1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:11,920 --> 00:00:16,320 Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays 3 00:00:16,360 --> 00:00:19,840 Speaker 2: at seven am Eastern on applecar Player, Android Auto with 4 00:00:19,880 --> 00:00:23,320 Speaker 2: the Bloomberg Business App. Listen on demand wherever you get 5 00:00:23,360 --> 00:00:26,200 Speaker 2: your podcasts, or watch us live on YouTube. 6 00:00:26,840 --> 00:00:30,600 Speaker 3: Christina Hooper, Chief Global Market Strategy to Vetsco, thank you 7 00:00:30,640 --> 00:00:32,760 Speaker 3: for joining us here this morning. Talk to us about 8 00:00:32,760 --> 00:00:34,360 Speaker 3: the FED, talk to us about what happens in a 9 00:00:34,720 --> 00:00:35,440 Speaker 3: Trump world. 10 00:00:37,400 --> 00:00:40,800 Speaker 4: So I think the FED was right to be very 11 00:00:40,800 --> 00:00:44,520 Speaker 4: emphatic in saying that they're not going to guess, assume, 12 00:00:44,760 --> 00:00:48,559 Speaker 4: speculate about what policies are coming down the pike and 13 00:00:48,600 --> 00:00:52,040 Speaker 4: the timing of them. So at this point it's all 14 00:00:52,159 --> 00:00:55,560 Speaker 4: about the data and what is actually showing up in 15 00:00:55,600 --> 00:01:00,600 Speaker 4: the data today. Now there is some risk that inflation resurges, 16 00:01:01,360 --> 00:01:04,080 Speaker 4: and that has absolutely nothing to do with who is 17 00:01:04,080 --> 00:01:06,200 Speaker 4: sitting in the White House. So I think the FED 18 00:01:06,319 --> 00:01:08,640 Speaker 4: needs to be super careful. And so I think the 19 00:01:09,200 --> 00:01:13,959 Speaker 4: FED is not necessarily going to cut in December. It 20 00:01:14,040 --> 00:01:16,560 Speaker 4: is not a FEDA compley. It's going to be really 21 00:01:16,600 --> 00:01:19,920 Speaker 4: dictated by what we see released in the next weeks 22 00:01:20,240 --> 00:01:23,959 Speaker 4: before the meeting. I do think there's probably some caution 23 00:01:24,120 --> 00:01:27,440 Speaker 4: in terms of worrying a bit about what could happen 24 00:01:27,600 --> 00:01:30,440 Speaker 4: if we see a lot of Trump policies come to 25 00:01:30,480 --> 00:01:35,160 Speaker 4: fruition in terms of stimulating growth and higher inflation. But 26 00:01:35,240 --> 00:01:37,479 Speaker 4: at this point the Fed is not going to act 27 00:01:37,520 --> 00:01:39,959 Speaker 4: on it, and I don't think it will until it 28 00:01:40,000 --> 00:01:42,480 Speaker 4: shows up in the data or it's reliable enough in 29 00:01:42,560 --> 00:01:45,200 Speaker 4: terms of the scope and the timing that they can 30 00:01:45,240 --> 00:01:47,080 Speaker 4: add it to their economic projections. 31 00:01:47,120 --> 00:01:49,600 Speaker 3: Well, Christina, I was listening to Bruce Casman over the weekend, 32 00:01:49,680 --> 00:01:52,000 Speaker 3: he and Joe Lupp in at Any Rate podcast, the 33 00:01:52,080 --> 00:01:52,760 Speaker 3: JP Morgan. 34 00:01:52,800 --> 00:01:53,640 Speaker 5: We know who they are. 35 00:01:53,920 --> 00:01:57,200 Speaker 3: You know they're talking about revising up growth expectations in 36 00:01:57,200 --> 00:02:00,320 Speaker 3: the US, revising them down in the Eurozone and China. 37 00:02:00,360 --> 00:02:02,040 Speaker 3: Do you agree with that and what is the impact 38 00:02:02,080 --> 00:02:03,000 Speaker 3: on inflation from that? 39 00:02:04,960 --> 00:02:07,760 Speaker 4: Well, I don't think that that's wrong. I don't know 40 00:02:07,840 --> 00:02:10,800 Speaker 4: if it's going to be as dramatic as we assume. 41 00:02:11,480 --> 00:02:14,440 Speaker 4: I certainly think that US growth is going to be stronger. 42 00:02:14,480 --> 00:02:16,720 Speaker 4: It has been stronger, So this would just be a 43 00:02:16,720 --> 00:02:19,560 Speaker 4: continuation of a trend that we've seen, and it might 44 00:02:19,639 --> 00:02:23,440 Speaker 4: get some kind of boost from Trump policies. Again, we 45 00:02:23,600 --> 00:02:25,400 Speaker 4: just don't know the scope, we don't know the timing, 46 00:02:25,680 --> 00:02:27,560 Speaker 4: we don't know what policies they'll focus on. 47 00:02:27,720 --> 00:02:28,040 Speaker 5: First. 48 00:02:29,280 --> 00:02:32,840 Speaker 4: I do think that the Eurozone could face some headwinds, 49 00:02:32,880 --> 00:02:34,920 Speaker 4: but I do think that we're going to be as 50 00:02:34,960 --> 00:02:38,520 Speaker 4: seeing a reacceleration and growth there as well. It's just 51 00:02:38,560 --> 00:02:40,720 Speaker 4: not going to be as strong as in the United States. 52 00:02:41,200 --> 00:02:46,120 Speaker 4: So I don't think it's as dramatic a situation. I 53 00:02:46,120 --> 00:02:48,560 Speaker 4: don't think there's going to be that significant a change 54 00:02:48,800 --> 00:02:51,359 Speaker 4: from what we anticipated months before the election. 55 00:02:51,600 --> 00:02:53,840 Speaker 3: Well, Christina, here's the disconnect for me. Like I agree 56 00:02:53,880 --> 00:02:56,120 Speaker 3: with you, it's going to take time for fiscal stimulus 57 00:02:56,160 --> 00:02:57,920 Speaker 3: to come through. It's going to take time, quite frankly, 58 00:02:57,960 --> 00:02:59,640 Speaker 3: for the towers to come through, right because he's going 59 00:02:59,680 --> 00:03:01,639 Speaker 3: to use that is negotiating to them by he I mean, 60 00:03:01,840 --> 00:03:04,239 Speaker 3: you know President elect Donald Trump. But you know, sentiment 61 00:03:04,520 --> 00:03:06,800 Speaker 3: is you know, not to be played with, not to 62 00:03:06,800 --> 00:03:08,440 Speaker 3: be trifled with. If you follow me here, I mean, 63 00:03:08,480 --> 00:03:11,519 Speaker 3: sentiment can start pricing this into markets far more quickly, 64 00:03:11,560 --> 00:03:14,639 Speaker 3: far more you know, rapidly than we otherwise expect. I mean, 65 00:03:14,639 --> 00:03:16,880 Speaker 3: what's the potential for that to happen between now and 66 00:03:16,919 --> 00:03:17,600 Speaker 3: the end of this year. 67 00:03:19,240 --> 00:03:21,520 Speaker 4: Oh, I certainly think there's the potential for that to happen. 68 00:03:21,600 --> 00:03:24,600 Speaker 4: We're already seeing a very visceral reaction in markets. But 69 00:03:24,680 --> 00:03:27,760 Speaker 4: I just want to draw the distinction between what happens 70 00:03:27,760 --> 00:03:30,320 Speaker 4: in markets and what happens in the economy. We could 71 00:03:30,320 --> 00:03:35,680 Speaker 4: see very well markets discount strong economy in twenty twenty five, 72 00:03:35,760 --> 00:03:37,240 Speaker 4: and I'm not going to argue with that. I do 73 00:03:37,280 --> 00:03:39,920 Speaker 4: think we're going to see a reacceleration in the US, 74 00:03:40,400 --> 00:03:45,200 Speaker 4: but I do think markets have a way of reacting very, 75 00:03:45,520 --> 00:03:50,520 Speaker 4: very robustly sometimes to what they think will happen, and 76 00:03:50,560 --> 00:03:53,800 Speaker 4: then there's a point where markets are likely to moderate. 77 00:03:54,000 --> 00:03:56,440 Speaker 4: It's not dis similar to what we saw in twenty sixteen. 78 00:03:56,840 --> 00:03:59,640 Speaker 4: We saw a very strong rally and some retracing, so 79 00:03:59,680 --> 00:04:02,960 Speaker 4: I would anticipate that's likely. But I certainly think we're 80 00:04:03,000 --> 00:04:07,480 Speaker 4: going to see the exuberance in markets in a more 81 00:04:07,560 --> 00:04:11,040 Speaker 4: distinct way than we will see show up in economic growth. 