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Speaker 3: Christina Hooper, Chief Global Market Strategy to Vetsco, thank you
Speaker 3: for joining us here this morning. Talk to us about
Speaker 3: the FED, talk to us about what happens in a
Speaker 3: Trump world.
Speaker 4: So I think the FED was right to be very
Speaker 4: emphatic in saying that they're not going to guess, assume,
Speaker 4: speculate about what policies are coming down the pike and
Speaker 4: the timing of them. So at this point it's all
Speaker 4: about the data and what is actually showing up in
Speaker 4: the data today. Now there is some risk that inflation resurges,
Speaker 4: and that has absolutely nothing to do with who is
Speaker 4: sitting in the White House. So I think the FED
Speaker 4: needs to be super careful. And so I think the
Speaker 4: FED is not necessarily going to cut in December. It
Speaker 4: is not a FEDA compley. It's going to be really
Speaker 4: dictated by what we see released in the next weeks
Speaker 4: before the meeting. I do think there's probably some caution
Speaker 4: in terms of worrying a bit about what could happen
Speaker 4: if we see a lot of Trump policies come to
Speaker 4: fruition in terms of stimulating growth and higher inflation. But
Speaker 4: at this point the Fed is not going to act
Speaker 4: on it, and I don't think it will until it
Speaker 4: shows up in the data or it's reliable enough in
Speaker 4: terms of the scope and the timing that they can
Speaker 4: add it to their economic projections.
Speaker 3: Well, Christina, I was listening to Bruce Casman over the weekend,
Speaker 3: he and Joe Lupp in at Any Rate podcast, the
Speaker 3: JP Morgan.
Speaker 5: We know who they are.
Speaker 3: You know they're talking about revising up growth expectations in
Speaker 3: the US, revising them down in the Eurozone and China.
Speaker 3: Do you agree with that and what is the impact
Speaker 3: on inflation from that?
Speaker 4: Well, I don't think that that's wrong. I don't know
Speaker 4: if it's going to be as dramatic as we assume.
Speaker 4: I certainly think that US growth is going to be stronger.
Speaker 4: It has been stronger, So this would just be a
Speaker 4: continuation of a trend that we've seen, and it might
Speaker 4: get some kind of boost from Trump policies. Again, we
Speaker 4: just don't know the scope, we don't know the timing,
Speaker 4: we don't know what policies they'll focus on.
Speaker 5: First.
Speaker 4: I do think that the Eurozone could face some headwinds,
Speaker 4: but I do think that we're going to be as
Speaker 4: seeing a reacceleration and growth there as well. It's just
Speaker 4: not going to be as strong as in the United States.
Speaker 4: So I don't think it's as dramatic a situation. I
Speaker 4: don't think there's going to be that significant a change
Speaker 4: from what we anticipated months before the election.
Speaker 3: Well, Christina, here's the disconnect for me. Like I agree
Speaker 3: with you, it's going to take time for fiscal stimulus
Speaker 3: to come through. It's going to take time, quite frankly,
Speaker 3: for the towers to come through, right because he's going
Speaker 3: to use that is negotiating to them by he I mean,
Speaker 3: you know President elect Donald Trump. But you know, sentiment
Speaker 3: is you know, not to be played with, not to
Speaker 3: be trifled with. If you follow me here, I mean,
Speaker 3: sentiment can start pricing this into markets far more quickly,
Speaker 3: far more you know, rapidly than we otherwise expect. I mean,
Speaker 3: what's the potential for that to happen between now and
Speaker 3: the end of this year.
Speaker 4: Oh, I certainly think there's the potential for that to happen.
Speaker 4: We're already seeing a very visceral reaction in markets. But
Speaker 4: I just want to draw the distinction between what happens
Speaker 4: in markets and what happens in the economy. We could
Speaker 4: see very well markets discount strong economy in twenty twenty five,
Speaker 4: and I'm not going to argue with that. I do
Speaker 4: think we're going to see a reacceleration in the US,
Speaker 4: but I do think markets have a way of reacting very,
Speaker 4: very robustly sometimes to what they think will happen, and
Speaker 4: then there's a point where markets are likely to moderate.
Speaker 4: It's not dis similar to what we saw in twenty sixteen.
Speaker 4: We saw a very strong rally and some retracing, so
Speaker 4: I would anticipate that's likely. But I certainly think we're
Speaker 4: going to see the exuberance in markets in a more
Speaker 4: distinct way than we will see show up in economic growth.
