Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: Week podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Got a great segment coming up to continue the macro talk.
Speaker 2: We've got our colleague, Rich Miller, who's on my team
Speaker 2: you know when I'm doing the rest of my job,
Speaker 2: which is covering the economy. So Rich, good colleague of
Speaker 2: mind based out of DC. He's with us on zoom
Speaker 2: and Ira Jersey, our chief US interest rate strategies with
Speaker 2: us here in the Bloomberg Interactive Burger studio. How do
Speaker 2: you guys doing.
Speaker 3: I'm doing great, Molly, thanks very much for having us
Speaker 3: and having me in the studio.
Speaker 4: And it looks like the investors I think we're saying
Speaker 4: in something of a holding pattern. Hand of the inflation
Speaker 4: data tomorrow and of course the FED decision on Wednesday,
Speaker 4: so let's get a preview of all that. Ira, who's
Speaker 4: in studio. By the way, do you know the difference
Speaker 4: between suspenders and braces? Because Ira can tell you.
Speaker 2: Please tell me Ira.
Speaker 5: One has buttons, one has clips.
Speaker 4: Keep that in mind. So the guy with the braces,
Speaker 4: he's the most important one. I suspect he's also in studio.
Speaker 4: So Ira, what is the market expecting at this point
Speaker 4: and what do you suppose the Fed's going to do?
Speaker 4: And why is there such a disconnector if there is one?
Speaker 3: Well, I think the rate market is thinking the Fed's
Speaker 3: not going to do anything this week, right, But the
Speaker 3: question is will they start to get more dubvish?
Speaker 4: Right?
Speaker 3: And certainly the market has completely shifted tone the last
Speaker 3: six weeks, where at the beginning of October we were
Speaker 3: basically pricing for the Fed to do almost nothing in
Speaker 3: twenty twenty four, maybe a cut at the end of
Speaker 3: the year. Now we're pricing for one hundred bases points
Speaker 3: of interest rate cuts starting in March, right, So we're
Speaker 3: going to be definitely listening for any tone shift from
Speaker 3: the Fed.
Speaker 5: That's a big one.
Speaker 3: And if they were a little bit more hawkish than
Speaker 3: they were, say last month or what you heard in
Speaker 3: the minute, then you can probably start to price out
Speaker 3: that March. That March cut that's already priced about.
Speaker 2: That is really dramatic to move up from basically no
Speaker 2: cuts to now starting as early as March. Rich, let's
Speaker 2: bring you in here because you had a great story
Speaker 2: over the weekend. As to the question isn't so much
Speaker 2: about the when, but the why. So tell us about
Speaker 2: the reasons why the Fed could cut and why that matters.
Speaker 6: Well, two basic reasons. One, you know, the economy's falling apart,
Speaker 6: and then they've got to come to the rescue. So
Speaker 6: in that case, probably the cuts will be rapid or big.
Speaker 6: But the other one, which Chris Waller Governor Chris Waller floated,
Speaker 6: would be if inflation keeps falling, they bring down rates
Speaker 6: in tandem with their fall in inflation, so they effectively
Speaker 6: keep the real rate interest rate after adjusting for inflation, steady,
Speaker 6: And so that would be sort of good news, probably
Speaker 6: certainly good news for the economy, because it would be
Speaker 6: suggesting that the economy is cruising along or in this
Speaker 6: soft landing. You know, inflation is coming down, a maculous disinflation,
Speaker 6: et cetera.
Speaker 4: Hey, I, when things turn, they usually turn pretty quickly
Speaker 4: and pretty severely. How dramatic of a turn have we
Speaker 4: seen when it comes to parsing the data?
Speaker 3: Well, not that dramatic, right, We've seen a mix of
Speaker 3: data right, where some data is certainly weaker and the
Speaker 3: data is certainly you know, not falling off a cliff yet.
Speaker 3: But to your point, John and I, you know, it's
Speaker 3: possible that you get this, you know, a massive downshift
Speaker 3: in the economy, and that would be one of the
Speaker 3: reasons why the Federal Reserve, as to what Rich was
Speaker 3: just saying, that would be one of the reasons why
Speaker 3: the Fed would start to cut early.
Speaker 2: Now that's a minority view to put that out.
Speaker 3: There, though, probably, But at the same time, if that
Speaker 3: does occur, then certainly the Fed might cut much faster.
Speaker 6: Right.
Speaker 5: Typically I call it escalator up elevator down.
Speaker 3: Right, when the Federal Reserve hikes interest rates, it increases
Speaker 3: them relatively, you know, slowly, although you know in.
Speaker 2: This site four seventy five faces point hypes incessions.
Speaker 5: A little bit different.
Speaker 6: Right.
Speaker 3: But when they cut, they cut, you know, one hundred
Speaker 3: basis points at a time, maybe for three times, right,
Speaker 3: so you can wind up with with very significant declines
Speaker 3: in it. Now, that's not my call, and I actually
Speaker 3: think that the market's probably getting ahead of itself because
Speaker 3: I do think that you know that Governor Waller and
Speaker 3: some of the other members of the FED. They would
Speaker 3: love to be able to kind of calibrate the federal
Speaker 3: funds rate with inflation and with the growth level, but
Speaker 3: it's very hard to do, right. So I agree with
Speaker 3: with the idea that we need to know why they're
Speaker 3: going to be cutting early, and I'm not convinced that
Speaker 3: they're that they need to or they're going to.
Speaker 2: Yeah, and Richie, you know, let's get into a little
Speaker 2: bit more in the story. Because when I pointed out
Speaker 2: that that reset why they'd be cutting because of a
Speaker 2: recession and being a minority view, it looked like in
Speaker 2: the survey that Bloomberg did earlier this month was what
Speaker 2: was it about twenty eight percent of people who thought
Speaker 2: that would be the reason why the Fed would be cutting,
Speaker 2: but closer to three quarters thinking it'd be more along
Speaker 2: the soft landing narrative that inflation is cooling and that
Speaker 2: would warrant a lower policy rate. So tell us for
Speaker 2: those people who are in more of the recession camp,
Speaker 2: I mean, not many of them left, Why do they
Speaker 2: think that's still the case?
Speaker 6: Well, I mean some of them include our own Anawong
Speaker 6: who's the chief of cons So it basically I think
Speaker 6: the people are arguing that there's still a recession likely,
Speaker 6: I guess have a couple of reasons. One, you know,
Speaker 6: if you go back in history, people always talking about
Speaker 6: soft landing just before recession.
Speaker 4: So that's one.
