1 00:00:05,040 --> 00:00:08,639 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:08,680 --> 00:00:12,040 Speaker 1: with Paul Sweeney. Join us each day for insight from 3 00:00:12,039 --> 00:00:16,200 Speaker 1: the best in economics, finance, investment, and international relations. You 4 00:00:16,239 --> 00:00:19,599 Speaker 1: can also watch the show live on YouTube. Visit the 5 00:00:19,600 --> 00:00:24,360 Speaker 1: Bloomberg Podcast channel on YouTube to see the show weekday 6 00:00:24,360 --> 00:00:27,400 Speaker 1: mornings from seven to ten am Eastern from our global 7 00:00:27,440 --> 00:00:32,080 Speaker 1: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 8 00:00:32,440 --> 00:00:36,000 Speaker 1: or anywhere else you listen and always I'm Bloomberg Radio, 9 00:00:36,159 --> 00:00:37,280 Speaker 1: the Bloomberg. 10 00:00:36,880 --> 00:00:39,400 Speaker 2: Terminal, and the Bloomberg Business App. 11 00:00:40,000 --> 00:00:41,479 Speaker 1: What you do when you have a jumble of a 12 00:00:41,520 --> 00:00:44,920 Speaker 1: day like yesterday, as you call somebody that can synthesize 13 00:00:44,960 --> 00:00:48,120 Speaker 1: it across economics at Market's David Rosenberg coming up later, 14 00:00:48,159 --> 00:00:51,680 Speaker 1: but right now, Michael Darter with us from Roth MKM. 15 00:00:51,720 --> 00:00:55,400 Speaker 1: They're chief economist and market strategists as well. Michael, we 16 00:00:55,440 --> 00:00:57,800 Speaker 1: haven't done it yet this morning. Let's dive into the 17 00:00:57,840 --> 00:01:02,120 Speaker 1: inflation statistic. Do you leave as I heard others Robin Brooks, 18 00:01:02,120 --> 00:01:05,640 Speaker 1: I thought was outstanding on Twitter last night that some 19 00:01:05,680 --> 00:01:08,199 Speaker 1: of this is a January effect where you could jump 20 00:01:08,240 --> 00:01:12,640 Speaker 1: conditions in certain service sector inflation subsets. 21 00:01:14,160 --> 00:01:17,039 Speaker 3: Hi Tom thanks for having me on. Look, this was 22 00:01:17,160 --> 00:01:21,039 Speaker 3: not a good report for the January CPI. The core 23 00:01:21,200 --> 00:01:25,679 Speaker 3: number accelerated pretty dramatically, and you know, even if you're 24 00:01:25,800 --> 00:01:27,959 Speaker 3: stripping there's been a lot of talk about, you know, 25 00:01:28,040 --> 00:01:31,080 Speaker 3: housing and the rental inflation. Even if you take that out, 26 00:01:31,160 --> 00:01:34,520 Speaker 3: the FED looks at a gauge of non energy services 27 00:01:34,560 --> 00:01:39,959 Speaker 3: prices excluding housing, and that accelerated pretty dramatically. So the 28 00:01:40,000 --> 00:01:42,200 Speaker 3: markets did not take this well. When your price for 29 00:01:42,720 --> 00:01:45,200 Speaker 3: profession and you have a set back, then you see 30 00:01:45,240 --> 00:01:48,640 Speaker 3: a dumplake we had yesterday. All of that said, you know, 31 00:01:48,760 --> 00:01:51,760 Speaker 3: let's not go into a complete panic over one number. 32 00:01:52,320 --> 00:01:55,400 Speaker 3: The FED does focus on the PCE deflator, which is 33 00:01:55,440 --> 00:01:58,840 Speaker 3: a different index, and there's been a pretty big gap 34 00:01:58,880 --> 00:02:01,680 Speaker 3: between the two. So if you look at the core 35 00:02:01,720 --> 00:02:05,680 Speaker 3: inflation readings from the PCE deflator over the last seven months, they're, 36 00:02:05,720 --> 00:02:08,720 Speaker 3: you know, basically in line with the Fed's target one 37 00:02:08,760 --> 00:02:12,959 Speaker 3: point nine percent average annualized growth. But the CPI core 38 00:02:13,040 --> 00:02:16,160 Speaker 3: CPI readings have been much higher, and the divergence is 39 00:02:16,200 --> 00:02:20,560 Speaker 3: about triple the historical average. Usually the CPI runs thirty 40 00:02:20,600 --> 00:02:25,120 Speaker 3: to fifty basis points above the PCE deflator, and you know, 41 00:02:25,160 --> 00:02:28,160 Speaker 3: we're we're seeing a gap about three times is wide now. 42 00:02:28,280 --> 00:02:31,600 Speaker 3: So if we take a step back, you know, I 43 00:02:31,680 --> 00:02:35,240 Speaker 3: think that the you know, the the CPI data could 44 00:02:35,240 --> 00:02:39,600 Speaker 3: be overstating the inflation problem here. Nominal spending. If you 45 00:02:39,639 --> 00:02:43,679 Speaker 3: look at nominal final sales to the private sector, over 46 00:02:43,760 --> 00:02:46,320 Speaker 3: the course of time that we've had these better PCE 47 00:02:46,800 --> 00:02:51,320 Speaker 3: core PCEE readings, we've essentially slowed to trend. So if 48 00:02:51,520 --> 00:02:55,600 Speaker 3: aggregate demand total spending in the economy has slowed to trend, 49 00:02:55,680 --> 00:02:59,560 Speaker 3: then that's going to take the inflation pressure off over time. 50 00:02:59,720 --> 00:03:03,040 Speaker 3: So let's not completely go into a full blown panic 51 00:03:03,080 --> 00:03:04,119 Speaker 3: over one number here. 52 00:03:04,320 --> 00:03:06,160 Speaker 4: And Michael, you know, I'm looking at the kind of 53 00:03:06,160 --> 00:03:08,919 Speaker 4: how the market traded yesterday. I mean, the indexes were off, 54 00:03:08,919 --> 00:03:11,280 Speaker 4: you know, kind of one and a half percent ish, 55 00:03:11,400 --> 00:03:13,600 Speaker 4: volume was kind of in line. It seemed like a 56 00:03:13,639 --> 00:03:17,440 Speaker 4: reasonable kind of market response after kind of the big 57 00:03:17,520 --> 00:03:20,720 Speaker 4: rips we've seen in November, December and strengthen. Maybe it's 58 00:03:20,760 --> 00:03:22,359 Speaker 4: just a healthy day in the market yesterday. 59 00:03:23,080 --> 00:03:26,480 Speaker 3: Oh, no doubt about it, Paul, no doubt about it. 60 00:03:26,520 --> 00:03:29,720 Speaker 3: I mean, you know, the run that we've seen, especially 61 00:03:29,720 --> 00:03:32,839 Speaker 3: in the S and P five hundred, led by infotech 62 00:03:32,919 --> 00:03:37,040 Speaker 3: and consumer discretionary basically at seven stocks dominating the index. 