1
00:00:01,120 --> 00:00:07,760
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

2
00:00:12,680 --> 00:00:16,479
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

3
00:00:16,520 --> 00:00:19,480
Speaker 2: with Lisa Bromwitz and am Marie Hordern. Join us each

4
00:00:19,560 --> 00:00:22,440
Speaker 2: day for insight from the best in markets, economics, and

5
00:00:22,480 --> 00:00:25,759
Speaker 2: geopolitics from our global headquarters in New York City. We

6
00:00:25,840 --> 00:00:28,479
Speaker 2: are live on Bloomberg Television weekday mornings from six to

7
00:00:28,560 --> 00:00:32,080
Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify

8
00:00:32,280 --> 00:00:34,519
Speaker 2: or anywhere else you listen, and as always on the

9
00:00:34,560 --> 00:00:37,920
Speaker 2: Bloomberg Terminal and the Bloomberg Business. John starts of Oppenheimer,

10
00:00:38,040 --> 00:00:40,120
Speaker 2: the Biggest Bull on Wall Street right in the following

11
00:00:40,280 --> 00:00:42,520
Speaker 2: we do not expect any dramatic cards from the Fed,

12
00:00:42,760 --> 00:00:45,640
Speaker 2: but rather measured trims. John joins us now for more.

13
00:00:45,720 --> 00:00:48,080
Speaker 2: Juhnken morning, Good morning. Love that done, your biggest bull

14
00:00:48,159 --> 00:00:49,440
Speaker 2: on Wall Street. It's how I said good morning to

15
00:00:49,440 --> 00:00:51,280
Speaker 2: you when I first saw you this morning. All time

16
00:00:51,360 --> 00:00:53,920
Speaker 2: highs on the SMP, record highs of the Nursdag not

17
00:00:53,960 --> 00:00:57,080
Speaker 2: too far away on small caps are trimmed cuds enough,

18
00:00:57,560 --> 00:00:58,440
Speaker 2: I think trim.

19
00:00:58,200 --> 00:01:00,840
Speaker 1: Cuts will be in love. And the wonderful thing about

20
00:01:00,880 --> 00:01:03,720
Speaker 1: trim cuts is for the FED, what it is is

21
00:01:03,760 --> 00:01:07,440
Speaker 1: the economic data, particularly around the job's number, has offered

22
00:01:07,680 --> 00:01:10,479
Speaker 1: an opportunity of essentially a free haul pass.

23
00:01:10,959 --> 00:01:13,040
Speaker 3: So if the FED Chair.

24
00:01:13,440 --> 00:01:17,400
Speaker 1: The FOMC Comte Committee come out with a cut, it's

25
00:01:17,440 --> 00:01:21,720
Speaker 1: not politics. It's just the dual mandate and looking at

26
00:01:21,760 --> 00:01:24,640
Speaker 1: what the weakness in the jobs market and adding some

27
00:01:24,720 --> 00:01:28,839
Speaker 1: liquidity to the system. And it's also an anniversary shop

28
00:01:28,920 --> 00:01:31,320
Speaker 1: in September. If they do twenty five BIPs, or if

29
00:01:31,319 --> 00:01:34,319
Speaker 1: they do even fifty, the market should be able to

30
00:01:34,360 --> 00:01:35,240
Speaker 1: take it digested.

31
00:01:35,400 --> 00:01:37,480
Speaker 2: Let's address that weakness in a job's market, and we

32
00:01:37,600 --> 00:01:40,319
Speaker 2: testing the limits of bad news being good news for stocks.

33
00:01:41,040 --> 00:01:43,520
Speaker 1: You know, I think somewhere in the middle of that

34
00:01:43,640 --> 00:01:46,040
Speaker 1: job it depends the way traders look at it and

35
00:01:46,120 --> 00:01:49,800
Speaker 1: the way intermediate to longer term investors who are investing

36
00:01:49,960 --> 00:01:53,440
Speaker 1: for retirement, which is a multi generational effort. Now that

37
00:01:53,520 --> 00:01:56,880
Speaker 1: has changed the tone of the private investor and the

38
00:01:56,920 --> 00:02:01,240
Speaker 1: size and presence of the individual private investor more than

39
00:02:01,280 --> 00:02:03,320
Speaker 1: I've ever seen it in forty two years.

40
00:02:03,800 --> 00:02:06,400
Speaker 4: At this point, we're watching what the FED signals next

41
00:02:06,440 --> 00:02:09,079
Speaker 4: week and how that really will play forward. And John

42
00:02:09,200 --> 00:02:11,320
Speaker 4: was talking about you know, he didn't say these words

43
00:02:11,320 --> 00:02:13,040
Speaker 4: because he hates these words, but a hawkish cut or

44
00:02:13,040 --> 00:02:15,840
Speaker 4: a dubbish cut. There's this question going forward if they

45
00:02:15,880 --> 00:02:18,440
Speaker 4: are alluded to it. You alluded to it because you

46
00:02:18,520 --> 00:02:20,440
Speaker 4: tried not to say it, which I admire, and you

47
00:02:20,440 --> 00:02:22,560
Speaker 4: did that very well. But of course I'm going to

48
00:02:22,600 --> 00:02:25,760
Speaker 4: filate that. I guess I'm curious if they are dubbish,

49
00:02:25,919 --> 00:02:27,960
Speaker 4: if they do indicate that this is something more than

50
00:02:27,960 --> 00:02:31,880
Speaker 4: a mid cycle adjustment, does that make you more bearish?

51
00:02:31,919 --> 00:02:34,840
Speaker 1: Well, it would be Would that make me become bearish

52
00:02:35,040 --> 00:02:35,960
Speaker 1: because I'm not buried?

53
00:02:37,120 --> 00:02:37,320
Speaker 2: Okay?

54
00:02:37,639 --> 00:02:40,919
Speaker 3: Would make you a little less bulleted? Yeah, well, it would.

