1 00:00:00,120 --> 00:00:07,280 Speaker 1: Rio taking stock continues global business news twenty four hours 2 00:00:07,280 --> 00:00:10,400 Speaker 1: a day at Bloomberg dot Com, the Radio, plus Globo 3 00:00:10,440 --> 00:00:13,720 Speaker 1: Last and on your radio. This is a Bloomberg Business 4 00:00:13,800 --> 00:00:17,279 Speaker 1: Flash from Bloomberg World Headquarters. I'm Katherine Cowdery. The stock 5 00:00:17,320 --> 00:00:19,800 Speaker 1: market is rebounding from a two day solov sparked by 6 00:00:19,800 --> 00:00:23,120 Speaker 1: the British vote to leave the European Union. There's optimism 7 00:00:23,120 --> 00:00:25,760 Speaker 1: that policy makers are committed to limit the fallout from 8 00:00:25,800 --> 00:00:29,520 Speaker 1: the UK's exit. European Central Bank President Mario Dragi said 9 00:00:29,560 --> 00:00:33,240 Speaker 1: there is a common responsibility to address the world's economic weaknesses. 10 00:00:33,680 --> 00:00:35,920 Speaker 1: Both the Bank of England and European Central Bank have 11 00:00:36,000 --> 00:00:39,040 Speaker 1: pledged to increase liquidity. We check the markets every fifteen 12 00:00:39,040 --> 00:00:42,159 Speaker 1: minutes throughout the trading day on Bloomberg Radio del Industrial 13 00:00:42,200 --> 00:00:44,879 Speaker 1: average is of one eighty seven points again and one 14 00:00:44,920 --> 00:00:48,560 Speaker 1: point one percent, trading at seventeen thousand, three hundred twenty six. 15 00:00:49,000 --> 00:00:51,480 Speaker 1: SMP five foundered up twenty six points one point three 16 00:00:51,479 --> 00:00:54,720 Speaker 1: percent to two thousand twenty six, NAZAC hire by eighty 17 00:00:54,720 --> 00:00:57,560 Speaker 1: points one and three quarters percent, trading at forty seventy 18 00:00:57,640 --> 00:01:00,040 Speaker 1: four less. Texas in the media. Crude oil up a 19 00:01:00,120 --> 00:01:03,520 Speaker 1: dollar fifty one and barrel three point three percent to five. 20 00:01:03,760 --> 00:01:06,520 Speaker 1: It's about goal down eight dollars announced at thirteen sixteen, 21 00:01:06,640 --> 00:01:09,440 Speaker 1: seventy ten year treasury down six thirty twconds with the 22 00:01:09,480 --> 00:01:12,200 Speaker 1: yield of one point four five percent. And that's a 23 00:01:12,240 --> 00:01:17,319 Speaker 1: Bloomberg Business flash. Listening to Taking Stock with Bin Box 24 00:01:17,400 --> 00:01:21,840 Speaker 1: and Kathleen Hayes on Bloomberg Radio, there's one big question 25 00:01:22,240 --> 00:01:27,640 Speaker 1: for investors starting around late Thursday night if you're in 26 00:01:27,680 --> 00:01:30,560 Speaker 1: the US, and early in the morning if you're going 27 00:01:30,560 --> 00:01:34,560 Speaker 1: into Asian trading, certainly since Friday when we learned, when 28 00:01:34,600 --> 00:01:37,760 Speaker 1: we realized that yes, the vote to leave the United Kingdom, 29 00:01:38,040 --> 00:01:41,280 Speaker 1: the Brexit vote one, and we had two days of 30 00:01:41,640 --> 00:01:45,640 Speaker 1: major declines in stock markets around the world, the pound 31 00:01:46,920 --> 00:01:50,400 Speaker 1: another huge leg in the bond market, rally joining us 32 00:01:50,400 --> 00:01:52,240 Speaker 1: down to put it all together and not just look 33 00:01:52,280 --> 00:01:55,760 Speaker 1: at Brexit, but about the presidential election, about at the 34 