82 00:04:11,160 --> 00:04:14,640 Speaker 4: Now that's not to discount that psychology plays a role 83 00:04:15,400 --> 00:04:18,160 Speaker 4: that when sentiment is better on the part of consumers 84 00:04:18,160 --> 00:04:20,320 Speaker 4: on the part of businesses, they spend more. And I 85 00:04:20,360 --> 00:04:22,200 Speaker 4: also think we're just going to get a bump from 86 00:04:22,240 --> 00:04:27,479 Speaker 4: having election certainty. The biggest risk that was before going 87 00:04:27,480 --> 00:04:30,960 Speaker 4: into the election, was that we'd get some kind of challenge, 88 00:04:31,520 --> 00:04:35,160 Speaker 4: we'd have prolonged uncertainty. That's behind us. And so now 89 00:04:35,520 --> 00:04:38,560 Speaker 4: all those spending plans and hiring plans that had been 90 00:04:38,560 --> 00:04:42,400 Speaker 4: held in abeyance by companies, and all those spending plans 91 00:04:42,400 --> 00:04:46,800 Speaker 4: that had been held in abeyance by consumers, that can 92 00:04:46,839 --> 00:04:47,800 Speaker 4: start again, all. 93 00:04:47,800 --> 00:04:52,599 Speaker 5: Right, Christina, chief Global market strategist for Investco. Where do 94 00:04:52,600 --> 00:04:53,279 Speaker 5: you go globally? 95 00:04:53,320 --> 00:04:53,560 Speaker 2: Here? 96 00:04:53,960 --> 00:04:54,680 Speaker 5: Knowing what we know? 97 00:04:56,920 --> 00:05:00,960 Speaker 4: So we certainly know that policy are going to be 98 00:05:01,360 --> 00:05:05,320 Speaker 4: supportive for the US economy, but that doesn't necessarily mean 99 00:05:05,440 --> 00:05:10,440 Speaker 4: that equity that economies outside the US are left out. Yes, 100 00:05:10,480 --> 00:05:13,120 Speaker 4: we might see some headwinds in the shorter term, but 101 00:05:13,200 --> 00:05:16,840 Speaker 4: I do think, as I mentioned, the European economy as 102 00:05:16,839 --> 00:05:21,599 Speaker 4: well as the UK economy will reaccelerate next year. I 103 00:05:21,600 --> 00:05:24,520 Speaker 4: think we could see a scenario where, especially if we 104 00:05:24,640 --> 00:05:28,479 Speaker 4: work out the tariff issues quickly, where we see a 105 00:05:28,560 --> 00:05:33,200 Speaker 4: global economy that reaccelerates. And so that means investors need 106 00:05:33,279 --> 00:05:37,280 Speaker 4: to be thinking broadly. It's not just about US equities, 107 00:05:37,360 --> 00:05:40,719 Speaker 4: especially because valuations are so high. So within the US, 108 00:05:41,160 --> 00:05:44,320 Speaker 4: I would add to exposure to small and midcaps, because 109 00:05:44,320 --> 00:05:47,240 Speaker 4: I think those will benefit very much from the environment 110 00:05:47,520 --> 00:05:50,920 Speaker 4: from fetising as well as Trump policies. And then of course, 111 00:05:51,240 --> 00:05:54,360 Speaker 4: looking globally, I think there's a lot of opportunity in 112 00:05:54,560 --> 00:06:01,120 Speaker 4: lower valuation places UK equities, emerging markets equities. So I 113 00:06:01,160 --> 00:06:05,640 Speaker 4: think we need to to be focused not just on growth, 114 00:06:05,680 --> 00:06:09,359 Speaker 4: but on valuations, and that leads to diversification. 115 00:06:09,279 --> 00:06:12,640 Speaker 3: Emerging market equities. That is music from my ears. No no, no, 116 00:06:12,760 --> 00:06:14,520 Speaker 3: I'm kidding. I'm kidding, you know, but I would love 117 00:06:14,520 --> 00:06:16,360 Speaker 3: to ask you. I mean, obviously we can't ignore what's 118 00:06:16,360 --> 00:06:18,080 Speaker 3: going on in currencies here, and we've come a long 119 00:06:18,120 --> 00:06:20,359 Speaker 3: way in a very short period of time. Initially, you know, 120 00:06:20,400 --> 00:06:22,440 Speaker 3: we saw mechs, we saw the China yuon, we saw 121 00:06:22,440 --> 00:06:24,520 Speaker 3: the Korean one all depreciate on the back of the 122 00:06:24,560 --> 00:06:27,280 Speaker 3: Trump victory, and then you know, came all the way 123 00:06:27,320 --> 00:06:29,279 Speaker 3: back almost right in the case of the Mexican peso, 124 00:06:29,320 --> 00:06:31,880 Speaker 3: it actually appreciated for a bit there, and then Friday 125 00:06:31,920 --> 00:06:33,760 Speaker 3: we kind of melted down and we continue to be 126 00:06:33,839 --> 00:06:35,760 Speaker 3: melting down here. Christina, talk to us a little bit 127 00:06:35,800 --> 00:06:38,200 Speaker 3: about what the dollar. Well, you know, what is it 128 00:06:38,279 --> 00:06:38,960 Speaker 3: telling you here? 129 00:06:40,800 --> 00:06:43,000 Speaker 4: So what I think it's telling us is that there's 130 00:06:43,080 --> 00:06:46,640 Speaker 4: a lot more to the currency picture than who is 131 00:06:46,680 --> 00:06:49,839 Speaker 4: sitting in the White House. In fact, more is dictated 132 00:06:49,880 --> 00:06:52,800 Speaker 4: by FED policy, and so I think we have to 133 00:06:52,839 --> 00:06:56,760 Speaker 4: recognize that the US dollar is likely to weaken, but 134 00:06:57,000 --> 00:07:00,880 Speaker 4: it's going to have different relationships with different made currencies, 135 00:07:01,279 --> 00:07:05,640 Speaker 4: and it's going to ease more relative to some currencies 136 00:07:05,680 --> 00:07:08,520 Speaker 4: than others, and that will play out over time as 137 00:07:08,520 --> 00:07:11,320 Speaker 4: we see what other central banks are doing as well. 138 00:07:11,840 --> 00:07:14,120 Speaker 4: In addition to the growth picture, I think it's really 139 00:07:14,160 --> 00:07:18,840 Speaker 4: important to recognize that you as a strong US economy 140 00:07:19,120 --> 00:07:23,640 Speaker 4: doesn't mean that other economies necessarily suffer. So we have 141 00:07:23,720 --> 00:07:26,640 Speaker 4: to just watch this play out. But to me, what 142 00:07:26,680 --> 00:07:30,119 Speaker 4: it's telling us is that this is not just who's 143 00:07:30,120 --> 00:07:31,080 Speaker 4: sitting in the White House. 144 00:07:31,480 --> 00:07:33,600 Speaker 5: All right, Christina, thank you so much for joining us. 145 00:07:33,880 --> 00:07:38,360 Speaker 5: Christina Hooper, she is chief of Global market Strategist for Investigo, 146 00:07:38,440 --> 00:07:41,000 Speaker 5: giving us her thoughts on these markets. 147 00:07:46,840 --> 00:07:50,679 Speaker 2: You're listening to the Bloomberg Surveillance Podcast. Catch us live 148 00:07:50,800 --> 00:07:54,080 Speaker 2: weekday afternoons from seven to ten am. Easter Listen on 149 00:07:54,160 --> 00:07:57,400 Speaker 2: Apple car Play and Android Auto with a Bloomberg Business app, 150 00:07:57,520 --> 00:07:59,240 Speaker 2: or watch us live on YouTube. 151 00:07:59,480 --> 00:08:02,520 Speaker 5: Let's check in Zach Cohen congressional reporter. I don't know 152 00:08:02,520 --> 00:08:04,720 Speaker 5: what he's doing down there. I mean, Zach, you still 153 00:08:04,760 --> 00:08:07,960 Speaker 5: have some house races that have yet to be called. 154 00:08:08,880 --> 00:08:10,679 Speaker 5: Where are we what's going on with those things? 155 00:08:11,560 --> 00:08:13,760 Speaker 6: Sure, Republicans are certainly the driver's seat at this hour. 156 00:08:14,160 --> 00:08:16,640 Speaker 6: They've maitted at least three seats, you know, picked up 157 00:08:16,640 --> 00:08:18,760 Speaker 6: a number of others. But Democrats have also flepped a 158 00:08:18,760 --> 00:08:21,400 Speaker 6: couple of seats, for a total of plus three at 159 00:08:21,400 --> 00:08:24,240 Speaker 6: this juncture. Obviously, the medic number to watches two eighteen 160 00:08:24,600 --> 00:08:27,760 Speaker 6: on Bloomberg dot com, and right now they're hovering at 161 00:08:27,760 --> 00:08:30,000 Speaker 6: around two fifteen at least, And so they're really on 162 00:08:30,040 --> 00:08:32,040 Speaker 6: the margin here. There's a couple of outstanding of races, 163 00:08:32,480 --> 00:08:35,160 Speaker 6: mostly west of the Mississippi River, many of them in California, 164 00:08:35,400 --> 00:08:39,240 Speaker 6: some in Iowa, Arizona, Alaska, even And so as those 165 00:08:39,240 --> 00:08:41,520 Speaker 6: ballots continue to come in, especially a mail in ballasts 166 00:08:41,559 --> 00:08:44,240 Speaker 6: that can arrive after election day, those need to be 167 00:08:44,280 --> 00:08:46,520 Speaker 6: counted before some of these closer races can get called. 