Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along
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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. We're gonna
Speaker 2: get to the markets, but with the politics of the weekend,
Speaker 2: and there's just no one that can help us better
Speaker 2: on the broad vision of what in God's name is
Speaker 2: going on in the heat. I mean, first of all, Tina,
Speaker 2: let's cut of the chase Emma Reti Kanu. She tells
Speaker 2: Andy Murray she won't play doubles, then she goes out
Speaker 2: and loses it. Wimbledon, I mean, it's a It was
Speaker 2: saved for the United Kingdom by Sir Lewis Hamilton winning
Speaker 2: the British Grand Prix. How did Britain get through the weekend.
Speaker 3: Well, don't forget the European Football Championship.
Speaker 4: Oh boy, that's right.
Speaker 3: Yeah, the UK won there as well. Now it's it's
Speaker 3: it's a it's a good mood in London. Dare I say,
Speaker 3: despite the fact that it did pour all weekend, we
Speaker 3: had elections where nobody objected, and you know, and everybody
Speaker 3: politely handed over and the moving van has already come
Speaker 3: and taken Richisu next stuff. So that was very civilized.
Speaker 2: Paul was hit an umbrella and a drink on his deck.
Speaker 2: Here it's like one hundred and two degrees there, Tina
Speaker 2: and he and he said, get Tina ford him and
Speaker 2: he did so. Because the arch question in America Drive
Speaker 2: time this morning learning is what is the United Kingdom election?
Speaker 2: What does the French election mean for the first Tuesday
Speaker 2: of November in America? What do we take away?
Speaker 3: It's a million dollar question, or maybe more analysts are
Speaker 3: like traders, you know, we like to spot patterns, but
Speaker 3: it isn't very obvious what the implications might be for
Speaker 3: the US, except that surprises happen in democracies. In France,
Speaker 3: a surprise really happened. I mean, even though we observed
Speaker 3: how this very unusual to the American political mind, this
Speaker 3: collaboration between different parties of where candidates would drop out
Speaker 3: of races that were calculated so that the end goal
Speaker 3: of keeping out the far right would be achieved. Even then,
Speaker 3: the polls on Friday in France did not put this
Speaker 3: new left code in first place. And there we went
Speaker 3: into the weekend still thinking that the Front I can't
Speaker 3: remember what they're called now then would be the far
Speaker 3: right party would be the largest in parliament. We all
Speaker 3: were told that every pole Friday confirmed it, and that
Speaker 3: didn't happen. They ended up third. So first takeaway is
Speaker 3: your regular public service reminder, without slacking off polsters, that
Speaker 3: polls are imperfect, People change their minds, and human behavior
Speaker 3: is incredibly difficult to model. So that is something we
Speaker 3: should take away into the US elections when we still
Speaker 3: have such narrow margins within the margin for error. So
Speaker 3: that's point one. Surprises and polling errors are are with.
Speaker 4: Us, Tina. Given the elections of both in the UK
Speaker 4: and in France, what does it mean for the UK
Speaker 4: and the European Union in terms of their relationship? Can
Speaker 4: they be closer together or is Brexit still I guess
Speaker 4: kind of the issue for the two entities.
Speaker 3: Well, Brexit was the word that you know, dare not
Speaker 3: speak its name during the campaign. Caros Starmer, now, the
Speaker 3: Prime Minister, did not actively campaign on reversing Brexit or
Speaker 3: anything like it. In fact, he said the day before
Speaker 3: Britain went to the polls that he didn't foresee that
Speaker 3: the UK would return to being a member of the
Speaker 3: European Union in his lifetime, thereby crushing the hopes of many,
Speaker 3: given just what a negative impact it's had on the
Speaker 3: UK economy and everything else. But in the first hours
Speaker 3: and days of the Starmer government taking over, we've seen
Speaker 3: some very positive noises about strengthening to about a defense
Speaker 3: packed new Foreign Minister David Lammy went to Germany first,
Speaker 3: that was a clear signal, followed by Poland and Sweden,
Speaker 3: also very much with the NATO summit in mind. So
Speaker 3: the energy that this new British government is projecting is
Speaker 3: very much about strengthening the UK's relationship with its allies
Speaker 3: in the EU and in the United States.
Speaker 4: So in the UK right now, what is the to
Speaker 4: do list for this new government. Is it simply to
Speaker 4: project stability or are there certainly some things they want
Speaker 4: to get done here well, as.
Speaker 3: Is usually the case, of course in national elections, the
Speaker 3: focus was very domestic. It's the first UK election that
Speaker 3: I can recall in my twenty two years of being
Speaker 3: here where housing reform reformed to the planning process was
Speaker 3: was front and center, and also the UK's crumbling public services.
Speaker 3: These are in the top five concerns from British voters.