Speaker 4: Now that's not to discount that psychology plays a role
Speaker 4: that when sentiment is better on the part of consumers
Speaker 4: on the part of businesses, they spend more. And I
Speaker 4: also think we're just going to get a bump from
Speaker 4: having election certainty. The biggest risk that was before going
Speaker 4: into the election, was that we'd get some kind of challenge,
Speaker 4: we'd have prolonged uncertainty. That's behind us. And so now
Speaker 4: all those spending plans and hiring plans that had been
Speaker 4: held in abeyance by companies, and all those spending plans
Speaker 4: that had been held in abeyance by consumers, that can
Speaker 4: start again, all.
Speaker 5: Right, Christina, chief Global market strategist for Investco. Where do
Speaker 5: you go globally?
Speaker 2: Here?
Speaker 5: Knowing what we know?
Speaker 4: So we certainly know that policy are going to be
Speaker 4: supportive for the US economy, but that doesn't necessarily mean
Speaker 4: that equity that economies outside the US are left out. Yes,
Speaker 4: we might see some headwinds in the shorter term, but
Speaker 4: I do think, as I mentioned, the European economy as
Speaker 4: well as the UK economy will reaccelerate next year. I
Speaker 4: think we could see a scenario where, especially if we
Speaker 4: work out the tariff issues quickly, where we see a
Speaker 4: global economy that reaccelerates. And so that means investors need
Speaker 4: to be thinking broadly. It's not just about US equities,
Speaker 4: especially because valuations are so high. So within the US,
Speaker 4: I would add to exposure to small and midcaps, because
Speaker 4: I think those will benefit very much from the environment
Speaker 4: from fetising as well as Trump policies. And then of course,
Speaker 4: looking globally, I think there's a lot of opportunity in
Speaker 4: lower valuation places UK equities, emerging markets equities. So I
Speaker 4: think we need to to be focused not just on growth,
Speaker 4: but on valuations, and that leads to diversification.
Speaker 3: Emerging market equities. That is music from my ears. No no, no,
Speaker 3: I'm kidding. I'm kidding, you know, but I would love
Speaker 3: to ask you. I mean, obviously we can't ignore what's
Speaker 3: going on in currencies here, and we've come a long
Speaker 3: way in a very short period of time. Initially, you know,
Speaker 3: we saw mechs, we saw the China yuon, we saw
Speaker 3: the Korean one all depreciate on the back of the
Speaker 3: Trump victory, and then you know, came all the way
Speaker 3: back almost right in the case of the Mexican peso,
Speaker 3: it actually appreciated for a bit there, and then Friday
Speaker 3: we kind of melted down and we continue to be
Speaker 3: melting down here. Christina, talk to us a little bit
Speaker 3: about what the dollar. Well, you know, what is it
Speaker 3: telling you here?
Speaker 4: So what I think it's telling us is that there's
Speaker 4: a lot more to the currency picture than who is
Speaker 4: sitting in the White House. In fact, more is dictated
Speaker 4: by FED policy, and so I think we have to
Speaker 4: recognize that the US dollar is likely to weaken, but
Speaker 4: it's going to have different relationships with different made currencies,
Speaker 4: and it's going to ease more relative to some currencies
Speaker 4: than others, and that will play out over time as
Speaker 4: we see what other central banks are doing as well.
Speaker 4: In addition to the growth picture, I think it's really
Speaker 4: important to recognize that you as a strong US economy
Speaker 4: doesn't mean that other economies necessarily suffer. So we have
Speaker 4: to just watch this play out. But to me, what
Speaker 4: it's telling us is that this is not just who's
Speaker 4: sitting in the White House.
Speaker 5: All right, Christina, thank you so much for joining us.
Speaker 5: Christina Hooper, she is chief of Global market Strategist for Investigo,
Speaker 5: giving us her thoughts on these markets.
Speaker 2: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 5: Let's check in Zach Cohen congressional reporter. I don't know
Speaker 5: what he's doing down there. I mean, Zach, you still
Speaker 5: have some house races that have yet to be called.
Speaker 5: Where are we what's going on with those things?
Speaker 6: Sure, Republicans are certainly the driver's seat at this hour.
Speaker 6: They've maitted at least three seats, you know, picked up
Speaker 6: a number of others. But Democrats have also flepped a
Speaker 6: couple of seats, for a total of plus three at
Speaker 6: this juncture. Obviously, the medic number to watches two eighteen
Speaker 6: on Bloomberg dot com, and right now they're hovering at
Speaker 6: around two fifteen at least, And so they're really on
Speaker 6: the margin here. There's a couple of outstanding of races,
Speaker 6: mostly west of the Mississippi River, many of them in California,
Speaker 6: some in Iowa, Arizona, Alaska, even And so as those
Speaker 6: ballots continue to come in, especially a mail in ballasts
Speaker 6: that can arrive after election day, those need to be
Speaker 6: counted before some of these closer races can get called.