168 00:08:46,520 --> 00:08:48,440 Speaker 6: And whether we find out whether in fact Speaker of 169 00:08:48,440 --> 00:08:49,520 Speaker 6: Mike Johnson gets to keep. 170 00:08:49,440 --> 00:08:51,839 Speaker 3: The gabble Zach percent see some announcements out of the 171 00:08:51,840 --> 00:08:53,880 Speaker 3: White House this morning at least Stepanek, for example, talk 172 00:08:53,880 --> 00:08:55,640 Speaker 3: to us a little bit about you know, Trump's cabinet. 173 00:08:55,640 --> 00:08:57,079 Speaker 3: What can we expect to hear over the next few 174 00:08:57,120 --> 00:08:59,480 Speaker 3: days weeks, I mean, talk to us about US Treasury secretary. 175 00:09:00,320 --> 00:09:02,760 Speaker 6: Yeah, so certainly at least a phonic. The Republican from 176 00:09:02,800 --> 00:09:06,480 Speaker 6: New York being tapped to be the ambassador to the 177 00:09:06,559 --> 00:09:11,720 Speaker 6: United Nations, replacing Nickayhaley, who obviously ran against then former 178 00:09:11,720 --> 00:09:14,320 Speaker 6: President Donald Trump now President elect Donald Trump and probably 179 00:09:14,360 --> 00:09:16,319 Speaker 6: was not going to get that role again. Somebody who 180 00:09:16,320 --> 00:09:18,560 Speaker 6: sort of worked her way up through the Republican ranks, 181 00:09:18,559 --> 00:09:21,840 Speaker 6: started off as a real moderate representing upstate New York, 182 00:09:22,320 --> 00:09:25,839 Speaker 6: and eventually became what she would call ultra maga, very 183 00:09:25,920 --> 00:09:27,920 Speaker 6: aligned with the Trump movement that seems to be paying 184 00:09:27,920 --> 00:09:32,280 Speaker 6: offer her. All of Trump's Senate confirmable appointees will need 185 00:09:32,280 --> 00:09:34,640 Speaker 6: to go through the Senate confirmation process. However, he's been 186 00:09:34,679 --> 00:09:37,240 Speaker 6: asking the next Republican leader, whoever that might be, whether 187 00:09:37,280 --> 00:09:40,120 Speaker 6: it's John Thune, John Cornyn, Rick Scott, to kind of 188 00:09:40,160 --> 00:09:44,040 Speaker 6: waive that process entirely and allow him to install cabinet 189 00:09:44,160 --> 00:09:48,000 Speaker 6: and other appointees through what are called recess appointments, which 190 00:09:48,000 --> 00:09:50,360 Speaker 6: are allowed under the Constitution. That remains to be seen 191 00:09:50,400 --> 00:09:53,600 Speaker 6: whether Congress would allow that procedure, that ectipedetic procedure. But 192 00:09:53,720 --> 00:09:55,160 Speaker 6: all of that is going to need to happen pretty 193 00:09:55,240 --> 00:09:56,280 Speaker 6: quickly come January. 194 00:09:57,520 --> 00:09:59,440 Speaker 5: Zach, give us a sense as we step back and 195 00:09:59,440 --> 00:10:02,480 Speaker 5: look at this whole realistically, how much of a red 196 00:10:02,920 --> 00:10:06,240 Speaker 5: sweep has it been for the Republicans And in fact, 197 00:10:07,160 --> 00:10:10,160 Speaker 5: what can President Trump get done here, given that it 198 00:10:10,640 --> 00:10:14,160 Speaker 5: has control of the Senate, appears to be at or 199 00:10:14,200 --> 00:10:17,080 Speaker 5: close to control of the House. How much of a 200 00:10:17,120 --> 00:10:18,200 Speaker 5: red sweep is it really? 201 00:10:19,160 --> 00:10:20,720 Speaker 6: I mean, the fact that Trump was able to carry 202 00:10:20,720 --> 00:10:23,199 Speaker 6: all seven battleground states, with the addition of I believe 203 00:10:23,240 --> 00:10:26,840 Speaker 6: Arizona last night or early this morning, certainly indicates that 204 00:10:26,920 --> 00:10:29,920 Speaker 6: this was a Republican maybe not a wave. You know 205 00:10:29,960 --> 00:10:32,240 Speaker 6: that we're sort of past the era of weave politics. 206 00:10:32,280 --> 00:10:34,480 Speaker 6: The fact that we're talking about a Republican victory potentially 207 00:10:34,520 --> 00:10:36,640 Speaker 6: in the House that'll be determined by just a handful 208 00:10:36,679 --> 00:10:39,920 Speaker 6: of votes, just given the fact that jerry mandering and 209 00:10:40,160 --> 00:10:42,760 Speaker 6: partisan sorting, people voting with their feet to places like 210 00:10:42,800 --> 00:10:46,000 Speaker 6: California or Florida depending on their politics, really makes it 211 00:10:46,040 --> 00:10:48,679 Speaker 6: hard for either party to win. The kind of results 212 00:10:48,679 --> 00:10:50,520 Speaker 6: that we saw back in the day where you know, 213 00:10:50,679 --> 00:10:52,520 Speaker 6: regul would be able to win forty nine out of 214 00:10:52,559 --> 00:10:55,920 Speaker 6: fifty states without batting an eyelash. But certainly the fact 215 00:10:55,920 --> 00:10:58,559 Speaker 6: that Trump will come into power, certainly with a Republican 216 00:10:58,559 --> 00:11:01,480 Speaker 6: controlled Senate, means one for his efforts to overhaul the 217 00:11:01,480 --> 00:11:04,880 Speaker 6: federal bench. He'll be able to appoint judges not just 218 00:11:05,000 --> 00:11:07,440 Speaker 6: the Supreme Court, but also to lower appellate courts and 219 00:11:07,520 --> 00:11:10,280 Speaker 6: federal district courts, you know, some of those benches that 220 00:11:10,360 --> 00:11:14,000 Speaker 6: make up the vast majority of federal litigation. Tom, So, certainly, 221 00:11:14,040 --> 00:11:17,600 Speaker 6: either through recess appointments or through actual confirmation, he's got 222 00:11:17,640 --> 00:11:18,320 Speaker 6: some power there. 223 00:11:18,800 --> 00:11:21,000 Speaker 3: Thanks Act. Tom Horman's been announced as the borders are 224 00:11:21,040 --> 00:11:23,679 Speaker 3: and I'm looking at you know what, many believe Trump 225 00:11:23,720 --> 00:11:26,000 Speaker 3: is about to embark on the largest deportation program in 226 00:11:26,080 --> 00:11:29,560 Speaker 3: US history. Talk to me about that announcement, that appointment, 227 00:11:29,880 --> 00:11:30,880 Speaker 3: What do you expect out of that? 228 00:11:32,240 --> 00:11:33,719 Speaker 6: Certainly I had to check if he was actually a 229 00:11:33,800 --> 00:11:36,360 Speaker 6: point you know, nominated to be Secretary of Home mad Security, 230 00:11:36,400 --> 00:11:38,880 Speaker 6: which is object to Senate confirmation, or if this is 231 00:11:38,920 --> 00:11:42,040 Speaker 6: sort of a czar like position where he's named but 232 00:11:42,120 --> 00:11:45,080 Speaker 6: with that you know, sort of limited power to promagate 233 00:11:45,120 --> 00:11:47,040 Speaker 6: regulations that be able to do the kinds of things 234 00:11:47,040 --> 00:11:48,520 Speaker 6: that Trump is talking about. Some of this can be 235 00:11:48,559 --> 00:11:51,680 Speaker 6: done via executive border I would expect, you know, within 236 00:11:51,720 --> 00:11:53,440 Speaker 6: the first couple of days we see some of the 237 00:11:53,480 --> 00:11:58,240 Speaker 6: return to Trump era policies around remain in Mexico or 238 00:11:58,280 --> 00:12:00,960 Speaker 6: catch and release, so to speak. But certainly Homan and 239 00:12:01,000 --> 00:12:02,960 Speaker 6: others are going to have some pretty