1 00:00:05,160 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:08,520 --> 00:00:12,360 Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,840 Speaker 1: for insight from the best an economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,119 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:29,840 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. 7 00:00:30,000 --> 00:00:32,560 Speaker 2: Joining us now is Marvin low Cydney, Global macro strategist 8 00:00:32,680 --> 00:00:34,640 Speaker 2: over Stay Street. Marvin, good morning to you, Sarah. It's 9 00:00:34,640 --> 00:00:36,440 Speaker 2: wonderful to have you with us on the program. To 10 00:00:36,520 --> 00:00:38,640 Speaker 2: kick off the trade in week CPI a little bit 11 00:00:38,680 --> 00:00:40,960 Speaker 2: later this week, we get retail sales as well, Marvin, 12 00:00:40,960 --> 00:00:42,879 Speaker 2: once we get to Friday, what do you expect that 13 00:00:42,960 --> 00:00:43,960 Speaker 2: data to look like? 14 00:00:45,479 --> 00:00:46,680 Speaker 3: Yeah, I mean, I think we're going to get a 15 00:00:46,680 --> 00:00:50,520 Speaker 3: continuation of the positive trends with the with the core data. 16 00:00:50,960 --> 00:00:55,160 Speaker 3: You know, certainly PCE raises the risk that it might 17 00:00:55,440 --> 00:00:58,680 Speaker 3: be a little bit of an upside surprise, but you know, 18 00:00:58,760 --> 00:01:00,480 Speaker 3: kind of having said that, given where we were, it's 19 00:01:00,480 --> 00:01:00,720 Speaker 3: not right. 20 00:01:00,720 --> 00:01:02,520 Speaker 4: I think we're moving in the right direction. 21 00:01:03,160 --> 00:01:07,440 Speaker 3: The consumer remains strong, so they're kind of continues that 22 00:01:07,600 --> 00:01:10,280 Speaker 3: the challenge that the FED has in terms of in 23 00:01:10,360 --> 00:01:14,640 Speaker 3: terms of a strong consumer and it making it harder 24 00:01:14,920 --> 00:01:16,760 Speaker 3: to get towards those inflation goals. 25 00:01:17,280 --> 00:01:21,280 Speaker 1: I look, Marvin at the idea of taking strategy or 26 00:01:21,360 --> 00:01:23,039 Speaker 1: economics and having a. 27 00:01:23,040 --> 00:01:24,560 Speaker 5: Conviction and belief. 28 00:01:24,760 --> 00:01:29,200 Speaker 1: I love your phrase painfully neutral. I mean, there we 29 00:01:29,280 --> 00:01:32,680 Speaker 1: are treading water here. Do you have conviction where you 30 00:01:32,720 --> 00:01:35,400 Speaker 1: can be in the market. Are you convicted to a 31 00:01:35,480 --> 00:01:37,880 Speaker 1: correction or do you got a gloom bear. 32 00:01:37,760 --> 00:01:38,679 Speaker 5: Market out front? 33 00:01:39,840 --> 00:01:40,080 Speaker 4: Yeah? 34 00:01:40,120 --> 00:01:43,800 Speaker 3: I mean, you know, we need a conviction when we 35 00:01:43,880 --> 00:01:49,960 Speaker 3: approach our portfolio selecting process ultimately in terms of playing 36 00:01:49,960 --> 00:01:50,520 Speaker 3: the market. 37 00:01:50,680 --> 00:01:53,000 Speaker 4: With regard to the choppiness around. 38 00:01:52,640 --> 00:01:55,360 Speaker 3: That conviction, I think it makes it to a certain 39 00:01:55,360 --> 00:01:58,560 Speaker 3: degree harder because certainly we're going to have volatility in 40 00:01:58,560 --> 00:02:01,040 Speaker 3: the market, but it's going to create opportunities if we 41 00:02:01,160 --> 00:02:04,920 Speaker 3: believe in ultimately that conviction. You know, I do think 42 00:02:04,960 --> 00:02:09,600 Speaker 3: that the recession versus remain out there, and the higher 43 00:02:09,639 --> 00:02:13,240 Speaker 3: for longer conversation becomes a harder landing, particularly when we 44 00:02:13,280 --> 00:02:15,799 Speaker 3: look at kind of some of the spending headwinds that 45 00:02:16,040 --> 00:02:18,399 Speaker 3: begin to come into the market next year, and then 46 00:02:18,560 --> 00:02:20,079 Speaker 3: you know, again, opportunities around that. 47 00:02:20,160 --> 00:02:22,560 Speaker 1: First study I did this morning, Marvin was a Bloomberg 48 00:02:22,600 --> 00:02:25,359 Speaker 1: financial conditions index. I went back way back, oh six 49 00:02:25,480 --> 00:02:28,760 Speaker 1: oh five, eleven ratios folded in there. I believe it's 50 00:02:28,800 --> 00:02:32,440 Speaker 1: a toxic brow And the answer is, we are accommodative. 