Speaker 6: And whether we find out whether in fact Speaker of
Speaker 6: Mike Johnson gets to keep.
Speaker 3: The gabble Zach percent see some announcements out of the
Speaker 3: White House this morning at least Stepanek, for example, talk
Speaker 3: to us a little bit about you know, Trump's cabinet.
Speaker 3: What can we expect to hear over the next few
Speaker 3: days weeks, I mean, talk to us about US Treasury secretary.
Speaker 6: Yeah, so certainly at least a phonic. The Republican from
Speaker 6: New York being tapped to be the ambassador to the
Speaker 6: United Nations, replacing Nickayhaley, who obviously ran against then former
Speaker 6: President Donald Trump now President elect Donald Trump and probably
Speaker 6: was not going to get that role again. Somebody who
Speaker 6: sort of worked her way up through the Republican ranks,
Speaker 6: started off as a real moderate representing upstate New York,
Speaker 6: and eventually became what she would call ultra maga, very
Speaker 6: aligned with the Trump movement that seems to be paying
Speaker 6: offer her. All of Trump's Senate confirmable appointees will need
Speaker 6: to go through the Senate confirmation process. However, he's been
Speaker 6: asking the next Republican leader, whoever that might be, whether
Speaker 6: it's John Thune, John Cornyn, Rick Scott, to kind of
Speaker 6: waive that process entirely and allow him to install cabinet
Speaker 6: and other appointees through what are called recess appointments, which
Speaker 6: are allowed under the Constitution. That remains to be seen
Speaker 6: whether Congress would allow that procedure, that ectipedetic procedure. But
Speaker 6: all of that is going to need to happen pretty
Speaker 6: quickly come January.
Speaker 5: Zach, give us a sense as we step back and
Speaker 5: look at this whole realistically, how much of a red
Speaker 5: sweep has it been for the Republicans And in fact,
Speaker 5: what can President Trump get done here, given that it
Speaker 5: has control of the Senate, appears to be at or
Speaker 5: close to control of the House. How much of a
Speaker 5: red sweep is it really?
Speaker 6: I mean, the fact that Trump was able to carry
Speaker 6: all seven battleground states, with the addition of I believe
Speaker 6: Arizona last night or early this morning, certainly indicates that
Speaker 6: this was a Republican maybe not a wave. You know
Speaker 6: that we're sort of past the era of weave politics.
Speaker 6: The fact that we're talking about a Republican victory potentially
Speaker 6: in the House that'll be determined by just a handful
Speaker 6: of votes, just given the fact that jerry mandering and
Speaker 6: partisan sorting, people voting with their feet to places like
Speaker 6: California or Florida depending on their politics, really makes it
Speaker 6: hard for either party to win. The kind of results
Speaker 6: that we saw back in the day where you know,
Speaker 6: regul would be able to win forty nine out of
Speaker 6: fifty states without batting an eyelash. But certainly the fact
Speaker 6: that Trump will come into power, certainly with a Republican
Speaker 6: controlled Senate, means one for his efforts to overhaul the
Speaker 6: federal bench. He'll be able to appoint judges not just
Speaker 6: the Supreme Court, but also to lower appellate courts and
Speaker 6: federal district courts, you know, some of those benches that
Speaker 6: make up the vast majority of federal litigation. Tom, So, certainly,
Speaker 6: either through recess appointments or through actual confirmation, he's got
Speaker 6: some power there.
Speaker 3: Thanks Act. Tom Horman's been announced as the borders are
Speaker 3: and I'm looking at you know what, many believe Trump
Speaker 3: is about to embark on the largest deportation program in
Speaker 3: US history. Talk to me about that announcement, that appointment,
Speaker 3: What do you expect out of that?
Speaker 6: Certainly I had to check if he was actually a
Speaker 6: point you know, nominated to be Secretary of Home mad Security,
Speaker 6: which is object to Senate confirmation, or if this is
Speaker 6: sort of a czar like position where he's named but
Speaker 6: with that you know, sort of limited power to promagate
Speaker 6: regulations that be able to do the kinds of things
Speaker 6: that Trump is talking about. Some of this can be
Speaker 6: done via executive border I would expect, you know, within
Speaker 6: the first couple of days we see some of the
Speaker 6: return to Trump era policies around remain in Mexico or
Speaker 6: catch and release, so to speak. But certainly Homan and
Speaker 6: others are going to have some pretty vast power under
Speaker 6: existing statute to change current immigration law. Whether a Republican
Speaker 6: lets send it, even a potentially narrowly narrow one. If
Speaker 6: you know, Dave McCormick doesn't hold on in Pennsylvania that
Speaker 6: race has been called, but apparently it's too close to
Speaker 6: call for some Democrats, then maybe we could see a
Speaker 6: confirmation fight if Susan Collins Lisa Rakowski have some concerns
Speaker 6: about any of these picks, so that'll be worth watching
Speaker 6: as well.
