waves out there. 0:18:08.680 --> 0:18:09.760 Is that why you're here in New York? 0:18:09.880 --> 0:18:10.520 Absolutely? 0:18:10.960 --> 0:18:14.360 Fall of course, unbelievable even by your standards. 0:18:14.400 --> 0:18:16.479 You guys are dell. Do you understand all that kind 0:18:16.520 --> 0:18:17.840 of stuff? What's going on there? 0:18:17.880 --> 0:18:19.680 Yeah? I mean it's just been wretched. 0:18:19.920 --> 0:18:23.280 Yeah, So hopefully you don't summer out in the desert. 0:18:23.320 --> 0:18:25.240 Hopefully, good Nancy. 0:18:25.240 --> 0:18:26.600 So what are we doing here? I mean, we've put 0:18:26.600 --> 0:18:29.120 the geopolitics aside. I want to step back and look 0:18:29.119 --> 0:18:32.560 at fundamentals. The earnings look pretty solid out there in 0:18:32.600 --> 0:18:35.679 corporate America. Are they enough to support this market going forward? 0:18:36.119 --> 0:18:38.240 I do think so, Paul. I mean, earnings are backward 0:18:38.280 --> 0:18:40.520 looking as we know, but what we saw were so 0:18:40.600 --> 0:18:44.040 many triple plays of companies beating on revs, beating on EPs, 0:18:44.080 --> 0:18:46.840 and then raising guidance. So we think once you get 0:18:47.160 --> 0:18:49.600 the first sort of ship through the straight of hor moves, 0:18:49.640 --> 0:18:52.920 that we will begin to see a return to fundamentals 0:18:52.960 --> 0:18:56.479 and if we are, in fact in a slowing economic environment, 0:18:56.560 --> 0:18:59.680 then you do continue to want to own technology which 0:18:59.680 --> 0:19:03.000 has putting up, you know, twenty plus percent earnings growth 0:19:03.280 --> 0:19:06.879 across the sector. So that's where we've been adding. We 0:19:06.920 --> 0:19:09.240 had been trimming them in the summer, and we're adding back. 0:19:10.080 --> 0:19:13.159 What don't you make of this AI trade? 0:19:13.200 --> 0:19:15.080 On the maybe the other side of the AI trade, 0:19:15.119 --> 0:19:18.199 which is which companies, which industries, which sectors might be 0:19:18.240 --> 0:19:19.160 at risk from AI? 0:19:19.640 --> 0:19:22.320 And software and software as a service. 0:19:22.040 --> 0:19:24.119 Really took it on the chin. So some names of 0:19:24.200 --> 0:19:25.960 Tom and I like, like, you know, we see like 0:19:25.960 --> 0:19:27.600 a Microsoft really under pressure. 0:19:27.920 --> 0:19:28.680 What do you make of that? 0:19:28.840 --> 0:19:31.040 We added to Microsoft Service Now, which was a little 0:19:31.080 --> 0:19:34.200 more controversial Palenteer. One of the names we had. Two 0:19:34.280 --> 0:19:37.959 names we had exited were Adobe and Salesforce, and it 0:19:38.000 --> 0:19:40.399 wasn't necessarily because we thought they were going to be losers, 0:19:40.440 --> 0:19:44.800 although we didn't think the Adobe CEO was pivoting fast enough. 0:19:44.880 --> 0:19:47.280 And in fact, there you have it. I mean, the 0:19:47.320 --> 0:19:48.880 stock has been dismal. 0:19:49.320 --> 0:19:52.119 At the Breakfast club in Scott Steal. If I was 0:19:52.160 --> 0:19:54.399 to go in and have the avocado toast and the 0:19:55.480 --> 0:19:59.000 Tangler booth in the back, the guys up at the 0:19:59.000 --> 0:20:04.200 front bar. They don't look scared. Their retirees obviously advantage 0:20:04.280 --> 0:20:07.359 living in Scottsdale. But the answer is what do you 0:20:07.520 --> 0:20:12.800 see from the core boomer retirement market. I don't think 0:20:12.800 --> 0:20:15.639 they look rattled because they've had a few other things 0:20:15.680 --> 0:20:18.400 along the way from mister Mueller's Vietnam. 0:20:18.880 --> 0:20:21.040 We grew up with this, We grew up with volatility. 0:20:21.080 --> 0:20:23.240 And remember we were shifting I'm a boomer, we were 0:20:23.240 --> 0:20:26.760 shifting to four a one case. I'm a deep boomer. 