Speaker 3: So the new Chancellor of the Exchequer the equivalent of
Speaker 3: Treasury Secretary Rachel Reeves, is talking a lot about delivering growth.
Speaker 3: But interestingly for US political observers, one of the lessons
Speaker 3: that the Starmer team took away from Obamacare and from
Speaker 3: Biden's industrial policies was the observation that they delivered positive
Speaker 3: results but didn't get much credit from voters for it.
Speaker 3: So they've come out against what they call deliverism, which
Speaker 3: I think is going to be interesting to watch.
Speaker 2: One final question, do you trust the polls in the
Speaker 2: United States of America?
Speaker 3: I mean trust sounds sounds like you know, it's something.
Speaker 2: Almost are useful. They are.
Speaker 3: Any poster will tell you a poll is a snapshot,
Speaker 3: not a prediction. Everybody seems to forget this, It's a
Speaker 3: snapshot of where public opinion is today. Do I trust
Speaker 3: the polls? I certainly use them as the only available
Speaker 3: quantitative measure. And I think that most people's gut instincts
Speaker 3: are terrible when it comes to reading the public mood.
Speaker 3: But the same with prediction markets, Tom. They are always wrong,
Speaker 3: and yet they're cited in every single cell side research report.
Speaker 3: We're going to need to marshal as much data as
Speaker 3: we can, but I think we need to put it
Speaker 3: in historical context and we need to think outside of
Speaker 3: the box when it comes to this US election, because
Speaker 3: the playbook is going out the door.
Speaker 2: Tina, Thank you, Tina Fordham just excellent. Can't say enough
Speaker 2: about our Fordum Forum Global for site. It was sitting
Speaker 2: room for years as well. Joining us Now a young
Speaker 2: buck Terry Haynes with Pangaea policy and I'm sorry, Terriott
Speaker 2: really hit home and I'm not frail, but there you are.
Speaker 2: What is the frailty measurement of this president? This morning?
Speaker 5: I'm in the I'm on the large font club myself. Tom,
Speaker 5: So thank thank you all, thank you all for gathering
Speaker 5: this morning. Uh, the frailty quotion is I don't know
Speaker 5: you know, I'm not a doctor, but the uh, you know,
Speaker 5: you can be frail and with it and uh and
Speaker 5: you know he bed by by public view. He goes
Speaker 5: up and down, so you know, here we are. But
Speaker 5: he still knows how to give the middle finger to people.
Speaker 5: And he did that with some force on Friday night,
Speaker 5: because he gave the middle finger to the Democratic donor
Speaker 5: class and a lot of the political class that all
Speaker 5: of a sudden decided he's not up to it.
Speaker 2: Well, jump in here, Paul, I'm rattled by Rachel Bdard's
Speaker 2: wonderful essay.
Speaker 4: So, Terry, I think if you were to ask John
Speaker 4: Q Democrat out on the street who he or she
Speaker 4: wants to be the nominee for the Democrat Party, they
Speaker 4: would probably respond, whoever can bet former President Trump the
Speaker 4: Republican nominee. Do we have any idea who that is? Today?
Speaker 5: Well, based on Bloomberg Morning Consultu polling, it's Biden. Biden's
Speaker 5: right in there with an electoral college tally that is
Speaker 5: basically even with seventy seven unknown votes in the middle.
Speaker 5: And you know, he's right there and able to be
Speaker 5: able to right the ship. So this whole business that
Speaker 5: you know, Biden's going to tank was wrong. The whole
Speaker 5: business that Trump's going to take votes from Biden is wrong,
Speaker 5: and that's really wrong.
Speaker 2: We've talked about that.
Speaker 5: I mean, whoever tentative Biden voters are, they don't want
Speaker 5: to go to Trump. And you're in a situation now
Speaker 5: where the apparently the wheels aren't falling off, and I
Speaker 5: imagine that's part of the President's calculations too, in them
Speaker 5: middle finger Friday night, Well.
Speaker 4: The President is out with a letter just this morning,
Speaker 4: addressed to Democratic lawmakers and released by his campaign. Bloomberg
Speaker 4: News is reporting and it's quote I am firmly committed
Speaker 4: to staying in this race, to running this race to
Speaker 4: the end into beating Donald Trump end quote. So there,
Speaker 4: I guess that says it all there, Terry, Is that
Speaker 4: kind of where we leave it at this point?
Speaker 5: Well, I find it interesting that everybody wants to give
Speaker 5: the smoke and mirrors on the political and donor side
Speaker 5: all the credence in the world, and Biden none of
Speaker 5: the credence. And Biden was I thought, very direct on
Speaker 5: Friday night. Regardless of what you think about the directness
Speaker 5: or you know, how you know whether it's advisable or not.
Speaker 5: I mean, that's where it is. And unless there's another
Speaker 5: glitch of the kind that existed in that debate, he's
Speaker 5: going to stay in. And that's what he said.