vast power under 240 00:12:03,000 --> 00:12:07,080 Speaker 6: existing statute to change current immigration law. Whether a Republican 241 00:12:07,160 --> 00:12:10,560 Speaker 6: lets send it, even a potentially narrowly narrow one. If 242 00:12:11,400 --> 00:12:13,800 Speaker 6: you know, Dave McCormick doesn't hold on in Pennsylvania that 243 00:12:13,880 --> 00:12:15,960 Speaker 6: race has been called, but apparently it's too close to 244 00:12:15,960 --> 00:12:18,679 Speaker 6: call for some Democrats, then maybe we could see a 245 00:12:18,679 --> 00:12:22,280 Speaker 6: confirmation fight if Susan Collins Lisa Rakowski have some concerns 246 00:12:22,280 --> 00:12:24,280 Speaker 6: about any of these picks, so that'll be worth watching 247 00:12:24,320 --> 00:12:25,360 Speaker 6: as well. 248 00:12:25,520 --> 00:12:28,840 Speaker 5: Zach, what's the to do list for Congress right now? 249 00:12:29,960 --> 00:12:32,440 Speaker 6: Certainly got to figure out government funding that expires in December, 250 00:12:32,600 --> 00:12:34,320 Speaker 6: as we could another shut down fight on our hands 251 00:12:34,360 --> 00:12:36,360 Speaker 6: if you've got Democrats who are hoping to lock in 252 00:12:36,559 --> 00:12:40,040 Speaker 6: federal funding levels for at least the first nine months 253 00:12:40,040 --> 00:12:42,640 Speaker 6: of the next Trump administration, and they'll be probably some 254 00:12:42,679 --> 00:12:44,720 Speaker 6: Democrats some Republicans as well who'd want to go along 255 00:12:44,760 --> 00:12:46,600 Speaker 6: with that, just to sort of clear the plate and 256 00:12:46,679 --> 00:12:49,480 Speaker 6: allow Trump to come in set budget levels and come 257 00:12:49,559 --> 00:12:51,240 Speaker 6: up for his own spending plan for the next couple 258 00:12:51,320 --> 00:12:54,280 Speaker 6: of years, although some Republicans certainly will want to hold 259 00:12:54,320 --> 00:12:56,640 Speaker 6: off on that decision in order to give the incoming 260 00:12:56,679 --> 00:13:00,280 Speaker 6: Trump administration the ability to set funding levels. Or the 261 00:13:00,320 --> 00:13:03,079 Speaker 6: current fiscal year that started September thirtieth of this calendar 262 00:13:03,160 --> 00:13:06,559 Speaker 6: year will likely see defense appropriations or actually be a 263 00:13:06,600 --> 00:13:09,719 Speaker 6: defense authorization built military policy bill that passes every year 264 00:13:09,760 --> 00:13:12,280 Speaker 6: and has for the last sixty some midd years. That's 265 00:13:12,360 --> 00:13:16,120 Speaker 6: usually a pretty bipartisan affair, and certainly Democrats are going 266 00:13:16,160 --> 00:13:17,959 Speaker 6: to want to confirm as many judges as possible to 267 00:13:18,000 --> 00:13:21,280 Speaker 6: the federal bench while they have unilateral control of that process. 268 00:13:21,320 --> 00:13:23,960 Speaker 6: There's a number of vacancies, not at the Supreme Court 269 00:13:24,000 --> 00:13:27,040 Speaker 6: level obviously, but for lower re pellate levels and at 270 00:13:27,040 --> 00:13:29,720 Speaker 6: the district courts that they could see done with a 271 00:13:29,720 --> 00:13:32,160 Speaker 6: simple majority, even if Trump wants to hold off on that. 272 00:13:32,679 --> 00:13:32,839 Speaker 2: Zach. 273 00:13:32,920 --> 00:13:34,960 Speaker 3: The US fixing can market is closed today, but the 274 00:13:35,000 --> 00:13:38,040 Speaker 3: bond market villgilantes are far from dead talk to us 275 00:13:38,080 --> 00:13:40,679 Speaker 3: about Treasury Secretary, Howard Lutnick. Is it going to be 276 00:13:40,760 --> 00:13:43,400 Speaker 3: John Paulson, Glenn young Kin, Scott Besson? And you're a 277 00:13:43,440 --> 00:13:45,280 Speaker 3: betting man, where do you place your bet? 278 00:13:46,400 --> 00:13:49,199 Speaker 6: It entirely depends on not just obviously true Trump wants 279 00:13:49,480 --> 00:13:52,720 Speaker 6: as his secretary, you know, to be the primary ambassador 280 00:13:52,720 --> 00:13:55,320 Speaker 6: for the American economy overseas, as Jenna Yellen has done, 281 00:13:55,600 --> 00:13:58,360 Speaker 6: but certainly what the market will bear. In the Senate, 282 00:13:58,960 --> 00:14:01,760 Speaker 6: as I mentioned, senator centers are coming in Republicans with 283 00:14:01,840 --> 00:14:05,439 Speaker 6: fifty three seats most likely assuming this result in Pennsylvania 284 00:14:05,440 --> 00:14:09,800 Speaker 6: holds and having flipped seats in West Virginia, Montana, and Ohio. 285 00:14:10,360 --> 00:14:12,960 Speaker 6: And so that gives him a pretty sizable majority to 286 00:14:12,960 --> 00:14:15,920 Speaker 6: be able to confirm really whoever Trump wants in that job. 287 00:14:15,960 --> 00:14:18,920 Speaker 6: And I could see somebody confirmed by January twentieth. Remember 288 00:14:18,920 --> 00:14:22,280 Speaker 6: Congress comes in January third, and that's the beginning of 289 00:14:22,320 --> 00:14:24,120 Speaker 6: the new Congress. Then there's a number of days before 290 00:14:24,160 --> 00:14:26,640 Speaker 6: the inauguration of the next president on January twentieth, So 291 00:14:26,680 --> 00:14:30,920 Speaker 6: it's not unusual for the Senate to start confirming nominees 292 00:14:30,960 --> 00:14:33,080 Speaker 6: for a president elect. So that way they can come 293 00:14:33,120 --> 00:14:34,880 Speaker 6: in with their team in place, and I would imagine 294 00:14:34,880 --> 00:14:37,720 Speaker 6: Treasury secretary and other cabinet appointees would fit the bill 295 00:14:37,760 --> 00:14:38,240 Speaker 6: on that one. 296 00:14:39,160 --> 00:14:41,160 Speaker 5: Hey, Zach, thanks so much for joining us. Really appreciate it. 297 00:14:41,240 --> 00:14:44,320 Speaker 5: Zach Ohen He is a congressional reporter for a Bloomberg 298 00:14:44,360 --> 00:14:45,960 Speaker 5: government down in Washington, DC. 299 00:14:46,520 --> 00:14:50,800 Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday 300 00:14:50,880 --> 00:14:54,080 Speaker 2: starting at seven am Eastern on applecar Play and Android 301 00:14:54,120 --> 00:14:57,000 Speaker 2: Auto with the Bloomberg Business app. You can also listen 302 00:14:57,080 --> 00:14:59,960 Speaker 2: live on Amazon Alexa from our flagship New York State 303 00:15:00,600 --> 00:15:02,920 Speaker 2: Just Say Alexa playing Bloomberg eleven. 304 00:15:03,480 --> 00:15:06,320 Speaker 5: Nick Stadneller joins us. He's in studio. He's had a 305 00:15:06,360 --> 00:15:10,200 Speaker 5: product at Medley Global Advisors. He does this in Damien, 306 00:15:10,280 --> 00:15:14,600 Speaker 5: called a merging mark. I ever heard of him exactly, Nick, 307 00:15:15,800 --> 00:15:18,520 Speaker 5: What emerging markets do you focus on in Which is 308 00:15:18,520 --> 00:15:21,480 Speaker 5: the most I think attractive to you at this moment? 309 00:15:22,440 --> 00:15:28,120 Speaker 7: Well, historically I've done the Senior region, so Turkey, the Gulf, Russia, Ukraine. 