Speaker 6: But two, I think it's more about that the interest
Speaker 6: rates will slowly start to weigh on consumers companies, and
Speaker 6: that you know, consumers have more or less exhausted all
Speaker 6: their surplus savings and now they're having a bar credit
Speaker 6: you know, people point to buy now pay later has
Speaker 6: like ballooned, and the companies, many of the companies, the
Speaker 6: rates they locked in will be coming doe and they'll
Speaker 6: have to refinance. So that's the argument of, as you say,
Speaker 6: sort of dwindling minority at the moment of people who
Speaker 6: think of recession. I mean, what was kind of interesting
Speaker 6: in the survey was that, just looking ahead to the meeting,
Speaker 6: is that the median economists we surveyed, you know, says
Speaker 6: the Fed itself is only going to have two interest
Speaker 6: rate cuts penciled into their dot plot. And that's like
Speaker 6: just half, as Ira was saying, that's just half of
Speaker 6: what the market is expecting the Fed will end up
Speaker 6: having to do.
Speaker 4: Is it instructive? Ira to look at history the interval
Speaker 4: between pauses, hikes, pauses and cuts. Does that tell you anything?
Speaker 3: I mean, it's not a time thing that the FED
Speaker 3: really worries about, right, it's where are we in the economy.
Speaker 5: But there is a cyclicality to the business.
Speaker 3: Cycle, for sure, right where you do have troughs and
Speaker 3: valleys and economic momentum. But sometimes it was manifest themselves
Speaker 3: in mid cycle slowdowns. I mean, I'll take twenty fifteen
Speaker 3: as a perfect example where you had some massive sectors
Speaker 3: of the economy that were in recession.
Speaker 4: Right.
Speaker 3: You had the oil patch was in recession for sure,
Speaker 3: but we didn't really fall into the category of making
Speaker 3: it a recession because it wasn't incredibly broad based.
Speaker 5: And it's possible that we could.
Speaker 3: Be in a situation like that right where we have
Speaker 3: a meaningful slow down right now that winds up accelerating
Speaker 3: sometime in the not too distant future and we don't
Speaker 3: technically get a recession, but it doesn't matter. The economy
Speaker 3: is slowing, right. There's you know, I think very few
Speaker 3: people and objective observers would deny that. The question is
Speaker 3: will the pace be slow enough that and broad enough
Speaker 3: that it worries the federal reserve, and does is it
Speaker 3: slow enough that inflation I'm sound enough for the.
Speaker 4: Federal reserve to be And then what's the history of
Speaker 4: soft landings? Do we have a good track record of that?
Speaker 3: You could you could argue we had one in nineteen
Speaker 3: ninety four. You can argue that, you know, we had
Speaker 3: one or two. But yeah, they don't normally happen.
Speaker 5: Right, It's it's the Fed cuts usually because there's an emergency,
Speaker 5: and it cuts a lot.
Speaker 2: Yeah, I mean what kind of emergency do you think
Speaker 2: that would be at this point, rich, Like, you know,
Speaker 2: that Job's report on Friday certainly doesn't look like any
Speaker 2: emergency in the labor market right now.
Speaker 6: Yeah, I mean, and all survey sort of said that
Speaker 6: one other option would because some sort of financial shock.
Speaker 6: And for the moment, none of the economists we survey
Speaker 6: are looking for a financial shock, which gets you a
Speaker 6: little worried. But you know that would be something you know,
Speaker 6: as I said, the people who see a recession sort
Speaker 6: of you know say, okay, you know things are always
Speaker 6: bright before it turns dark or some thing like that,
Speaker 6: and that you know that that that that that this
Speaker 6: interest rates have have an impact. High interest rates have
Speaker 6: an impact, and they will. They will basically wear the
Speaker 6: economy down to recession. I'll be a most people think
Speaker 6: it's going to be very mild, but still that's I mean.
Speaker 6: I think will be interesting next week, Will you know
Speaker 6: be the Fed has kind of in its statement has
Speaker 6: a bit of a tightening bias. Will they reword that
Speaker 6: some people, some economists like Michael Gapin of Bank of
Speaker 6: America suggesting they may even drop that. And then the
Speaker 6: other things I mentioned earlier will be you know, the
Speaker 6: dot plot, and you know how much, how many, how many,
Speaker 6: how many, how many rate cuts they've got priced in.
Speaker 6: At the last press conference after the last meeting, Powell
Speaker 6: said they weren't even thinking about rate cuts, not talking
Speaker 6: about rate cuts.
Speaker 4: It's going to be hot for him.
Speaker 6: I think to say that this time.
Speaker 4: Rich joys a pleasure thanks a lot rich on Zoom
Speaker 4: from Washington, D C. Rich Miller, our economics reporter and
Speaker 4: in studio with us Ira Jersey, the chief US industrate
Speaker 4: strategists with Bloomberg Intelligence. Of course, the FED meeting Wednesday
Speaker 4: and the foul Powell press conference will be specifically looking
Speaker 4: for the summary of economic projections. You're listening to Bloomberg.
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Speaker 4: You know New York Molly has been winning listings from London,
Speaker 4: the Chipman early listings. That is, well stock listings.
Speaker 2: Yeah, the kind that our listeners care about.
Speaker 4: What'd you think I was talking about?
Speaker 2: I don't know. I mean, you know, my mind's been
Speaker 2: in the real estate space lately.
Speaker 4: Oh that's right. Just closed, closed.
Speaker 2: We just signed a contract. Big except we're closing.
Speaker 4: You become a big girl now, Oh.
Speaker 2: My goodness, you better believe it.
Speaker 4: Mortgage and everything well, chip Maker arm when you talk
Speaker 4: about listings, that's the one that immediately comes to mind.
Speaker 4: Based in Cambridge, listing in New York. With that as
Speaker 4: a backdrop, let's explore the ties between our two great cities,
Speaker 4: New York and London. And we're honored to say hi
Speaker 4: to Chris Hayworth, the Policy Chairman for the City of London.
Speaker 4: So New York and London are we friends, enemies, frenemies
Speaker 4: competitors something else.
Speaker 7: Well, I would say we are first and foremost friends
Speaker 7: and also just a little bit of competition between our
Speaker 7: two great cities as well. But as far as the
Speaker 7: listings go, I mean, I think both our exchanges have
Speaker 7: had challenging years, ours more than yours. We know our
Speaker 7: listings are down in London, and really that's down to
Speaker 7: availability of capital and capital flows, and particularly we've seen
Speaker 7: it with fintech and fintech sector companies who we would
Speaker 7: have had would have listed on the London Stock Exchange
Speaker 7: have come across the pond because then get bigger valuations
Speaker 7: here there's more capital availability. But our regulators have adjusted
Speaker 7: some of the restrictions on listing in on the London
Speaker 7: Stock Exchange, and so we're hoping to continue to win
Speaker 7: business in a friendly and competitive way with you in
Speaker 7: New York.