55
00:02:40,680 --> 00:02:43,239
Speaker 1: Certainly make me take a look at the data, see

56
00:02:43,240 --> 00:02:44,840
Speaker 1: where we're going to take a look at what the

57
00:02:45,280 --> 00:02:48,440
Speaker 1: what the terms were that when the FED chair is

58
00:02:48,480 --> 00:02:49,960
Speaker 1: reporting to the press.

59
00:02:50,240 --> 00:02:54,000
Speaker 3: How things went and answering questions. But overall, you know,

60
00:02:54,360 --> 00:02:57,239
Speaker 3: what we've seen really over the last couple of years has.

61
00:02:57,120 --> 00:03:00,000
Speaker 1: Been the size of the US economy and the resons

62
00:03:00,080 --> 00:03:03,920
Speaker 1: allions that exhibited both by corporations and by the consumer,

63
00:03:04,000 --> 00:03:05,119
Speaker 1: I mean the consumer.

64
00:03:05,160 --> 00:03:06,280
Speaker 3: The soft data is.

65
00:03:06,320 --> 00:03:09,000
Speaker 1: Oh, they're so worried about inflation, yet the consumer is

66
00:03:09,040 --> 00:03:13,720
Speaker 1: still spending, you know, at different things. But it also

67
00:03:13,760 --> 00:03:20,000
Speaker 1: prudently you know, this day of digitalization and information going

68
00:03:20,040 --> 00:03:21,400
Speaker 1: around the world fairly quickly.

69
00:03:21,800 --> 00:03:23,560
Speaker 3: It really is remarkable.

70
00:03:23,040 --> 00:03:25,760
Speaker 1: When you look at the US economy around thirty trillion

71
00:03:25,800 --> 00:03:28,600
Speaker 1: in size, still way ahead of China. After all these

72
00:03:28,720 --> 00:03:31,480
Speaker 1: years of US hearing that China was going to surpass

73
00:03:31,560 --> 00:03:35,760
Speaker 1: us and everything else, it hasn't happened. And we think

74
00:03:35,800 --> 00:03:38,360
Speaker 1: a lot of that is related to innovation. The Federal

75
00:03:38,400 --> 00:03:42,320
Speaker 1: Reserve has done its job, we think remarkably well, you know,

76
00:03:42,680 --> 00:03:45,040
Speaker 1: once they got out from being behind the curve and

77
00:03:45,600 --> 00:03:47,640
Speaker 1: what you we call it in March of twenty twenty two.

78
00:03:48,120 --> 00:03:49,360
Speaker 3: So far with all the.

79
00:03:49,360 --> 00:03:53,160
Speaker 1: Hikes, all the pauses, and very few cuts, no recession.

80
00:03:53,440 --> 00:03:54,040
Speaker 3: Remarkable.

81
00:03:54,120 --> 00:03:56,200
Speaker 4: A lot of people who are listening to are probably

82
00:03:56,240 --> 00:03:58,720
Speaker 4: nodding along with this idea of innovation, especially when it

83
00:03:58,720 --> 00:04:01,040
Speaker 4: comes to technology and how much that's powered what we've

84
00:04:01,080 --> 00:04:05,440
Speaker 4: seen in the US equity markets. Can I continue powering it?

85
00:04:05,640 --> 00:04:08,920
Speaker 4: Given how inflated expectations are and how difficult it is

86
00:04:08,960 --> 00:04:12,560
Speaker 4: to price in a sea change in technology innovation at

87
00:04:12,560 --> 00:04:15,440
Speaker 4: the scale that say Oracle is predicting, well.

88
00:04:15,400 --> 00:04:16,960
Speaker 3: I would say, I think.

89
00:04:18,760 --> 00:04:23,919
Speaker 1: What type of overvaluation is being placed by investment or

90
00:04:24,000 --> 00:04:26,680
Speaker 1: capex at this point? Really is in the eyes and

91
00:04:26,720 --> 00:04:29,880
Speaker 1: the ears of the beholder, because maybe the investments that

92
00:04:29,920 --> 00:04:33,520
Speaker 1: are being made across the eleven sectors to participate in

93
00:04:33,600 --> 00:04:36,719
Speaker 1: what AI can do, both for the consumer as well

94
00:04:36,760 --> 00:04:41,479
Speaker 1: as for businesses, maybe this may be appropriate.

95
00:04:41,560 --> 00:04:44,560
Speaker 3: What we're seeing, this is so.

96
00:04:44,600 --> 00:04:46,880
Speaker 1: Different than the you know, I remember the tech bubble,

97
00:04:46,920 --> 00:04:49,279
Speaker 1: you know, I mean, like father time, forty two years.

98
00:04:49,080 --> 00:04:49,680
Speaker 5: In the business.

99
00:04:49,920 --> 00:04:53,000
Speaker 1: Good lord, it's shocking, you know, I still feel thirty five,

100
00:04:53,120 --> 00:04:55,640
Speaker 1: but it's like nearly one hundred, you know, at this point.

101
00:04:56,279 --> 00:04:58,960
Speaker 1: But when I look at it, it's just this is

102
00:04:59,000 --> 00:05:02,400
Speaker 1: not this is not beginners technology. This is, if anything,

103
00:05:02,480 --> 00:05:05,440
Speaker 1: is technology that needs to be has to be checked

104
00:05:05,480 --> 00:05:09,159
Speaker 1: somewhat by regulation necessary, but not by too much regulation.