310 00:15:28,400 --> 00:15:31,160 Speaker 7: I've spent quite a few years living in most of 311 00:15:31,160 --> 00:15:34,280 Speaker 7: those places. But sort of over the last couple of years, 312 00:15:34,320 --> 00:15:37,280 Speaker 7: I've been looking a lot more globally and in terms 313 00:15:37,320 --> 00:15:40,520 Speaker 7: of what looks interesting to me right now. Quite frankly, 314 00:15:40,520 --> 00:15:43,040 Speaker 7: I'm a bit worried about a lot of emerging markets 315 00:15:43,120 --> 00:15:45,680 Speaker 7: right now. But I think if I were, you know, 316 00:15:45,720 --> 00:15:48,160 Speaker 7: if someone held a gun to mind, why is that Well? 317 00:15:48,200 --> 00:15:50,640 Speaker 7: I think that the biggest risk that I see is 318 00:15:50,680 --> 00:15:54,200 Speaker 7: an inflationary US and a deflationary China, and if both 319 00:15:54,200 --> 00:15:56,040 Speaker 7: of those happened at the same time, it's going to 320 00:15:56,080 --> 00:15:58,440 Speaker 7: be really bad for emerging markets for quite some time. 321 00:15:59,000 --> 00:16:00,920 Speaker 7: But if somebody held a gun my head and said 322 00:16:01,080 --> 00:16:02,800 Speaker 7: what do you like right now? I think I would 323 00:16:02,800 --> 00:16:06,080 Speaker 7: probably be focusing more on frontier markets and further down 324 00:16:06,160 --> 00:16:10,160 Speaker 7: the credit stream, so lower rated distress sovereigns in places 325 00:16:10,160 --> 00:16:12,480 Speaker 7: like Sub Saharan Africa and parts. 326 00:16:12,200 --> 00:16:15,440 Speaker 5: Of Asia that's not like Mexico or Brazil. 327 00:16:15,520 --> 00:16:18,800 Speaker 3: That this yeah, I be talking about the dollar bonds, Paul. 328 00:16:18,840 --> 00:16:21,160 Speaker 3: I mean, let's get into the nitty gritty here. I mean, 329 00:16:21,200 --> 00:16:23,320 Speaker 3: let's first begin with the Central and Eastern Europe. Right, 330 00:16:23,360 --> 00:16:26,040 Speaker 3: Let's talk about Hungary. Let's talk about victor Orbon He's 331 00:16:26,120 --> 00:16:28,680 Speaker 3: first went to graduate Trump after he won. Let's talk 332 00:16:28,720 --> 00:16:31,520 Speaker 3: about this rumor that Trump and Putin spoke just a 333 00:16:31,520 --> 00:16:34,280 Speaker 3: few days back. And now I think the Krumlin's rejecting that. 334 00:16:34,360 --> 00:16:36,960 Speaker 3: I mean, what's up, what's down, what's going on in 335 00:16:37,000 --> 00:16:37,480 Speaker 3: your region? 336 00:16:38,200 --> 00:16:42,960 Speaker 7: Well, I think the situation with Orbon and Hungary is 337 00:16:43,000 --> 00:16:45,720 Speaker 7: a bit mixed, because, of course, Orbon's thrilled to see 338 00:16:45,720 --> 00:16:49,360 Speaker 7: Trump win. They share a lot of political ideas. 339 00:16:49,440 --> 00:16:52,600 Speaker 3: And they share a locker tamarack non and. 340 00:16:52,560 --> 00:16:55,200 Speaker 7: I'm sure that Trump would be very supportive specifically of 341 00:16:55,320 --> 00:16:58,600 Speaker 7: Orbon when he can. But the fact is that Trump 342 00:16:58,680 --> 00:17:02,680 Speaker 7: is much euroskeptic, a skeptic of the Transatlantic Alliance, and 343 00:17:02,760 --> 00:17:04,600 Speaker 7: there are a lot of worries about the Euro and 344 00:17:04,640 --> 00:17:09,840 Speaker 7: the US relationship with the European Union and the Hungarian Foreest, 345 00:17:10,640 --> 00:17:13,680 Speaker 7: you know, Czech and Poland. Those are all sort of 346 00:17:13,760 --> 00:17:16,680 Speaker 7: high beata versions of the Euro and very closely tied 347 00:17:16,720 --> 00:17:18,960 Speaker 7: to the fates of the Euro. So the irony is, 348 00:17:19,000 --> 00:17:23,360 Speaker 7: even though or Bond really you know, supports Trump, it's 349 00:17:23,359 --> 00:17:25,439 Speaker 7: probably not going to be very good for financial markets 350 00:17:25,440 --> 00:17:28,240 Speaker 7: in Central Europe. And you're starting to see that filter 351 00:17:28,359 --> 00:17:30,080 Speaker 7: into two currency prices there. 352 00:17:30,320 --> 00:17:33,000 Speaker 3: And what about the impact of the German coalition, you know, 353 00:17:33,200 --> 00:17:35,080 Speaker 3: falling out of bed here. I mean, like there's got 354 00:17:35,119 --> 00:17:37,160 Speaker 3: to be an impact on some of these periphery markets 355 00:17:37,240 --> 00:17:40,400 Speaker 3: like Poland, like Remania, Hungary, the Czech Republic, I mean, 356 00:17:40,400 --> 00:17:41,880 Speaker 3: any sort of spillover from that. 357 00:17:43,080 --> 00:17:46,280 Speaker 7: Well, I think right now it seems sort of minimal. 358 00:17:46,760 --> 00:17:49,479 Speaker 7: One of the weird things that's happened is German boons 359 00:17:49,480 --> 00:17:53,640 Speaker 7: are starting to trade through Euro interest rate swaps, which 360 00:17:53,680 --> 00:17:56,679 Speaker 7: suggests sort of, I would say, a thing in the 361 00:17:56,880 --> 00:17:59,560 Speaker 7: financial market conditions for the European bond market, and that 362 00:17:59,640 --> 00:18:02,000 Speaker 7: sort of thing always filters in and the higher risk, 363 00:18:02,920 --> 00:18:06,639 Speaker 7: the emerging sort of periphery of the EU is always 364 00:18:06,680 --> 00:18:09,000 Speaker 7: going to suffer. But in the in the short term, 365 00:18:09,040 --> 00:18:11,160 Speaker 7: I think, you know, a little bit of domestic political 366 00:18:11,160 --> 00:18:14,600 Speaker 7: instability in Berlin is probably not going to throw the 367 00:18:14,640 --> 00:18:15,960 Speaker 7: European Union off its rails. 368 00:18:16,000 --> 00:18:17,920 Speaker 3: Now for our audience who's not following that, but we're 369 00:18:17,920 --> 00:18:20,680 Speaker 3: seeing our swap sweads in the Eurzone, specifically shats spreads 370 00:18:20,680 --> 00:18:25,119 Speaker 3: to your swap spreads in Germany narrow. We're seeing a 371 00:18:25,119 --> 00:18:27,240 Speaker 3: little bit of a little bit of disruption and the 372 00:18:27,280 --> 00:18:29,840 Speaker 3: plumbing of the European fixed income market right and the 373 00:18:29,840 --> 00:18:33,040 Speaker 3: funding markets, and what we look at our European swap spreads, 374 00:18:33,040 --> 00:18:36,879 Speaker 3: specifically German shats to your swap spreads, which is German. 375 00:18:37,359 --> 00:18:39,119 Speaker 5: It's the spread between Europe. 376 00:18:39,280 --> 00:18:41,919 Speaker 3: It's it's the spread between European swaps and basically the 377 00:18:42,000 --> 00:18:44,320 Speaker 3: underlying bonds, and what you've seen are them narrow as 378 00:18:44,359 --> 00:18:46,080 Speaker 3: the bond market is effectively sold off. 379 00:18:46,160 --> 00:18:48,320 Speaker 5: Right. So I've been on Wall Street for thirty five years. 380 00:18:48,359 --> 00:18:49,600 Speaker 5: I've never heard that once before. 381 00:18:49,640 --> 00:18:51,640 Speaker 3: I mean, you have to be looking at this. I mean, 382 00:18:51,640 --> 00:18:54,159 Speaker 3: this is like looking at the plumbing of the US market, right, 383 00:18:54,200 --> 00:18:56,320 Speaker 3: But I mean, really where we are, Nick, I mean, 384 00:18:56,480 --> 00:19:00,320 Speaker 3: is you're talking about, you know, financial conditions tightening in Europe, right, 385 00:19:00,359 --> 00:19:01,800 Speaker 3: and so what does that mean? I mean, does that 386 00:19:01,840 --> 00:19:04,320 Speaker 3: mean that you know we're going to see more stimulus 387 00:19:04,320 --> 00:19:06,560 Speaker 3: out of the Eurozone or is that something we could 388 00:19:06,560 --> 00:19:08,160 Speaker 3: be waiting for as well here in the US. 389 00:19:08,680 --> 00:19:11,120 Speaker 7: Well, I think at the margin, it increases the chances 390 00:19:11,400 --> 00:19:13,199 Speaker 7: that the European Central Bank is going to have to 391 00:19:13,200 --> 00:19:16,520 Speaker 7: cut a bit more aggressively. But the history of European 392 00:19:16,600 --> 00:19:20,000 Speaker 7: policy makers is that they do the bare minimum after 393 00:19:20,080 --> 00:19:23,960 Speaker 7: they're absolutely forced into it. So I wouldn't get too 394 00:19:24,000 --> 00:19:27,600 Speaker 7: preemptive and call a very bold move from European central 395 00:19:27,600 --> 00:19:28,520 Speaker 7: bankers quite yet. 396 00:19:29,080 --> 00:19:30,920 Speaker 3: So let's shift a little bit and look a little 397 00:19:30,920 --> 00:19:33,199 Speaker 3: further sap into the Middle East and look into Israel. 