00:01:55,800 --> 00:01:58,080 Speaker 1: Federal Reserve, and and just then what it all means 35 00:01:58,080 --> 00:01:59,760 Speaker 1: for where you put your money at a time like 36 00:01:59,800 --> 00:02:03,040 Speaker 1: this or you keep it. Ken Fisher, founder, executive chairman 37 00:02:03,120 --> 00:02:07,240 Speaker 1: and co chief investment officer at Fisher Investments with nearly 38 00:02:07,280 --> 00:02:11,680 Speaker 1: sixty five billion dollars assets center management, usually in sunny, 39 00:02:11,680 --> 00:02:14,240 Speaker 1: beautiful Woodside, California. But joining us in our New York 40 00:02:14,280 --> 00:02:17,600 Speaker 1: studio today, Well, you know I'm not in Woodside, California. 41 00:02:17,639 --> 00:02:19,600 Speaker 1: That's where you're in southern California. No, no, no, no, 42 00:02:19,720 --> 00:02:21,600 Speaker 1: we used to be in Woodside, and in fact, we 43 00:02:21,639 --> 00:02:24,359 Speaker 1: still have five employees there, but over half of our 44 00:02:24,400 --> 00:02:28,799 Speaker 1: employees are in sunny Camus, Washington, tied over the border 45 00:02:28,840 --> 00:02:30,320 Speaker 1: from the Portland or you know that I grew up 46 00:02:30,320 --> 00:02:33,040 Speaker 1: at Olympia, Washington, I did not. Well, yes, I know 47 00:02:33,120 --> 00:02:36,000 Speaker 1: Camas very well. Literally, we have a thousand people. Were 48 00:02:36,040 --> 00:02:38,400 Speaker 1: the biggest private sector employer in the town of Camas. 49 00:02:38,480 --> 00:02:40,799 Speaker 1: You're a lucky employee. Such a I mean, we can't 50 00:02:40,800 --> 00:02:42,280 Speaker 1: we could go on on about this obvious. I'm a 51 00:02:42,280 --> 00:02:44,519 Speaker 1: big fan of Washington State at anyway, can Fisher just 52 00:02:44,600 --> 00:02:48,519 Speaker 1: showing one more reason why such a Smartphington I am 53 00:02:48,520 --> 00:02:51,560 Speaker 1: born and rays Yeah, you just sound southernmost tips proud 54 00:02:51,560 --> 00:02:54,160 Speaker 1: of it. It's the water that makes Olympia beer. By 55 00:02:54,160 --> 00:02:57,959 Speaker 1: the way, county, well, well it's the state capital. We're 56 00:02:57,960 --> 00:03:00,480 Speaker 1: gonna do another segment when these stays on Thursday and 57 00:03:00,520 --> 00:03:02,040 Speaker 1: and what it is now and what it was with 58 00:03:02,120 --> 00:03:03,919 Speaker 1: Ken Fisher. But today, we've got to get too. Breaks 59 00:03:03,960 --> 00:03:05,960 Speaker 1: in another part of the world can because what's your 60 00:03:05,960 --> 00:03:09,800 Speaker 1: immediate reaction. What I've been saying all year long, which 61 00:03:09,840 --> 00:03:12,359 Speaker 1: the last few days seems to defy, but I don't 62 00:03:12,440 --> 00:03:14,800 Speaker 1: think it truly does, is that this is a year 63 00:03:14,880 --> 00:03:18,520 Speaker 1: that started with huge uncertainty about so many topics, and 64 00:03:18,560 --> 00:03:20,640 Speaker 1: by the time we get to the end of the 65 00:03:20,720 --> 00:03:24,720 Speaker 1: year will have become a year of irregularly falling uncertainty. 