Speaker 5: Zach, what's the to do list for Congress right now?
Speaker 6: Certainly got to figure out government funding that expires in December,
Speaker 6: as we could another shut down fight on our hands
Speaker 6: if you've got Democrats who are hoping to lock in
Speaker 6: federal funding levels for at least the first nine months
Speaker 6: of the next Trump administration, and they'll be probably some
Speaker 6: Democrats some Republicans as well who'd want to go along
Speaker 6: with that, just to sort of clear the plate and
Speaker 6: allow Trump to come in set budget levels and come
Speaker 6: up for his own spending plan for the next couple
Speaker 6: of years, although some Republicans certainly will want to hold
Speaker 6: off on that decision in order to give the incoming
Speaker 6: Trump administration the ability to set funding levels. Or the
Speaker 6: current fiscal year that started September thirtieth of this calendar
Speaker 6: year will likely see defense appropriations or actually be a
Speaker 6: defense authorization built military policy bill that passes every year
Speaker 6: and has for the last sixty some midd years. That's
Speaker 6: usually a pretty bipartisan affair, and certainly Democrats are going
Speaker 6: to want to confirm as many judges as possible to
Speaker 6: the federal bench while they have unilateral control of that process.
Speaker 6: There's a number of vacancies, not at the Supreme Court
Speaker 6: level obviously, but for lower re pellate levels and at
Speaker 6: the district courts that they could see done with a
Speaker 6: simple majority, even if Trump wants to hold off on that.
Speaker 2: Zach.
Speaker 3: The US fixing can market is closed today, but the
Speaker 3: bond market villgilantes are far from dead talk to us
Speaker 3: about Treasury Secretary, Howard Lutnick. Is it going to be
Speaker 3: John Paulson, Glenn young Kin, Scott Besson? And you're a
Speaker 3: betting man, where do you place your bet?
Speaker 6: It entirely depends on not just obviously true Trump wants
Speaker 6: as his secretary, you know, to be the primary ambassador
Speaker 6: for the American economy overseas, as Jenna Yellen has done,
Speaker 6: but certainly what the market will bear. In the Senate,
Speaker 6: as I mentioned, senator centers are coming in Republicans with
Speaker 6: fifty three seats most likely assuming this result in Pennsylvania
Speaker 6: holds and having flipped seats in West Virginia, Montana, and Ohio.
Speaker 6: And so that gives him a pretty sizable majority to
Speaker 6: be able to confirm really whoever Trump wants in that job.
Speaker 6: And I could see somebody confirmed by January twentieth. Remember
Speaker 6: Congress comes in January third, and that's the beginning of
Speaker 6: the new Congress. Then there's a number of days before
Speaker 6: the inauguration of the next president on January twentieth, So
Speaker 6: it's not unusual for the Senate to start confirming nominees
Speaker 6: for a president elect. So that way they can come
Speaker 6: in with their team in place, and I would imagine
Speaker 6: Treasury secretary and other cabinet appointees would fit the bill
Speaker 6: on that one.
Speaker 5: Hey, Zach, thanks so much for joining us. Really appreciate it.
Speaker 5: Zach Ohen He is a congressional reporter for a Bloomberg
Speaker 5: government down in Washington, DC.
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: Just Say Alexa playing Bloomberg eleven.
Speaker 5: Nick Stadneller joins us. He's in studio. He's had a
Speaker 5: product at Medley Global Advisors. He does this in Damien,
Speaker 5: called a merging mark. I ever heard of him exactly, Nick,
Speaker 5: What emerging markets do you focus on in Which is
Speaker 5: the most I think attractive to you at this moment?
Speaker 7: Well, historically I've done the Senior region, so Turkey, the Gulf, Russia, Ukraine.
Speaker 7: I've spent quite a few years living in most of
Speaker 7: those places. But sort of over the last couple of years,
Speaker 7: I've been looking a lot more globally and in terms
Speaker 7: of what looks interesting to me right now. Quite frankly,
Speaker 7: I'm a bit worried about a lot of emerging markets
Speaker 7: right now. But I think if I were, you know,
Speaker 7: if someone held a gun to mind, why is that Well?
Speaker 7: I think that the biggest risk that I see is
Speaker 7: an inflationary US and a deflationary China, and if both
Speaker 7: of those happened at the same time, it's going to
Speaker 7: be really bad for emerging markets for quite some time.