Speaker 4: Is it too much regulation in your city?
Speaker 7: We don't think so. We think that high quality regulation.
Speaker 7: Financial regulation is actually very important. It's important to attract
Speaker 7: foreign direct investments into our country. But at the same
Speaker 7: time it mustn't be restrictive. It has to be innovative
Speaker 7: as well. And the one thing you do much better
Speaker 7: in New York than we do is you actually take
Speaker 7: risk in business, and unfortunately regulation has become something that's
Speaker 7: seen not innovative, not promoting global competitiveness. We're very keen
Speaker 7: to see them do that, but not to downgrade the
Speaker 7: quality of our regulation.
Speaker 2: Got it, well, Chris, tell us a little bit more
Speaker 2: about your title. We were trying to understand as a
Speaker 2: lot little bit before. You know your distinction is policy chairman.
Speaker 2: What role that really entails? And I'm also a little
Speaker 2: bit while you're here this week.
Speaker 7: So okay, So the Policy Chairman of the City of
Speaker 7: London is the political leader of the corporation. Serves for
Speaker 7: five years. We have one hundred and twenty so.
Speaker 4: That deserves explanation on itself. There's there's London and the Corporation,
Speaker 4: which is in the Guema Square city So where does
Speaker 4: the where does that get its roots? The corporation?
Speaker 7: The Corporation goes back over one thousand years. It is
Speaker 7: the oldest part the heart of the of London in general.
Speaker 7: London in general is made up of thirty two different
Speaker 7: London boroughs and the City of London Corporation. But our
Speaker 7: job specifically is to promote UK financial and professional services
Speaker 7: both and to represent them, both to the UK government
Speaker 7: and internationally. So my job sees me doing sixty five
Speaker 7: days travel around the world promoting London as a global
Speaker 7: financial capital.
Speaker 4: And to that and you're opening an office.
Speaker 7: We are we are know this. This is something I've
Speaker 7: wanted to do for a number of years now. We
Speaker 7: have a global representation in other countries, we haven't had
Speaker 7: it here in the US, and so I've hired a
Speaker 7: managing director and we're going to work between DC, where
Speaker 7: we obviously have the regulators, the Hill and the think tanks,
Speaker 7: and New York, where you obviously have the commercial and
Speaker 7: financial center. The idea is really to talk together about
Speaker 7: regulation and alignment of regulation and policy areas as well,
Speaker 7: and of course to promote flows off trade and investment
Speaker 7: between our two great nations.
Speaker 2: So tell us, Chris, because admittedly, so like I said,
Speaker 2: I'm a huge fan of your city. I studied abroad
Speaker 2: there when I was in college, have been dying to
Speaker 2: get back when My memory though of the financial center
Speaker 2: of London is that it's largely Canary Wharf, right or
Speaker 2: is there a whole lot else going on beyond that area?
Speaker 7: Absolutely? I mean what you will find in Canary Wharf
Speaker 7: are some of the big banks, some of the big
Speaker 7: investment banks, but you will find huge amounts to financial
Speaker 7: services companies and some banks in the square mile itself.
Speaker 7: What happened is, you know, we only have one square mile.
Speaker 7: That's a tiny area to actually be able to cope
Speaker 7: with the explosion of growth in the past twenty years
Speaker 7: in the financial services sector. And so fifteen so years ago,
Speaker 7: a number of the moved to Canary Wharfs. Some are
Speaker 7: now moving back into the city, but we still maintain
Speaker 7: that the reputation when you're talking globally, what people remember
Speaker 7: is not Canary Wharf. They remember the city of London.
Speaker 4: It's not a one way street. There's US investment going
Speaker 4: to London. Tell us about that, particularly with venture capital.
Speaker 7: With venture capital particularly there is and that's hugely important
Speaker 7: for us. And what I've been doing today and I
Speaker 7: will be doing in the next few days here and
Speaker 7: in DC is. I spoke today with the New York
Speaker 7: Stock Exchange and we agreed to mutual collaboration. Although there
Speaker 7: is com competition, there's no reason why we can't equally
Speaker 7: support each other's aspirations. And there's lots of ways we
Speaker 7: can align and one of the encouraging things is we
Speaker 7: do get two way flows, it's not just one way.
Speaker 7: We do have US investment into the United Kingdom and
Speaker 7: that's been growing, and the VC market in particular.
Speaker 2: And tell us about investment then from other countries. As
Speaker 2: much as we sometimes like to think, the US is
Speaker 2: not the center of the world, So tell us what's
Speaker 2: happening elsewhere.
Speaker 7: Well, look, we've been through a very difficult challenge over
Speaker 7: the past seven years with the Brexit debate and leaving
Speaker 7: Europe and leaving the EU, leaving the Single Market. So
Speaker 7: that's forced us now to look globally, and we've been
Speaker 7: doing free trade agreements around the world and unfortunately I
Speaker 7: don't think we're going to get a free trade agreement
Speaker 7: with the US, but that I don't think will stop
Speaker 7: US trading as we do very effectively between US and
Speaker 7: the UK. I don't think either of your political parties
Speaker 7: here have our appetite for free trade agreement with US.
Speaker 7: But nevertheless, there is a tremendous flow of business and
Speaker 7: trade and investment going both ways across the Atlantic. And
Speaker 7: we know this transatlantic alliance, this friendship has been around
Speaker 7: for decades and centuries in fact, and what we want
Speaker 7: to do is take it to its next level. That's
Speaker 7: why we're opening an office here.
Speaker 4: What excites you the most about this relationship and where
Speaker 4: it's headed.
Speaker 7: Well, I think we have lots of things in common
Speaker 7: between the United States and the United Kingdom. We both
Speaker 7: speak the same language. We both have slightly different accent
Speaker 7: to it, maybe, but we do both speak the same language.
Speaker 7: We're both financial capitals. Look New York. We have huge
Speaker 7: respect for New York and the New York Stock Exchange,
Speaker 7: and I think the city of London is reciprocated. You know,
Speaker 7: we see ourselves as a global financial center. So what
Speaker 7: excites me is how do we bring the tour us
Speaker 7: together to strengthen the alliance in the Western world between
Speaker 7: these two great financial capitals.
Speaker 4: Yeah, you know, in financial houses in New York and
Speaker 4: even places like Bloomberg, you sort of cut your teeth
Speaker 4: in London. At some point in your career, you're sent
Speaker 4: over there, and that's like a have.
Speaker 2: You been with Bloomberg or otherwise you had to ask,
Speaker 2: didn't for the work, Okay, just for fun? Well have
Speaker 2: you been to our office over there? Chris, I hear.
Speaker 2: It's quite the marvel.