105
00:05:09,560 --> 00:05:12,479
Speaker 1: And yet what it offers in a world in which

106
00:05:12,800 --> 00:05:16,600
Speaker 1: we have not reproduced enough to replace ourselves, AI may

107
00:05:16,640 --> 00:05:19,359
Speaker 1: be able to fill things out in factories and in

108
00:05:19,440 --> 00:05:22,800
Speaker 1: offices where there might be shortages of employees. I do

109
00:05:22,880 --> 00:05:25,560
Speaker 1: think in case you think I'm just being too bullish

110
00:05:25,640 --> 00:05:29,000
Speaker 1: or too positive, no, what I would say what does

111
00:05:29,080 --> 00:05:32,880
Speaker 1: concern me is when we look at the current environment

112
00:05:33,000 --> 00:05:36,960
Speaker 1: is moving forward, the first tranch beyond what we see

113
00:05:36,960 --> 00:05:41,359
Speaker 1: in technology of layoffs will be a shock to the

114
00:05:41,440 --> 00:05:43,719
Speaker 1: system and will cause a lot of questions as to

115
00:05:43,760 --> 00:05:45,520
Speaker 1: how we're going to deal with it. But I think

116
00:05:45,520 --> 00:05:50,360
Speaker 1: it's an opportunity for corporations to step up and train personnel,

117
00:05:51,040 --> 00:05:54,760
Speaker 1: really position ourselves for what is genuinely a new economy

118
00:05:54,800 --> 00:05:57,000
Speaker 1: that we are moving towards based on innovation.

119
00:05:57,279 --> 00:05:59,279
Speaker 5: That's what I want to ask you to accept this innovation.

120
00:05:59,400 --> 00:06:01,000
Speaker 5: Do we need to accept that we're just going to

121
00:06:01,120 --> 00:06:04,200
Speaker 5: have bigger layoffs and less jobs in the economy.

122
00:06:04,320 --> 00:06:06,719
Speaker 1: Well, I think I think that's the first part, you

123
00:06:06,720 --> 00:06:07,640
Speaker 1: know that it gets.

124
00:06:07,680 --> 00:06:09,120
Speaker 3: I think we need to prepare for that.

125
00:06:09,320 --> 00:06:11,719
Speaker 1: And I think already we've heard Elon Musk and others

126
00:06:11,760 --> 00:06:16,080
Speaker 1: mentioned things that may be necessary to be considered it

127
00:06:16,960 --> 00:06:21,200
Speaker 1: really if we meet it with retraining, looking for opportunities,

128
00:06:21,200 --> 00:06:23,880
Speaker 1: because the biggest thing is as wonderful as the machines

129
00:06:23,920 --> 00:06:24,280
Speaker 1: can be.

130
00:06:24,360 --> 00:06:27,520
Speaker 3: People love to deal with human beings. They just do

131
00:06:27,760 --> 00:06:32,000
Speaker 3: or not always love. But I okay, well it's not no.

132
00:06:32,440 --> 00:06:35,640
Speaker 6: But but at the same time, just think yourself, if

133
00:06:35,680 --> 00:06:38,640
Speaker 6: you're trying to get some customer service, you know it's

134
00:06:38,800 --> 00:06:41,160
Speaker 6: rare that you find an outfit that has real good

135
00:06:41,560 --> 00:06:45,960
Speaker 6: beginners AI in those chat boxes and things to settle things.

136
00:06:46,240 --> 00:06:48,800
Speaker 5: When you mentioned the consumer as well, yesterday we did

137
00:06:48,839 --> 00:06:52,160
Speaker 5: see household furnishings becoming a bit more expensive, clothing, airfares

138
00:06:52,200 --> 00:06:54,400
Speaker 5: are up. Are you concerned about more of a tariff

139
00:06:54,480 --> 00:06:57,279
Speaker 5: pass through as we progress throughout twenty twenty five?

140
00:06:57,400 --> 00:06:59,720
Speaker 1: I think most certainly in the near term, and then

141
00:07:00,040 --> 00:07:03,680
Speaker 1: because we go forward, if we see the benefits that

142
00:07:03,720 --> 00:07:09,359
Speaker 1: the administration expects from it and reducing our deficits, I

143
00:07:09,400 --> 00:07:12,120
Speaker 1: think that would be it would be very much helpful.

144
00:07:12,200 --> 00:07:14,040
Speaker 1: And I also think in addition to that, what we

145
00:07:14,120 --> 00:07:17,720
Speaker 1: haven't seen yet across the sectors in a broad format

146
00:07:17,880 --> 00:07:21,680
Speaker 1: is the reintroduction of competition. And usually, you know, my

147
00:07:21,800 --> 00:07:26,880
Speaker 1: generation went through hyperinflation relative for the US back in

148
00:07:26,920 --> 00:07:30,480
Speaker 1: the late seventies early eighties, and it took years to

149
00:07:30,520 --> 00:07:36,120
Speaker 1: get rid of that inflation stickiness inflation. The institutional memory

150
00:07:36,200 --> 00:07:40,360
Speaker 1: is relatively short, but for the humans that went through it, gosh,

151
00:07:40,360 --> 00:07:42,960
Speaker 1: it takes a while. But eventually you find people go, hey,

152
00:07:42,960 --> 00:07:46,000
Speaker 1: wait a minute, if I give up what I'm charging

153
00:07:46,040 --> 00:07:48,960
Speaker 1: on a per unit price and do volume, I can

154
00:07:49,040 --> 00:07:53,440
Speaker 1: really get ahead of my competition, my competitors. When that begins,

155
00:07:53,440 --> 00:07:55,800
Speaker 1: and it'll start. We've seen a little bit of it

156
00:07:55,880 --> 00:07:59,880
Speaker 1: earlier this year in the airlines, but now it's going

157
00:08:00,080 --> 00:08:02,720
Speaker 1: the other way and that's its demand is what's doing.

158
00:08:03,080 --> 00:08:05,600
Speaker 2: What you said about AI I think is so so important.

159
00:08:06,000 --> 00:08:09,000
Speaker 2: What you're acknowledging is that it's going to be regressive upfront.

160
00:08:09,280 --> 00:08:11,440
Speaker 2: This is something that Luke Kara, former colleague, has talked

161
00:08:11,440 --> 00:08:14,520
Speaker 2: about extensively and something Leasa's hamme it hold on again

162
00:08:14,560 --> 00:08:16,320
Speaker 2: and again and again over the last month or so,

163
00:08:16,640 --> 00:08:18,440
Speaker 2: is that we could see a real decaupling between the

164
00:08:18,480 --> 00:08:20,840
Speaker 2: performance of a stock market and the direction of the

165
00:08:20,920 --> 00:08:23,640
Speaker 2: labor market. Is that what you think people are comfortable

166
00:08:23,640 --> 00:08:25,000
Speaker 2: with going into twenty six?