63 00:03:37,520 --> 00:03:40,560 Speaker 3: I mean, these valuations have really become stretched and we 64 00:03:40,640 --> 00:03:43,920 Speaker 3: have a momentum market. It doesn't take much. It just 65 00:03:43,960 --> 00:03:46,480 Speaker 3: needs to be some change of the narrative, whether it's 66 00:03:46,480 --> 00:03:50,400 Speaker 3: sustained or not. And you see what we saw yesterday, 67 00:03:50,520 --> 00:03:53,400 Speaker 3: so you just can't have a straight up market. We're 68 00:03:53,440 --> 00:03:56,320 Speaker 3: starting to move into pretty unhealthy territory where you start 69 00:03:56,360 --> 00:04:00,000 Speaker 3: to get worried about what could be on the other side. 70 00:04:00,120 --> 00:04:03,480 Speaker 3: I mean, these kinds of valuations tend to be rarely 71 00:04:03,520 --> 00:04:06,360 Speaker 3: seen in history and never sustained. So we're at levels 72 00:04:06,400 --> 00:04:08,600 Speaker 3: now where your price to perfection and you do have 73 00:04:08,640 --> 00:04:11,640 Speaker 3: to worry about threats to the you know, the perfect 74 00:04:11,720 --> 00:04:12,720 Speaker 3: narrative unfolding. 75 00:04:13,200 --> 00:04:15,640 Speaker 4: So part of that part of that narrative, Michael, is 76 00:04:15,960 --> 00:04:18,720 Speaker 4: kind of the Federal Reserve obviously, and I think the uh, 77 00:04:19,120 --> 00:04:21,479 Speaker 4: you know, the markets expectation is that that march is 78 00:04:21,600 --> 00:04:23,960 Speaker 4: clearly off the table. FED Chairman j pob is pretty 79 00:04:23,960 --> 00:04:26,200 Speaker 4: clear about that on those recent comments. But now the 80 00:04:26,279 --> 00:04:29,599 Speaker 4: I guess the focus has shifted to May or June 81 00:04:29,760 --> 00:04:33,719 Speaker 4: for the initiation of some rate cuts. Did yesterday's data 82 00:04:33,880 --> 00:04:35,720 Speaker 4: kind of change your view? Where do you think the 83 00:04:35,760 --> 00:04:36,680 Speaker 4: Fed's going to come out here. 84 00:04:38,279 --> 00:04:41,440 Speaker 3: It's interesting. I mean, our thought was that the FED 85 00:04:41,560 --> 00:04:45,440 Speaker 3: was probably going to push back on the timing and 86 00:04:45,760 --> 00:04:49,520 Speaker 3: both the timing and magnitude of the easing expectations that 87 00:04:49,560 --> 00:04:52,640 Speaker 3: were in the market, even if you think the economy 88 00:04:52,680 --> 00:04:54,960 Speaker 3: is going to underperform this year. I mean, the Fed's 89 00:04:55,200 --> 00:04:58,279 Speaker 3: framework is to look at SLACK and the labor market. 90 00:04:58,600 --> 00:05:00,799 Speaker 3: You know, we've had you know, we have haven't really 91 00:05:00,839 --> 00:05:03,960 Speaker 3: had a material increase in SELAC in the labor market yet, 92 00:05:04,880 --> 00:05:09,200 Speaker 3: just very just very and they're watching things like financial conditions, 93 00:05:09,279 --> 00:05:11,880 Speaker 3: which you know, based on our market discussion, have eased 94 00:05:11,920 --> 00:05:16,239 Speaker 3: pretty dramatically. So I wasn't surprised to see Powell push back. 95 00:05:16,400 --> 00:05:18,720 Speaker 3: And then if you get data like we saw, you know, 96 00:05:18,800 --> 00:05:21,920 Speaker 3: with the with the CPI readings for January, then that 97 00:05:22,040 --> 00:05:24,800 Speaker 3: genally enforces it. So I do think they're going to 98 00:05:24,839 --> 00:05:28,960 Speaker 3: be pretty cautious in terms of when they start this process. 99 00:05:29,440 --> 00:05:31,960 Speaker 3: And you know, we'll see you know, obviously we'll have 100 00:05:32,000 --> 00:05:34,920 Speaker 3: more data before we get to the May meeting, but yes, 101 00:05:34,960 --> 00:05:36,720 Speaker 3: for sure, March looks. 102 00:05:36,440 --> 00:05:38,400 Speaker 2: Like I'm going to go walk right now. You can 103 00:05:38,400 --> 00:05:39,520 Speaker 2: do this with Michael data. 104 00:05:39,680 --> 00:05:42,480 Speaker 1: I'm doing an event and Michael data Kid comes up 105 00:05:42,520 --> 00:05:45,400 Speaker 1: to me and on his phone he has his email 106 00:05:45,440 --> 00:05:47,360 Speaker 1: from when he was an intern at Bloomberg and we 107 00:05:47,360 --> 00:05:50,880 Speaker 1: were talking about the ambiguity of Hixe and and Slutsky 108 00:05:50,960 --> 00:05:53,720 Speaker 1: and income distribution and substitution effect. 109 00:05:54,200 --> 00:05:56,480 Speaker 2: We're not going to go over this on Valentine's Day. 110 00:05:56,400 --> 00:05:56,760 Speaker 5: Thank you. 111 00:05:56,960 --> 00:05:59,960 Speaker 1: But but Michael, what's great about this is that I 112 00:06:00,000 --> 00:06:05,760 Speaker 1: identify as a euclidean ambiguity of our micro economics. Right now, 113 00:06:05,800 --> 00:06:10,800 Speaker 1: we've got macro ambiguity with higher interest rates. Can we 114 00:06:10,880 --> 00:06:13,919 Speaker 1: have a good economy and a good stock market because 115 00:06:13,960 --> 00:06:17,040 Speaker 1: we pop nominal GDP and get a better revenue stream 116 00:06:17,080 --> 00:06:17,800 Speaker 1: than expected? 117 00:06:19,520 --> 00:06:22,200 Speaker 3: Well, I think that has been the story, tom right. 118 00:06:22,240 --> 00:06:25,240 Speaker 3: I mean, we're sitting here talking about an interest rate 119 00:06:25,279 --> 00:06:30,359 Speaker 3: structure that none of us thought was likely several years ago, 120 00:06:30,520 --> 00:06:33,719 Speaker 3: right right, And so that's really been driven by the 121 00:06:33,800 --> 00:06:38,560 Speaker 3: business cycle, the vigorousness of the upswing from the COVID recession, 122 00:06:38,960 --> 00:06:42,240 Speaker 3: and you know, in the inflationary environment that we've been in. 123 00:06:42,360 --> 00:06:45,360 Speaker 3: So you know, if you want to get wonky here, 124 00:06:45,400 --> 00:06:49,320 Speaker 3: it means that the neutral interest rate, the Viccilian equilibrium rate, 125 00:06:49,400 --> 00:06:52,719 Speaker 3: is higher setting like we've had then in the last 126 00:06:52,720 --> 00:06:56,240 Speaker 3: business cycle where we had very slow growth, very low inflation, 127 00:06:56,440 --> 00:06:59,760 Speaker 3: a lot of deleveraging pressures. Right, So this is you know, 128 00:06:59,800 --> 00:07:02,800 Speaker 3: this is something that's that's quite different. What makes this 129 00:07:02,960 --> 00:07:06,000 Speaker 3: tricky going forward is you know, is the FED actually 130 00:07:06,040 --> 00:07:09,160 Speaker 3: restrictive now or is the FED not restrictive? And there's 131 00:07:09,200 --> 00:07:12,560 Speaker 3: a big debate about that. People talking about financial conditions 132 00:07:12,600 --> 00:07:15,920 Speaker 3: are too loose. So the FED really isn't restrictive. But 133 00:07:16,800 --> 00:07:19,760 Speaker 3: let's drill into markets. If we look at forward looking 134 00:07:19,880 --> 00:07:23,840 Speaker 3: measures of inflation expectations, you know, those have reverted to 135 00:07:23,960 --> 00:07:26,800 Speaker 3: levels that are consistent with price stability. That was not 136 00:07:26,960 --> 00:07:29,080 Speaker 3: the case when we went into the early evenings of 137 00:07:29,120 --> 00:07:32,680 Speaker 3: the FED tightening those rights inflation break even spreads or 138 00:07:32,720 --> 00:07:35,160 Speaker 3: telling the Fed they were really miles behind the curve. 