Speaker 2: Terry Nick Thompson at The Atlantic had a brilliant observation.
Speaker 2: I'm going to paraphrase it here. I want to be
Speaker 2: very careful, holl I do this. He said, we've become
Speaker 2: parties plural, but in the Democratic Party of an anointment
Speaker 2: by an inside group, you know, Clinton, Clinton's plural, Obamas plural,
Speaker 2: et cetera. The Bushes on the other side, maybe mister Trump,
Speaker 2: et cetera. How do we get back to our ute
Speaker 2: where they actually, you know, really had a debate with
Speaker 2: delegates involved. Do we get back to that or is
Speaker 2: it just gone?
Speaker 5: It can come back pretty easily. Actually, you only need
Speaker 5: you only need one rule change, and that's the that's
Speaker 5: the rule change that since nineteen seventy two for Democrats
Speaker 5: nineteen seventy six for Republicans, requires the delegate vote to
Speaker 5: be an assignment to be binding on the first ballot.
Speaker 5: You take that away and you get the old style
Speaker 5: conventions where people assemble and all of a sudden figure
Speaker 5: out you know what, I don't like any of these people.
Speaker 5: We want to do something else, and that used to
Speaker 5: happen a lot, It can happen again, might even happen
Speaker 5: this summer yet.
Speaker 4: So I guess that goes to the next question to her.
Speaker 4: Should Tom and I be paying attention to these conventions
Speaker 4: this summer?
Speaker 2: Sure? Absolutely?
Speaker 5: You know, right now I don't think there's I mean,
Speaker 5: right now, Trump's going to be the nominee on the
Speaker 5: Republican side right now, Biden's going to be the nominee
Speaker 5: on the Democratic side because nobody can tell him no, apparently,
Speaker 5: and you know, you've got the political class on the
Speaker 5: other side saying, well, he's got to make a decision
Speaker 5: by this Friday. Let's let's think about that. This Friday
Speaker 5: is just after the NATO summit and just before the
Speaker 5: Republican convention. So the look you want Democrats and the
Speaker 5: press is you want Biden to capitulate the Trump on
Speaker 5: the eve of Trump's convention. That's what you want. Biden's
Speaker 5: going to Biden's not going to do that. So there's not.
Speaker 2: Because of time too. I got to squeeze this in.
Speaker 2: You led with a single sentence that I've heard many
Speaker 2: others say now that all that matters is the polls.
Speaker 2: When do we see polls besides a Bloomberg pole it
Speaker 2: was out, When do we see polls that quantifies pro
Speaker 2: Biden anti Biden, for that matter, pro Trump anti Trump.
Speaker 5: I think you see them trickle in later this week,
Speaker 5: and there's probably another big trash coming just before the
Speaker 5: Republican Convention. I would urge you all to pay attention
Speaker 5: to only two things, what's actually going on in the
Speaker 5: swing states, and whether they are registered voter or likely
Speaker 5: voter polls. Likely voter polls are what matters, and registered
Speaker 5: voter polls are pretty much all you're getting right now.
Speaker 2: This has been brilliant. Terry Haynes is always thank you
Speaker 2: so much. With Pangaea policy. Everybody leaning on what Brian
Speaker 2: Bilski says. He's one of the pinatas on the street.
Speaker 2: He's been a bull, he's been correct the bears at
Speaker 2: m he joins us here from BEMO Capital Markets. We
Speaker 2: were talking about Michael Mobison and you were way out
Speaker 2: front of this. I think it was in his year
Speaker 2: he was at OpCo. He was still getting carted in
Speaker 2: bars downtown. Brian, I want to just talk about capital
Speaker 2: efficiency and the Graham Dot and Coddle doesn't work in
Speaker 2: our analysis. Now, what are we missing about the capital allocation?
Speaker 2: Capital efficiency of these technology stocks?
Speaker 6: Well, thanks for asking, Thank you so much for having
Speaker 6: us too. I mean, I think that so many investors,
Speaker 6: meaning analysts or hedge funds or whatever, have gotten away
Speaker 6: from looking at balance sheets and cash flow and everything.
Speaker 6: They don't even know what capital allocation is. And these
Speaker 6: companies have become so massively efficient. Tom, and I think
Speaker 6: that really began actually twenty two years ago this month,
Speaker 6: if you remember, you know, we were still trying to
Speaker 6: buy the dip in two thousand and one, two thousand
Speaker 6: and two, and I remember John Chambers coming out and
Speaker 6: talking about second corner earnings for Cisco and he said,
Speaker 6: we have no forecast in the market.
Speaker 7: This I was at a meeting.
Speaker 6: I was I was a strategist at Piper Jeffrey at
Speaker 6: the time, and I was having a meeting and Morgan
Speaker 6: Stanley when they moved up in the McGrath Hill building.