0:20:26.880 --> 0:20:30.800 It's it's the pace on the Scottsdale. 0:20:30.359 --> 0:20:32.439 We were shifting to for a one case that we 0:20:32.480 --> 0:20:35.200 had to live with volatility, and it was our money 0:20:35.200 --> 0:20:37.360 we were putting in. So I think the boomers understand 0:20:37.440 --> 0:20:40.199 the markets. Those were the clients that were calling us 0:20:40.200 --> 0:20:42.440 and not saying sell, but saying, hey, is there a 0:20:42.480 --> 0:20:44.240 way that we can play the shift in the trend 0:20:44.280 --> 0:20:46.280 when the market does begin to go up, And that's 0:20:46.320 --> 0:20:47.080 why we bought calls. 0:20:47.800 --> 0:20:51.040 Yeah, thank you so much, Nancy greatly greatly appreciated today. Yes, 0:20:51.080 --> 0:20:52.639 we'd love to visit in February. 0:20:52.760 --> 0:20:53.240 We please. 0:20:53.320 --> 0:21:00.280 Dale left for Tangler Investments. Nancy stay with us from 0:21:00.320 --> 0:21:03.040 Bloomberg Surveillance coming up After. 0:21:02.800 --> 0:21:13.479 This, you're listening to the Bloomberg Surveillance podcast. Catch US 0:21:13.560 --> 0:21:16.879 Live weekday afternoons from seven to ten am Eastern Listen 0:21:16.920 --> 0:21:20.520 on Apple Karplay and Android Otto with the Bloomberg Business app, 0:21:20.680 --> 0:21:22.400 or watch us live on YouTube. 0:21:22.680 --> 0:21:26.560 One of the great features of the McKenzie Global Institute 0:21:26.720 --> 0:21:31.600 MGI is they hire people with jaw dropping competency. One 0:21:31.640 --> 0:21:36.200 of them is Olivia White, Senior Partner Director Mackenzie Global Institute, 0:21:36.359 --> 0:21:41.240 and she is carried forward the baton of research excellence. 0:21:41.800 --> 0:21:42.040 There. 0:21:42.200 --> 0:21:45.080 She stopped me cold a couple of weeks ago with 0:21:45.800 --> 0:21:50.240 a series it was out, playing off Mark Kearney's word geometry, 0:21:50.640 --> 0:21:55.320 geopolitics and the geometry of global trade. Olivia White joins 0:21:55.400 --> 0:21:58.879 us this morning from MGI with a rewrite, if you 0:21:58.920 --> 0:22:03.480 were to publish today, how would tariff splashes, AI waves 0:22:03.520 --> 0:22:06.160 and the ripples be different with this war? 0:22:08.400 --> 0:22:12.520 That's quite an introduction. I think I might say something similar. 0:22:13.200 --> 0:22:16.280 You know, one thing that we saw when we looked 0:22:16.280 --> 0:22:19.680 at how trade evolved in twenty twenty five was that 0:22:19.960 --> 0:22:23.720 her term volatility and splashes, if you will, can be 0:22:23.800 --> 0:22:27.840 super important, but the long term waves of. 0:22:27.960 --> 0:22:32.239 Change are often what you need to be able to 0:22:32.280 --> 0:22:34.199 look through to see. 0:22:34.400 --> 0:22:35.280 So we saw. 0:22:35.200 --> 0:22:39.000 AI trade or trade in AI related goods going up 0:22:39.200 --> 0:22:42.320 a lot, and I can say more about that. We 0:22:42.359 --> 0:22:46.920 saw China moving upstream in the way that they produced 0:22:47.080 --> 0:22:50.760 intermediate goods that fed factors across the world. Right, so 0:22:50.800 --> 0:22:52.640 we saw these long term things. It was a good 0:22:52.680 --> 0:22:54.400 reminder look through the long term. 0:22:54.640 --> 0:22:57.120 I mean, you've got some great charts, but the bottom 0:22:57.160 --> 0:22:59.760 line is in a number of our guests have said 0:22:59.800 --> 0:23:03.760 we're AIB in six months. We don't know, but almost 0:23:03.760 --> 0:23:07.320 from an organizational research out of your stand for years ago, 0:23:08.040 --> 0:23:12.240 where does mg I think AI will be in three years. 0:23:14.400 --> 0:23:16.280 It's going to be a bigger deal then than it 0:23:16.320 --> 0:23:20.359