Speaker 7: But if somebody held a gun my head and said
Speaker 7: what do you like right now? I think I would
Speaker 7: probably be focusing more on frontier markets and further down
Speaker 7: the credit stream, so lower rated distress sovereigns in places
Speaker 7: like Sub Saharan Africa and parts.
Speaker 5: Of Asia that's not like Mexico or Brazil.
Speaker 3: That this yeah, I be talking about the dollar bonds, Paul.
Speaker 3: I mean, let's get into the nitty gritty here. I mean,
Speaker 3: let's first begin with the Central and Eastern Europe. Right,
Speaker 3: Let's talk about Hungary. Let's talk about victor Orbon He's
Speaker 3: first went to graduate Trump after he won. Let's talk
Speaker 3: about this rumor that Trump and Putin spoke just a
Speaker 3: few days back. And now I think the Krumlin's rejecting that.
Speaker 3: I mean, what's up, what's down, what's going on in
Speaker 3: your region?
Speaker 7: Well, I think the situation with Orbon and Hungary is
Speaker 7: a bit mixed, because, of course, Orbon's thrilled to see
Speaker 7: Trump win. They share a lot of political ideas.
Speaker 3: And they share a locker tamarack non and.
Speaker 7: I'm sure that Trump would be very supportive specifically of
Speaker 7: Orbon when he can. But the fact is that Trump
Speaker 7: is much euroskeptic, a skeptic of the Transatlantic Alliance, and
Speaker 7: there are a lot of worries about the Euro and
Speaker 7: the US relationship with the European Union and the Hungarian Foreest,
Speaker 7: you know, Czech and Poland. Those are all sort of
Speaker 7: high beata versions of the Euro and very closely tied
Speaker 7: to the fates of the Euro. So the irony is,
Speaker 7: even though or Bond really you know, supports Trump, it's
Speaker 7: probably not going to be very good for financial markets
Speaker 7: in Central Europe. And you're starting to see that filter
Speaker 7: into two currency prices there.
Speaker 3: And what about the impact of the German coalition, you know,
Speaker 3: falling out of bed here. I mean, like there's got
Speaker 3: to be an impact on some of these periphery markets
Speaker 3: like Poland, like Remania, Hungary, the Czech Republic, I mean,
Speaker 3: any sort of spillover from that.
Speaker 7: Well, I think right now it seems sort of minimal.
Speaker 7: One of the weird things that's happened is German boons
Speaker 7: are starting to trade through Euro interest rate swaps, which
Speaker 7: suggests sort of, I would say, a thing in the
Speaker 7: financial market conditions for the European bond market, and that
Speaker 7: sort of thing always filters in and the higher risk,
Speaker 7: the emerging sort of periphery of the EU is always
Speaker 7: going to suffer. But in the in the short term,
Speaker 7: I think, you know, a little bit of domestic political
Speaker 7: instability in Berlin is probably not going to throw the
Speaker 7: European Union off its rails.
Speaker 3: Now for our audience who's not following that, but we're
Speaker 3: seeing our swap sweads in the Eurzone, specifically shats spreads
Speaker 3: to your swap spreads in Germany narrow. We're seeing a
Speaker 3: little bit of a little bit of disruption and the
Speaker 3: plumbing of the European fixed income market right and the
Speaker 3: funding markets, and what we look at our European swap spreads,
Speaker 3: specifically German shats to your swap spreads, which is German.
Speaker 5: It's the spread between Europe.
Speaker 3: It's it's the spread between European swaps and basically the
Speaker 3: underlying bonds, and what you've seen are them narrow as
Speaker 3: the bond market is effectively sold off.
Speaker 5: Right. So I've been on Wall Street for thirty five years.
Speaker 5: I've never heard that once before.
Speaker 3: I mean, you have to be looking at this. I mean,
Speaker 3: this is like looking at the plumbing of the US market, right,
Speaker 3: But I mean, really where we are, Nick, I mean,
Speaker 3: is you're talking about, you know, financial conditions tightening in Europe, right,
Speaker 3: and so what does that mean? I mean, does that
Speaker 3: mean that you know we're going to see more stimulus
Speaker 3: out of the Eurozone or is that something we could
Speaker 3: be waiting for as well here in the US.
Speaker 7: Well, I think at the margin, it increases the chances
Speaker 7: that the European Central Bank is going to have to
Speaker 7: cut a bit more aggressively. But the history of European
Speaker 7: policy makers is that they do the bare minimum after
Speaker 7: they're absolutely forced into it. So I wouldn't get too
Speaker 7: preemptive and call a very bold move from European central
Speaker 7: bankers quite yet.
Speaker 3: So let's shift a little bit and look a little
Speaker 3: further sap into the Middle East and look into Israel.