167
00:08:25,160 --> 00:08:27,600
Speaker 1: Oh, you know, at least at this point, I don't

168
00:08:27,640 --> 00:08:30,840
Speaker 1: think that the market is looking as much to twenty six.

169
00:08:30,920 --> 00:08:34,120
Speaker 3: Yeah, as to the end of this year. I really think.

170
00:08:34,360 --> 00:08:36,720
Speaker 1: I think when we start looking at it in twenty six,

171
00:08:36,800 --> 00:08:40,440
Speaker 1: it'll probably bring up a bit somewhat a periods of

172
00:08:40,520 --> 00:08:44,560
Speaker 1: volatility when we see catalysts in terms of news items

173
00:08:44,559 --> 00:08:49,080
Speaker 1: and things that they'll make trainers, skeptics and bears give

174
00:08:49,080 --> 00:08:52,080
Speaker 1: them an opportunity to take profits without FOMA and what

175
00:08:52,320 --> 00:08:56,000
Speaker 1: likely is a sexual ball market based on the degree

176
00:08:56,040 --> 00:08:57,800
Speaker 1: of innovation we have today.

177
00:08:58,160 --> 00:08:58,839
Speaker 3: Stay with us.

178
00:08:59,160 --> 00:09:12,000
Speaker 2: Marble Impergs have it's coming up after this. Robert Fishman,

179
00:09:12,360 --> 00:09:15,120
Speaker 2: senior research analyst of Muffin Nithisen, is writing this. We

180
00:09:15,240 --> 00:09:17,680
Speaker 2: view the news as a key milestone in the Warner

181
00:09:17,720 --> 00:09:21,200
Speaker 2: Brothers Discovery success story and potentially the opening of a

182
00:09:21,320 --> 00:09:24,679
Speaker 2: second chapter for a growing media conglomerate. Robert joins is

183
00:09:24,720 --> 00:09:26,640
Speaker 2: now for more. Robert, Welcome to the program sir. Let's

184
00:09:26,679 --> 00:09:28,920
Speaker 2: just start with the basics. What's to like this morning

185
00:09:29,080 --> 00:09:30,240
Speaker 2: with this potential tie up?

186
00:09:31,600 --> 00:09:34,480
Speaker 7: Well, I think, as you just heard, what you have

187
00:09:34,640 --> 00:09:38,560
Speaker 7: is a lot of potential strategic combination between these two players.

188
00:09:39,200 --> 00:09:41,560
Speaker 7: We've been talking for a long time about the lack

189
00:09:41,600 --> 00:09:45,240
Speaker 7: of scale on streaming and what this does is really

190
00:09:45,320 --> 00:09:50,199
Speaker 7: help accelerate the streaming story by putting two subscale players

191
00:09:50,240 --> 00:09:54,200
Speaker 7: together to help better compete in the current landscape. Then

192
00:09:54,240 --> 00:09:56,920
Speaker 7: you also have to go to the cost savings that

193
00:09:56,960 --> 00:10:00,080
Speaker 7: were just discussed. We're still working through our assumptions, but

194
00:10:00,520 --> 00:10:03,960
Speaker 7: essentially there will be a lot of extra cost synergies

195
00:10:04,000 --> 00:10:08,280
Speaker 7: putting these portfolios together. And then really what this does

196
00:10:08,320 --> 00:10:12,640
Speaker 7: for Warner Brothers Discovery is allow them to accelerate that

197
00:10:12,760 --> 00:10:16,880
Speaker 7: timeline that you just talked about. And really for investors

198
00:10:16,920 --> 00:10:20,440
Speaker 7: to see the payoff of how valuable these assets are,

199
00:10:20,520 --> 00:10:24,040
Speaker 7: like HBO and Max and Warner Brothers Studio. So it

200
00:10:24,160 --> 00:10:28,520
Speaker 7: really is a really strong evidence of the value in

201
00:10:28,559 --> 00:10:29,920
Speaker 7: the Warner Brothers portfolio.

202
00:10:30,160 --> 00:10:30,760
Speaker 3: Once upon a.

203
00:10:30,679 --> 00:10:33,880
Speaker 4: Time, the idea of CBS and CNN being combined and

204
00:10:33,920 --> 00:10:37,400
Speaker 4: the idea of synergies read probably job losses and some

205
00:10:37,440 --> 00:10:41,840
Speaker 4: consolidation of efforts would have raised concerns by regulators. Will

206
00:10:41,840 --> 00:10:45,160
Speaker 4: it still or has the landscape changed so much competitively

207
00:10:45,520 --> 00:10:47,600
Speaker 4: that it doesn't necessarily reach that level.

208
00:10:48,800 --> 00:10:52,319
Speaker 7: Ye, that's a really interesting question. I would say that

209
00:10:52,360 --> 00:10:55,200
Speaker 7: the landscape has clearly changed. You know, back to my

210
00:10:55,240 --> 00:10:58,840
Speaker 7: first point, Streaming is first and foremost here and that's

211
00:10:58,880 --> 00:11:02,400
Speaker 7: where all the I are going and already you know,

212
00:11:02,520 --> 00:11:05,720
Speaker 7: essentially are for a lot of the parts in the

213
00:11:05,760 --> 00:11:10,600
Speaker 7: media business on news specifically. Yes, it does seem like

214
00:11:10,679 --> 00:11:14,400
Speaker 7: the strategic combination of a CBS News with a CNN

215
00:11:14,800 --> 00:11:17,120
Speaker 7: would be something that that makes a lot of sense

216
00:11:17,800 --> 00:11:21,040
Speaker 7: from a cost saving standpoint and strategically to put those

217
00:11:21,080 --> 00:11:22,160
Speaker 7: two assets together.

218
00:11:22,600 --> 00:11:24,760
Speaker 4: How much do you think that Warner Brothers is just

219
00:11:24,760 --> 00:11:27,160
Speaker 4: going to hold off on any kind of deal because

220
00:11:27,320 --> 00:11:28,920
Speaker 4: they were planning on splitting.