139 00:07:35,640 --> 00:07:38,400 Speaker 3: That's not the case now. So the Fed actually does 140 00:07:38,480 --> 00:07:41,400 Speaker 3: have the real rate if you use forward looking inflation 141 00:07:41,600 --> 00:07:45,400 Speaker 3: expectations at pretty cyclically high levels. And I do think 142 00:07:45,440 --> 00:07:47,920 Speaker 3: that is going to mean, you know, the economy is 143 00:07:47,960 --> 00:07:51,480 Speaker 3: going to continue to slow too, if not below trend. 144 00:07:52,040 --> 00:07:54,040 Speaker 3: And the trick for the FED will be the timing 145 00:07:54,080 --> 00:07:56,200 Speaker 3: on starting the rate cuts. If they're too late, then 146 00:07:56,240 --> 00:07:58,360 Speaker 3: you get a recession. If they're too soon, then you're 147 00:07:58,360 --> 00:07:59,760 Speaker 3: going to have persistent inflation. 148 00:08:02,960 --> 00:08:05,240 Speaker 1: Michael Data, thank you, thank you, thank you. On short 149 00:08:05,320 --> 00:08:07,960 Speaker 1: notice today after what we saw yesterday. Michael Darter with 150 00:08:08,080 --> 00:08:21,280 Speaker 1: his spartan emails in it says time get the sequence straight, 151 00:08:21,640 --> 00:08:22,880 Speaker 1: Paul save them. 152 00:08:23,160 --> 00:08:25,240 Speaker 4: Yes, absolutely we can do that right now because I'm 153 00:08:25,240 --> 00:08:27,400 Speaker 4: people trying to get a sense here giving that sol 154 00:08:27,400 --> 00:08:28,920 Speaker 4: if we had yesterday kind of what does it all 155 00:08:28,960 --> 00:08:31,280 Speaker 4: mean here as we think about what the Fed's going 156 00:08:31,320 --> 00:08:33,000 Speaker 4: to do and what these equity markets are going to do. 157 00:08:33,040 --> 00:08:35,360 Speaker 4: So we figured it was a good time to check 158 00:08:35,400 --> 00:08:35,480 Speaker 4: you on. 159 00:08:35,559 --> 00:08:35,760 Speaker 3: Geena. 160 00:08:35,800 --> 00:08:37,920 Speaker 4: Martin Adam Sheet leads all of our equity strategy for 161 00:08:38,000 --> 00:08:42,280 Speaker 4: Bloomberg Intelligence. Gina, I guess I was looking at yesterday's trading. 162 00:08:42,320 --> 00:08:46,560 Speaker 4: It's just a normal, healthy pullback in reaction to a 163 00:08:46,679 --> 00:08:48,760 Speaker 4: data point that the market wasn't discounting. 164 00:08:49,600 --> 00:08:51,600 Speaker 6: Not much more than that. Am I being naive there? 165 00:08:53,000 --> 00:08:53,080 Speaker 5: No? 166 00:08:53,320 --> 00:08:54,480 Speaker 7: I don't think you're being naive. 167 00:08:54,559 --> 00:08:56,599 Speaker 8: I just think there is a degree of volatility and 168 00:08:56,679 --> 00:08:59,320 Speaker 8: rights markets. It's really difficult for the equity market to 169 00:08:59,400 --> 00:09:01,840 Speaker 8: absorb on a daily basis. There was nothing in the 170 00:09:01,880 --> 00:09:05,480 Speaker 8: inflation report, frankly that was terribly damaging for the profits 171 00:09:05,480 --> 00:09:08,120 Speaker 8: outlook for companies. As a matter of fact, when we 172 00:09:08,160 --> 00:09:11,079 Speaker 8: look at the long term scheme of things, CPI holding 173 00:09:11,080 --> 00:09:14,480 Speaker 8: in pretty steady, with PPI decelerating and import prices fallowing, 174 00:09:14,600 --> 00:09:16,760 Speaker 8: is a great environment for margin growth for the S 175 00:09:16,800 --> 00:09:19,320 Speaker 8: and P five hundred. That's been the characteristic that has 176 00:09:19,360 --> 00:09:22,520 Speaker 8: defined the margin recovery of the last year. So the 177 00:09:22,559 --> 00:09:26,319 Speaker 8: inflation report in and of itself was not necessarily damaging 178 00:09:26,360 --> 00:09:28,920 Speaker 8: to the outlook for stocks, but it did clearly create 179 00:09:28,960 --> 00:09:31,720 Speaker 8: a lot of rate volatility, and the rates market seems 180 00:09:31,720 --> 00:09:36,240 Speaker 8: to be incredibly frenetic. That is creating some valuation disruption 181 00:09:36,360 --> 00:09:38,880 Speaker 8: for the equity market, as there is some follow through 182 00:09:38,920 --> 00:09:40,200 Speaker 8: from rates onto stocks. 183 00:09:41,000 --> 00:09:42,720 Speaker 7: Frankly, though, when we just threw. 184 00:09:42,600 --> 00:09:45,600 Speaker 8: Past five thousand, we had very strong momentum in the 185 00:09:45,720 --> 00:09:48,600 Speaker 8: SNP five hundred. A couple bit of a couple near 186 00:09:48,679 --> 00:09:52,600 Speaker 8: term breadth breakdowns last week would have suggested that we 187 00:09:52,679 --> 00:09:55,760 Speaker 8: weren't due for some sort of modest consolidation phase in 188 00:09:55,800 --> 00:09:56,680 Speaker 8: the index anyway. 189 00:09:56,840 --> 00:09:57,640 Speaker 2: So here's what I do. 190 00:09:57,720 --> 00:09:59,480 Speaker 1: I'm only doing this to pretend g you have to 191 00:09:59,600 --> 00:10:02,240 Speaker 1: radio gig doesn't work out, YouTube and car plack can 192 00:10:02,320 --> 00:10:04,280 Speaker 1: go work for GENA carry our. 193 00:10:04,280 --> 00:10:05,440 Speaker 2: Coffee and Jana. 194 00:10:05,480 --> 00:10:07,440 Speaker 1: What I would do here is I take two standard 195 00:10:07,440 --> 00:10:11,480 Speaker 1: deviations trading envelope off of the VIX, and the VIX 196 00:10:11,520 --> 00:10:13,880 Speaker 1: here is at fourteen point six y two, doing better 197 00:10:13,920 --> 00:10:19,599 Speaker 1: than eighteen at one point yesterday, even with the eighteen spike. Yesterday, 198 00:10:19,800 --> 00:10:23,480 Speaker 1: I didn't get a Fibonacci across the two standard deviations. 199 00:10:24,000 --> 00:10:27,680 Speaker 1: The fibonacci was eighteen point six to two center tendency. 