Speaker 3: I know that's right in your wheelhouse as well. Let's
Speaker 3: look at what's going on in the golf region. I mean,
Speaker 3: any thoughts there, I mean, what does a Trump administration
Speaker 3: mean for the Middle East, for Saudi Arabia, for some
Speaker 3: of these other markets.
Speaker 7: Well, Trump and his family have cultivated very strong ties
Speaker 7: with the Saudi leadership and other senior golf officials around
Speaker 7: the region. So I'm sure in a lot of golf
Speaker 7: capitals there's a lot of celebration going on about the
Speaker 7: process backs of a second Trump presidency. But ultimately, I
Speaker 7: think the complication that you have with Israel and the
Speaker 7: fact that you know, since since the conflict began with
Speaker 7: Hamas and the more recent conflict with Iran, the Saudis
Speaker 7: have have sort of got cold feet about the idea
Speaker 7: of normalizing relations with Israel. So it's going to be
Speaker 7: very difficult for Trump to keep all of his friends
Speaker 7: and partners in the Middle East happy, continuing to support Israel,
Speaker 7: which he's unequivocally said that he will do, while at
Speaker 7: the same time trying to brooker some sort of deal
Speaker 7: between Israel and Saudi. It's kind of a tough climb,
Speaker 7: so I'd say expectations are pretty high. But more broadly,
Speaker 7: I think that you know, the Gulf will definitely bask
Speaker 7: in a moment of good relations with the US.
Speaker 5: Here, what's the what's your call on China? Here?
Speaker 7: My call in China is kind of like what I
Speaker 7: said about the European authorities earlier, is that the Chinese
Speaker 7: and I don't think it's that the Chinese officials are
Speaker 7: slow to react, is just to have a very different
Speaker 7: reaction function, and so they will continue supporting the market.
Speaker 7: The Pollup Bureau is quite clear that they're going to
Speaker 7: draw a line under house prices. But this is a
Speaker 7: balance sheet problem. And the balance sheet problem is you
Speaker 7: have a slumping stock market and more importantly, a slumping
Speaker 7: property market, which is really eating into consumer confidence. And
Speaker 7: the Chinese consumer, even before all of this happened, was
Speaker 7: not an aggressive leveraged.
Speaker 5: Play.
Speaker 7: You know, at Chinese consumers have always been big savers
Speaker 7: and very conservative. The government needs to get asset prices
Speaker 7: moving in the right direction to get confidence going to
Speaker 7: get consumer spending up in China, and that's going to
Speaker 7: take time. And I think the way investors think about
Speaker 7: this is okay, and now it's a big bazooka today,
Speaker 7: and then in a month or two Chinese consumers are
Speaker 7: going to spend again and everything's going to be fine.
Speaker 7: This is a multi quarter, if not multi year, balance
Speaker 7: sheet problem the authorities are trying to solve. They will
Speaker 7: do it, but they will do it on their own timeframe,
Speaker 7: and I think investors are going to be disappointed by
Speaker 7: how long that takes.
Speaker 3: Nick last question thirty seconds here. You know, at the
Speaker 3: outset of our conversation, you mentioned, you know, Sub Saharan Africa, right,
Speaker 3: some of these frontier sovereigns which are all dollar bonds.
Speaker 3: But I mean the spreads on those dollar bonds have
Speaker 3: come in quite considerably, right. I mean, if you look
Speaker 3: at the EM distressed, the both of EM distressed index,
Speaker 3: it's up sixty percent year to date, largely because of
Speaker 3: spread compression in the sovereign space, high yield to overeign space.
Speaker 3: Just how much juice is left in those bonds really.
Speaker 7: Well, probably not another sixty percent. But I think the
Speaker 7: story for why the outlook is I think pretty good
Speaker 7: going forward is one you know, you're seeing ongoing reforms
Speaker 7: and improvements places like Egypt, which is up there, not
Speaker 7: Sub Saharan, but in northern Egypt. You know, you're continuing
Speaker 7: to see good reforms, and I think they're also a
Speaker 7: little bit less exposed to dollar higher dollar yields because
Speaker 7: rates are already so high. They move up another fifty hundred,
Speaker 7: two hundred basis points, it's not going to.
Speaker 5: Kill them, all right, Nick, thank you so much for
Speaker 5: joining us. Nix stad Miller, head of Product Medley Global Advisors.
Speaker 5: They're out there in Milwaukee, but he's here in New
Speaker 5: York City, and there's no way you're getting this dude
Speaker 5: from like Saudi Arabia where he was to go to Milwaukee.
Speaker 5: It's a great town though, By the way, Nick tid Man,
Speaker 5: thanks so much for joining us.