Speaker 6: And I remember that day in particular, and that was
Speaker 6: the bottom in the tech sector. And then from that
Speaker 6: place that time frame, tech stocks had a massive secular
Speaker 6: change in terms of how they manage their capital, how
Speaker 6: they looked at cash flow.
Speaker 7: And I think the key key thing with that.
Speaker 6: Is that through that, through the cash flow and then
Speaker 6: filtering into the income statement, how their earnings actually became
Speaker 6: massively discernible and steady.
Speaker 2: That was the key thing, Paul. Paul, you lived this
Speaker 2: as well. I mean the three of us lived as
Speaker 2: Lisa was she was in fourth grade or something like that.
Speaker 2: But Paul, what's so important here is when I say
Speaker 2: these companies are running like nineteenth century merchant banks in
Speaker 2: Hong Kong, they're running for profit, not the normal securities
Speaker 2: analysis we grew.
Speaker 1: Up with, so Brian.
Speaker 4: But there is the risk here of concentration here. How
Speaker 4: do you get comfortable with this concentration risk in the
Speaker 4: s and P five.
Speaker 6: We've done a lot of concentration work in the past,
Speaker 6: and people just kind of poop pooed it. We've shown
Speaker 6: that markets can do well out of this super concentration.
Speaker 6: We are worried, quite frankly, on a near term basis, Paul,
Speaker 6: that the market has gotten a little ahead of itself.
Speaker 7: I think that's pretty clear, and we.
Speaker 6: Have not had a correction more than three percent, and
Speaker 6: we need in the second year of this cyclical bull market.
Speaker 6: Remember our call has been resolute since twenty ten that
Speaker 6: stocks entered a secular bull market, US stocks having a
Speaker 6: secular bowl market in two thousand and ninths or got
Speaker 6: another ten years to go if you want to do
Speaker 6: the quick math. But we need a nine On average,
Speaker 6: we see a nine point four percent correction in the
Speaker 6: second year of a bull market. So we think that
Speaker 6: we can see a correction and that'll be your next
Speaker 6: great entry point. And oh, by the way, from a
Speaker 6: sentiment perspective, everybody and their mother, brothers, sister, cousin, uncle's
Speaker 6: bullish everybody and the bears are getting kicked down to
Speaker 6: the ground. And that's okay. By the way, remember bulls
Speaker 6: making money. Bears are really smart. But at the end
Speaker 6: of the day, at the end of the day, we
Speaker 6: need a bit of a refrad I think that's your
Speaker 6: next great buying opportunity in this next big secular market.
Speaker 4: All right, you are at the Bank of Montreal. Let's
Speaker 4: throw a boone to our friends up in Canada. Opportunities
Speaker 4: in Canadian equities.
Speaker 6: Oh my gosh, you know, I think you know I've
Speaker 6: been a beaman on twelve and a half years and
Speaker 6: what I've learned is it's a great stock picking market.
Speaker 6: But I've learned also that it's a massively contrarian market.
Speaker 6: When everybody's talking about one thing, go the other way.
Speaker 6: So everybody hates TD in Canada. That's my pick to click.
Speaker 6: I mean TD to twenty twenty four in Canada is
Speaker 6: what City Group was the America in twenty twenty three.
Speaker 7: Everybody hated the City Group Ember a year ago.
Speaker 6: When they're cutting costs, I think TD is a great
Speaker 6: place to be from a contraying perspective. I think from
Speaker 6: a stockpicking perspective to Paul is that you want to
Speaker 6: look at the Canadian consumer and stocks like a Ritzia
Speaker 6: in koush Tard which is circle K. You know that brand,
Speaker 6: very very strong names and Dollar Rama for that matter.
Speaker 6: So the Canadian consumer names look really really interesting to
Speaker 6: us from a longer term size.
Speaker 4: So does that mean the Canadian consumer is in pretty
Speaker 4: good shape? Well, you know, all work shows that they
Speaker 4: have a big home ownership issues.
Speaker 7: Big home ownership issues, big debt issues.
Speaker 6: But what our work shows from a back testing perspective
Speaker 6: is that the content can consumer does very well. If
Speaker 6: the market thinks they're heading into a recession. Now the
Speaker 6: Bank can is probably going to cut again, So the
Speaker 6: Bank of Canada thinks so that Canada is going into
Speaker 6: maybe a little bit of a recession. That's when you
Speaker 6: want to buy consumer discretionary.
Speaker 2: Now you got an election in the way, is well,
Speaker 2: Brian Belski, you mentioned being contrarian looking at consensus. Right now,
Speaker 2: the hedge funds zeitgeist is out of tech more towards
Speaker 2: energy and materials. How do you interpret that?
Speaker 6: Well, technically, from our US strategy perspective, we're underweight both
Speaker 6: materials and energy.