200 00:10:28,000 --> 00:10:31,160 Speaker 1: We didn't even get back to center tendency, and now 201 00:10:31,200 --> 00:10:34,640 Speaker 1: we're back down to a twenty three percent Fibonacci. The 202 00:10:34,679 --> 00:10:39,200 Speaker 1: answer is, we are so far advanced we need a 203 00:10:39,440 --> 00:10:42,880 Speaker 1: huge pullback to normalize, don't we. 204 00:10:42,880 --> 00:10:46,040 Speaker 8: Well, we would, and certainly you would normally see greater 205 00:10:46,080 --> 00:10:48,600 Speaker 8: than two percent down days start to emerge if we 206 00:10:48,600 --> 00:10:53,520 Speaker 8: were moving into some sort of bigger, longer term corrective process. 207 00:10:53,840 --> 00:10:56,400 Speaker 8: You know, these one to two percent days. Anything less 208 00:10:56,400 --> 00:10:58,880 Speaker 8: than two percent is frankly just a normal trading day 209 00:10:58,960 --> 00:11:02,320 Speaker 8: in the world of equity. So to have stocks down 210 00:11:02,559 --> 00:11:05,880 Speaker 8: relatively modestly yesterday, yeah, it's a down day, and we 211 00:11:06,000 --> 00:11:08,480 Speaker 8: hadn't become terribly accustomed to those down days over the 212 00:11:08,600 --> 00:11:12,040 Speaker 8: last several weeks of gains. But it's a normal down day. 213 00:11:12,120 --> 00:11:14,240 Speaker 8: In the grand scheme of things, really, with the Vics, 214 00:11:14,280 --> 00:11:17,440 Speaker 8: we don't worry about anything under twenty. Frankly, the long 215 00:11:17,600 --> 00:11:20,559 Speaker 8: term you usually seeing that spiked to twenty as indicative 216 00:11:20,600 --> 00:11:22,720 Speaker 8: of underlying volatility weakness emerging. 217 00:11:22,840 --> 00:11:25,280 Speaker 1: I mean, I bought my first shares off Triple Lovers 218 00:11:25,280 --> 00:11:28,120 Speaker 1: Dog cash, Paul, like three days ago, and I'm way underwater. 219 00:11:28,160 --> 00:11:31,839 Speaker 6: That's all right. Sorry, you've taken a long term view here, Gina. 220 00:11:32,040 --> 00:11:33,960 Speaker 4: We're about seventy five percent of the way through the 221 00:11:34,000 --> 00:11:36,600 Speaker 4: earning cycle here. I kind of feel like it's not 222 00:11:36,679 --> 00:11:39,719 Speaker 4: getting much attention. It's all fed this, fed that. What 223 00:11:40,280 --> 00:11:42,360 Speaker 4: are you taking away in your team in terms of 224 00:11:42,400 --> 00:11:43,680 Speaker 4: what we've seen in the earning cycle. 225 00:11:44,520 --> 00:11:47,120 Speaker 8: Oh, you're absolutely right, Paul. It's been a really fascinating 226 00:11:47,160 --> 00:11:50,040 Speaker 8: earning season actually, because the S and P five hundred 227 00:11:50,040 --> 00:11:52,480 Speaker 8: is on track to post greater than six percent earnings growth. 228 00:11:52,480 --> 00:11:54,959 Speaker 8: The consensus coming into this season was for less than 229 00:11:54,960 --> 00:11:57,760 Speaker 8: two So we're talking S and P five hundred earning 230 00:11:57,760 --> 00:12:00,000 Speaker 8: scrat at triple the pace that that was expected by 231 00:12:00,160 --> 00:12:04,040 Speaker 8: the consensus. Eighty percent of companies have also beat expectations. 232 00:12:04,480 --> 00:12:07,319 Speaker 8: That is substantially better than long term average of sixty 233 00:12:07,400 --> 00:12:10,040 Speaker 8: five and even better than the post COVID average which 234 00:12:10,040 --> 00:12:14,320 Speaker 8: has been abnormally high. So very strong earnings growth at 235 00:12:14,400 --> 00:12:18,520 Speaker 8: least relative to expectations when we exclude the energy sector, 236 00:12:18,559 --> 00:12:21,160 Speaker 8: which remember energy is something we've been watching very carefully 237 00:12:21,160 --> 00:12:23,959 Speaker 8: because it is a net problem for the rest of 238 00:12:24,000 --> 00:12:27,440 Speaker 8: the index. When energy stocks are doing well, excluding the 239 00:12:27,559 --> 00:12:29,840 Speaker 8: energy sector, you're looking at ten percent earnings growth for 240 00:12:29,880 --> 00:12:33,840 Speaker 8: the S and P five hundred and stronger breadths stronger 241 00:12:33,880 --> 00:12:37,520 Speaker 8: recovery emerging for most sectors into the first and second 242 00:12:37,600 --> 00:12:40,800 Speaker 8: quarter of this year. So it has gone largely unnoticed 243 00:12:40,880 --> 00:12:44,200 Speaker 8: or at least uncommented on, as the FED has taken 244 00:12:44,280 --> 00:12:47,520 Speaker 8: a lot of mind share. But frankly, the earnings numbers 245 00:12:47,559 --> 00:12:50,680 Speaker 8: are are much better than expected and painting a pretty 246 00:12:50,679 --> 00:12:52,440 Speaker 8: solid backdrop for stocks right now. 247 00:12:52,600 --> 00:12:55,160 Speaker 4: And I know you guys on your team gena look 248 00:12:55,160 --> 00:12:58,400 Speaker 4: at margins and the trends and margins are these quality 249 00:12:58,480 --> 00:13:01,000 Speaker 4: earnings from what you can tell it to say stage. 250 00:13:01,440 --> 00:13:04,880 Speaker 8: Yeah, it's mixed, to be quite honest, it's very mixed 251 00:13:04,880 --> 00:13:08,560 Speaker 8: by sector, very mixed by industry. When we look at margins, 252 00:13:08,840 --> 00:13:13,000 Speaker 8: net income margins do a computer improving faster than operating margins, 253 00:13:13,040 --> 00:13:15,120 Speaker 8: which I don't want to call it a red flag, 254 00:13:15,160 --> 00:13:19,400 Speaker 8: but it's something to watch for for pervasiveness. You really 255 00:13:19,400 --> 00:13:22,599 Speaker 8: want to see both net income margins and operating margins improving. 256 00:13:23,280 --> 00:13:25,880 Speaker 8: We're not yet there on the operating margin line, which 257 00:13:25,920 --> 00:13:29,719 Speaker 8: does suggest that there may be some income statement of 258 00:13:29,760 --> 00:13:33,360 Speaker 8: manipulations that are helping to improve margins. So we want 259 00:13:33,400 --> 00:13:37,160 Speaker 8: to watch pretty carefully. That's said, certain sectors are improving 260 00:13:37,440 --> 00:13:42,120 Speaker 8: very significantly, namely tech and communications, while other sectors like 261 00:13:42,240 --> 00:13:45,440 Speaker 8: energy and materials are big drugs. That to me is 262 00:13:45,520 --> 00:13:48,800 Speaker 8: not necessarily a bad sign. Energy and materials are commodity 263 00:13:48,880 --> 00:13:51,560 Speaker 8: sensitive sectors. They are cost inputs for a lot of 264 00:13:51,600 --> 00:13:54,440 Speaker 8: the other groups in the S and P, so the 265 00:13:54,520 --> 00:14:00,199 Speaker 8: index can sustain improving fundamental conditions if these two sectors 266 00:14:00,280 --> 00:14:01,320 Speaker 8: are the weak spots. 