66 00:03:24,800 --> 00:03:28,040 Speaker 1: And I think this fits into that pattern in that 67 00:03:28,520 --> 00:03:31,520 Speaker 1: right now there's a lot of polatility about it, and 68 00:03:31,560 --> 00:03:33,560 Speaker 1: by the time we get to the end of the year, 69 00:03:33,840 --> 00:03:36,400 Speaker 1: it will mostly be old news. I think there are 70 00:03:36,440 --> 00:03:39,120 Speaker 1: some things we can say about it that aren't widely said, 71 00:03:39,160 --> 00:03:41,400 Speaker 1: although there's been much said about it obviously in the 72 00:03:41,480 --> 00:03:43,920 Speaker 1: last few days from a lot of different angles. And 73 00:03:43,960 --> 00:03:46,600 Speaker 1: I don't want to be redundant about any of those things. 74 00:03:46,640 --> 00:03:48,720 Speaker 1: But one of the points is to think about it 75 00:03:48,760 --> 00:03:50,800 Speaker 1: a little bit from the way, which I don't think 76 00:03:50,800 --> 00:03:54,400 Speaker 1: people do that either Bernie Sanders or Don Trump might 77 00:03:54,440 --> 00:03:57,960 Speaker 1: think about it, and uh, not so much the way 78 00:03:58,120 --> 00:04:00,720 Speaker 1: MS Clinton might think about it. Not that I'm saying 79 00:04:00,760 --> 00:04:02,880 Speaker 1: good or bad about any of those three people. The 80 00:04:02,920 --> 00:04:04,480 Speaker 1: first look, I just top you for a second. Are 81 00:04:04,520 --> 00:04:07,320 Speaker 1: regularly falling uncertainty. So it seems you're saying that over 82 00:04:07,320 --> 00:04:09,560 Speaker 1: the next six months we're gonna have headline risk. Headlines 83 00:04:09,560 --> 00:04:11,280 Speaker 1: are going to hit the stock market, the bond market, 84 00:04:11,320 --> 00:04:13,560 Speaker 1: We're going to see that. But basically, if you look 85 00:04:13,600 --> 00:04:16,680 Speaker 1: at the trend line June December, we're gonna do that 86 00:04:17,040 --> 00:04:21,440 Speaker 1: resolve of itself. We know what happens, including the presidential elections, true, 87 00:04:21,560 --> 00:04:26,000 Speaker 1: isn't it, the Spanish elections, including so many things over 88 00:04:26,040 --> 00:04:29,719 Speaker 1: the course of the year, we've had some falling uncertainty already. 89 00:04:29,760 --> 00:04:31,560 Speaker 1: So you know, if you think of the beginning of 90 00:04:31,560 --> 00:04:33,560 Speaker 1: the year, there was all of the concern about China 91 00:04:33,640 --> 00:04:37,359 Speaker 1: melting down. China hasn't melted down. There was a concern 92 00:04:37,440 --> 00:04:40,640 Speaker 1: that we would have a recession in America. GDP stronger 93 00:04:40,680 --> 00:04:43,000 Speaker 1: than people thought. It's not robust, but it's stronger than 94 00:04:43,000 --> 00:04:45,160 Speaker 1: people thought. We didn't have the recession, we didn't have 95 00:04:45,240 --> 00:04:48,880 Speaker 1: the meltdown. We had a huge number of the biggest 96 00:04:48,920 --> 00:04:52,440 Speaker 1: field ever Republican candidates running for president. There's now a 97 00:04:52,560 --> 00:04:55,440 Speaker 1: presumptive nominee. There's a little bit of wiggle about what's 98 00:04:55,440 --> 00:04:58,240 Speaker 1: going to happen with the convention and a vice presidential pick. 99 00:04:58,480 --> 00:05:00,880 Speaker 1: There's the same kind of stuff on the Democratic side 100 00:05:00,880 --> 00:05:04,040 Speaker 1: with Mr Sanders wiggling around. That'll all go away. Then 101 00:05:04,040 --> 00:05:06,719 Speaker 1: you'll have a campaign, we'll get a winner. Will like 102 00:05:06,839 --> 00:05:09,960 Speaker 1: the winner better than we like that candidate