Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: Twenty twenty four was a year full of twists and
Speaker 2: turns and shakeups with huge global implications, the biggest global
Speaker 2: election year in history. How much you think the vod's
Speaker 2: going to have to cut rates? Has Balla confirming that
Speaker 2: yet another senior military commander has also been killed.
Speaker 3: Take a look at what happened.
Speaker 1: The assassination attempts on the former US president.
Speaker 2: Of course, this afternoon, President Joe Biden changing course, ending
Speaker 2: its re election bid.
Speaker 1: Donald Trump is the President of the United States of America.
Speaker 3: Twenty twenty four.
Speaker 2: Is bitcoin pierced one hundred thousand dollars right now? The
Speaker 2: NYPD has identified a person of interest in the killing
Speaker 2: of the United Healthcare CEO. News events can move markets
Speaker 2: in real time, but they can also shift how Wall
Speaker 2: Street thinks about the future, and for years, Sam Potter,
Speaker 2: a senior editor on Bloomberg's Markets team, has led an
Speaker 2: effort to burrow through piles of these outlooks and predictions
Speaker 2: to surface trends.
Speaker 1: This is what these people are talking about in house,
Speaker 1: this is what they're talking about with clients. So for me,
Speaker 1: I like to bring it all together. See what the
Speaker 1: big picture is where the all the calls are falling.
Speaker 2: This is the big take from Bloomberg News. I'm David Gerra.
Speaker 2: Today on the show, we look back at what Wall
Speaker 2: Street predicted for twenty twenty four and look ahead at
Speaker 2: what it expects in twenty twenty five. Going into the
Speaker 2: holiday season, when things were winding down a bit at work,
Speaker 2: Bloomberg Sam Potter was burning the midnight oil sifting through
Speaker 2: a tall stack of outlooks for the year ahead from
Speaker 2: banks and financial services firms all over the world.
Speaker 1: Yeah, it has become something that takes over my life
Speaker 1: in December every year. It was never intense to be
Speaker 1: that way. I started five or six years ago just
Speaker 1: gathering what I felt with the most interesting calls, and
Speaker 1: it kind of snowboard and has now become an annual
Speaker 1: Bloomberg tradition that I works through them, and I harvest
Speaker 1: the most interesting calls and put them all together in
Speaker 1: one place so that people can analyze and compare them.
Speaker 2: For folks who aren't in the city or on Wall Street.
Speaker 2: What is the utility of these year ahead outlooks? How
Speaker 2: are they used in finance?
Speaker 1: I think chiefly we have to acknowledge that a lot
Speaker 1: of this is about marketing. I think all of us
Speaker 1: realistically who work in this industry know how difficult it
Speaker 1: is to predict what's going to happen next week, next month,
Speaker 1: let alone in the year to come. And you know,
Speaker 1: repeatedly we see Wall Street calls turn out to be
Speaker 1: way off. But still the institutions come forward, largely because
Speaker 1: they're trying to communicate to clients the way they're approaching
Speaker 1: the year, what they think a client should do with
Speaker 1: their money, and try to demonstrate a little bit of
Speaker 1: their expertise, experience and their read of what could happen.
Speaker 1: I suppose there's always the long shot that they might
Speaker 1: be proved right, and at the end of the year
Speaker 1: they can crow about it. But really, I think it's
Speaker 1: a natural, it's a human thing for us all to
Speaker 1: be looking ahead when that day on the calendar comes
Speaker 1: around and we have a fresh start, fresh year ahead
Speaker 1: of us.
Speaker 2: Before we look ahead, could we look back to what
Speaker 2: was predicted for twenty twenty four And I'm just curious
Speaker 2: sort of how much of those kind of broader predictions
Speaker 2: that you surfaced from those outlooks actually came to pass.
Speaker 1: There was a lot probably above average inaccuracy in the
Speaker 1: outlooks for twenty twenty four. A lot of people felt
Speaker 1: that as the FED was and other central banks have
Speaker 1: been raising interest rates, that some kind of landing was
Speaker 1: going to occur, in economic landing. By that, we mean
Speaker 1: the business cycle was going to slow down. There were
Speaker 1: lots of people fretting about recession and eventual recession. In
Speaker 1: the event, what we got in twenty twenty four was
Speaker 1: a kind of remarkable performance from the US in particular
Speaker 1: US assets particular. We ended the year with stocks not
Speaker 1: far from all time records. We ended with credit spreads
Speaker 1: at incredibly high levels. We ended with even cryptocurrencies hitting records.
Speaker 1: So that landing softer or otherwise never really materialized. And
Speaker 1: I think that as I look back, as I think
Speaker 1: back to twenty twenty four, not many people called that,
Speaker 1: not many people expected that, And then, of course the election,
Speaker 1: so the year proved anything but predictable last year.
Speaker 2: So now let's look forward to twenty twenty five. What
Speaker 2: are the trends that you found as you went through
Speaker 2: these hundreds of predictions.