Speaker 7: It is the most remarkable building, the most sustainable office
Speaker 7: building in the whole of Europe. It's a fabulous building.
Speaker 7: I go on the radio Bloomberg in London regularly. I
Speaker 7: do Bloomberg TV regularly, and I have met your great
Speaker 7: mister Bloomberg last week at the cop actually out in Dubai,
Speaker 7: so I went to the Bloomberg dinner.
Speaker 2: So I was very lucky, fantastic. Well, we love to hear. Then,
Speaker 2: thank you.
Speaker 4: I haven't been invited to the new building yet.
Speaker 2: I haven't either. Maybe that'll be our next week.
Speaker 7: You need to get an invitation, you really do, and
Speaker 7: come and see us in the Guildhall in the City
Speaker 7: of London.
Speaker 4: Office opening in New York.
Speaker 5: Well, we're at the moment.
Speaker 7: We're working between New York and DC to identify locations
Speaker 7: in both and we'll we're bottom that ats. We've appointed
Speaker 7: the MD we'll bottom that out in the next few months.
Speaker 2: Keep us updated.
Speaker 4: Fantastic, appreciate it and Chris Hayward, the policy Chairman for
Speaker 4: the City of London, deepening the relationship the ties between
Speaker 4: New York and London.
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Speaker 4: Have you booked a hotel in a big appolitely.
Speaker 2: In a city where I live?
Speaker 4: I don't know. Oh, come on, it's almost a rhetorical
Speaker 4: question for the listeners and viewers. Right, So I did
Speaker 4: because I had to do a quick turnover, and I
Speaker 4: don't live here. I live in another state. But my
Speaker 4: eyeballs almost pomped out of their sack.
Speaker 2: Scary stuff.
Speaker 4: Oh goodness, gracious, I didn't pay for it. I mean
Speaker 4: I put them on the MX. But anyway, Our next
Speaker 4: guest follows the hotel and hospitality industry pretty closely. Kevin
Speaker 4: Davis is CEO of America's Hotels and Hospitality at JLL.
Speaker 4: So how does the Big Apple stack up? Right now?
Speaker 8: The New York City hotel market is performing exceptionally well.
Speaker 8: In fact, we are having a record year from an
Speaker 8: average daily rate perspective. We're up almost thirteen percent compared
Speaker 8: to twenty nineteen and over twenty two percent compared to
Speaker 8: twenty twenty two, So incredibly strong dynamics in New York City.
Speaker 2: So how much of this, Kevin, is like pent up
Speaker 2: COVID demand versus I'm sure you get this question a
Speaker 2: lot to see you already roll in your eyes or
Speaker 2: is this like really smile by this? Okay, we're smiling,
Speaker 2: but I mean, really is that a valid question?
Speaker 8: Look, some of it's pent up demand. There are also
Speaker 8: some supply dynamics that are taking place in New York
Speaker 8: City that I think are.
Speaker 4: Your typical New Yorker. By the way, you're like, why
Speaker 4: would anybody want to come here?
Speaker 2: I love living here, And we're gonna ask Kevin why
Speaker 2: my real estate investment is going to appreciate.
Speaker 8: He there you go, and I'll tell you why. I'll
Speaker 8: give you fifty reasons why. But look, the reality is
Speaker 8: part of it is pent up demand. I think part
Speaker 8: of it is there's a supply story, there's a demand story.
Speaker 8: So from a demand perspective, sure people are continuing to
Speaker 8: travel post COVID. I think COVID unleashed this you only
Speaker 8: live once mentality, and I think a lot of people
Speaker 8: are continuing to travel as a result of that and
Speaker 8: want to get out and experience the world.
Speaker 4: We've seen a.
Speaker 8: Return of international travel to New York City, which is
Speaker 8: a significant demand driver in this market. Interestingly, the Chinese,
Speaker 8: which historically have been the second largest foreign demand group,
Speaker 8: they recently relaxed their group travel restrictions, which is a
Speaker 8: big driver of traction of travel to New York City
Speaker 8: from an international perspective, so we expect to see significant
Speaker 8: inbound Chinese travel as well as from some of the
Speaker 8: other foreign jurisdictions. The other dynamics that we're seeing returned
Speaker 8: to the office and return of business travelers coming back
Speaker 8: to New York staying in hotels, group travel meetings taking place,
Speaker 8: which is also driving demand from a supply perspective. Couple
Speaker 8: things taking place. We've had a significant influx of new
Speaker 8: hotels over the past ten or twelve years in New
Speaker 8: York City, which we expect that influx to decline pretty significantly.
Speaker 8: There was a legislative initiative past several years ago which
Speaker 8: makes it much more difficult to build new hotels in
Speaker 8: New York City. You effectively need City Planning Commission approval
Speaker 8: to get a new hotel built, which makes it a
Speaker 8: lot harder to build new hotels. So Ultimately there will
Speaker 8: likely be fewer.
Speaker 4: New hotels built.
Speaker 8: Also, Airbnb, the city passed regulations which make it more
Speaker 8: difficult for owners for homeowners to essentially put their properties
Speaker 8: on Airbnb, So we've seen a meaningful decline in Airbnb
Speaker 8: as a result.
Speaker 4: So an investor who wants to capture some of this
Speaker 4: upside potential, what do they do?
Speaker 8: Look, there are properties certainly on the market. We expect
Speaker 8: that there will be a lot more properties on the
Speaker 8: market over the next twelve months for sale, which should
Speaker 8: drive significant volume. And interestingly, in twenty twenty three, we've
Speaker 8: actually had a meaningful uptick in investment sales activity. Almost
Speaker 8: three billion dollars of hotels have sold in New York City,
Speaker 8: which is a record. That's October year to date, which
Speaker 8: is a record relative going back to twenty fifteen. So
Speaker 8: we haven't had this strong of an investment year since
Speaker 8: twenty fifteen. A lot of the reason ties into a
Speaker 8: couple of the things that we talked about before. Difficult
Speaker 8: to build, hard to build, a lot of demand for
Speaker 8: people wanting to come to New York City and stay
Speaker 8: in hotels. So that's a trend that we expect will
Speaker 8: continue well into twenty twenty four.
Speaker 2: Yeah, so let's recap on this what you just said here, Kevin,
Speaker 2: because I heard that all of the demand indicators look
Speaker 2: like they're going up, a lot of the supply ones
Speaker 2: are going down. Correct, that sounds like a nice recipe
Speaker 2: for inflation.
Speaker 8: Well for higher hotel rates, higher hotel rates, how's that now?
Speaker 8: Look the other side of that is, I mean labor
Speaker 8: costs have gone up, so it's certainly more expensive to
Speaker 8: operate a hotel in New York City.