now, even 103 00:05:09,960 --> 00:05:13,760 Speaker 1: though we may not like that candidate all that much 104 00:05:13,960 --> 00:05:17,200 Speaker 1: more than now. We always get a winner. The uncertainty 105 00:05:17,240 --> 00:05:19,800 Speaker 1: will fade all your long. Markets should like that. In 106 00:05:19,920 --> 00:05:22,280 Speaker 1: the second half of the year and second half of 107 00:05:22,360 --> 00:05:26,440 Speaker 1: election years in America usually are strong compared to overseas 108 00:05:26,440 --> 00:05:31,039 Speaker 1: markets because the falling uncertainty in America is bigger during 109 00:05:31,080 --> 00:05:37,000 Speaker 1: that second half than uncertainty overseas. It should work that way. Okay, 110 00:05:37,000 --> 00:05:38,520 Speaker 1: so let me ask you some of these things, specifically, 111 00:05:38,560 --> 00:05:40,080 Speaker 1: a little bit of a boom boom boom going down 112 00:05:40,080 --> 00:05:41,720 Speaker 1: the list. Okay, at the end of the year, what 113 00:05:41,760 --> 00:05:44,400 Speaker 1: will what will be the permanent impact of brexit? If 114 00:05:44,440 --> 00:05:46,880 Speaker 1: anyway we're right now, there's a concern about Italian banks. 115 00:05:46,880 --> 00:05:50,200 Speaker 1: There's a concern about just what this means that more broadly, 116 00:05:50,400 --> 00:05:52,440 Speaker 1: at the end of the year, are we gonna see 117 00:05:52,760 --> 00:05:55,200 Speaker 1: there won't be a financial crisis again, that they'll they'll 118 00:05:55,279 --> 00:05:58,040 Speaker 1: be the new Prime minister in the UK, they will 119 00:05:58,080 --> 00:06:00,520 Speaker 1: be negotiating the exit and markets will have their focus 120 00:06:00,560 --> 00:06:02,800 Speaker 1: off of it. And the big force that people don't 121 00:06:02,839 --> 00:06:05,640 Speaker 1: talk about now is what I was starting to allude 122 00:06:05,640 --> 00:06:08,240 Speaker 1: to before, which is the way Sanders or Trump might 123 00:06:08,360 --> 00:06:12,039 Speaker 1: think about this, which is that before you get to 124 00:06:12,120 --> 00:06:16,200 Speaker 1: the end of the negotiations on Brexit on both sides 125 00:06:16,240 --> 00:06:21,760 Speaker 1: of the Channel, the big fish private sector corporate global 126 00:06:22,000 --> 00:06:26,880 Speaker 1: interests that have huge stakes will have lobbied so hard 127 00:06:26,960 --> 00:06:30,760 Speaker 1: to the politicians on both sides that most of the 128 00:06:30,800 --> 00:06:35,440 Speaker 1: worst of things will have gotten mitigated to their best interests, 129 00:06:35,560 --> 00:06:39,280 Speaker 1: and we'll end up seeing something that may have And 130 00:06:39,320 --> 00:06:41,719 Speaker 1: this is the biggest risk of Brexit in my opinion. 131 00:06:41,839 --> 00:06:44,680 Speaker 1: In terms of economic policy, there's another risk as well, 132 00:06:44,720 --> 00:06:49,120 Speaker 1: as Steve Forbes articulates well, but in in in in 133 00:06:49,400 --> 00:06:54,240 Speaker 1: economic policy, the biggest risk is unintended consequences in the negotiation. 