267 00:14:01,679 --> 00:14:03,400 Speaker 2: Gina Martin Adams, thank you so much. 268 00:14:08,040 --> 00:14:10,840 Speaker 1: I want to call it this because I think it's generational. 269 00:14:10,880 --> 00:14:14,640 Speaker 1: As we go to Alex Webb in London on technology, 270 00:14:15,200 --> 00:14:17,559 Speaker 1: You're a kid from you know, like pretty basic means, 271 00:14:17,600 --> 00:14:20,560 Speaker 1: you play hockey, You end up Paul at the Rhode 272 00:14:20,600 --> 00:14:25,080 Speaker 1: Island School of Design, and then you invent this strange 273 00:14:25,200 --> 00:14:28,160 Speaker 1: thing where you have an apartment and you can rent 274 00:14:28,160 --> 00:14:31,680 Speaker 1: it out and it's another playstory. Of course, it's Airbnb, 275 00:14:31,800 --> 00:14:35,600 Speaker 1: and this is Brian Cheske we're talking about. And what's 276 00:14:35,680 --> 00:14:39,560 Speaker 1: fascinating to me is, all of a sudden, he's a 277 00:14:39,600 --> 00:14:43,600 Speaker 1: grown up six billion dollars sure buy back Uber. All 278 00:14:43,640 --> 00:14:46,600 Speaker 1: of a sudden, they're a grown up with a generational 279 00:14:46,920 --> 00:14:49,640 Speaker 1: and Alex Webb is so wise he can, you know, 280 00:14:49,720 --> 00:14:54,360 Speaker 1: do the generational tilt. Alex Webb is Silicon Valley in 281 00:14:54,400 --> 00:14:55,240 Speaker 1: a broad sense. 282 00:14:55,440 --> 00:14:57,160 Speaker 2: Is tech growing up? 283 00:14:58,680 --> 00:15:02,600 Speaker 9: Yeah, I mean Facebook's kind of like prime example of 284 00:15:02,640 --> 00:15:06,520 Speaker 9: that as well. Meta you know, they doing massive buybacks 285 00:15:06,920 --> 00:15:10,280 Speaker 9: as well. Actually wrote a piece just last week where 286 00:15:11,040 --> 00:15:12,160 Speaker 9: they're really becoming a. 287 00:15:12,080 --> 00:15:13,040 Speaker 5: Lot more like Apple. 288 00:15:13,080 --> 00:15:16,440 Speaker 9: They're realizing that that shareholders care about cash at the 289 00:15:16,440 --> 00:15:19,680 Speaker 9: moment in a way that they perhaps didn't in those 290 00:15:19,720 --> 00:15:21,200 Speaker 9: heady years a few years ago when it was all 291 00:15:21,200 --> 00:15:23,920 Speaker 9: about growth. They obviously not they're not exactly value stocks, 292 00:15:24,280 --> 00:15:29,480 Speaker 9: but there's a massive pivot, which you know, is sensible 293 00:15:29,520 --> 00:15:30,800 Speaker 9: giving the market dynamics. 294 00:15:31,240 --> 00:15:35,560 Speaker 4: And we actually saw better initiade a you know, token dividend, 295 00:15:35,840 --> 00:15:37,640 Speaker 4: but kind of a dividend in line with a yield 296 00:15:37,680 --> 00:15:38,760 Speaker 4: that's in line with Apple. 297 00:15:38,880 --> 00:15:40,720 Speaker 6: So maybe that's a little bit of a trend there, Alex. 298 00:15:42,000 --> 00:15:43,360 Speaker 5: It certainly looks that way. 299 00:15:43,400 --> 00:15:45,640 Speaker 9: And you know, you think also about all the the 300 00:15:45,720 --> 00:15:50,160 Speaker 9: increased focus on efficiency, which you know, unfortunately euphemism in 301 00:15:50,200 --> 00:15:52,560 Speaker 9: many works in many cases for job cuts. 302 00:15:53,720 --> 00:15:56,360 Speaker 5: When you look at the sort of average. 303 00:15:55,840 --> 00:15:59,960 Speaker 9: Revenue per employee at a company like like Mester or 304 00:16:00,120 --> 00:16:04,000 Speaker 9: like Amazon, it fell massively actually in the years up 305 00:16:04,000 --> 00:16:07,040 Speaker 9: to the pandemic because they were just hiring with such gusto. 306 00:16:07,720 --> 00:16:10,400 Speaker 9: What we've seen in the past sort of six eight, 307 00:16:10,440 --> 00:16:13,520 Speaker 9: twelve months is that there seems to be an increased 308 00:16:13,560 --> 00:16:16,280 Speaker 9: focus on that number, that they have realized that their 309 00:16:16,320 --> 00:16:19,280 Speaker 9: employees are not that they're working less efficiently essentially because 310 00:16:19,280 --> 00:16:21,240 Speaker 9: they have too many of them. So we've seen massive 311 00:16:21,240 --> 00:16:22,800 Speaker 9: reductions in headcounts of consequence. 312 00:16:23,280 --> 00:16:26,600 Speaker 4: So, Alex, we did get Uber, another one of those names, 313 00:16:26,600 --> 00:16:29,880 Speaker 4: one of those gig economy companies that's really come into 314 00:16:29,920 --> 00:16:33,040 Speaker 4: its own with maybe some some new management with Derekkaswashahi. 315 00:16:33,640 --> 00:16:35,000 Speaker 6: Now they've got to buy back here. 316 00:16:36,200 --> 00:16:39,400 Speaker 4: That seems to validate them, as I guess adults in 317 00:16:39,400 --> 00:16:40,120 Speaker 4: the room kind of thing. 318 00:16:41,640 --> 00:16:45,560 Speaker 9: Yeah, And it's like, you know, ultimately it's not a 319 00:16:45,560 --> 00:16:47,840 Speaker 9: company that's growing anywhere near at the pace it was 320 00:16:47,880 --> 00:16:50,280 Speaker 9: you know, if you think about back in twenty twenty 321 00:16:50,400 --> 00:16:52,040 Speaker 9: two when you had like of course they did some 322 00:16:52,040 --> 00:16:54,520 Speaker 9: acquisitions as well, which turbo charge it. But you know, 323 00:16:54,600 --> 00:16:57,680 Speaker 9: revenue almost doubled in a twelve month period. Now it's 324 00:16:58,080 --> 00:17:00,600 Speaker 9: the market's looking for a sort of fifteen sixteen percent 325 00:17:00,680 --> 00:17:04,720 Speaker 9: growth rate this year. But crucially it is now profitable, 326 00:17:04,840 --> 00:17:07,240 Speaker 9: right That was not the case for the most of 327 00:17:07,280 --> 00:17:10,200 Speaker 9: its existence throughout fifteen years or something of its existence 328 00:17:10,200 --> 00:17:13,520 Speaker 9: only a decade it was not a profitable company. Now 329 00:17:13,640 --> 00:17:15,960 Speaker 9: that's why it's interesting as well with Lift at the moment, 330 00:17:16,000 --> 00:17:20,600 Speaker 9: because you know they are expected to post a profit 331 00:17:20,760 --> 00:17:23,040 Speaker 9: at least an operating basis for the first time this year. 332 00:17:23,040 --> 00:17:24,000 Speaker 5: That's meaningful. 333 00:17:24,960 --> 00:17:27,639 Speaker 9: Shouldn't be probably given the way we've used to companies, 334 00:17:27,640 --> 00:17:29,520 Speaker 9: but in the world of tech it isn't. It hasn't 335 00:17:29,520 --> 00:17:30,119 Speaker 9: been a given. 