Speaker 2: Again, we can pass those on through the higher hotel rates.
Speaker 8: That is certainly possible in some instances. But yes, there
Speaker 8: have been higher costs, but obviously rates across the city
Speaker 8: are at record highs. Look the other dynamic that we're
Speaker 8: seeing about twelve percent of the hotel rooms in New
Speaker 8: York City are being leased out to migrants. So that's
Speaker 8: a fair number of rooms. Call it seventeen one to seven.
Speaker 8: Seventeen thousand hotel rooms in New York City are actually
Speaker 8: effectively offline because they're being used used by the migrants.
Speaker 4: The metric by which we judge success in the hotel
Speaker 4: and is revenue per available room, right, that is correct? RevPAR?
Speaker 4: How does that work? I mean, I wish everybody would
Speaker 4: just like use the same accounting standard we need.
Speaker 2: We need one for each industry.
Speaker 8: John, Well, it counterbalances your average daily rate and your occupancy,
Speaker 8: so it tells you effectively, if your rate is one
Speaker 8: number and your occupancy is another number, you multiply those
Speaker 8: two together and you get what is revenue per available room.
Speaker 8: So it's actually what you're getting.
Speaker 4: As a function of the occupancy.
Speaker 2: So as John was just saying, I am in this
Speaker 2: apartment buying journey that I've been taking the listeners through
Speaker 2: for several months now, and I'm always looking for reasons
Speaker 2: to as to why my investment is going to do well.
Speaker 2: So I mean, tell me, it sounds like there's a
Speaker 2: lot of great factors for like you just said, tourism
Speaker 2: in New York City. What does that mean if anything,
Speaker 2: for like the you know, the residential market here. Is
Speaker 2: there any reason to think that that strength on the
Speaker 2: tourism side could be good for the residential market too.
Speaker 8: Yeah, absolutely, particularly if we start to see more foreign
Speaker 8: investment in in residinnacial real estate in New York City,
Speaker 8: which has historically been a big driver of demand in
Speaker 8: this market. So certainly we could see overflow. You know,
Speaker 8: one of the interesting dynamics at play is a lot
Speaker 8: of foreign investors, either for their own country as a
Speaker 8: result of their own country restrictions visa issues, have not
Speaker 8: been able to visit New York, meaning they haven't been
Speaker 8: able to look at hotels that they may be interested
Speaker 8: in buying and or residential real estate. So I think
Speaker 8: as some of those barriers have decreased over time, we
Speaker 8: should expect to see more foreign investment in New York City.
Speaker 8: Absolutely from a hotel perspective, I would expect that that
Speaker 8: will continue from in the residential context. You know, Interestingly,
Speaker 8: we've seen a meaningful uptick from Asian buyers and Middle
Speaker 8: Eastern buyers in the hotel space in twenty twenty three,
Speaker 8: and in New.
Speaker 4: York the most sauday after spaces seem to be at
Speaker 4: opposite ends of the spectrum.
Speaker 8: Yeah, that's correct, And it's not just a New York
Speaker 8: City dynamic. It's it's across the industry more broadly, where
Speaker 8: you've had strong investor interest in luxury assets on one
Speaker 8: end of the spectrum and then select service and extended
Speaker 8: stay assets on the other end of the spectrum.
Speaker 4: You might ask why that is, both those.
Speaker 8: Sectors have performed incredibly well in a in a post
Speaker 8: COVID environment, and given the strong operating performance, you've seen
Speaker 8: a meaningful, meaningful interest in those asset classes on the
Speaker 8: part of investors.
Speaker 4: I lobby to do this interview at the Carlisle. They
Speaker 4: turned me down.
Speaker 2: Then, Carlisle, what's your nice place to stay?
Speaker 4: Yet? Well, not just I know the downstairs source of
Speaker 4: the hope that the restaurant.
Speaker 2: Oh, I was thinking the Carlisle Hotel on the Upper
Speaker 2: east Side. Yeah, where Roger stays during the US Open for.
Speaker 4: Bobby Short used to play in the in the the
Speaker 4: Carlisle Cafe. Right, what's what's your That leads me to
Speaker 4: my next question? What's your favorite spot in New York City?
Speaker 4: The hotel space? Oh?
Speaker 8: Wow, I mean there there are so many amazing hotels.
Speaker 4: I tell you.
Speaker 8: I'll name one where I had breakfast this morning, which
Speaker 8: is an absolutely lovely hotel, the Whitby Hotel on fifty sixth.
Speaker 2: I don't think I've ever heard fifty sixth.
Speaker 8: And fifty sixth between fifth and sixth.
Speaker 2: Okay, smack in the middle of midtown. There you go,
Speaker 2: There you go.
Speaker 8: It's a great Hotel. But of course New York City
Speaker 8: has has a bunch of wonderful hotels, the Carlisle, the Equinox, the.
Speaker 2: Music to My Ears, the Equinox Hotel, nice spaces.
Speaker 4: They'll never let me in. Kevin, good to see you,
Speaker 4: Thanks for stopping by the studios. You noticed he didn't
Speaker 4: do this via zoom because he's you know, we love
Speaker 4: him the local guy. All of America's hotels and hospitalities
Speaker 4: for a J L L.
Speaker 1: You're listening to the Bloomberg Business Week podcas catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,
Speaker 1: or watch us live on YouTube.
Speaker 9: Much more than this, I did it live.
Speaker 4: Away all right, Thanks Frank, Frank Sinacha you ever heard
Speaker 4: of him?
Speaker 2: He's not Taylor Swift, but you know.
Speaker 4: That's more my cup of tea anyway, John Tucker, Molly
Speaker 4: Smith with you. Argentina has a new leader. Javier Marley
Speaker 4: got there promising to fix the economy. Now he seems
Speaker 4: to be a ditching some of the key pillars of
Speaker 4: his radical economic platform. Manuela Tobias and Joel Weber put
Speaker 4: together a story on Argentina's new leader, and they join us. Now, Joel,
Speaker 4: he's a a practicality, it seems would be giving way
Speaker 4: to some of the promises that he made.
Speaker 10: Well, there were some big promises before the election, and
Speaker 10: what's happened That election was last month and over the
Speaker 10: weekend we had an inauguration and basically everything he ran
Speaker 10: on has become sort of a big question mark because
Speaker 10: it seems like he is tacking in ways that are
Speaker 10: totally unexpected. And I think Argentina, which is if you
Speaker 10: look at recent history in Argentina, has been through the.
Speaker 4: Ringer and it looks like more ringer ahead.
Speaker 10: So Manuel, bring us up to speed on how Argentinians
Speaker 10: are feeling about this election and the person that they
Speaker 10: put in to the presidency.
Speaker 11: Yeah.