134 00:06:55,440 --> 00:07:01,160 Speaker 1: Some big things well intended architected by bureaucrats, perhaps morphed 135 00:07:01,200 --> 00:07:03,880 Speaker 1: a little bit by some private sector interest in lobbying, 136 00:07:04,200 --> 00:07:06,760 Speaker 1: and that generates something on toward a little bit like 137 00:07:06,760 --> 00:07:09,720 Speaker 1: the negative impacts in two thousand seven to nine of 138 00:07:09,880 --> 00:07:13,880 Speaker 1: f AS one seven I se seven quick summation of 139 00:07:13,920 --> 00:07:18,720 Speaker 1: what each presidential candidate would mean for the capital markets. Uh, 140 00:07:18,920 --> 00:07:21,400 Speaker 1: let me just make this simple, and then we can 141 00:07:21,400 --> 00:07:25,000 Speaker 1: get too complicated. As a general rule in American history 142 00:07:25,080 --> 00:07:27,480 Speaker 1: that people don't fully appreciate. And this goes back a 143 00:07:27,480 --> 00:07:29,080 Speaker 1: long way, as it goes back to the beginning of 144 00:07:29,120 --> 00:07:32,200 Speaker 1: the s and P. Five hundred. In a year where 145 00:07:32,240 --> 00:07:37,960 Speaker 1: we elect a Republican, the year is much stronger than 146 00:07:38,000 --> 00:07:40,520 Speaker 1: a year where we elect the Democrat, and then that 147 00:07:40,600 --> 00:07:43,880 Speaker 1: flips for both of them in the inaugural year. Democrat 148 00:07:43,920 --> 00:07:47,880 Speaker 1: inaugural initial inaugural years are much stronger than Republican initial 149 00:07:47,880 --> 00:07:52,080 Speaker 1: inaugural years. The election years the reverse. So if we 150 00:07:52,200 --> 00:07:55,600 Speaker 1: elect Mr Trump, despite all of the things people have 151 00:07:55,680 --> 00:07:59,640 Speaker 1: his concerns about him, we should assume that markets are 152 00:07:59,800 --> 00:08:03,320 Speaker 1: more or benign this year, and you pay for that 153 00:08:03,360 --> 00:08:05,480 Speaker 1: next year. On the other hand, despite all the things 154 00:08:05,480 --> 00:08:08,560 Speaker 1: you might say about Ms Clinton, if we elect her, 155 00:08:09,280 --> 00:08:12,080 Speaker 1: we should have a less robust year this year, and 156 00:08:12,120 --> 00:08:15,080 Speaker 1: then next year we get the benefit of not having 157 00:08:15,080 --> 00:08:17,520 Speaker 1: gotten too evulent in the back half of two thousand 158 00:08:17,480 --> 00:08:20,200 Speaker 1: and sixteen, having not been evulent for a long time. 159 00:08:20,600 --> 00:08:23,040 Speaker 1: People don't get this, but we're actually right for a 160 00:08:23,080 --> 00:08:28,920 Speaker 1: little bit of evulence for a while. So for investors, then, 161 00:08:29,160 --> 00:08:33,120 Speaker 1: what is the takeaway from this? My view would be 162 00:08:33,440 --> 00:08:38,080 Speaker 1: if you look at a lot of the stocks that 163 00:08:38,160 --> 00:08:41,160 Speaker 1: you might have thought to own before any of this 164 00:08:41,280 --> 00:08:47,280 Speaker 1: happened in America that have gotten whacked the most, that's 165 00:08:47,360 --> 00:08:52,640 Speaker 1: a perfect buying opportunity, Big Strong, or whatever else it 166 00:08:52,760 --> 00:08:58,640 Speaker 1: is that you particularly liked. Overweight US in my mind, 167 00:08:58,840 --> 00:09:04,880 Speaker 1: but many may to degree overweight Big Pharma that has 168 00:09:05,760 --> 00:09:15,199 Speaker 1: building proprietary pipeline by gross stable, mature but still growing 169 00:09:15,760 --> 00:09:21,120 Speaker 1: tech that is not I'm not talking about exciting tech. 170 00:09:21,360 --> 00:09:25,720 Speaker 1: You're talking like a Microsoft tech oracle hasn't hasn't