221
00:11:28,640 --> 00:11:31,079
Speaker 3: Up, and they did believe that each of the pieces

222
00:11:31,320 --> 00:11:32,760
Speaker 3: was worth a lot more than the whole.

223
00:11:32,840 --> 00:11:35,200
Speaker 4: We are seeing a premium here in terms of the

224
00:11:35,200 --> 00:11:38,720
Speaker 4: paramount Skydance offer from Ellison. But do you think that

225
00:11:38,760 --> 00:11:40,319
Speaker 4: it's enough or do you think that it's going to

226
00:11:40,400 --> 00:11:41,200
Speaker 4: have to be sweetened?

227
00:11:43,080 --> 00:11:45,760
Speaker 7: Well, I think we're going to see how this all

228
00:11:45,760 --> 00:11:48,319
Speaker 7: plays out, so that this is just kind of the

229
00:11:48,640 --> 00:11:52,600
Speaker 7: first salvo. And really what we're really waiting to see

230
00:11:52,800 --> 00:11:57,400
Speaker 7: is if there's gonna if the paramount sky Dance bid

231
00:11:57,480 --> 00:12:00,600
Speaker 7: is going to bring in other bidders here, because that

232
00:12:00,640 --> 00:12:04,000
Speaker 7: potentially has the opportunity to As we've seen in past,

233
00:12:04,360 --> 00:12:11,000
Speaker 7: these are premium, you know, very very demanded assets, especially

234
00:12:11,000 --> 00:12:14,840
Speaker 7: when you think about the studio and streaming and HBO.

235
00:12:15,320 --> 00:12:18,440
Speaker 7: So if this is the opportunity for other companies to

236
00:12:18,640 --> 00:12:21,680
Speaker 7: explore that that that's something that we're waiting to see

237
00:12:21,679 --> 00:12:24,640
Speaker 7: if if that's going to bring in other potential bidders here.

238
00:12:24,559 --> 00:12:25,720
Speaker 3: Potentially a price war.

239
00:12:25,800 --> 00:12:28,079
Speaker 5: Who else could bid for these assets?

240
00:12:29,600 --> 00:12:32,439
Speaker 7: Well, I mean, if you go through the list, clearly

241
00:12:32,600 --> 00:12:36,520
Speaker 7: Comcast is a potential bidder. It's unclear you know, to

242
00:12:36,559 --> 00:12:39,960
Speaker 7: the regular regulatory point if they're going to look to

243
00:12:41,280 --> 00:12:43,880
Speaker 7: enter into into the fray and and you know, put

244
00:12:43,880 --> 00:12:47,160
Speaker 7: their hat in the ring. But I think Comcast has

245
00:12:47,320 --> 00:12:50,640
Speaker 7: long been discussed again from the streaming side and also

246
00:12:50,720 --> 00:12:53,400
Speaker 7: from the studio side and other assets that that this

247
00:12:53,480 --> 00:12:56,040
Speaker 7: can be part of that. The question is they're going

248
00:12:56,040 --> 00:13:00,079
Speaker 7: through their own spin with versay it and you know,

249
00:13:00,200 --> 00:13:04,280
Speaker 7: essentially do they want to change strategies as well? That

250
00:13:04,400 --> 00:13:08,400
Speaker 7: that's that's that's a remains an open question. You know,

251
00:13:08,480 --> 00:13:13,079
Speaker 7: obviously that the digital big bidders are someone's that that

252
00:13:13,200 --> 00:13:17,440
Speaker 7: we all have to look at and and see whether

253
00:13:17,520 --> 00:13:19,240
Speaker 7: or not they want to really throw the hat in

254
00:13:19,240 --> 00:13:22,280
Speaker 7: the ring. Again from the regulatory side and even a

255
00:13:22,320 --> 00:13:25,120
Speaker 7: company like Apple, if they really want to go all

256
00:13:25,160 --> 00:13:26,840
Speaker 7: in on media, how much.

257
00:13:26,679 --> 00:13:29,520
Speaker 5: More consolidation could we see Robert in this space.

258
00:13:31,800 --> 00:13:33,160
Speaker 3: Well, this is a big one.

259
00:13:33,640 --> 00:13:36,760
Speaker 7: We've been waiting for something like this for a little

260
00:13:36,760 --> 00:13:40,400
Speaker 7: while now, again talking about the potential dance partners with

261
00:13:40,440 --> 00:13:44,920
Speaker 7: a Comcast, with Warner Brothers, Discovery and and Paramounts being

262
00:13:45,120 --> 00:13:48,760
Speaker 7: the three key players. So you know, I think this

263
00:13:48,800 --> 00:13:52,280
Speaker 7: is going to lead to other potential dominoes that that

264
00:13:52,320 --> 00:13:54,640
Speaker 7: could fall. But but clearly that this is the big

265
00:13:54,679 --> 00:13:56,199
Speaker 7: one that we're all focused on right now.

266
00:13:57,080 --> 00:14:10,320
Speaker 2: Stay with us Multpleinberg. Savannah's coming up after this. Andrew

267
00:14:10,360 --> 00:14:13,439
Speaker 2: Holnholt of City Writing, we continue to expect one hundred

268
00:14:13,480 --> 00:14:15,920
Speaker 2: and twenty five basis points of right cuts over the

269
00:14:15,960 --> 00:14:19,040
Speaker 2: next five FMC meetings, with growing risk that the Fed

270
00:14:19,080 --> 00:14:22,720
Speaker 2: will continue cutting interest rates below three percent. Andrew Joints

271
00:14:22,760 --> 00:14:24,560
Speaker 2: is now for more, Andrew and Monic, I've got to

272
00:14:24,600 --> 00:14:26,200
Speaker 2: get to that three percent call in just a moment, Boile,

273
00:14:26,200 --> 00:14:27,640
Speaker 2: I want to address the danks for the last twenty

274
00:14:27,640 --> 00:14:29,960
Speaker 2: four hours, so jobless claims came in close to four

275
00:14:30,040 --> 00:14:32,720
Speaker 2: year highs, spiked a bit of concern. Then we got

276
00:14:32,720 --> 00:14:35,640
Speaker 2: into the numbers and it screams one state, it screams Texas.