Speaker 12: I think a great way. You summed it up pretty well.
Speaker 12: We've been through the Ringer here in Argentina. And Lay
Speaker 12: was this radical candidate who came onto the scene literally
Speaker 12: with a chainsaw, saying he was going to burn down
Speaker 12: the central bank and dollarize the economy, ditch the Argentine
Speaker 12: bisson and he he took office on Sunday, and basically
Speaker 12: what we saw is a very a much more moderate.
Speaker 12: President also said he was going to cut ties with
Speaker 12: China and Brazil, our biggest trading partners. Uh and then
Speaker 12: very very amicable you know, greeting with with all of
Speaker 12: the foreign ministers yesterday.
Speaker 9: What.
Speaker 11: Yeah.
Speaker 12: Basically, these these radical proposals that he said he would
Speaker 12: do on the campaign trail, he's he's toned them down,
Speaker 12: and we very much saw that in his choice of
Speaker 12: cabinet members. All the people who were there at his
Speaker 12: victory party just a couple of weeks ago, we've seen
Speaker 12: them leave.
Speaker 11: In different forms. And at the same time.
Speaker 12: This might be like, oh, he's not the person he
Speaker 12: said he was, this is actually really really a promising
Speaker 12: for Wall Street.
Speaker 11: We saw.
Speaker 12: Sovereign bonds go up thirty percent, really rally, and he's
Speaker 12: given some really promising signs in these last couple of days,
Speaker 12: last couple of weeks that you know, it's it's a
Speaker 12: question mark what that radical fan base thinks about it,
Speaker 12: but it's given the market some much needed calm in
Speaker 12: these last months of hectic times in Argentina. Just to
Speaker 12: give you context, we were at one hundred and forty
Speaker 12: three percent inflation and already expecting double digits this upcoming month.
Speaker 2: Scary numbers, and we think we've got an inflational problem
Speaker 2: here in the US. So Benuela tell us though a
Speaker 2: little bit about the rationale for this abrupt pivot, because
Speaker 2: it really, like you just said, is just so completely
Speaker 2: different from what Mela was campaign. Was he getting pressure
Speaker 2: to tone down some of these policies.
Speaker 11: Yeah, so maay.
Speaker 12: He comes onto the scene in August in this primary
Speaker 12: where poles show him a distant third place, and he
Speaker 12: gets first with thirty percentage points.
Speaker 11: That's when everyone goes mad.
Speaker 12: They say, oh my goodness, this person we he didn't
Speaker 12: even think, you know, he would get here, promising to
Speaker 12: burn down the central bank. Suddenly gets first place in
Speaker 12: a primary, and then we see him plateau in the
Speaker 12: general election which took place in October, where he still
Speaker 12: gets thirty percent of the votes, so he doesn't grow,
Speaker 12: but his one of one of the contenders from the
Speaker 12: Pro Business Party, Patricia Vuldrich, comes in third with twenty
Speaker 12: four percent of the points.
Speaker 11: So you know, the ideas for a line.
Speaker 12: But you've got the opposition divided into against the current
Speaker 12: left wing Parentis Party and basically they joined forces in
Speaker 12: the in the November runoff, and so you've got Melais
Speaker 12: thirty percent of hardcourt voters joined with this more moderate
Speaker 12: pro business twenty four percent.
Speaker 11: And I think that's what we see.
Speaker 12: We see him sort of tone down because he needs
Speaker 12: the votes, but also.
Speaker 11: Now he needs to govern.
Speaker 12: So in order to even just fill up his cabinet,
Speaker 12: he had people with no government experience from the private sector,
Speaker 12: but also just a lot of academics, people who had
Speaker 12: just never had this kind of responsibility, who are now
Speaker 12: going to have to have a purse of billions of dollars.
Speaker 12: And so I think we saw what we were hoping
Speaker 12: and expecting, which is just now you have to govern
Speaker 12: and you're not the same person as you were on
Speaker 12: the campaign trail. You're responsible for forty six million Argentines.
Speaker 12: And so he he toned it down and ditched those
Speaker 12: friends who got him into power in in that.
Speaker 4: Yeah, so George, let me ask you, what's the outlook
Speaker 4: for Argentina.
Speaker 10: Now, Well, I think that's the question, right, like they
Speaker 10: are we going to be using pesos still or is
Speaker 10: it going to eventually become dollars?
Speaker 6: Right?
Speaker 10: And what you know, I think Manuel you hinted at this,
Speaker 10: and I'm curious to like bring it back to you
Speaker 10: is like, you know, this guy was willing to just
Speaker 10: basically burn it all down.
Speaker 5: That's what he ran on.
Speaker 10: And now it seems like he's maybe actually been an
Speaker 10: establishment candidate all along. So what is how is Wall
Speaker 10: Street you know, to see the bonds rally like this? Like,
Speaker 10: what what is Wall Street seeing that? You know, maybe
Speaker 10: argent times are not seen?
Speaker 11: I think you know this is.
Speaker 12: Uh, the going back to the speech that he gave yesterday.
Speaker 11: Yeah, yesterday was Sunday. It's been a long couple of days.
Speaker 12: When he swears into office.
Speaker 11: He in some ways he didn't change his speech.
Speaker 12: What he says is we've been in you know, one
Speaker 12: hundred year decline and things need to be you know,
Speaker 12: changed fast. And this is what Mauriciomakriti President twenty fifteen
Speaker 12: twenty nineteen, uh breaks with you know, more than a
Speaker 12: decade of left wing paranis rules, says he's going to
Speaker 12: change things up falls into gradualism. Isn't actually able to
Speaker 12: put in the changes that he said. This guy comes
Speaker 12: along says some really crazy stuff, ends up you know,
Speaker 12: moderating himself. Because also something that I didn't say earlier
Speaker 12: is he has tiny fraction of minorities in both houses
Speaker 12: of Congress, so you simply cannot dolerize the economy with
Speaker 12: with such little representation. And so I think what's so
Speaker 12: promising about what he says is he is telling Argentine
Speaker 12: straight on, like, this is gonna hurt. We're gonna do
Speaker 12: a massive fiscal adjustment. He even warned of fifteen thousand
Speaker 12: percent possible inflation that we're inheriting from the previous government.
Speaker 2: Oh my god, He's laying.
Speaker 12: It all up front. You know this, this is gonna hurt.
Speaker 12: We're gonna have to do some some big changes, some
Speaker 12: big budget cuts. And I think that's a little bit
Speaker 12: the message and the embrace from the population of yeah,
Speaker 12: we're ready for that, we want that change, even though
Speaker 12: you know, he presented it as this chainsaw. But I
Speaker 12: think what what Wall Street likes is, you know, you've
Speaker 12: got this population who's finally ready, or at least claims
Speaker 12: to be ready for radical change. It's not gonna happen
Speaker 12: because it's simply not possible to happen in Congress. And
Speaker 12: so you meet somewhere in the middle, and I think
Speaker 12: that that change is what we need. So so badly
Speaker 12: in Argentina to get out of this inflation. Maybe this
Speaker 12: guy has the.