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 5: All right, folks, you detly look at the front pages
Speaker 5: around the world, Lisa Matteo, front pages in the newspapers.
Speaker 5: What's going on out there? All right?
Speaker 1: Have either of you ever taken a cruise to like
Speaker 1: Norway or like some of these cold Arctic like destinations.
Speaker 5: No, but no, I'm thinking about it. I'm thinking about
Speaker 5: a cruise coming up in the fall.
Speaker 1: Okay, so here's the thing. Okay, travelers are paying well,
Speaker 1: I don't know if you're gonna pay this, but ten
Speaker 1: thousand dollars for seven nights day on this luxury vessel.
Speaker 1: You see Wales, Wallas is bears right. But climate change,
Speaker 1: this is from the Washington boasts. They say it's starting
Speaker 1: to change things. The rapid ice melts. It sparked this
Speaker 1: polar cruise boom, like more people going because it's opening
Speaker 1: up these easier paths for the boats to get in around.
Speaker 1: It's extending the season. But at the same time, it's
Speaker 1: also melting the attractions that people want to see. So
Speaker 1: you have certain places where they may not be having
Speaker 1: these cruises for very long because a few decades from
Speaker 1: now they might not be there. So that's a change
Speaker 1: that they're starting to see. But it's pretty pricey.
Speaker 3: I mean, I've never been on a cruise. To be
Speaker 3: honest with you, I mean, Lisa, I mean, I mean
Speaker 3: talk to me about you know, that whole beauty of
Speaker 3: being on a cruise in a post pandemic environment that
Speaker 3: they still have the buffet special with unlimited from cocktail.
Speaker 3: I mean, you know that's just so healthy.
Speaker 1: I have not done one yet. I know I've been
Speaker 1: meaning to, but I'm telling you it's the Arctic is
Speaker 1: the way to go for a lot of these. That's
Speaker 1: what they're saying.
Speaker 3: But experience.
Speaker 5: Charlie Pellett is our cruise person.
Speaker 1: Oh that's great. You got to ask him if he's
Speaker 1: been a whole cruise in Norway.
Speaker 5: Cruise anywhere. Like he takes a cruise to go see
Speaker 5: the oil riggs in the northern Atlanta. Like there's three
Speaker 5: people in the cruise ship and he's one of them.
Speaker 5: So anyway, that's our Charlie pell What else you got?
Speaker 5: All right?
Speaker 1: So have you been to any of your kids?
Speaker 2: Yeah?
Speaker 1: Parents weekend? I know you have a son. You have
Speaker 1: a son too that's in college. Well, now more parents
Speaker 1: are actually joining in on the festivities. We're talking jell shots,
Speaker 1: beer pong, flip cup. They're taking part in all the festivities.
Speaker 1: This is in the journal. A lot more parents they
Speaker 1: say they want to party, their kids say that they're
Speaker 1: cool with it. They start drinking at eight thirty in
Speaker 1: the morning because you know, the football game start at noon.
Speaker 1: And the thing they do, say they pass on is
Speaker 1: the cheap beer. So they bring their own mini bottles
Speaker 1: of Tito's in their little fanny pack.
Speaker 5: So they so long that I can relate to. But
Speaker 5: I mean put.
Speaker 1: Their own little, you know, cocktails in their water flasks.
Speaker 1: But some parent, you have the flip side. Some parents
Speaker 1: are saying, no, it's not right, like you got to
Speaker 1: be a parent.
Speaker 3: So Miami didn't have Parents Weekend this weekend, but Tulane
Speaker 3: University did, and yeah, shout out to Robin Hober and
Speaker 3: Little kings Lane Rodbrick, New York. I got to pick
Speaker 3: of her on a mechanical bull this weekend. So let's
Speaker 3: just be clear. You know, you're not You're not too
Speaker 3: You're never too well to get out a mechanical bull
Speaker 3: in New Orleans.
Speaker 5: Oh yeah, yeah, So, I mean parents are getting into
Speaker 5: it's probably hey, I'm paying a good.
Speaker 1: A lot of them are saying they just they want
Speaker 1: to relive the golden years. Maybe no, you got to
Speaker 1: bring along the tumbs.
Speaker 5: I'm saying, if you're.
Speaker 1: Going to trip like that, this is something right up
Speaker 1: your alley.
Speaker 4: Paul.
Speaker 1: So this is in Bloomberg screen Time newsletter has to
Speaker 1: look inside Netflix's move into live programming. So we've been
Speaker 1: hearing more about it right the past couple of years.
Speaker 1: Live cooking shows, tennis match, hot dog eating contest, comedy special,
Speaker 1: football games, wrestling and you know, in a few days
Speaker 1: you have that boxing match between Jake Paul Mike Tyson.