398 00:19:33,280 --> 00:19:35,280 Speaker 3: I know that's right in your wheelhouse as well. Let's 399 00:19:35,320 --> 00:19:37,840 Speaker 3: look at what's going on in the golf region. I mean, 400 00:19:38,160 --> 00:19:40,480 Speaker 3: any thoughts there, I mean, what does a Trump administration 401 00:19:40,640 --> 00:19:43,359 Speaker 3: mean for the Middle East, for Saudi Arabia, for some 402 00:19:43,400 --> 00:19:44,240 Speaker 3: of these other markets. 403 00:19:45,359 --> 00:19:48,760 Speaker 7: Well, Trump and his family have cultivated very strong ties 404 00:19:48,960 --> 00:19:52,720 Speaker 7: with the Saudi leadership and other senior golf officials around 405 00:19:52,760 --> 00:19:54,920 Speaker 7: the region. So I'm sure in a lot of golf 406 00:19:54,960 --> 00:19:59,639 Speaker 7: capitals there's a lot of celebration going on about the 407 00:19:59,680 --> 00:20:04,320 Speaker 7: process backs of a second Trump presidency. But ultimately, I 408 00:20:04,320 --> 00:20:08,399 Speaker 7: think the complication that you have with Israel and the 409 00:20:08,480 --> 00:20:12,320 Speaker 7: fact that you know, since since the conflict began with 410 00:20:12,400 --> 00:20:17,080 Speaker 7: Hamas and the more recent conflict with Iran, the Saudis 411 00:20:17,119 --> 00:20:18,960 Speaker 7: have have sort of got cold feet about the idea 412 00:20:18,960 --> 00:20:22,080 Speaker 7: of normalizing relations with Israel. So it's going to be 413 00:20:22,240 --> 00:20:25,320 Speaker 7: very difficult for Trump to keep all of his friends 414 00:20:25,480 --> 00:20:28,800 Speaker 7: and partners in the Middle East happy, continuing to support Israel, 415 00:20:28,800 --> 00:20:31,639 Speaker 7: which he's unequivocally said that he will do, while at 416 00:20:31,640 --> 00:20:34,000 Speaker 7: the same time trying to brooker some sort of deal 417 00:20:34,040 --> 00:20:37,359 Speaker 7: between Israel and Saudi. It's kind of a tough climb, 418 00:20:37,359 --> 00:20:40,480 Speaker 7: so I'd say expectations are pretty high. But more broadly, 419 00:20:40,560 --> 00:20:44,040 Speaker 7: I think that you know, the Gulf will definitely bask 420 00:20:44,080 --> 00:20:46,720 Speaker 7: in a moment of good relations with the US. 421 00:20:46,760 --> 00:20:50,640 Speaker 5: Here, what's the what's your call on China? Here? 422 00:20:52,359 --> 00:20:54,840 Speaker 7: My call in China is kind of like what I 423 00:20:54,840 --> 00:20:57,880 Speaker 7: said about the European authorities earlier, is that the Chinese 424 00:20:58,160 --> 00:21:02,560 Speaker 7: and I don't think it's that the Chinese officials are 425 00:21:02,680 --> 00:21:04,520 Speaker 7: slow to react, is just to have a very different 426 00:21:04,520 --> 00:21:07,720 Speaker 7: reaction function, and so they will continue supporting the market. 427 00:21:08,200 --> 00:21:10,159 Speaker 7: The Pollup Bureau is quite clear that they're going to 428 00:21:10,240 --> 00:21:13,040 Speaker 7: draw a line under house prices. But this is a 429 00:21:13,040 --> 00:21:15,520 Speaker 7: balance sheet problem. And the balance sheet problem is you 430 00:21:15,520 --> 00:21:18,360 Speaker 7: have a slumping stock market and more importantly, a slumping 431 00:21:18,400 --> 00:21:22,119 Speaker 7: property market, which is really eating into consumer confidence. And 432 00:21:22,160 --> 00:21:24,520 Speaker 7: the Chinese consumer, even before all of this happened, was 433 00:21:24,560 --> 00:21:27,040 Speaker 7: not an aggressive leveraged. 434 00:21:28,600 --> 00:21:28,919 Speaker 5: Play. 435 00:21:29,080 --> 00:21:31,680 Speaker 7: You know, at Chinese consumers have always been big savers 436 00:21:31,680 --> 00:21:36,080 Speaker 7: and very conservative. The government needs to get asset prices 437 00:21:36,280 --> 00:21:39,159 Speaker 7: moving in the right direction to get confidence going to 438 00:21:39,240 --> 00:21:42,439 Speaker 7: get consumer spending up in China, and that's going to 439 00:21:42,440 --> 00:21:44,840 Speaker 7: take time. And I think the way investors think about 440 00:21:44,880 --> 00:21:47,320 Speaker 7: this is okay, and now it's a big bazooka today, 441 00:21:47,680 --> 00:21:49,520 Speaker 7: and then in a month or two Chinese consumers are 442 00:21:49,520 --> 00:21:51,640 Speaker 7: going to spend again and everything's going to be fine. 443 00:21:51,880 --> 00:21:54,520 Speaker 7: This is a multi quarter, if not multi year, balance 444 00:21:54,560 --> 00:21:57,320 Speaker 7: sheet problem the authorities are trying to solve. They will 445 00:21:57,320 --> 00:21:59,120 Speaker 7: do it, but they will do it on their own timeframe, 446 00:21:59,160 --> 00:22:01,240 Speaker 7: and I think investors are going to be disappointed by 447 00:22:01,240 --> 00:22:02,080 Speaker 7: how long that takes. 448 00:22:02,359 --> 00:22:04,399 Speaker 3: Nick last question thirty seconds here. You know, at the 449 00:22:04,400 --> 00:22:08,439 Speaker 3: outset of our conversation, you mentioned, you know, Sub Saharan Africa, right, 450 00:22:08,480 --> 00:22:11,320 Speaker 3: some of these frontier sovereigns which are all dollar bonds. 451 00:22:11,320 --> 00:22:13,080 Speaker 3: But I mean the spreads on those dollar bonds have 452 00:22:13,119 --> 00:22:15,200 Speaker 3: come in quite considerably, right. I mean, if you look 453 00:22:15,240 --> 00:22:18,040 Speaker 3: at the EM distressed, the both of EM distressed index, 454 00:22:18,119 --> 00:22:20,480 Speaker 3: it's up sixty percent year to date, largely because of 455 00:22:20,520 --> 00:22:23,600 Speaker 3: spread compression in the sovereign space, high yield to overeign space. 456 00:22:23,880 --> 00:22:26,480 Speaker 3: Just how much juice is left in those bonds really. 457 00:22:26,960 --> 00:22:29,560 Speaker 7: Well, probably not another sixty percent. But I think the 458 00:22:30,040 --> 00:22:33,000 Speaker 7: story for why the outlook is I think pretty good 459 00:22:33,080 --> 00:22:37,280 Speaker 7: going forward is one you know, you're seeing ongoing reforms 460 00:22:37,280 --> 00:22:40,800 Speaker 7: and improvements places like Egypt, which is up there, not 461 00:22:40,840 --> 00:22:43,280 Speaker 7: Sub Saharan, but in northern Egypt. You know, you're continuing 462 00:22:43,320 --> 00:22:46,080 Speaker 7: to see good reforms, and I think they're also a 463 00:22:46,080 --> 00:22:50,679 Speaker 7: little bit less exposed to dollar higher dollar yields because 464 00:22:50,760 --> 00:22:53,560 Speaker 7: rates are already so high. They move up another fifty hundred, 465 00:22:53,600 --> 00:22:55,080 Speaker 7: two hundred basis points, it's not going to. 466 00:22:55,119 --> 00:22:56,800 Speaker 5: Kill them, all right, Nick, thank you so much for 467 00:22:56,880 --> 00:23:00,840 Speaker 5: joining us. Nix stad Miller, head of Product Medley Global Advisors. 468 00:23:01,520 --> 00:23:03,240 Speaker 5: They're out there in Milwaukee, but he's here in New 469 00:23:03,320 --> 00:23:05,040 Speaker 5: York City, and there's no way you're getting this dude 470 00:23:05,040 --> 00:23:07,439 Speaker 5: from like Saudi Arabia where he was to go to Milwaukee. 