Speaker 4: Answer, So tell me more about this guy who potentially
Speaker 4: has the answer. He sounded like kind of a nut job.
Speaker 10: Well that's when when he first came on the scene,
Speaker 10: and Manuel you know, you know this extremely well, it's
Speaker 10: like sort of like who is this guy?
Speaker 4: Right? And he would say he's a bachelor, he hasn't
Speaker 4: been married. He's sort of like calls his dogs his children.
Speaker 2: That it is part of a cultures comment.
Speaker 10: And and you know, and what's crazy is like in
Speaker 10: Argentinian politics that's maybe not so crazy, Like this is
Speaker 10: a country that has seen a lot of flamboyant people
Speaker 10: in politics. But what's interesting was like the fact that
Speaker 10: he had that staying power that we kind of talked about,
Speaker 10: and not only was it and that's I think speaks
Speaker 10: to the desperate nature of who's voting. It's like, yeah,
Speaker 10: like you have this inflation for this long, people are
Speaker 10: willing to, you know, take.
Speaker 5: A big risk.
Speaker 4: He represents that risk.
Speaker 10: But you know, the thing that's that again intrigues me
Speaker 10: in all of this is those establishment figures that he's
Speaker 10: been willing.
Speaker 4: To lean back into.
Speaker 10: Manuela who are some of the people, Like, yes, some
Speaker 10: people spoke up for him and and we're excited about him,
Speaker 10: and and yes they are no longer there, but there
Speaker 10: are so other people that have been sort of central
Speaker 10: in like the Caputo administration even that or the when
Speaker 10: Caputo is there, you know, like, so, who are these
Speaker 10: other people that he has turned to who are sort
Speaker 10: of establishment candidates.
Speaker 12: Yeah, it's funny because first you asked sort of like
Speaker 12: who is he?
Speaker 11: And then who is his team?
Speaker 12: And it's it's nine and day because Gabuto, who was
Speaker 12: actually finance minister under under former President Modicio Muckety, that
Speaker 12: pro business president we were talking about earlier, who wasn't
Speaker 12: able to to enact the change Milay, had some really
Speaker 12: harsh things to say about him when he was in
Speaker 12: that role. He said he smoked away fifteen billion dollars,
Speaker 12: really criticized his time at the Central Bank as well.
Speaker 11: This is this is out a Wall.
Speaker 12: Street trader at heart, who did have, you know, very
Speaker 12: very prominent role under Makti's government, left with some uh
Speaker 12: some some problems with the IMF program. Didn't live under
Speaker 12: the best conditions, I think was twenty eighteen in Magda's government,
Speaker 12: and now he put him as his ECON minister and
Speaker 12: as Central Bank president. We've got one of his right
Speaker 12: hand men, Sandel. This is the guy who said he
Speaker 12: wanted a totally this guy meaning Milea, who said he
Speaker 12: wanted a totally independent central bank, and who was going
Speaker 12: to give the keys to Emilio Gambol, the author of
Speaker 12: his dollarization.
Speaker 11: Plan to close down the central bank. So you suddenly
Speaker 11: you went.
Speaker 12: From independent, burned down central bank to the right hand
Speaker 12: man of the ECON minister at the helm. And so
Speaker 12: that is to give you a little sense of how
Speaker 12: far we've we've changed pivoted.
Speaker 11: And yeah.
Speaker 12: So so those are the top ECON ministers, and we've
Speaker 12: got in defense and security. We were going to have
Speaker 12: the Vice President, Victoria viol who he spoke at length
Speaker 12: on the campaign, was going to handle those issues. And
Speaker 12: now our new security Minister is going to be Patricia Woolrich,
Speaker 12: who was the pro business candidate who got that twenty
Speaker 12: four percent. So his rival on the campaign turned ally
Speaker 12: who helped him get those votes, is now head of security,
Speaker 12: which is a big, big issue here because we've bought
Speaker 12: forty five percent now poverty one hundred and forty three
Speaker 12: percent inflation. You can imagine the sort of issues we're
Speaker 12: dealing with more and more insecurity.
Speaker 4: On speak A great story and a great read, Manuela,
Speaker 4: thanks very much for being with us. Appreciated. Manuela Tobias
Speaker 4: on Zoom There from Argentina and Joel Weber Bloomberg BusinessWeek
Speaker 4: Editor Argentina with its new leader and apparently a heady
Speaker 4: number of defections, people sort of disenchanted with the way
Speaker 4: things are going, at least his most avid supporters on them.
Speaker 2: A journal.
Speaker 6: Yeah, bet you let me.
Speaker 4: Oh no, no, no no, who's going to jug.
Speaker 1: Please?
Speaker 4: I'll travel.
Speaker 9: I want to drive.
Speaker 2: It's a good question.
Speaker 1: This is the drive to the globes. We'll buy an
Speaker 1: shut it on.
Speaker 4: On Bloomberg Radio. You're listening to Bloomberg Business we come,
Speaker 4: John Tucker along with Molly Smith.
Speaker 2: Yes, another wonderful Monday afternoon together.
Speaker 4: Yeah.
Speaker 2: Absolutely, usually in the morning for us though, well.
Speaker 4: Yeah, but you know, as utility infielders, you got to
Speaker 4: get used to different shifts as.
Speaker 2: Right, we're pinch hitting today. And for our good friends
Speaker 2: Carol Masser and Tim Stanovic who are elsewhere.
Speaker 4: Elsewhere and they should be back soon.
Speaker 2: They will be don't worry.
Speaker 4: Don't worry. A bit of caution. I'm going to say
Speaker 4: it kind of seems to be permeating some of the
Speaker 4: markets today as we wait for the inflation data. We
Speaker 4: get that tomorrow in the form of the CPI and
Speaker 4: of course the FED meeting Wednesday. So Molly wants an
Speaker 4: investor to do. Let's bring in the next guest. Jeff
Speaker 4: Crumpleman is chief investment strategist and head of Equities at
Speaker 4: Mariner Wealth Advisors. Joining us from Cleveland.
Speaker 2: Cleveland the home of Cincinnati even better Ccinnati, not the
Speaker 2: rock and roll Hall of Fame. Is that where you're
Speaker 2: going with that?
Speaker 4: No, I was going to say thirty one to fifty
Speaker 4: nine West eleventh Street, which is the Christmas Story House.