51 00:02:33,000 --> 00:02:37,160 Speaker 1: We are Are we painfully accommodative for central banks like 52 00:02:37,240 --> 00:02:38,520 Speaker 1: you're painfully neutral? 53 00:02:39,720 --> 00:02:42,280 Speaker 3: Well, you know, I think I think we've got the 54 00:02:42,320 --> 00:02:46,360 Speaker 3: policy diversions that's starting to emerge globally and it's making 55 00:02:46,400 --> 00:02:49,600 Speaker 3: these conversations interesting for us in the macro space. But 56 00:02:49,680 --> 00:02:52,680 Speaker 3: it's really showing the challenges that all the different central 57 00:02:52,680 --> 00:02:53,079 Speaker 3: banks have. 58 00:02:53,720 --> 00:02:55,079 Speaker 4: It's hard to say that the. 59 00:02:55,200 --> 00:02:59,720 Speaker 3: US is incredibly restrictive, just given where the economy is performing, 60 00:02:59,720 --> 00:03:03,200 Speaker 3: where you see that transmission mechanism making its way much 61 00:03:03,280 --> 00:03:07,800 Speaker 3: more readily into the European economies and certainly the economies 62 00:03:07,840 --> 00:03:08,640 Speaker 3: around the Antipodean. 63 00:03:08,800 --> 00:03:11,600 Speaker 4: So you know, you do have kind of these. 64 00:03:11,440 --> 00:03:14,440 Speaker 3: These divergences, which is really the challenge that we have 65 00:03:14,520 --> 00:03:16,560 Speaker 3: going into the end of the year and thinking about 66 00:03:16,560 --> 00:03:17,360 Speaker 3: policy going. 67 00:03:17,160 --> 00:03:20,000 Speaker 6: Into next year, and then understanding also the inter relationship 68 00:03:20,040 --> 00:03:22,079 Speaker 6: between some of these divergencies. I think of the Bank 69 00:03:22,120 --> 00:03:26,679 Speaker 6: of Japan over the weekend raising the possibility of understanding 70 00:03:27,000 --> 00:03:29,400 Speaker 6: the need to abandon negative yields and even move away 71 00:03:29,440 --> 00:03:31,800 Speaker 6: from yield curve control as soon as later this year. 72 00:03:31,840 --> 00:03:34,120 Speaker 6: This is a new kind of time frame. Does that 73 00:03:34,240 --> 00:03:35,840 Speaker 6: shift your understanding of where. 74 00:03:35,800 --> 00:03:37,640 Speaker 4: US yields should be given? 75 00:03:37,960 --> 00:03:41,000 Speaker 6: Yeah, there is this divergence, but there's inter relationship between 76 00:03:41,000 --> 00:03:42,040 Speaker 6: these global markets. 77 00:03:42,880 --> 00:03:44,120 Speaker 4: Yeah, I mean that's significant. 78 00:03:44,520 --> 00:03:47,720 Speaker 3: You know, the view that Japan is finally in a 79 00:03:47,760 --> 00:03:51,000 Speaker 3: position to make a longer term decision reversing something that 80 00:03:51,040 --> 00:03:54,440 Speaker 3: has been you know, a decades long policy is significant 81 00:03:54,440 --> 00:03:56,560 Speaker 3: within the global landscape, particularly when you look at it 82 00:03:56,600 --> 00:03:59,520 Speaker 3: from the US perspective and they are participation in the 83 00:03:59,760 --> 00:04:02,400 Speaker 3: trade market. You know that that's a conversation that we 84 00:04:02,480 --> 00:04:04,720 Speaker 3: started to have in early August, which now comes to 85 00:04:04,800 --> 00:04:05,520 Speaker 3: the forefront again. 86 00:04:05,640 --> 00:04:07,360 Speaker 4: If they're not as accommodator for sure. 87 00:04:07,760 --> 00:04:09,600 Speaker 6: Morgan Stanley came out and said that they actually have 88 00:04:09,720 --> 00:04:12,400 Speaker 6: conviction that yields are going to come down and to 89 00:04:12,480 --> 00:04:15,440 Speaker 6: remain bullish on US bonds. How much do you push 90 00:04:15,520 --> 00:04:17,760 Speaker 6: back against that? How much do you feel like the 91 00:04:17,880 --> 00:04:20,720 Speaker 6: stickiness that we're seeing in yields is going to be 92 00:04:20,920 --> 00:04:21,800 Speaker 6: really the new normal? 