336 00:17:30,400 --> 00:17:33,200 Speaker 1: Alex Web with us in London here on Technology Alex. 337 00:17:33,240 --> 00:17:37,399 Speaker 1: One of our emailers thank you for emailing in huge 338 00:17:37,480 --> 00:17:40,600 Speaker 1: alex webfan and they say, Tom, cut the chat on 339 00:17:40,640 --> 00:17:44,200 Speaker 1: these rich guys, alex webber you returning your vision bro? 340 00:17:44,440 --> 00:17:46,160 Speaker 2: Are you just saying enough it doesn't work? 341 00:17:46,920 --> 00:17:48,680 Speaker 5: If I was a rich guy, I might have a 342 00:17:48,760 --> 00:17:49,720 Speaker 5: vision bro. I am not. 343 00:17:50,000 --> 00:17:50,679 Speaker 9: I don't know. 344 00:17:50,760 --> 00:17:52,359 Speaker 5: I mean, it's it was quite interesting. 345 00:17:52,400 --> 00:17:54,840 Speaker 9: There was a video of Mark Zuckerberg basically giving his 346 00:17:54,920 --> 00:17:57,360 Speaker 9: in a heavily verted commerce review of the Vision Pro. 347 00:17:57,520 --> 00:17:59,800 Speaker 9: Surprise surprise, he says, our product is a lot better. 348 00:18:01,040 --> 00:18:03,000 Speaker 9: I mean, the case I've made before is that actually 349 00:18:03,000 --> 00:18:05,040 Speaker 9: Apple doesn't need the vision Pro to be a hit, right, 350 00:18:05,119 --> 00:18:07,600 Speaker 9: It just needs to make sure that whatever Meta comes 351 00:18:07,640 --> 00:18:10,360 Speaker 9: up with is not a hit, because if it sacrifices 352 00:18:10,440 --> 00:18:14,400 Speaker 9: the next you know, vector of computing to a competitor, 353 00:18:14,440 --> 00:18:16,040 Speaker 9: then it's got a big problems in its hands. If 354 00:18:16,080 --> 00:18:20,119 Speaker 9: if like smart glasses, you know, virtuality or mental reality, 355 00:18:20,160 --> 00:18:22,080 Speaker 9: mixed reality, whatever you want to call it, if that 356 00:18:22,119 --> 00:18:24,480 Speaker 9: doesn't take off as a category, that's not really the 357 00:18:24,560 --> 00:18:25,960 Speaker 9: end of the world for Apple. The problem is that 358 00:18:26,000 --> 00:18:27,800 Speaker 9: if it does and Apple's not in there. 359 00:18:27,760 --> 00:18:29,399 Speaker 2: Is a non financial guy. 360 00:18:29,920 --> 00:18:33,240 Speaker 1: When the financial people say Apple has an ecosystem of 361 00:18:33,240 --> 00:18:35,679 Speaker 1: what is a two point two billion pall ye something 362 00:18:35,720 --> 00:18:36,080 Speaker 1: like that? 363 00:18:36,640 --> 00:18:39,080 Speaker 2: Do you see that growing out ginormous to like three 364 00:18:39,160 --> 00:18:39,919 Speaker 2: billion people? 365 00:18:40,000 --> 00:18:42,680 Speaker 1: Is there just an endless Apple universe out there? 366 00:18:43,760 --> 00:18:47,560 Speaker 9: Hard to see how that happens without really going down 367 00:18:47,600 --> 00:18:51,439 Speaker 9: into more affordable devices, right, Like, you know, The reason 368 00:18:51,480 --> 00:18:55,800 Speaker 9: that Apple has managed to continue growing earnings for share 369 00:18:55,960 --> 00:18:59,359 Speaker 9: at a feral clip even as its top line growth 370 00:18:59,480 --> 00:19:03,120 Speaker 9: is slow or in fact last year's shrunk, is because 371 00:19:03,400 --> 00:19:05,440 Speaker 9: it's able to sell more of the top of the 372 00:19:05,560 --> 00:19:09,480 Speaker 9: range devices, devices where you're selling two hundred and fifty 373 00:19:09,480 --> 00:19:12,440 Speaker 9: six gigabytes of memory at a at an eighty five 374 00:19:12,440 --> 00:19:16,480 Speaker 9: percent gross margin, right, whereas the smaller, cheaper devices do 375 00:19:16,600 --> 00:19:20,720 Speaker 9: not have those sort of margins. So, you know, the 376 00:19:21,280 --> 00:19:25,520 Speaker 9: if you're going to get to that next whatever market 377 00:19:25,640 --> 00:19:27,840 Speaker 9: of another billion people, you probably need to be in 378 00:19:27,840 --> 00:19:30,440 Speaker 9: the one hundred two hundred less than three hundred dollars range. 379 00:19:30,480 --> 00:19:32,520 Speaker 5: And I think most Apple typically played well. 380 00:19:32,600 --> 00:19:34,760 Speaker 4: And when we talked to analyst Alex it doesn't sound 381 00:19:34,800 --> 00:19:36,760 Speaker 4: like just let's just take it. In India, for example, 382 00:19:37,119 --> 00:19:38,920 Speaker 4: you could make the case that point if they come 383 00:19:38,960 --> 00:19:41,639 Speaker 4: in with a cheaper phone, man, they can get huge 384 00:19:41,680 --> 00:19:44,480 Speaker 4: market share there, and analysts kind of say them, they're 385 00:19:44,520 --> 00:19:47,040 Speaker 4: going to stick with their high end products and wait 386 00:19:47,080 --> 00:19:49,160 Speaker 4: for the middle class to grow out, you know, similar 387 00:19:49,160 --> 00:19:50,080 Speaker 4: to what they did in China. 388 00:19:50,960 --> 00:19:52,520 Speaker 6: I guess that's the way they're going to go there. 389 00:19:53,720 --> 00:19:56,359 Speaker 9: It's really fascinating India because it's such a price sensitive market. 390 00:19:56,400 --> 00:19:58,760 Speaker 9: If you look at Netflix, it's experience in that market 391 00:19:58,760 --> 00:20:00,240 Speaker 9: where you know, you think of it, Oh, we could 392 00:20:00,240 --> 00:20:02,520 Speaker 9: have four hundred million customers there. Well, you know, actually, 393 00:20:03,000 --> 00:20:04,800 Speaker 9: are you going to get four hundred million people to 394 00:20:04,920 --> 00:20:08,480 Speaker 9: pay you know, something in the order of twelve dollars 395 00:20:08,520 --> 00:20:11,040 Speaker 9: a month? Almost certainly, not certainly not yet, you know, 396 00:20:11,040 --> 00:20:12,240 Speaker 9: it might be in a few years time. 397 00:20:12,320 --> 00:20:12,480 Speaker 5: Now. 398 00:20:12,520 --> 00:20:14,840 Speaker 9: If you if Netflix can't convince people to part with 399 00:20:15,240 --> 00:20:17,879 Speaker 9: you know, ten dollars a month, what's the likelihood of 400 00:20:17,880 --> 00:20:20,400 Speaker 9: Apple being able to convince them to then actually download 401 00:20:20,400 --> 00:20:24,080 Speaker 9: an iPhone, download and iPhone, buy an iPhone, then download 402 00:20:24,160 --> 00:20:26,639 Speaker 9: a huge number of apps of you know, getting Apple Music, 403 00:20:26,800 --> 00:20:29,360 Speaker 9: of getting an iCloud, getting all these things which are 404 00:20:29,560 --> 00:20:32,240 Speaker 9: the flywheel of earnings that that you know, that come 405 00:20:32,240 --> 00:20:33,440 Speaker 9: off the iPhone. 