Speaker 1: So the top line that really stood out was the
Speaker 1: Trump factor. Essentially, the outlook for twenty twenty five everything
Speaker 1: marked with the words unpredictable, unpredictability, uncertainty, largely stemming from
Speaker 1: Donald Trump. Now, there is a lot of optimism as well.
Speaker 1: It should be said, I've seen that in asset prices
Speaker 1: since the election. He is seen as pro business generally,
Speaker 1: despite being quite protectionist in terms of global trade. He's
Speaker 1: expected to look at deregulation in various sectors. Lower taxes,
Speaker 1: particularly corporate tax is what people are looking for. So
Speaker 1: there's a lot of optimism, but also a lot of
Speaker 1: unknown because he does tend to talk a very tough game.
Speaker 1: Everyone expects tariffs to come, but no one's quite sure
Speaker 1: at what level he will set them. Trump brings with
Speaker 1: him this air of unpredictability, and it makes it extremely
Speaker 1: difficult to say what's going to happen, what's he going
Speaker 1: to do, and how's that going to play out.
Speaker 3: That's what everyone's everyone's talking about. Am I right?
Speaker 2: That there is this sense that uncertainty begets opportunity On
Speaker 2: Wall Street?
Speaker 1: Yeah, they always tend to say that. One of their
Speaker 1: favorite things is always are investors this year will have
Speaker 1: to be nimble, Active managers will be required, obviously, that
Speaker 1: is most often that is Wall Street and associate firms
Speaker 1: talking their own book. You know, they're in the business
Speaker 1: of managing your money for you, so they're going to
Speaker 1: talk up the need to. But certainly, I think those
Speaker 1: institutions that enter twenty twenty four with quite a downbeat
Speaker 1: or a cautious outlook, only to see the S and
Speaker 1: P five hundred posts twenty plus percent gains, I think
Speaker 1: on one level, the risk they see is being left out.
Speaker 2: After the break in twenty twenty four, no one wanted
Speaker 2: to be left out of the AI frenzy? Does Wall
Speaker 2: Street think that'll continue? And analyst views on Trump's proposed
Speaker 2: tariffs will be right back? Bloomberg. Sam Potter read hundreds
Speaker 2: of pages of predictions from market strategists and Wall Street
Speaker 2: economists to get their outlooks for twenty twenty five, and
Speaker 2: a common thread in them is President elect Trump's promise
Speaker 2: to impose more tariffs on imported goods. What is the
Speaker 2: consensus from these outlooks on whether the President elect is
Speaker 2: actually going to implement these teriffs when he becomes the president.
Speaker 2: Are there enough folks kind of making bets on that
Speaker 2: for it to be interesting to you?
Speaker 1: Yeah, it stands out very clearly that pretty much all
Speaker 1: the firms expect some form of tariffs to come in
Speaker 1: He's going to do it. I can't think of one
Speaker 1: institution who didn't think that tariffs would happen. The debate
Speaker 1: is about to what extent they'll be applied. Overall, I
Speaker 1: think the consensus is that, yes, tariff's are coming. They
Speaker 1: may be implemented quite fast, but they won't be as
Speaker 1: tough or necessarily as wide ranging as Trump has threatened.
Speaker 1: A number of the firms suggested it's a negotiating tactic
Speaker 1: and that if the likes of Europe are responsive, then
Speaker 1: he won't go fully aggressive. The exception to that, I
Speaker 1: have to say is China. Trump, you know, is no
Speaker 1: friend of China, and everyone is expecting that China is
Speaker 1: going to get hit with tariffs and there's not much
Speaker 1: they can do about it.
Speaker 2: So Sam, obviously what happens with tariffs and trade policy
Speaker 2: is a big risk for markets. What else is on
Speaker 2: Wall Street's mind that could potentially cause some trouble in
Speaker 2: your head?
Speaker 1: The thing that stood out to me that came up
Speaker 1: time and again was the theme of bond vigilantes. We
Speaker 1: have seen global governments running high deficits now for a while,
Speaker 1: a lot of big fiscal spending. So far, the bond
Speaker 1: markets have kind of gone along with that. They've been
Speaker 1: okay with it. But one of the fears, one of
Speaker 1: the significant fears, I would say, is that this tolerance
Speaker 1: of the bond investor is not infinite. While there is
Speaker 1: little appetite within governments for them to tighten their belts,
Speaker 1: if they keep going like they are, the bond vigilantes
Speaker 1: may appear. Yields could get considerably higher, and that would
Speaker 1: be potentially interests for so many economies.
Speaker 2: May maybe I can have you pivot from predictions about
Speaker 2: the global macro environment to sort of what we're seeing
Speaker 2: in terms of expectations for certain sectors. And I feel
Speaker 2: like for a couple of years now, I've talked so
Speaker 2: much about the prospects of artificial intelligence, and we've certainly
Speaker 2: seen that minted out in sort of how well it's done.