Speaker 7: Here's why.
Speaker 6: You know, when inflation's going down, the commodity price goes down,
Speaker 6: and that means the underlying fundamentals are going to be
Speaker 6: going down in energy materials. If you take a look
Speaker 6: at other areas of the world, the other there's other
Speaker 6: places to buy energy and materials, especially Canada relative to
Speaker 6: the US. And so while we own Freeport Macmaran, and
Speaker 6: we own Chevron and Exxon and some in Chesapeake and
Speaker 6: certain equity portfolios, we're not going to be overweight the
Speaker 6: sector anytime soon.
Speaker 2: What are you doing with the glory stocks at the moment? Like,
Speaker 2: if you want to talk individual stocks. Grade is a
Speaker 2: general statement, what are you doing with those stocks as
Speaker 2: you listen to their earnings?
Speaker 6: The Glory seven, I think we shouldn't come up the
Speaker 6: Glory stocks. I like, I come the Super seven. I
Speaker 6: think the Super seven could be your kind of consumer staples.
Speaker 6: They'll they'll be your core holdings. And I think whoever
Speaker 6: thought that a trade down into a five hundred or
Speaker 6: eight hundred billion dollar company like Oracles a trade down?
Speaker 7: I mean, how pathetic is that?
Speaker 2: So retail is saying these are conservative stocks, and hedge
Speaker 2: funds are saying they're a volatility of a certain persuasion.
Speaker 7: They are.
Speaker 6: And think about this Bill O'Neill, which I learned the
Speaker 6: business from a long time ago, and then Lisa was
Speaker 6: in first grade or something like that.
Speaker 7: Let's just be clear on that.
Speaker 6: But he said that the social money's a smart money
Speaker 6: and retails of dumb money. It's the exact opposite. Now,
Speaker 6: So institutional is all about what you did for me yesterday.
Speaker 6: Retail and private weal, it's all about longer terms of
Speaker 6: what I have at wealth we think is very well positioned.
Speaker 4: All right, So we're gonna have earnings starting actually Thursday.
Speaker 4: Some of the airlines come out and then Friday, JP
Speaker 4: Morgan and some of the other big banks. What are
Speaker 4: you looking for? What do you think this market has
Speaker 4: to see in this earning cycle.
Speaker 6: Well, we've said that we could see a nineteen ninety
Speaker 6: six type event. Nineteen ninety six, Micron missed earnings, and
Speaker 6: if you remember back the second half of ninety five,
Speaker 6: the last quarter ninety five into ninety six, that's when
Speaker 6: the kind of tech got going, and it was earnings
Speaker 6: and fundamentally driven. Then it was momentum in dot dot
Speaker 6: com driven, and that caused a pretty decent correction in
Speaker 6: the summer of ninety six.
Speaker 7: I think that could happen again.
Speaker 6: Now.
Speaker 7: A lot of people are giving.
Speaker 6: Me crap about looking at earnings so closely, but these
Speaker 6: stocks are priced to perfection. It's going to be more
Speaker 6: about what they're going to say going forward into into
Speaker 6: twenty twenty five and twenty twenty six in terms.
Speaker 7: Of their growth rates.
Speaker 6: So I think we could see a bit of a
Speaker 6: correction there. But listen, I think earnings on the financial
Speaker 6: side are understated. I think healthcare earnings are understated, so
Speaker 6: we could see a kick there. I think financials with
Speaker 6: respect to return on equity is way understated as well,
Speaker 6: and I think you're going to see it a surprise
Speaker 6: up there, especially in wealth management in the capital market.
Speaker 2: What's a Belskie correction looked like? I mean in this world,
Speaker 2: you know, pull a pullback three percent blogey correction.
Speaker 3: Yeah.
Speaker 6: Yeah, we need a healthy type thing that will scare people.
Speaker 6: I think anything over five to six will scare people,
Speaker 6: and then you'll have a little bit of capitulation, let's
Speaker 6: call it. In this type of market, two PM.
Speaker 7: Let's feel some pain.
Speaker 2: Just goes out to twenty five or thirty the good
Speaker 2: old days, the good old days.
Speaker 7: We don't want people to lose money.
Speaker 6: Let's be clear. We don't like it when people lose money.
Speaker 6: But we do like it when we see a little
Speaker 6: bit of air come out of this. And that's I
Speaker 6: think the needs to happen.
Speaker 2: Single best idea stock go Netflix, Netflix.
Speaker 6: Yeah, so think about this, what's happening in paramount Think
Speaker 6: about this. So our theme for communication services is cash,
Speaker 6: content and consolidation.
Speaker 7: It has been all year.
Speaker 6: We were overweight last year, neutral this year because we
Speaker 6: thought there's gonna be some consternation.
Speaker 7: Netflix.