471 00:23:07,520 --> 00:23:09,240 Speaker 5: It's a great town though, By the way, Nick tid Man, 472 00:23:09,359 --> 00:23:16,360 Speaker 5: thanks so much for joining us. 473 00:23:17,359 --> 00:23:21,640 Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday 474 00:23:21,720 --> 00:23:24,920 Speaker 2: starting at seven am Eastern on applecar Play and Android 475 00:23:24,960 --> 00:23:27,879 Speaker 2: Auto with the Bloomberg Business app. You can also watch 476 00:23:27,960 --> 00:23:31,240 Speaker 2: us live every weekday on YouTube and always on the 477 00:23:31,240 --> 00:23:32,199 Speaker 2: Bloomberg terminal. 478 00:23:32,280 --> 00:23:33,960 Speaker 5: All right, folks, you detly look at the front pages 479 00:23:34,000 --> 00:23:39,000 Speaker 5: around the world, Lisa Matteo, front pages in the newspapers. 480 00:23:39,720 --> 00:23:41,000 Speaker 5: What's going on out there? All right? 481 00:23:41,000 --> 00:23:42,760 Speaker 1: Have either of you ever taken a cruise to like 482 00:23:42,840 --> 00:23:46,720 Speaker 1: Norway or like some of these cold Arctic like destinations. 483 00:23:46,880 --> 00:23:49,320 Speaker 5: No, but no, I'm thinking about it. I'm thinking about 484 00:23:49,359 --> 00:23:50,520 Speaker 5: a cruise coming up in the fall. 485 00:23:50,600 --> 00:23:53,520 Speaker 1: Okay, so here's the thing. Okay, travelers are paying well, 486 00:23:53,520 --> 00:23:54,840 Speaker 1: I don't know if you're gonna pay this, but ten 487 00:23:54,880 --> 00:23:57,840 Speaker 1: thousand dollars for seven nights day on this luxury vessel. 488 00:23:58,400 --> 00:24:02,240 Speaker 1: You see Wales, Wallas is bears right. But climate change, 489 00:24:02,240 --> 00:24:04,119 Speaker 1: this is from the Washington boasts. They say it's starting 490 00:24:04,119 --> 00:24:07,119 Speaker 1: to change things. The rapid ice melts. It sparked this 491 00:24:07,160 --> 00:24:10,600 Speaker 1: polar cruise boom, like more people going because it's opening 492 00:24:10,680 --> 00:24:13,399 Speaker 1: up these easier paths for the boats to get in around. 493 00:24:13,440 --> 00:24:16,160 Speaker 1: It's extending the season. But at the same time, it's 494 00:24:16,200 --> 00:24:19,320 Speaker 1: also melting the attractions that people want to see. So 495 00:24:19,720 --> 00:24:22,640 Speaker 1: you have certain places where they may not be having 496 00:24:22,640 --> 00:24:25,000 Speaker 1: these cruises for very long because a few decades from 497 00:24:25,000 --> 00:24:28,000 Speaker 1: now they might not be there. So that's a change 498 00:24:28,000 --> 00:24:29,959 Speaker 1: that they're starting to see. But it's pretty pricey. 499 00:24:30,480 --> 00:24:31,960 Speaker 3: I mean, I've never been on a cruise. To be 500 00:24:31,960 --> 00:24:34,280 Speaker 3: honest with you, I mean, Lisa, I mean, I mean 501 00:24:34,320 --> 00:24:36,239 Speaker 3: talk to me about you know, that whole beauty of 502 00:24:36,240 --> 00:24:38,399 Speaker 3: being on a cruise in a post pandemic environment that 503 00:24:38,440 --> 00:24:41,440 Speaker 3: they still have the buffet special with unlimited from cocktail. 504 00:24:41,480 --> 00:24:43,439 Speaker 3: I mean, you know that's just so healthy. 505 00:24:44,240 --> 00:24:46,160 Speaker 1: I have not done one yet. I know I've been 506 00:24:46,400 --> 00:24:48,760 Speaker 1: meaning to, but I'm telling you it's the Arctic is 507 00:24:48,760 --> 00:24:50,240 Speaker 1: the way to go for a lot of these. That's 508 00:24:50,280 --> 00:24:50,840 Speaker 1: what they're saying. 509 00:24:50,880 --> 00:24:51,560 Speaker 3: But experience. 510 00:24:51,640 --> 00:24:53,080 Speaker 5: Charlie Pellett is our cruise person. 511 00:24:53,160 --> 00:24:54,920 Speaker 1: Oh that's great. You got to ask him if he's 512 00:24:54,920 --> 00:24:56,440 Speaker 1: been a whole cruise in Norway. 513 00:24:56,160 --> 00:24:58,440 Speaker 5: Cruise anywhere. Like he takes a cruise to go see 514 00:24:58,480 --> 00:25:01,240 Speaker 5: the oil riggs in the northern Atlanta. Like there's three 515 00:25:01,240 --> 00:25:02,760 Speaker 5: people in the cruise ship and he's one of them. 516 00:25:02,840 --> 00:25:05,720 Speaker 5: So anyway, that's our Charlie pell What else you got? 517 00:25:05,800 --> 00:25:06,160 Speaker 5: All right? 518 00:25:06,240 --> 00:25:08,920 Speaker 1: So have you been to any of your kids? 519 00:25:09,000 --> 00:25:09,200 Speaker 2: Yeah? 520 00:25:09,440 --> 00:25:11,560 Speaker 1: Parents weekend? I know you have a son. You have 521 00:25:11,560 --> 00:25:15,520 Speaker 1: a son too that's in college. Well, now more parents 522 00:25:15,520 --> 00:25:19,199 Speaker 1: are actually joining in on the festivities. We're talking jell shots, 523 00:25:19,240 --> 00:25:22,960 Speaker 1: beer pong, flip cup. They're taking part in all the festivities. 524 00:25:23,320 --> 00:25:25,919 Speaker 1: This is in the journal. A lot more parents they 525 00:25:25,960 --> 00:25:28,000 Speaker 1: say they want to party, their kids say that they're 526 00:25:28,040 --> 00:25:30,840 Speaker 1: cool with it. They start drinking at eight thirty in 527 00:25:30,880 --> 00:25:33,240 Speaker 1: the morning because you know, the football game start at noon. 528 00:25:33,920 --> 00:25:36,560 Speaker 1: And the thing they do, say they pass on is 529 00:25:36,600 --> 00:25:38,679 Speaker 1: the cheap beer. So they bring their own mini bottles 530 00:25:38,680 --> 00:25:40,120 Speaker 1: of Tito's in their little fanny pack. 531 00:25:40,240 --> 00:25:43,480 Speaker 5: So they so long that I can relate to. But 532 00:25:43,560 --> 00:25:44,400 Speaker 5: I mean put. 533 00:25:44,200 --> 00:25:47,600 Speaker 1: Their own little, you know, cocktails in their water flasks. 534 00:25:48,600 --> 00:25:50,440 Speaker 1: But some parent, you have the flip side. Some parents 535 00:25:50,480 --> 00:25:52,280 Speaker 1: are saying, no, it's not right, like you got to 536 00:25:52,280 --> 00:25:52,680 Speaker 1: be a parent. 537 00:25:52,720 --> 00:25:55,840 Speaker 3: So Miami didn't have Parents Weekend this weekend, but Tulane 538 00:25:55,920 --> 00:25:58,040 Speaker 3: University did, and yeah, shout out to Robin Hober and 539 00:25:58,040 --> 00:25:59,919 Speaker 3: Little kings Lane Rodbrick, New York. I got to pick 540 00:26:00,160 --> 00:26:03,240 Speaker 3: of her on a mechanical bull this weekend. So let's 541 00:26:03,280 --> 00:26:05,640 Speaker 3: just be clear. You know, you're not You're not too 542 00:26:05,800 --> 00:26:07,480 Speaker 3: You're never too well to get out a mechanical bull 543 00:26:07,480 --> 00:26:08,119 Speaker 3: in New Orleans. 544 00:26:08,160 --> 00:26:10,600 Speaker 5: Oh yeah, yeah, So, I mean parents are getting into 545 00:26:10,600 --> 00:26:12,639 Speaker 5: it's probably hey, I'm paying a good. 546 00:26:15,359 --> 00:26:16,840 Speaker 1: A lot of them are saying they just they want 547 00:26:16,880 --> 00:26:21,159 Speaker 1: to relive the golden years. Maybe no, you got to 548 00:26:21,160 --> 00:26:21,960 Speaker 1: bring along the tumbs. 549 00:26:21,960 --> 00:26:22,880 Speaker 5: I'm saying, if you're. 550 00:26:22,840 --> 00:26:25,879 Speaker 1: Going to trip like that, this is something right up 551 00:26:25,920 --> 00:26:26,240 Speaker 1: your alley. 552 00:26:26,280 --> 00:26:26,480 Speaker 4: Paul. 553 00:26:26,560 --> 00:26:29,240 Speaker 1: So this is in Bloomberg screen Time newsletter has to 554 00:26:29,240 --> 00:26:32,360 Speaker 1: look inside Netflix's move into live programming. So we've been 555 00:26:32,359 --> 00:26:34,439 Speaker 1: hearing more about it right the past couple of years. 556 00:26:34,680 --> 00:26:38,840 Speaker 1: Live cooking shows, tennis match, hot dog eating contest, comedy special, 557 00:26:39,200 --> 00:26:41,880 Speaker 1: football games, wrestling and you know, in a few days 558 00:26:41,920 --> 00:26:44,399 Speaker 1: you have that boxing match between Jake Paul Mike Tyson. 