Speaker 2: Going into twenty twenty four, I think a lot of
Speaker 2: people were wondering if the AI bubble was going to burst.
Speaker 3: Lo it hasn't.
Speaker 2: Yeah, what are the expectations for st of where artificial
Speaker 2: intelligence goes from you're into twenty twenty five.
Speaker 1: Yeah, AI is one of the one of the sort
Speaker 1: of bigger themes as well. Beyond Trump, AI, as we know,
Speaker 1: has been a major feature of the market now for
Speaker 1: a couple of years. There is some debate still, as
Speaker 1: we know, as we all know, about exactly how valuable.
Speaker 3: The AI revolution is going to prove.
Speaker 1: Is it going to justify these incredible run ups in
Speaker 1: the valuations of the megacap text docs that we've seen.
Speaker 3: In the US.
Speaker 1: The view seems to be, well, there's two interesting things
Speaker 1: about it. One is that AI has not yet reached
Speaker 1: its full potential. So there is definitely a view emerging
Speaker 1: that other parts of the market, other companies are going
Speaker 1: to be able to adopt AI, and they're going to
Speaker 1: get better at adopting AI in their own industries, so.
Speaker 3: Away from tech.
Speaker 1: So there's one school of thoughts sort of recommending look
Speaker 1: for the places this is going to happen, the areas
Speaker 1: of the market that can really benefit from AI. I
Speaker 1: think healthcare is one that's mentioned. And then there's this
Speaker 1: other school of thought that one thing we all know
Speaker 1: about AI now is it's incredibly demanding in terms of
Speaker 1: energy and in terms of processing power, and a lot
Speaker 1: of the views from the outlooks suggest that the energy
Speaker 1: and infrastructure needs and not yet being met. We need
Speaker 1: power stations, we need data centers. Companies are going to
Speaker 1: have to be paid to build this stuff. So there's
Speaker 1: a real dual opportunity seen in AI. So definitely, the
Speaker 1: takeaway I had was that the AI boom, the AI
Speaker 1: revolution is still ongoing and has room to run. There
Speaker 1: were one or two firms, it must be said, who
Speaker 1: floated the idea that, rather than this being on the
Speaker 1: cusp of a revolution, what if it's just nineteen ninety
Speaker 1: nine and we're heading for another dot com style crash.
Speaker 1: That was more a risk that they had in their
Speaker 1: heads than something that they would predicted would happen. I
Speaker 1: don't think anyone wants to stand in front of the
Speaker 1: AI train at this point.
Speaker 2: My last question is you talked about how this is
Speaker 2: kind of a marketing exercise for a lot of these firms,
Speaker 2: But what's the takeaway from looking at this kind of
Speaker 2: constellation of outlooks for the area D What do you
Speaker 2: take away from it? What do you think that readers
Speaker 2: can take away from looking at these various predictions, sort
Speaker 2: of seeing what the consensus is, general consensus is and
Speaker 2: also seeing what those outliers are.
Speaker 1: I think it's a good place to get a feel
Speaker 1: for what might impact the year ahead. As mentioned, we
Speaker 1: have seen time and again that the actual predictions can
Speaker 1: prove very far from the reality. But it is always
Speaker 1: interesting to see where consensus forms because this is also
Speaker 1: where a lot of the money's going to be steered.
Speaker 1: Right If we looked at it, I'm sure we would
Speaker 1: see that a lot of the investment flows are following
Speaker 1: the patterns that are laid out in these in these outlooks.
Speaker 1: More broadly, I think of it's a way to connect
Speaker 1: with the financial wealth. You know, this is what these
Speaker 1: people are talking about in house, this is what they're
Speaker 1: talking about with clients, and it gives me a.
Speaker 3: Sense as we go into the new year that Okay,
Speaker 3: I know life.
Speaker 1: Is unpredictable, the world's going to be unpredictable, but I
Speaker 1: have some starting point. We know where we are, we
Speaker 1: know where we think we could go, and I find
Speaker 1: that incredibly useful.
Speaker 2: This is the Big Take from Bloomberg News. I'm David Gurra.
Speaker 2: To read Sam's full report on the twenty twenty five
Speaker 2: market outlook, heads to Bloomberg dot com or follow the
Speaker 2: link in our episode notes. This episode is produced by
Speaker 2: Alan Tie. It was edited by Aaron Edwards. It was
Speaker 2: mixed and sound designed by Alex Sagura and fact checked
Speaker 2: by our editorial team. Our senior producer is Naomi Shaven.
Speaker 2: Our senior editor is Elizabeth Ponso. Our executive producer is
Speaker 2: Nicole Beamster. Bor Sage Bauman is Bloomberg's head of podcasts.
Speaker 2: If you liked this episode, make sure to subscribe and
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Speaker 2: back tomorrow with the third episode in our series on
Speaker 2: the global fertility industry.