Speaker 6: This is the Kleenex of streaming it's the clear winner.
Speaker 6: It's the clear winner, and we think it's going to
Speaker 6: continue to win while all these others try to combine
Speaker 6: to take it on.
Speaker 4: I mean, Paramount just the opposite side of the trade.
Speaker 4: They get taken out today arguably down now down you
Speaker 4: know almost you know about three quarters one percent, So
Speaker 4: go figure out.
Speaker 2: Okay, sorry.
Speaker 6: The American consumers super smart though they know the product
Speaker 6: that Paramount is offering, what they're gonna be streaming. Just
Speaker 6: like on our retail side, they're super smart. They're going
Speaker 6: to go to They're going to go to Costco and
Speaker 6: Walmart all the time to get their stuff, but they're
Speaker 6: also going to go to like Lulu to get their
Speaker 6: specialized stuff.
Speaker 2: That's Lisa, you know, I can understand that. Brian. We
Speaker 2: got a couple of minutes left with you. We've extended
Speaker 2: this interview because it's frankly, it's important, and Brian, I
Speaker 2: want you to talk about the job now where cab
Speaker 2: drivers don't have an S and P on their lap
Speaker 2: or a Valian line next to them looking at individual stocks,
Speaker 2: How is your world change when everybody's in ETFs and
Speaker 2: index funds within our square square to point nine to
Speaker 2: eight it's a different world.
Speaker 7: It's a different world.
Speaker 6: Like when I used to come to New York, you'd
Speaker 6: ask when the cab drivers and the uber drivers were
Speaker 6: talking about stocks, you knew it was the end. And
Speaker 6: now you have to kind of pull it out of.
Speaker 2: Them a little bit.
Speaker 6: It's more about when you're in stores and you're talking
Speaker 6: or in restaurants and you're talking about how business is.
Speaker 7: You have to kind of do that bottles up.
Speaker 6: But my biggest problem with the people that do what
Speaker 6: I do, and let's face it, it's a really, really
Speaker 6: tough job. Too many strategies and comics are worried about
Speaker 6: the market levels. They're forgetting that the stock market is
Speaker 6: a market of stocks. I think that's where most of
Speaker 6: them have been wrong in terms of their market targets.
Speaker 4: Let's talk market targets. You got SBX. I think at
Speaker 4: fifty six hundred, you guys are one of the first
Speaker 4: on the street to raise your targets. Initiated a fifty
Speaker 4: five hundred bull case back in November of twenty three.
Speaker 4: Here we are, We're darn close to fifty six hundred.
Speaker 4: Now where do we go?
Speaker 2: Well, well, it's call it today.
Speaker 1: The markets are in there listen.
Speaker 6: I think I still think we're gonna get a better
Speaker 6: buying opportunity. What's really cool about corrections are and especially
Speaker 6: in these big bowl markets where fundamentals actually early. Verybody
Speaker 6: keeps talking about momentum, but on average you get like
Speaker 6: a fifteen percent rally once we make a higher low, right,
Speaker 6: And so it depends upon where we kind of see
Speaker 6: the market going down in this cuestion.
Speaker 7: Tom asked a great question, what does a crustion look like?
Speaker 7: To us? We would love to see a ten percent correction.
Speaker 6: We're going to get there. I don't know if we
Speaker 6: see if we see an eight percent correction, we're going
Speaker 6: to see a twelve percent correction because we're going to
Speaker 6: not see ten exactly. So you know, we think that
Speaker 6: there's a likelihood of fifty six hundred is probably too low.
Speaker 7: We'll see if we have to adapt that. But we're
Speaker 7: very very very very comfortable with where we are right now.
Speaker 2: Brian Belski, thank you so much the BEMO Capital Markets
Speaker 2: there inequities. I can't say enough about the acuity of
Speaker 2: his research notes plural. We protect the copyright of all
Speaker 2: of our guests. Get that from BEMO Capital Markets. He's
Speaker 2: got four. They sound like eight notes or whatever. Yeah,
Speaker 2: he's got some intern way over it, way too much energy.
Speaker 2: His oldest son sounding like afidote. Yeah, he'll be in.
Speaker 2: He's looking at Netflix now. Used to be the note
Speaker 2: you got from Belski and now he's go you run.
Speaker 2: It's like it's like, you know, he's good. How many
Speaker 2: interns do you have? Skins? I have no interns. You
Speaker 2: have no interns. Listen, I've got I've got one associate.
Speaker 2: I Lincoln has like five interns. What's the difference.
Speaker 6: It's all about efficiency at PMO, Man, we're efficiency ratio
Speaker 6: man e largest making North America, fourth largest making commercial
Speaker 6: fourth Marrow's commercial wake in the United States.