406 00:20:33,560 --> 00:20:35,960 Speaker 1: It's one final question if I can, what's the buzz 407 00:20:36,000 --> 00:20:37,000 Speaker 1: at the Apple store there? 408 00:20:37,000 --> 00:20:38,119 Speaker 2: Where is it? Coven Garden? 409 00:20:38,240 --> 00:20:40,160 Speaker 6: I was going to ask, where is the flagship Apple store? 410 00:20:40,320 --> 00:20:40,439 Speaker 4: Well? 411 00:20:40,480 --> 00:20:42,439 Speaker 5: I think it's is am I right, Alex, I think 412 00:20:42,680 --> 00:20:43,760 Speaker 5: there is this one on Common Garden. 413 00:20:43,760 --> 00:20:45,520 Speaker 9: There's one on Regent Street. Yeah, there are quite quite 414 00:20:45,520 --> 00:20:46,640 Speaker 9: a few swanky locations around. 415 00:20:46,680 --> 00:20:50,240 Speaker 1: What's a swanky coven Garden. Every time I go to London, 416 00:20:50,280 --> 00:20:53,160 Speaker 1: Pharrell's hanging out in line there. But you know, what's 417 00:20:53,200 --> 00:20:56,399 Speaker 1: the what what's the buzz at the Covent Garden store? 418 00:20:58,280 --> 00:21:00,760 Speaker 9: I mean from social medialy So I've not been down 419 00:21:00,800 --> 00:21:06,000 Speaker 9: there myself recently, no, but it's like, you know, everybody 420 00:21:06,040 --> 00:21:08,720 Speaker 9: wants to try the vision pro how you're actually buying 421 00:21:08,720 --> 00:21:10,919 Speaker 9: it different matter now. It doesn't look like there's a 422 00:21:10,920 --> 00:21:14,800 Speaker 9: massive amount of supply anyway, so you know people want 423 00:21:14,840 --> 00:21:18,480 Speaker 9: to try it. There's some suspicion that once people try it, 424 00:21:18,520 --> 00:21:20,919 Speaker 9: maybe you will get more people buying it. But like again, 425 00:21:21,200 --> 00:21:22,920 Speaker 9: that's something where the price has to come down. 426 00:21:23,280 --> 00:21:24,720 Speaker 2: Alex, Thank you, Alex. 427 00:21:24,800 --> 00:21:27,200 Speaker 1: We are brilliant there and use of cash among these 428 00:21:27,240 --> 00:21:27,879 Speaker 1: young terms. 429 00:21:27,920 --> 00:21:29,920 Speaker 2: Paul, to me, this is a huge deal. I've complained 430 00:21:29,920 --> 00:21:30,840 Speaker 2: for years. 431 00:21:37,480 --> 00:21:37,800 Speaker 6: Now. 432 00:21:37,920 --> 00:21:39,280 Speaker 2: I'll look at the front pages. 433 00:21:39,359 --> 00:21:40,920 Speaker 6: What's making news around the. 434 00:21:40,800 --> 00:21:45,720 Speaker 1: World, your daily roundup of today's headlines from major publications. 435 00:21:45,200 --> 00:21:46,520 Speaker 2: Today's pictures and catchers. 436 00:21:46,560 --> 00:21:50,160 Speaker 1: Headlines, of course, always brought you by Interactive Brokers buying 437 00:21:50,240 --> 00:21:56,000 Speaker 1: marketplace access. Interactive Brokers vest selection of over one million 438 00:21:56,040 --> 00:22:00,120 Speaker 1: global fixed income securities. There are no markups or building spread. 439 00:22:00,160 --> 00:22:03,800 Speaker 1: Some low transparent commissions. Learn more at I b k 440 00:22:04,080 --> 00:22:09,600 Speaker 1: r dot com slash bonds. I got an email from 441 00:22:09,640 --> 00:22:12,040 Speaker 1: missus Kean. It's not pictures and Catchers today. 442 00:22:12,280 --> 00:22:14,040 Speaker 6: No, it's Valentine. 443 00:22:14,280 --> 00:22:16,040 Speaker 4: That's what I hear. 444 00:22:15,200 --> 00:22:21,400 Speaker 10: I didn't know that you forget Vale, you too. The 445 00:22:21,440 --> 00:22:27,480 Speaker 10: first story is about Valentine's control room, and missus Keane 446 00:22:27,520 --> 00:22:28,480 Speaker 10: is gonna love this one. 447 00:22:28,520 --> 00:22:28,800 Speaker 5: Okay. 448 00:22:28,840 --> 00:22:31,960 Speaker 10: So the Wall Street Journal is saying self gifting is 449 00:22:32,000 --> 00:22:34,760 Speaker 10: on the rise. So spouses are tired of getting gifts 450 00:22:34,800 --> 00:22:37,480 Speaker 10: that they basically don't like, so they're. 451 00:22:37,320 --> 00:22:38,399 Speaker 7: Gonna buy what they like. 452 00:22:40,400 --> 00:22:43,000 Speaker 10: We're going to the store and we're buying our own gifts. 453 00:22:43,040 --> 00:22:44,040 Speaker 10: And then you have those. 454 00:22:43,800 --> 00:22:47,000 Speaker 7: Who are single, they're treating themselves. You have Gallantine's Day. 455 00:22:47,119 --> 00:22:50,320 Speaker 7: That's the thing, now, please. My daughter and friends had 456 00:22:50,359 --> 00:22:53,280 Speaker 7: got a Galentine's Day party. They have parties. It's all 457 00:22:53,320 --> 00:22:56,840 Speaker 7: the girls, all the single girls. Gullantine's what's Galentines? All 458 00:22:56,840 --> 00:22:58,160 Speaker 7: the single girls? Gals? 459 00:22:58,280 --> 00:22:59,160 Speaker 6: I think gals. 460 00:22:59,240 --> 00:23:01,439 Speaker 2: I get a little slowly. 461 00:23:02,760 --> 00:23:05,840 Speaker 10: But it's good for retailers, right because people are starting 462 00:23:05,840 --> 00:23:06,920 Speaker 10: to shop a little bit more. 463 00:23:07,040 --> 00:23:09,680 Speaker 7: And you even had to Beer's Jewelry. They're offering right 464 00:23:09,720 --> 00:23:11,400 Speaker 7: hand ring collection instead of. 465 00:23:11,400 --> 00:23:13,600 Speaker 6: Oh, really they have pinky rings. 466 00:23:14,119 --> 00:23:14,920 Speaker 7: I'm sure they do. 467 00:23:15,200 --> 00:23:17,720 Speaker 2: Okay, I mean every girl needs a pink. 468 00:23:17,600 --> 00:23:20,280 Speaker 4: I love this quote in this Wall Wall Street journal story. 469 00:23:20,400 --> 00:23:23,000 Speaker 4: My husband is amazing, but he has trouble figuring out 470 00:23:23,000 --> 00:23:23,479 Speaker 4: my taste. 471 00:23:23,560 --> 00:23:24,600 Speaker 10: Sometimes that happens. 472 00:23:24,680 --> 00:23:29,240 Speaker 1: Yes, Gallantine's day every we learn every day, every day, 473 00:23:29,359 --> 00:23:29,840 Speaker 1: every day. 474 00:23:30,080 --> 00:23:34,800 Speaker 10: Next, Okay, Business Insider has this Apparently wealthy Californians they're 475 00:23:34,840 --> 00:23:38,560 Speaker 10: ditching the state and they're going to Beverly Hills of Arizona. 