93 00:04:22,880 --> 00:04:23,080 Speaker 5: Yeah? 94 00:04:23,120 --> 00:04:26,240 Speaker 3: I mean I wouldn't be playing a significant decrease in 95 00:04:26,320 --> 00:04:28,280 Speaker 3: yields at this point in time. 96 00:04:28,360 --> 00:04:30,600 Speaker 4: You know, I do think again a recession is going 97 00:04:30,680 --> 00:04:32,080 Speaker 4: to drive that type of conversation. 98 00:04:32,279 --> 00:04:35,120 Speaker 3: But you know again that that painfully neutral type of 99 00:04:35,240 --> 00:04:38,880 Speaker 3: view kind of having said that, where valuations are, I 100 00:04:38,960 --> 00:04:42,840 Speaker 3: don't mind the income quite frankly, and I still think 101 00:04:42,920 --> 00:04:46,320 Speaker 3: that you could think about curve steepeners, but you know, 102 00:04:46,600 --> 00:04:49,280 Speaker 3: you need to do it more tactically than just looking 103 00:04:49,320 --> 00:04:51,000 Speaker 3: at a two s tens perspective. You got to look 104 00:04:51,000 --> 00:04:53,320 Speaker 3: at how long this thing might take and whether or 105 00:04:53,320 --> 00:04:54,720 Speaker 3: not out of five to thirties. 106 00:04:54,480 --> 00:04:55,640 Speaker 4: View makes more sense. 107 00:04:56,240 --> 00:04:59,479 Speaker 3: But you know, just simply simply owning treasuries in an 108 00:04:59,560 --> 00:05:03,880 Speaker 3: environment where inflation is below that yield is a decent return. 109 00:05:04,279 --> 00:05:06,800 Speaker 7: Do you saying pick up the front end, Maffin or 110 00:05:06,880 --> 00:05:07,640 Speaker 7: you sank them out? 111 00:05:08,680 --> 00:05:11,240 Speaker 4: I like, I like, I like the belly more. I 112 00:05:11,360 --> 00:05:11,960 Speaker 4: like the belly more. 113 00:05:11,960 --> 00:05:15,400 Speaker 2: Okay, So the five to seven year portion of the curve, Yeah, 114 00:05:15,800 --> 00:05:17,480 Speaker 2: does the same apply to credit because we had a 115 00:05:17,520 --> 00:05:20,120 Speaker 2: lot of credit issuance last week and the bulk of 116 00:05:20,200 --> 00:05:22,640 Speaker 2: that was quite short term stuff, Marv, And I just 117 00:05:22,760 --> 00:05:25,600 Speaker 2: wonder what kind of signal you take away from that issuance? 118 00:05:26,880 --> 00:05:28,839 Speaker 4: Yeah, I mean, it's it's opportunistic for sure. 119 00:05:29,160 --> 00:05:31,040 Speaker 3: You know, the fact that the liquidity is in the 120 00:05:31,160 --> 00:05:36,040 Speaker 3: market is ultimately concerned corporations are taking advantage of that. 121 00:05:37,040 --> 00:05:41,080 Speaker 3: I still think that credit is a challenge if the 122 00:05:41,200 --> 00:05:44,760 Speaker 3: short end becomes a risk. You know, certainly high yield 123 00:05:45,120 --> 00:05:48,400 Speaker 3: has a greater risk associated with that. Really, kind of 124 00:05:48,480 --> 00:05:52,400 Speaker 3: getting past the choppiness that might evolve over the next 125 00:05:52,440 --> 00:05:55,440 Speaker 3: two to three years is something to be cognizant of. 126 00:05:55,760 --> 00:05:58,200 Speaker 2: Marvin, Thank you, sir for the update from State Street. 