Speaker 2: Oh, okay, a little different. Well, anyway, Cincinnati sounds lovely
Speaker 2: this time of year. Thanks for joining us, Jeff. Yeah,
Speaker 2: Like John just said, lots going on to parse through
Speaker 2: this week as far as you know, investible decision making
Speaker 2: things going on. So what's where's your head at right
Speaker 2: now going into this week? A lot of things going on.
Speaker 9: Well, you know, we just say, had a lot to celebrate,
Speaker 9: I think.
Speaker 2: But the jobs report, well, you know.
Speaker 9: There's sure. The jobs report, and I just think the
Speaker 9: plethora of data through the year, we were positive going
Speaker 9: into it. I think when the rest of the world
Speaker 9: or a lot of the world was very negative, things
Speaker 9: just didn't need to be hunky dory. They just need
Speaker 9: to be less worse. And so inflation trends and we
Speaker 9: get the CPI report tomorrow. So inflation trends have pretty
Speaker 9: consistently since June of twenty twenty two, been trending in
Speaker 9: a better fashion. And the economy is held up pretty well.
Speaker 9: So we're going to get retail sales and we're going
Speaker 9: to get industrial production. We had a nice employment report,
Speaker 9: as you cite last Friday, so the consumers employed making
Speaker 9: pretty good wage. Costs are coming down from painful levels,
Speaker 9: and things are just better than feared. So I don't
Speaker 9: know if there's much to focus on and to do.
Speaker 9: You don't want to get complacent, but I would say
Speaker 9: enjoy the fact that we are in a fairly healthy backdrop,
Speaker 9: and maybe others will start appreciating that more and more
Speaker 9: as we see other strategies taking up targets, and so
Speaker 9: twenty twenty four could be shaping up to be I'm
Speaker 9: sure we'll have wallworry items that crop up, but a
Speaker 9: fairly decent year.
Speaker 4: Jeff, explain to everybody what happens for managers like yourself
Speaker 4: as you go into your end tax loss harvesting. How
Speaker 4: do the dynamics change for the next couple of weeks.
Speaker 9: Well, it can cause a rally in different types of
Speaker 9: stocks as the losers. You know you're going in and
Speaker 9: you're going to try and capture a loss where it
Speaker 9: makes sense to do that unless you think there could
Speaker 9: be a snap back recovery. People will harvest losses and
Speaker 9: then you have to go somewhere with those stocks. So
Speaker 9: one of the things that we've been thinking about in
Speaker 9: your end. You really have seen a very narrow market
Speaker 9: this year, right, So everyone's talking about megad and Magnificence seven,
Speaker 9: and we tried to be a little more diversified than that.
Speaker 9: We do think that it's a little overdone. There are
Speaker 9: a number of tech names that have done well this year,
Speaker 9: but there's there's a lot that have not done as well.
Speaker 9: So you sell your losers and you move into these
Speaker 9: these areas that you know have not participated along with
Speaker 9: the Mega seven or eight, and you can get a
Speaker 9: pretty hard rally in some nice growth names, and so
Speaker 9: that's what's going on. And I think you're seeing the
Speaker 9: market broaden out a little bit as values starting to outperform.
Speaker 9: You're equal weighted S and P five hundred's outperforming market
Speaker 9: cap weighted. Your non mega tech names are moving in
Speaker 9: a bit direction, and you can see kind of a
Speaker 9: risk on attitude that's developing as we make some of
Speaker 9: these these shifts totally.
Speaker 2: I mean that growth story, those Magnificent seven, that was
Speaker 2: obviously the big story of that November rally. What do
Speaker 2: you think the big theme is going to be for
Speaker 2: this month and just heading into the new year.
Speaker 9: You know, I don't think there is a theme.
Speaker 1: I have.
Speaker 9: We said all year that this can be a really
Speaker 9: fertile market if you are a active stock portfolio manager
Speaker 9: and an active strategy, and you know, we've been saying
Speaker 9: that for just a long time, and I kind of
Speaker 9: was getting to the point where I thought, maybe I'm
Speaker 9: a dinosaur. Maybe everybody's just gonna etf it and go passive.
Speaker 9: And certainly this has been a year where our more
Speaker 9: aggressive strategies we've outperformed very handsomely because there have been
Speaker 9: a lot of stocks on sale that have great earnings,
Speaker 9: and once balance sheets matter and rates start rising again,
Speaker 9: you know, some people are able to invest and obtain
Speaker 9: capital and drive margins and some folks can't when rates
Speaker 9: move up like they have. So I don't think there's
Speaker 9: a theme. I think if you look at consumer discretionary,
Speaker 9: you look at technology and healthcare, those traditional growth areas,
Speaker 9: there's some really active names. There's a capital spending boom
Speaker 9: that's underway. On the other hand, that makes us very
Speaker 9: I think attracted two industrials and some of your material
Speaker 9: stocks like a United Rental, a Jacob's Solutions, a deer
Speaker 9: an Eton in the industrials area, or a Vulcan Materials
Speaker 9: or a Ball Corp within materials. So I think there's
Speaker 9: a capital spending boom as we re on shore that's
Speaker 9: out there. That might be one of the underappreciated themes
Speaker 9: that you're asking.
Speaker 4: About the correlation between stocks and bonds. I guess has
Speaker 4: been a little muddied. Sixty forty Is that still something?
Speaker 9: Yeah? I think you know this this is a last
Speaker 9: year you could have panned sixty forty as we had
Speaker 9: a down year in stocks, you know, twenty two percent
Speaker 9: down and then bonds also weren't a great tout of
Speaker 9: return play this year. You've seen the opposite thing after
Speaker 9: this November rally where you've made money, and I think
Speaker 9: stocks and bonds off of very weak levels, and you know,
Speaker 9: at the end of the day, let's let's sit back
Speaker 9: and gain perspective as all these mood slings are all
Speaker 9: over the map, and this timing sixty forty is bad. No,
Speaker 9: it's good. No, it's bad. No, it's good. You know,
Speaker 9: quite frankly, over the last five years in the S
Speaker 9: and P five hundred, which is part of that big
Speaker 9: sixty percent, you're up twelve percent a year, which is
Speaker 9: above the long term average for all the moves and
Speaker 9: all the angst. And you know, so yeah, I think
Speaker 9: that it's still alive and well and feel very good
Speaker 9: about prospects as race stabilized and the market looks pretty
Speaker 9: strong in the equity sector at the twenty.
Speaker 4: Twenty four Good to see you, Jeff, Jeff Crumpleman from Cincinnati.
Speaker 4: It's Alicant Carps.
Speaker 2: Wendy City. No, that's Chicago. What do I know?
Speaker 4: Somewhere in the Midwest, here's fan as I am.
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