Speaker 2: As are you and Ian Lincoln? On speaking terms? What's that? Oh? Yes,
Speaker 2: of course we are. What if we get a three
Speaker 2: seventy five three eighty ian lncoln yield? What does it
Speaker 2: do to your world? Nothing?
Speaker 6: Nothing, because I think it's I think we're three fifty
Speaker 6: to four to fifty for a while, and that's normalization.
Speaker 7: This is really good.
Speaker 2: Three seventy five four Take it, Brian Bells, thank you
Speaker 2: so much. Beam on capital markets in the front pages
Speaker 2: of Lisa Matteo show. At least I thought it was
Speaker 2: a great list. What do you got?
Speaker 1: All right?
Speaker 2: Boomer?
Speaker 8: Not sure if you guys have done this, but a
Speaker 8: lot of boomers are passing their wealth earlier to their
Speaker 8: millennial kids.
Speaker 1: There's a little bit of a catch though.
Speaker 2: It's called tuition.
Speaker 8: They're telling business Insider the kids, if they get the
Speaker 8: money now, they're not going to expect that inheritance later.
Speaker 8: So you take it now, enjoy it because you're not
Speaker 8: kidding anything. Later they can give them yearly cash gifts,
Speaker 8: paying for grandkids though, to go to private school, go
Speaker 8: to college. They're helping them with down payments for homes.
Speaker 8: But the millennials are saying they could use the help
Speaker 8: because what they made, you know, compared to what their
Speaker 8: parents did at that same time, is not the same.
Speaker 2: There's something we'll shifted here. This came up this weekend.
Speaker 2: I mean, when we were kids, you knew you'd go three,
Speaker 2: four or five steps down from your parents. You know,
Speaker 2: if you grew up advantaged, you knew you weren't advantage.
Speaker 2: My first apartment was above a pizza parlor on Monroe Avenue,
Speaker 2: down from Getsies hot Dogs, and every night at two
Speaker 2: am the cockroaches came upstairs. Kids don't want to do that. Now,
Speaker 2: they don't they want to don't want.
Speaker 4: To do I don't know, you know what we did,
Speaker 4: but that transfer of wealth. I mean, you hear from
Speaker 4: these financial advisors are saying it's gonna be trillions of
Speaker 4: dollars from the baby boomer generation to the next. And
Speaker 4: how do you get it from one generation to the
Speaker 4: next and most text social way, and that is an
Speaker 4: industry in and of itself.
Speaker 2: I'll go with that, but also for me, and what's
Speaker 2: important here is what do they do with the money?
Speaker 4: I mean, I told my kids the last check I write,
Speaker 4: it's gonna bounce. Baby.
Speaker 2: There we go, cruel and unusual swinging.
Speaker 8: So we talked about a higher housing costs, right, because
Speaker 8: that's the problem. A lot of kids can't afford to
Speaker 8: get the house. But it's also pushing couples to move.
Speaker 1: In together earlier.
Speaker 8: So I know, I moved in with my husband before
Speaker 8: like we were married. Oh yeah, Dad wasn't happy, but
Speaker 8: that's a but it did help, you know, financially because
Speaker 8: we were able to split the rent.
Speaker 1: So a lot of couples are doing that.
Speaker 8: But the problem is relationship experts are saying that it's
Speaker 8: causing some friction within the couples, so they're breaking apart earlier.
Speaker 8: But hey, I'm going on twenty five years.
Speaker 1: So it.
Speaker 8: Worked for you, but it's not working for everybody, and
Speaker 8: that's the problem.
Speaker 4: But that you can see the economics. Housing affordability is
Speaker 4: just a huge issue.
Speaker 2: A lot of people sing in a country. Can we
Speaker 2: all agree the biggest thing is a single tax joint
Speaker 2: tax differential. I don't, I don't get okay. They want
Speaker 2: to promote being married, so if you joint, you pay
Speaker 2: less taxes than if you're single. And I just I
Speaker 2: never got it. No, it's a big number. I mean
Speaker 2: for a lot of people.
Speaker 4: All right, what else you Lisa, Okay?
Speaker 2: Reach too much? Informations?
Speaker 8: Retailers they're rushing to ship their holiday goods earlier because
Speaker 8: they want to beat the rising freight costs. You have
Speaker 8: companies like Mayor saying that they're going to increase a
Speaker 8: freight costs, so they want to get ahead of it, right,
Speaker 8: So they they're brooking their peak season forward moving goes
Speaker 8: from December holidays as early as April and May instead
Speaker 8: of July and October because they don't want to risk
Speaker 8: the empty shelves that we saw during the pandemic.
Speaker 1: So they're moving these these dates up higher. But it's
Speaker 1: a risks rising.
Speaker 2: Is it because of oil or is it the upset
Speaker 2: in the Red Sea?
Speaker 1: I was about to say the Red Sea. It's a
Speaker 1: lot to do with the Red.