476 00:23:38,000 --> 00:23:40,840 Speaker 7: Which is Paradise Valley, Arizon. I don't know if any 477 00:23:40,880 --> 00:23:42,719 Speaker 7: of you, either of you have ever built to Scott's. 478 00:23:43,440 --> 00:23:45,919 Speaker 2: I'm sorry we did this for Sweeney. I mean I 479 00:23:45,960 --> 00:23:46,639 Speaker 2: saw this in it. 480 00:23:46,760 --> 00:23:49,240 Speaker 1: You know, I'm Lisa and I would never be looking 481 00:23:49,280 --> 00:23:52,480 Speaker 1: at this, but you know, Paradise, Paul. 482 00:23:52,560 --> 00:23:53,840 Speaker 6: This just says you. 483 00:23:53,840 --> 00:23:56,960 Speaker 4: It does, I mean, golf courses, celebrities, perfect. 484 00:23:57,119 --> 00:24:00,600 Speaker 6: Yeah, exactly, eight five two five three good more. Yep. 485 00:24:00,760 --> 00:24:03,800 Speaker 10: Absolutely, it's it's they want the privacy, they want the 486 00:24:03,880 --> 00:24:06,560 Speaker 10: luxurious life style, lower taxes also. 487 00:24:06,840 --> 00:24:08,120 Speaker 7: And the quality of life. 488 00:24:08,280 --> 00:24:11,200 Speaker 2: This is nice, like it's it's outside something Phoenix. I 489 00:24:11,240 --> 00:24:11,960 Speaker 2: don't think it's too so. 490 00:24:12,000 --> 00:24:15,000 Speaker 7: I think it's more like between like Phoenix, Scottsdale, Yeah, Phoenix. 491 00:24:15,480 --> 00:24:17,400 Speaker 2: What's it like there in the summer though? 492 00:24:17,840 --> 00:24:18,199 Speaker 6: Brutal? 493 00:24:18,359 --> 00:24:20,399 Speaker 4: I mean I think it's even worse. I mean one 494 00:24:20,480 --> 00:24:23,160 Speaker 4: hundred degree days and that. You can talk about dry 495 00:24:23,200 --> 00:24:24,800 Speaker 4: heat all you want, but you know, one hundred and 496 00:24:24,840 --> 00:24:26,280 Speaker 4: ten is one hundred and ten. 497 00:24:26,600 --> 00:24:30,440 Speaker 2: So like you with like a winter home there and there? 498 00:24:30,560 --> 00:24:32,159 Speaker 4: I think so, I think that's what. But a lot 499 00:24:32,160 --> 00:24:33,679 Speaker 4: of people are out there kind of full time now. 500 00:24:33,680 --> 00:24:35,600 Speaker 4: I mean, you know, you see you hear the stories 501 00:24:35,600 --> 00:24:39,200 Speaker 4: about folks leaving California for a variety of reasons, whether 502 00:24:39,280 --> 00:24:42,240 Speaker 4: going to Idaho or going to Colorado and now Arizona. 503 00:24:42,359 --> 00:24:43,760 Speaker 6: You know, so paradise. 504 00:24:43,880 --> 00:24:45,159 Speaker 7: Can you see a nice valley? 505 00:24:45,359 --> 00:24:48,160 Speaker 2: Is Bloomberg surveillance, Tom Keane with no life in New 506 00:24:48,240 --> 00:24:50,920 Speaker 2: York City joining us now Paul Sweening. 507 00:24:53,440 --> 00:24:54,080 Speaker 6: The golf course. 508 00:24:54,680 --> 00:24:55,200 Speaker 3: Golf course? 509 00:24:55,720 --> 00:24:56,080 Speaker 5: All right? 510 00:24:56,280 --> 00:24:59,040 Speaker 10: Uh this is from the Wall Street Journal. Apparently there's 511 00:24:59,080 --> 00:25:03,440 Speaker 10: a no fly list for dogs and could be on it. 512 00:25:03,720 --> 00:25:05,280 Speaker 7: I don't know if you take the dogs with you 513 00:25:05,359 --> 00:25:10,080 Speaker 7: when you travel on an airplane, but more people do, Yeah, 514 00:25:10,119 --> 00:25:10,720 Speaker 7: a lot. 515 00:25:10,520 --> 00:25:12,639 Speaker 10: More people, especially since COVID, Yes, when a lot more 516 00:25:12,640 --> 00:25:16,240 Speaker 10: people were buying the dogs and the carriers are cracking down. 517 00:25:16,320 --> 00:25:20,080 Speaker 10: Apparently they're biting their they're batting them for different reasons, 518 00:25:20,119 --> 00:25:22,000 Speaker 10: whether they bite, where they go to the bathroom, where 519 00:25:22,040 --> 00:25:25,000 Speaker 10: they don't behave right. But they're putting a mark on 520 00:25:25,119 --> 00:25:25,760 Speaker 10: their record. 521 00:25:25,800 --> 00:25:27,520 Speaker 7: So when you check in, there's going to be a 522 00:25:27,520 --> 00:25:28,360 Speaker 7: big flag there. 523 00:25:28,359 --> 00:25:29,160 Speaker 6: That's his dogs. 524 00:25:29,160 --> 00:25:32,280 Speaker 4: When Matt Miller relocated, this is years ago, relocated from 525 00:25:32,320 --> 00:25:35,480 Speaker 4: New York to Berlin, he posted a picture on social media. 526 00:25:35,800 --> 00:25:38,480 Speaker 6: His dog, God, I forget the name. It's the worst 527 00:25:38,480 --> 00:25:39,239 Speaker 6: dog name of all time. 528 00:25:39,400 --> 00:25:42,720 Speaker 4: It's a huge dog, had his own first class seat 529 00:25:42,800 --> 00:25:46,760 Speaker 4: on the plane, right next to the map. So really 530 00:25:46,840 --> 00:25:49,240 Speaker 4: talk to go over to Germany. So I don't know 531 00:25:49,240 --> 00:25:49,760 Speaker 4: how that works. 532 00:25:50,760 --> 00:25:52,159 Speaker 7: You do you pay like one hundred and twenty five 533 00:25:52,200 --> 00:25:52,720 Speaker 7: bucks or something? 534 00:25:53,520 --> 00:25:56,000 Speaker 1: What do you do on a long flight? I mean, 535 00:25:56,000 --> 00:25:59,159 Speaker 1: I'm asking for a friend. We're going to take a 536 00:25:59,280 --> 00:26:02,119 Speaker 1: vet bill and I don't feed to Paris here to 537 00:26:02,160 --> 00:26:05,680 Speaker 1: see you know. One of the offspring is early. But 538 00:26:06,080 --> 00:26:07,000 Speaker 1: don't I don't get it. 539 00:26:07,240 --> 00:26:08,919 Speaker 4: They have to fit under the seat in front of you, 540 00:26:08,960 --> 00:26:11,359 Speaker 4: I think is the thing. You have to put them 541 00:26:11,359 --> 00:26:11,960 Speaker 4: in a little bag. 542 00:26:12,080 --> 00:26:17,960 Speaker 2: What do you do four hours in? I don't I 543 00:26:18,080 --> 00:26:18,960 Speaker 2: simply don't get it. 544 00:26:19,280 --> 00:26:22,480 Speaker 1: This is a Bloomberg Surveillance podcast, bringing you the best 545 00:26:22,480 --> 00:26:27,280 Speaker 1: in economics, finance, investment, and international relations. You can also 546 00:26:27,320 --> 00:26:31,359 Speaker 1: watch the show live on YouTube. Visit the Bloomberg Podcast 547 00:26:31,480 --> 00:26:35,520 Speaker 1: channel on YouTube to see the show weekday mornings from 548 00:26:35,560 --> 00:26:38,840 Speaker 1: seven to ten am Eastern from our global headquarters in 549 00:26:38,920 --> 00:26:42,600 Speaker 1: New York City. Subscribe to the podcast on Apple, Spotify, 550 00:26:42,960 --> 00:26:46,520 Speaker 1: or anywhere else you listen, and always on Bloomberg Radio, 551 00:26:46,720 --> 00:26:49,880 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app.