277
00:14:35,960 --> 00:14:37,960
Speaker 2: Is that anything will be concerned about here at all?

278
00:14:38,400 --> 00:14:38,920
Speaker 3: I mean, I think you.

279
00:14:38,880 --> 00:14:41,000
Speaker 8: Always have to watch the jobless claims numbers. What we

280
00:14:41,040 --> 00:14:42,560
Speaker 8: would look for is is this going to be a

281
00:14:42,600 --> 00:14:43,960
Speaker 8: sustained movement.

282
00:14:43,840 --> 00:14:44,960
Speaker 3: Up in jobless claims?

283
00:14:45,000 --> 00:14:46,920
Speaker 8: A lot of times you get one week of data

284
00:14:46,960 --> 00:14:49,000
Speaker 8: and it's weekly data, right, You're trying to seasonally a

285
00:14:49,120 --> 00:14:51,960
Speaker 8: just weekly data in a holiday week spiked up in

286
00:14:52,000 --> 00:14:54,560
Speaker 8: one state, So you never take that too seriously. So

287
00:14:54,560 --> 00:14:56,440
Speaker 8: so I'd be kind of cautious in terms of getting

288
00:14:56,640 --> 00:14:57,880
Speaker 8: too concerned about that number.

289
00:14:57,920 --> 00:15:00,680
Speaker 2: The broader backdrop, though, the totality of the data, as

290
00:15:00,680 --> 00:15:02,680
Speaker 2: the Fed likes to say, hasn't been great on the

291
00:15:02,760 --> 00:15:05,000
Speaker 2: labor market side of things. When we go into next week,

292
00:15:05,040 --> 00:15:07,760
Speaker 2: we're talking about the following mid cycle adjustment or the

293
00:15:07,800 --> 00:15:10,240
Speaker 2: start of a really big easy cycle, and you've alluded

294
00:15:10,280 --> 00:15:12,560
Speaker 2: to it, we're going to stop at three percent, or well,

295
00:15:12,600 --> 00:15:13,640
Speaker 2: we need to go even further.

296
00:15:14,120 --> 00:15:15,920
Speaker 8: I think it's increasingly clear that we're going to get

297
00:15:15,960 --> 00:15:18,320
Speaker 8: to at least three percent. And you look at the

298
00:15:18,400 --> 00:15:21,120
Speaker 8: jobs data, and we do have some conflict in the data.

299
00:15:21,160 --> 00:15:23,320
Speaker 8: If you look at the household survey, where the unemployment

300
00:15:23,360 --> 00:15:26,160
Speaker 8: rate comes from, unemployment rate has been more stable, did

301
00:15:26,240 --> 00:15:28,720
Speaker 8: move up in the last report. You look at the

302
00:15:28,760 --> 00:15:32,200
Speaker 8: payrolls data, and with these revisions, it's just fallen apart.

303
00:15:32,240 --> 00:15:34,200
Speaker 8: I mean, we're running at twenty nine thousand jobs per

304
00:15:34,240 --> 00:15:36,560
Speaker 8: month on a moving average basis, just twenty two thousand

305
00:15:36,640 --> 00:15:39,520
Speaker 8: jobs last month. You look at the benchmark revisions and say,

306
00:15:39,760 --> 00:15:43,120
Speaker 8: maybe we're overstating that payrolls number each month, So you know,

307
00:15:43,160 --> 00:15:45,840
Speaker 8: subtract a little for that. We're probably close to zero

308
00:15:45,960 --> 00:15:49,880
Speaker 8: job growth in terms of payrolls. So there's no question

309
00:15:50,000 --> 00:15:51,960
Speaker 8: that you want to be moving rates at least back

310
00:15:52,000 --> 00:15:55,760
Speaker 8: towards a more neutral setting. I think with the cooler

311
00:15:55,800 --> 00:15:58,480
Speaker 8: inflation data that we're getting now, you can really start

312
00:15:58,520 --> 00:16:00,720
Speaker 8: thinking about do they actually move below three percent?

313
00:16:00,760 --> 00:16:03,960
Speaker 4: Hold on a second, the cooling inflation data cooling, sure,

314
00:16:04,160 --> 00:16:07,080
Speaker 4: we're still above three percent on a year over year basis.

315
00:16:07,080 --> 00:16:10,360
Speaker 4: You still haven't gotten below two percent going back more

316
00:16:10,400 --> 00:16:13,480
Speaker 4: than four years. Is that enough at this point to

317
00:16:13,560 --> 00:16:16,320
Speaker 4: be actually a reason for the Fed to cut aggressively?

318
00:16:16,480 --> 00:16:19,360
Speaker 8: Well, I think the reason to cut aggressively is the

319
00:16:19,440 --> 00:16:21,800
Speaker 8: jobs data, what we're seeing in the labor market. The

320
00:16:21,880 --> 00:16:24,200
Speaker 8: question is how can strained are you by inflation? To

321
00:16:24,240 --> 00:16:26,360
Speaker 8: your point, and you're right. You look at core pc inflation,

322
00:16:26,560 --> 00:16:28,760
Speaker 8: we're still above three percent when we looked at the

323
00:16:28,800 --> 00:16:31,680
Speaker 8: CPI report yesterday. Though, this is really interesting. You map

324
00:16:31,760 --> 00:16:34,840
Speaker 8: that through to core PCEE inflation. We're getting just zero

325
00:16:34,920 --> 00:16:37,960
Speaker 8: point two zero percent month on month core PCEE inflation.