done 171 00:09:25,720 --> 00:09:29,920 Speaker 1: well lately. Normally, these kinds of stocks in the latter 172 00:09:30,000 --> 00:09:34,480 Speaker 1: stages of bull markets run in spurts, and both of 173 00:09:34,480 --> 00:09:38,160 Speaker 1: those had spurts, have backed off, likely in the back 174 00:09:38,200 --> 00:09:39,719 Speaker 1: half of the year, and the year where US is 175 00:09:39,760 --> 00:09:42,640 Speaker 1: better than form, you get another spurt, and they're the 176 00:09:42,720 --> 00:09:46,400 Speaker 1: kind of things somebody would normally buy for the last 177 00:09:46,480 --> 00:09:49,840 Speaker 1: third of a bull market. And this is a long, 178 00:09:50,160 --> 00:09:52,840 Speaker 1: begrudging bull market. This bull market has been going on 179 00:09:52,920 --> 00:09:55,920 Speaker 1: and won't quite die, but it doesn't get to that 180 00:09:56,040 --> 00:09:59,319 Speaker 1: rip roaring, ebulent stage and I'm not suggesting necessarily word 181 00:09:59,320 --> 00:10:01,040 Speaker 1: about to have that. That's not where I'm going. My 182 00:10:01,120 --> 00:10:04,600 Speaker 1: point is that normally in the latter part of bowl markets, 183 00:10:05,040 --> 00:10:07,480 Speaker 1: companies just like that end up doing well in the 184 00:10:07,480 --> 00:10:10,040 Speaker 1: stock market in spurts. Okay, this is quick. I'm gonna 185 00:10:10,080 --> 00:10:12,280 Speaker 1: ask you two questions. You've got thirty seconds to answer, 186 00:10:12,360 --> 00:10:15,120 Speaker 1: So fifteen seconds for the first one. By energy stocks, 187 00:10:15,120 --> 00:10:20,600 Speaker 1: sell energy stocks. Um, I'd prefer materials non energy to energy. Okay, 188 00:10:20,679 --> 00:10:23,599 Speaker 1: they capture the same effect, but they're not perceived to. 189 00:10:24,000 --> 00:10:27,080 Speaker 1: All right, how about banks mightily beaten up the last 190 00:10:27,080 --> 00:10:29,920 Speaker 1: few days. Again, you have to separate big from small. 191 00:10:29,920 --> 00:10:32,040 Speaker 1: But if you're talking about big, which is where most 192 00:10:32,080 --> 00:10:33,959 Speaker 1: of the beat ups, then I think the answer is yes. 193 00:10:34,000 --> 00:10:36,280 Speaker 1: In particularly US, I guess I can get one more 194 00:10:36,480 --> 00:10:40,000 Speaker 1: consumer discretionary retail. Some people like it. Now. Again, i'd 195 00:10:40,040 --> 00:10:42,600 Speaker 1: be focused on making sure you're not going to get 196 00:10:42,640 --> 00:10:46,920 Speaker 1: caught by the electronic effect. Oh Amazon, Uh, it's the 197 00:10:46,960 --> 00:10:51,240 Speaker 1: elephant in the room, the very big elephant in the room. Yes, 198 00:10:51,280 --> 00:10:53,920 Speaker 1: and if you can get free shipping and everything, so 199 00:10:54,080 --> 00:10:56,560 Speaker 1: that elephant is really very enticing to so many people. 200 00:10:56,600 --> 00:11:00,280 Speaker 1: Can Fisher sticking around founder executive Chairman and co chief 201 00:11:00,280 --> 00:11:03,840 Speaker 1: Investment Officer at Fisher Investments. Our stock sitder, Dave Wilson's 202 00:11:03,880 --> 00:11:08,240 Speaker 1: coming back, Carl Ricka Donna from Bloomberg Intelligence on the 203 00:11:08,320 --> 00:11:10,720 Speaker 1: eCos side, and we're all going to mix it up 204 00:11:10,720 --> 00:11:12,360 Speaker 1: coming up on Bloomberg Radio