559 00:26:44,480 --> 00:26:47,040 Speaker 1: That's the big draw. But some people are saying it's 560 00:26:47,040 --> 00:26:50,280 Speaker 1: weird because Netflix kind of created this streaming service as 561 00:26:50,320 --> 00:26:54,400 Speaker 1: an alternative to live TV, but it's all about advertising. 562 00:26:54,760 --> 00:26:56,800 Speaker 1: Like a lot of its customers pay more to avoid 563 00:26:56,840 --> 00:26:59,639 Speaker 1: the ads, but with live programming they can put the 564 00:26:59,640 --> 00:27:00,960 Speaker 1: advertgeers in front. 565 00:27:00,720 --> 00:27:02,959 Speaker 5: Of all the right. That's I mean, it's just kind 566 00:27:03,000 --> 00:27:05,440 Speaker 5: of you know when you think about the the ad dollars, 567 00:27:05,480 --> 00:27:08,240 Speaker 5: you know, shifting from traditional media broadcast network's, cable network's 568 00:27:08,240 --> 00:27:11,399 Speaker 5: going to streaming. It's just a matter of time before 569 00:27:11,400 --> 00:27:13,920 Speaker 5: the streaming services. I meant sport. 570 00:27:14,000 --> 00:27:15,800 Speaker 3: This is right in your wheelhouse, Paul Sweeny, and I 571 00:27:15,800 --> 00:27:17,959 Speaker 3: mean for me, I mean, Netflix is just eating everyone 572 00:27:18,000 --> 00:27:19,800 Speaker 3: else's lunch. And we have Walt Disney earning it's coming 573 00:27:19,800 --> 00:27:21,960 Speaker 3: in on Thursday. You know, Walt Disney better than most. 574 00:27:22,000 --> 00:27:23,320 Speaker 3: I mean, what do you expect out of that? 575 00:27:23,440 --> 00:27:25,639 Speaker 5: I mean it's yeah, I mean Walt Disney Company has 576 00:27:25,680 --> 00:27:28,879 Speaker 5: become a basically a theme park company. That's a you know, 577 00:27:28,960 --> 00:27:32,360 Speaker 5: more than half of their operating profit, and so we'll 578 00:27:32,359 --> 00:27:34,440 Speaker 5: have to see it. But again they're trying to navigate 579 00:27:34,480 --> 00:27:37,760 Speaker 5: the migration to streaming. All I know is I did 580 00:27:37,840 --> 00:27:41,560 Speaker 5: not watch the Penn State game, the white Out game 581 00:27:41,960 --> 00:27:44,119 Speaker 5: on Saturday evening because it was on Peacock. I'm like, 582 00:27:44,200 --> 00:27:46,080 Speaker 5: I'm just not going there. I mean, I got enough 583 00:27:46,080 --> 00:27:48,160 Speaker 5: things hitting my credit card. I'm not going to Peacock 584 00:27:48,640 --> 00:27:52,080 Speaker 5: to watch Penn State. So you know, Dan ives prince 585 00:27:52,240 --> 00:27:55,960 Speaker 5: was the principle. Yeah, exactly out of Princeville principle. Exactly 586 00:27:56,000 --> 00:27:56,359 Speaker 5: what do you have? 587 00:27:56,840 --> 00:27:58,600 Speaker 1: All Right? So we talked about, you know, the parents 588 00:27:58,680 --> 00:28:01,439 Speaker 1: living it up at colleges drinking. But now we have 589 00:28:01,600 --> 00:28:03,680 Speaker 1: wine makers. This is on the flip side. They're going 590 00:28:03,720 --> 00:28:07,200 Speaker 1: to the younger, health conscious drinkers. So they're making more 591 00:28:07,240 --> 00:28:11,359 Speaker 1: wines with less alcohol and fewer calories. You've seen the popularity, right, 592 00:28:11,400 --> 00:28:13,720 Speaker 1: the hard selsers really got it. But the Wall Street 593 00:28:13,800 --> 00:28:16,639 Speaker 1: Journal is saying, okay, overall wine sales, they've declined for 594 00:28:16,640 --> 00:28:18,320 Speaker 1: a thirty year in a row. But you have the 595 00:28:18,440 --> 00:28:21,160 Speaker 1: light wine category. It's actually increased two hundred and nine 596 00:28:21,200 --> 00:28:23,960 Speaker 1: million in sales twenty twenty four from sixteen million in 597 00:28:24,000 --> 00:28:24,760 Speaker 1: twenty nineteen. 598 00:28:24,880 --> 00:28:25,560 Speaker 5: Light wine. 599 00:28:25,640 --> 00:28:28,600 Speaker 1: Light wine, they're about fifteen dollars a bottle. You know, 600 00:28:28,720 --> 00:28:31,639 Speaker 1: it goes about eighty calories as opposed to one hundred 601 00:28:31,640 --> 00:28:34,040 Speaker 1: and twenty calories. It's usually white wine because the red 602 00:28:34,119 --> 00:28:36,560 Speaker 1: wine is a little bit tougher because it already has 603 00:28:36,840 --> 00:28:39,880 Speaker 1: more alcohol and more sugar in it. But they do it. 604 00:28:39,920 --> 00:28:42,440 Speaker 1: They don't just add water, so they're not just diluting it. 605 00:28:42,480 --> 00:28:45,680 Speaker 1: They're using this disolation process to remove a portion of 606 00:28:45,720 --> 00:28:48,600 Speaker 1: the article of the alcohol. But some people are saying 607 00:28:48,600 --> 00:28:50,520 Speaker 1: that the taste, I don't know, all right. 608 00:28:50,760 --> 00:28:54,640 Speaker 5: So this company in Woodville washing the stale Washington. The 609 00:28:54,680 --> 00:28:57,600 Speaker 5: company removes alcohol from thirty percent of the finished wine 610 00:28:57,640 --> 00:29:02,040 Speaker 5: and combines it with an unaltered wine to preserve the taste. 611 00:29:02,080 --> 00:29:05,720 Speaker 5: About a quarter fires become returning customers, according to the survey. 612 00:29:05,760 --> 00:29:07,600 Speaker 3: Paul Sweenia, I'm fifty years old, and for the better 613 00:29:07,640 --> 00:29:09,400 Speaker 3: part of my life, people were trying to figure out 614 00:29:09,440 --> 00:29:12,560 Speaker 3: how to inject more alcohol into a sip. Of yes, 615 00:29:12,840 --> 00:29:15,080 Speaker 3: into a beverage, and you know, and it's kind of 616 00:29:15,120 --> 00:29:16,240 Speaker 3: like the it's kind of like the rest of the world. 617 00:29:16,240 --> 00:29:18,640 Speaker 3: The US. We've been on a globalization path. Now we're 618 00:29:18,640 --> 00:29:21,080 Speaker 3: getting more into a nationalistic plant. We're sort of cutting 619 00:29:21,080 --> 00:29:24,400 Speaker 3: off our relationships with everyone, and now we're cutting off 620 00:29:24,440 --> 00:29:27,840 Speaker 3: all the alcohol. I'm strusted. I just don't even know. 621 00:29:28,040 --> 00:29:28,720 Speaker 5: I don't know what to do. 622 00:29:29,120 --> 00:29:31,200 Speaker 1: I don't I don't mind the idea of it, you know, 623 00:29:31,240 --> 00:29:33,360 Speaker 1: because then you can have like a second glass without 624 00:29:33,400 --> 00:29:35,600 Speaker 1: fiel and guilty. 625 00:29:35,840 --> 00:29:38,920 Speaker 5: I mean, there's light beer, so I guess why wouldn't 626 00:29:38,920 --> 00:29:39,800 Speaker 5: there be a light wine? 627 00:29:39,960 --> 00:29:42,720 Speaker 1: Yes, but it's usually the white. The white wine is easier. 628 00:29:42,800 --> 00:29:44,760 Speaker 1: But yeah, that's that's the new trend. I'm gonna have 629 00:29:44,800 --> 00:29:45,360 Speaker 1: to check it out. 630 00:29:45,440 --> 00:29:48,840 Speaker 5: I doubt we're going to get a light jamison now happening. 631 00:29:49,160 --> 00:29:51,840 Speaker 5: My friend's over in Ireland. Yeah, so all right, Lisa 632 00:29:51,920 --> 00:29:53,600 Speaker 5: Matteo with the newspapers. 633 00:29:53,880 --> 00:29:58,320 Speaker 2: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 634 00:29:58,480 --> 00:30:02,600 Speaker 2: and anywhere else you get your listen live each weekday 635 00:30:02,720 --> 00:30:05,760 Speaker 2: seven to ten am Eastern on Bloomberg dot Com, the 636 00:30:05,880 --> 00:30:09,680 Speaker 2: iHeartRadio app, tune In, and the Bloomberg Business app. You 637 00:30:09,720 --> 00:30:13,000 Speaker 2: can also watch us live every weekday on YouTube and 638 00:30:13,160 --> 00:30:14,720 Speaker 2: always on the Bloomberg terminal