326
00:16:38,120 --> 00:16:42,440
Speaker 8: So that's monthly annualized core inflation that's running pretty close

327
00:16:42,480 --> 00:16:44,920
Speaker 8: to two percent, and that year on year figure maybe

328
00:16:44,960 --> 00:16:46,840
Speaker 8: going to come down to two point nine percent, so

329
00:16:47,080 --> 00:16:49,080
Speaker 8: we could get below three percent on a year on

330
00:16:49,160 --> 00:16:51,880
Speaker 8: year basis. I'm running close to two percent on a

331
00:16:51,880 --> 00:16:55,280
Speaker 8: monthly basis. And remember this is August inflation data. This

332
00:16:55,320 --> 00:16:57,840
Speaker 8: was meant to be the peak of tariff pass through

333
00:16:57,960 --> 00:16:59,600
Speaker 8: and you know the high inflation that we were going

334
00:16:59,600 --> 00:17:01,440
Speaker 8: to see, and we're close to target. So I think

335
00:17:01,560 --> 00:17:03,600
Speaker 8: there's a lot less of a constrain on the inflation

336
00:17:03,800 --> 00:17:06,440
Speaker 8: side that's going to be more underappreciated by the market

337
00:17:06,520 --> 00:17:09,040
Speaker 8: right now. I think everyone's acknowledging now that you have

338
00:17:09,119 --> 00:17:10,840
Speaker 8: this risk on the labor market side.

339
00:17:10,920 --> 00:17:12,480
Speaker 3: I'm pretty clear what the Fed's going to do here.

340
00:17:12,520 --> 00:17:15,320
Speaker 4: I mean, we've got the Restoration Hardware CEO cursing out

341
00:17:15,359 --> 00:17:17,640
Speaker 4: the investors because of their inability to have pricing power,

342
00:17:17,720 --> 00:17:19,960
Speaker 4: So it raises a question of further disinflation. There is

343
00:17:19,960 --> 00:17:21,760
Speaker 4: a feeling though that going forward there is going to

344
00:17:21,800 --> 00:17:24,720
Speaker 4: be a reacceleration of the economy, thus the bet on

345
00:17:24,800 --> 00:17:28,080
Speaker 4: small caps, thus the bet on equities, And how much

346
00:17:28,119 --> 00:17:30,760
Speaker 4: do you see that as sort of predicated on the

347
00:17:30,760 --> 00:17:33,080
Speaker 4: FED cuts that you're talking about, that that will ignite

348
00:17:33,600 --> 00:17:37,200
Speaker 4: the reacceleration of growth that so many people are hinging

349
00:17:37,240 --> 00:17:37,760
Speaker 4: their bets on.

350
00:17:38,040 --> 00:17:40,240
Speaker 8: There's a little bit of a disconnect between markets here,

351
00:17:40,280 --> 00:17:42,760
Speaker 8: and this is I hear this when I speak with investors. Also,

352
00:17:42,800 --> 00:17:45,640
Speaker 8: that equity market, I think definitely thinks that there will

353
00:17:45,640 --> 00:17:47,480
Speaker 8: be this reacceleration in the economy.

354
00:17:47,680 --> 00:17:49,720
Speaker 3: Not as clear to me that the rates.

355
00:17:49,560 --> 00:17:51,520
Speaker 8: Market is sold on that, which is part of why

356
00:17:51,520 --> 00:17:53,760
Speaker 8: we're pricing in these cuts in the rates market. So

357
00:17:54,040 --> 00:17:56,320
Speaker 8: maybe you need to kind of reconcile those two markets

358
00:17:56,359 --> 00:17:59,800
Speaker 8: with each other. I do think that these FED cuts

359
00:17:59,840 --> 00:18:03,359
Speaker 8: are getting increasingly priced in. I think that is part

360
00:18:03,400 --> 00:18:06,560
Speaker 8: of the story of what is supposed to get the

361
00:18:06,600 --> 00:18:09,280
Speaker 8: economy moving a little bit faster. You look at the

362
00:18:09,320 --> 00:18:12,199
Speaker 8: housing market, that's the most interest rate sensitive sector of

363
00:18:12,240 --> 00:18:15,760
Speaker 8: the economy, and we have really weak housing right now.

364
00:18:15,600 --> 00:18:18,640
Speaker 3: In terms of activity. In terms of prices moving lower.

365
00:18:18,480 --> 00:18:20,399
Speaker 8: You need to get rates lower if you want to

366
00:18:20,440 --> 00:18:22,440
Speaker 8: re accelerate that portion of the economy.

367
00:18:22,720 --> 00:18:24,880
Speaker 3: The question, though, is if fit cuts interest.

368
00:18:24,720 --> 00:18:26,399
Speaker 8: Rates, it's going to bring down policy rates, it's going

369
00:18:26,440 --> 00:18:28,960
Speaker 8: to bring down the two year yield. How much lower

370
00:18:29,000 --> 00:18:30,520
Speaker 8: will we get in terms of the ten year yield.

371
00:18:30,560 --> 00:18:32,879
Speaker 8: It has been moving down together with the front end

372
00:18:32,880 --> 00:18:34,760
Speaker 8: of the yield curve, but I think that's still an

373
00:18:34,760 --> 00:18:35,359
Speaker 8: open question.

374
00:18:35,560 --> 00:18:37,960
Speaker 5: Andrew, how likely is it potentially that they go fifty

375
00:18:38,000 --> 00:18:40,679
Speaker 5: basis points, especially given everything you've just outlined in the

376
00:18:40,720 --> 00:18:41,600
Speaker 5: last five minutes.

377
00:18:41,960 --> 00:18:43,840
Speaker 8: So I think fundamentally, you can look at this data

378
00:18:43,840 --> 00:18:45,960
Speaker 8: and you can say, look back at June payrolls. June

379
00:18:46,000 --> 00:18:48,480
Speaker 8: payrolls originally reported above one hundred and fifty thousand.

380
00:18:48,720 --> 00:18:51,240
Speaker 3: Now it's negative. Right, if we had had a negative.

381
00:18:50,920 --> 00:18:53,439
Speaker 8: Payrolls print in June, I'm pretty sure this is a

382
00:18:53,440 --> 00:18:55,200
Speaker 8: FED that would have been cutting in July.

383
00:18:55,320 --> 00:18:55,399
Speaker 7: Right.