Speaker 1: That's the big draw. But some people are saying it's
Speaker 1: weird because Netflix kind of created this streaming service as
Speaker 1: an alternative to live TV, but it's all about advertising.
Speaker 1: Like a lot of its customers pay more to avoid
Speaker 1: the ads, but with live programming they can put the
Speaker 1: advertgeers in front.
Speaker 5: Of all the right. That's I mean, it's just kind
Speaker 5: of you know when you think about the the ad dollars,
Speaker 5: you know, shifting from traditional media broadcast network's, cable network's
Speaker 5: going to streaming. It's just a matter of time before
Speaker 5: the streaming services. I meant sport.
Speaker 3: This is right in your wheelhouse, Paul Sweeny, and I
Speaker 3: mean for me, I mean, Netflix is just eating everyone
Speaker 3: else's lunch. And we have Walt Disney earning it's coming
Speaker 3: in on Thursday. You know, Walt Disney better than most.
Speaker 3: I mean, what do you expect out of that?
Speaker 5: I mean it's yeah, I mean Walt Disney Company has
Speaker 5: become a basically a theme park company. That's a you know,
Speaker 5: more than half of their operating profit, and so we'll
Speaker 5: have to see it. But again they're trying to navigate
Speaker 5: the migration to streaming. All I know is I did
Speaker 5: not watch the Penn State game, the white Out game
Speaker 5: on Saturday evening because it was on Peacock. I'm like,
Speaker 5: I'm just not going there. I mean, I got enough
Speaker 5: things hitting my credit card. I'm not going to Peacock
Speaker 5: to watch Penn State. So you know, Dan ives prince
Speaker 5: was the principle. Yeah, exactly out of Princeville principle. Exactly
Speaker 5: what do you have?
Speaker 1: All Right? So we talked about, you know, the parents
Speaker 1: living it up at colleges drinking. But now we have
Speaker 1: wine makers. This is on the flip side. They're going
Speaker 1: to the younger, health conscious drinkers. So they're making more
Speaker 1: wines with less alcohol and fewer calories. You've seen the popularity, right,
Speaker 1: the hard selsers really got it. But the Wall Street
Speaker 1: Journal is saying, okay, overall wine sales, they've declined for
Speaker 1: a thirty year in a row. But you have the
Speaker 1: light wine category. It's actually increased two hundred and nine
Speaker 1: million in sales twenty twenty four from sixteen million in
Speaker 1: twenty nineteen.
Speaker 5: Light wine.
Speaker 1: Light wine, they're about fifteen dollars a bottle. You know,
Speaker 1: it goes about eighty calories as opposed to one hundred
Speaker 1: and twenty calories. It's usually white wine because the red
Speaker 1: wine is a little bit tougher because it already has
Speaker 1: more alcohol and more sugar in it. But they do it.
Speaker 1: They don't just add water, so they're not just diluting it.
Speaker 1: They're using this disolation process to remove a portion of
Speaker 1: the article of the alcohol. But some people are saying
Speaker 1: that the taste, I don't know, all right.
Speaker 5: So this company in Woodville washing the stale Washington. The
Speaker 5: company removes alcohol from thirty percent of the finished wine
Speaker 5: and combines it with an unaltered wine to preserve the taste.
Speaker 5: About a quarter fires become returning customers, according to the survey.
Speaker 3: Paul Sweenia, I'm fifty years old, and for the better
Speaker 3: part of my life, people were trying to figure out
Speaker 3: how to inject more alcohol into a sip. Of yes,
Speaker 3: into a beverage, and you know, and it's kind of
Speaker 3: like the it's kind of like the rest of the world.
Speaker 3: The US. We've been on a globalization path. Now we're
Speaker 3: getting more into a nationalistic plant. We're sort of cutting
Speaker 3: off our relationships with everyone, and now we're cutting off
Speaker 3: all the alcohol. I'm strusted. I just don't even know.
Speaker 5: I don't know what to do.
Speaker 1: I don't I don't mind the idea of it, you know,
Speaker 1: because then you can have like a second glass without
Speaker 1: fiel and guilty.
Speaker 5: I mean, there's light beer, so I guess why wouldn't
Speaker 5: there be a light wine?
Speaker 1: Yes, but it's usually the white. The white wine is easier.
Speaker 1: But yeah, that's that's the new trend. I'm gonna have
Speaker 1: to check it out.
Speaker 5: I doubt we're going to get a light jamison now happening.
Speaker 5: My friend's over in Ireland. Yeah, so all right, Lisa
Speaker 5: Matteo with the newspapers.
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