Speaker 4: Sea financial times. This is a good financial times and
Speaker 4: attacks on ships in the Red Sea of forced carriers
Speaker 4: to take longer transit routes, injecting unpredictability and global supply
Speaker 4: chains that increase port congestion from Asia to the US
Speaker 4: East coast. So but again that means more inventory on
Speaker 4: the retailers, right, it's all so that could be a
Speaker 4: margin issue.
Speaker 8: Oh that's interesting, right, because they're they're they're hoping that
Speaker 8: they have the consumer demand.
Speaker 2: Hope that's right here that we did. We did the
Speaker 2: children's names thing earlier. Yeah, you know, it's a slot.
Speaker 2: I'm getting the amount of hate mail gets off the chart.
Speaker 2: Everybody named their daughter deaf and in fun of it,
Speaker 2: I'm sorry, folks, I meant no ill Willy. We're just
Speaker 2: the messengers we start calling you. How about that that
Speaker 2: was one of the names.
Speaker 8: My goodness, Now, what kind of socks are you wearing
Speaker 8: on your feet when you wear sneakers, Let's say, are
Speaker 8: you wearing the low cut socks or the high cut socks,
Speaker 8: because it's kind of an indication of how old you are.
Speaker 1: So I don't know, I wear the low cut side.
Speaker 8: But apportently it's this controversy that's kicking around about your
Speaker 8: sock height.
Speaker 1: So the higher socks where it covers the ankles, you know, like.
Speaker 4: And even with sneakers, they wear the dark socks, which
Speaker 4: you I would to get left off the playground if
Speaker 4: I did that back in the day.
Speaker 1: But now it's the opposite. So you have this shift.
Speaker 8: So now it's popular to wear the higher cut sock
Speaker 8: and not the low ones. Apparently I'm not the cool
Speaker 8: mom anymore. I was told that a million times. So
Speaker 8: this is a new thing. Teens and gen z they
Speaker 8: wearing the higher.
Speaker 2: So it's important here. And I go to surveillance fashioned
Speaker 2: slave data them cam advisers, I mean roth, I should say,
Speaker 2: and you know Darta wears the socks with like the
Speaker 2: flip flops or the and I mean you know, this
Speaker 2: is a major source of conversation. You know, after thought
Speaker 2: almost threw a baked potato at me. Yeah, I mean,
Speaker 2: what do you think the socks with sandals?
Speaker 1: The kids do that with the little slides they wear.
Speaker 2: Dartist style in that he's out on some islands somewhere.
Speaker 2: You know, what do you what do you think? I mean,
Speaker 2: I'll be on YouTube chat. I mean should I can
Speaker 2: see me in the doc Martin slides with the socks.
Speaker 8: But do you have to be the high cut slot
Speaker 8: the socks. You can't wear the ankle socks anymore?
Speaker 1: Parents ankle socks are yes, it says.
Speaker 4: That you're seventies. Going back, you had the the white
Speaker 4: athletic socks up to the knees.
Speaker 1: Oh yeah, like the basketball players, and.
Speaker 4: Then maybe some wing WANs on top of we were
Speaker 4: two socks, so we had the tube socks going up
Speaker 4: to the the then we had what's called wigwams. Go
Speaker 4: google that, Go google that wigwams.
Speaker 1: And you kind of push them down, you switch them down.
Speaker 4: That's what you were Trent and Cyo basketball. That was
Speaker 4: the uniform back in the case.
Speaker 2: If I can bring us back to something to do
Speaker 2: with the investment, I'm sorry. This weekend inflation is pernicious.
Speaker 2: It's out there in every single transaction and the bow ties,
Speaker 2: a suit and Ti crew we talked to. They're not
Speaker 2: talking the same thing I'm living or anybody else's living.
Speaker 2: It's tangible, the inflation. It's just it's every single thing.
Speaker 8: It's ever you see in the restaurant, you see it
Speaker 8: at the grocery store, you see it.
Speaker 1: Did you see the price of the bow ties? Did
Speaker 1: they go up?
Speaker 2: Yeah? They did? Yes, thank you. It's a French provider.
Speaker 2: I think they'll still be in business after the French election.
Speaker 4: But it's just the absolute level of price isn't And
Speaker 4: so the question I've here when will we get accustomed
Speaker 4: to this new level.
Speaker 2: We'll do when our wages go up?
Speaker 4: Yeah, but the way has been going up faster than
Speaker 4: inflation several years. But still not there. Still not there,
Speaker 4: I think. So that's the question, when will we all
Speaker 4: become accustomed to this new price level that we don't
Speaker 4: think about anymore?
Speaker 2: Lisa Matteo with a strong newspaper segment. Here on a Monday,
Speaker 2: So thank you. This is a Bloomberg Surveillance podcast, bringing
Speaker 2: you the best in economics, finance, investment, and international relations.
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