384
00:18:55,480 --> 00:18:59,560
Speaker 8: We have seen rate cuts by now. That said, they're

385
00:18:59,560 --> 00:19:02,040
Speaker 8: a big diferences across the committee. Remember back in June,

386
00:19:02,040 --> 00:19:03,840
Speaker 8: we had a lot of FED officials who didn't want

387
00:19:03,840 --> 00:19:06,120
Speaker 8: to cut at all. This year, Powell has to pull

388
00:19:06,160 --> 00:19:08,840
Speaker 8: that committee together. So twenty five basis points I think

389
00:19:08,920 --> 00:19:10,760
Speaker 8: is going to be a lot easier to build a

390
00:19:10,800 --> 00:19:13,560
Speaker 8: consensus around. We could see some descents for fifty. I

391
00:19:13,560 --> 00:19:16,280
Speaker 8: wouldn't be surprised if we see some descents, but twenty

392
00:19:16,320 --> 00:19:18,439
Speaker 8: five looks much much more likely than fifty.

393
00:19:18,600 --> 00:19:21,280
Speaker 5: What is a FED under Laurence Lindsay, Kevin Warsh or

394
00:19:21,359 --> 00:19:23,399
Speaker 5: James Bullard look like, given the fact that those are

395
00:19:23,440 --> 00:19:26,200
Speaker 5: the most recent individuals to sit down the Treasury Secretary.

396
00:19:26,320 --> 00:19:29,080
Speaker 8: Yeah, personnel matters here, right, There's no question that the

397
00:19:29,359 --> 00:19:32,200
Speaker 8: fedchair matters. It is a committee, right, So we always

398
00:19:32,200 --> 00:19:34,120
Speaker 8: think about where are the votes actually going to line

399
00:19:34,200 --> 00:19:37,560
Speaker 8: up in terms of where policy rates go. One discussion,

400
00:19:37,560 --> 00:19:40,200
Speaker 8: we're talking about three percent. Why does everyone talk about

401
00:19:40,240 --> 00:19:42,359
Speaker 8: three percent? That's kind of a notion of where maybe

402
00:19:42,400 --> 00:19:45,800
Speaker 8: the neutral policy rate is. Different candidates for fedchair are

403
00:19:45,800 --> 00:19:49,080
Speaker 8: going to have different views about where the neutral raiate is.

404
00:19:49,440 --> 00:19:52,200
Speaker 8: And I'm pretty sure when Treasury Secretary Beston is interviewing

405
00:19:52,200 --> 00:19:54,960
Speaker 8: these FED officials, that's one of the discussions that they're having.

406
00:19:55,000 --> 00:19:57,399
Speaker 8: So where do you see neutral? How quickly do you

407
00:19:57,400 --> 00:19:59,840
Speaker 8: think we need to get to neutral? That could depend

408
00:19:59,880 --> 00:20:00,680
Speaker 8: on FED scher.

409
00:20:00,520 --> 00:20:01,680
Speaker 3: And where do you see neutral?

410
00:20:02,520 --> 00:20:04,879
Speaker 8: I think neutral is still around three percent here. So

411
00:20:04,880 --> 00:20:07,320
Speaker 8: when we talk about the FED cutting below three percent,

412
00:20:07,520 --> 00:20:10,639
Speaker 8: that really are they going to actually go to stimulative levels?

413
00:20:10,840 --> 00:20:13,399
Speaker 8: To Lisa's point, if you have an inflation problem, it

414
00:20:13,440 --> 00:20:16,919
Speaker 8: gets pretty awkward to get below neutral. But if this

415
00:20:17,000 --> 00:20:19,920
Speaker 8: inflation problem is, you know, kind of quickly disappearing, which

416
00:20:20,080 --> 00:20:21,760
Speaker 8: I think it may in the next few months of data,

417
00:20:22,400 --> 00:20:24,640
Speaker 8: all of a sudden, there's less of a constrained and yeah,

418
00:20:24,640 --> 00:20:26,000
Speaker 8: you should support the labor market.

419
00:20:25,880 --> 00:20:28,399
Speaker 2: Got about sixty seconds left. They don't forecast payrolls, they

420
00:20:28,440 --> 00:20:31,320
Speaker 2: forecast unemployment, and they've got unemployment year round at four

421
00:20:31,359 --> 00:20:34,679
Speaker 2: point five percent, core PC at three point one. Is

422
00:20:34,720 --> 00:20:37,120
Speaker 2: there anythink that's evolved since the last meeting that sound

423
00:20:37,119 --> 00:20:38,440
Speaker 2: of whack with the June SEP.

424
00:20:39,000 --> 00:20:42,240
Speaker 8: Those for forecasts can actually pretty much stay where they are.

425
00:20:42,280 --> 00:20:43,919
Speaker 8: And I think the way that Cher Paul will talk

426
00:20:43,920 --> 00:20:45,879
Speaker 8: about this, and he said this at Jackson Hole is

427
00:20:45,920 --> 00:20:47,840
Speaker 8: not where that point estimate is. So you might still

428
00:20:47,880 --> 00:20:49,800
Speaker 8: be at four point five percent on the unemployment rate.

429
00:20:50,119 --> 00:20:53,200
Speaker 8: What's the risk around that you're running twenty nine thousand payrolls?

430
00:20:53,280 --> 00:20:55,240
Speaker 3: It's to the upside.

431
00:20:55,760 --> 00:20:59,320
Speaker 2: This is the Bloombergs Events podcast, bringing you the best

432
00:20:59,320 --> 00:21:02,640
Speaker 2: in market, economics, angio politics. You can watch the show

433
00:21:02,720 --> 00:21:05,679
Speaker 2: live on Bloomberg TV weekday mornings from six am to

434
00:21:05,800 --> 00:21:09,560
Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify

435
00:21:09,680 --> 00:21:11,920
Speaker 2: or anywhere else you listen, and as always, on the

436
00:21:11,920 --> 00:21:14,359
Speaker 2: Bloomberg Terminal and the Bloomberg Business app