127 00:05:58,240 --> 00:05:59,719 Speaker 2: Marvin Low, thank you very much. 128 00:06:04,000 --> 00:06:04,040 Speaker 4: So. 129 00:06:04,760 --> 00:06:07,360 Speaker 1: Rajapa joins us now ahead of US right strategy, it's 130 00:06:07,400 --> 00:06:10,360 Speaker 1: sock Gen here on the forty seven narratives that were 131 00:06:10,400 --> 00:06:12,400 Speaker 1: out there, you have to pick a narrative this weekend 132 00:06:12,480 --> 00:06:15,720 Speaker 1: to go with on Monday, which is the sock Gen 133 00:06:15,839 --> 00:06:16,720 Speaker 1: narrative right now. 134 00:06:17,200 --> 00:06:21,159 Speaker 5: On what rates will do, I. 135 00:06:21,200 --> 00:06:22,880 Speaker 8: Think for the most part it's going to be wait 136 00:06:22,960 --> 00:06:24,760 Speaker 8: and see at least for this week ahead of f 137 00:06:24,960 --> 00:06:30,400 Speaker 8: MC next week. Broadly speaking, if you look at the 138 00:06:30,640 --> 00:06:32,440 Speaker 8: price action that we've seen in the bond market, the 139 00:06:32,520 --> 00:06:35,800 Speaker 8: funand seems to be very anchored to FED expectations. The 140 00:06:35,880 --> 00:06:38,719 Speaker 8: Fed's going to pause at the September meeting whether they 141 00:06:38,839 --> 00:06:41,320 Speaker 8: hike again in November is yet to be seen, but 142 00:06:41,440 --> 00:06:43,680 Speaker 8: the data that we get this week will kind of 143 00:06:43,760 --> 00:06:47,320 Speaker 8: guide the dots for next week as well as set 144 00:06:47,360 --> 00:06:50,479 Speaker 8: the trend for what potentially the Fed could be doing 145 00:06:50,640 --> 00:06:54,040 Speaker 8: in November and beyond. So, and that's sort of context 146 00:06:54,160 --> 00:06:56,920 Speaker 8: range bond markets for the next week or so. We 147 00:06:57,040 --> 00:06:59,279 Speaker 8: did get a ton of corporate supply that's been pushing 148 00:06:59,600 --> 00:07:02,159 Speaker 8: TENA yields higher. We could probably see a little bit 149 00:07:02,200 --> 00:07:04,960 Speaker 8: more of that momentum, but really you're going to need 150 00:07:05,080 --> 00:07:07,120 Speaker 8: more data to direct the markets from your. 151 00:07:07,040 --> 00:07:10,000 Speaker 6: On what's your takets about? Drew on the implication from 152 00:07:10,080 --> 00:07:13,960 Speaker 6: the latest missive over in Japan about potentially ending yield 153 00:07:14,080 --> 00:07:17,240 Speaker 6: curve control as well as negative yielding policy sometime in 154 00:07:17,280 --> 00:07:19,200 Speaker 6: the near future and having a better sense of when 155 00:07:19,280 --> 00:07:22,040 Speaker 6: that would be appropriate by the end of this year. 156 00:07:22,120 --> 00:07:25,360 Speaker 6: Does that change your outlook for US yields given the 157 00:07:25,480 --> 00:07:28,640 Speaker 6: incredible buyer base that we've seen coming from Japan. 158 00:07:30,480 --> 00:07:34,800 Speaker 8: Absolutely, I think that we've seen a pretty decent change 159 00:07:34,880 --> 00:07:39,320 Speaker 8: in the trend and momentum in yields in August. Granted 160 00:07:39,320 --> 00:07:41,880 Speaker 8: it's a quiet month, but we had the Fitch down grades, 161 00:07:42,240 --> 00:07:45,800 Speaker 8: you had the change in the YCC policy that's definitely 162 00:07:45,840 --> 00:07:50,040 Speaker 8: putting some pressure on yields, not just in the US 163 00:07:50,120 --> 00:07:53,400 Speaker 8: but also globally. But we'll have to kind of see 164 00:07:53,440 --> 00:07:55,880 Speaker 8: how things play out because at the same time, while 165 00:07:55,960 --> 00:08:00,080 Speaker 8: they're adjusting policy, you're also looking at a broader snowdown Europe. Know, 166 00:08:00,120 --> 00:08:02,720 Speaker 8: you're starting to see a slowdown in growth there. In 167 00:08:02,800 --> 00:08:06,480 Speaker 8: the fourth quarter of this year, we'll probably see that 168 00:08:06,600 --> 00:08:08,960 Speaker 8: the US economy will also start to come under pressure 169 00:08:08,960 --> 00:08:10,840 Speaker 8: as the consumers start to pull back a little bit. 170 00:08:11,120 --> 00:08:14,320 Speaker 8: We've seen a summer splurge. Consumers have been extraordinarily resilient, 171 00:08:14,760 --> 00:08:17,880 Speaker 8: but you know, with student lot moratoriums expiring, saving straights 172 00:08:17,880 --> 00:08:20,920 Speaker 8: starting to decline, delinquency starting to go up, I think 173 00:08:20,960 --> 00:08:22,960 Speaker 8: that you're going to see a lot more pressure on 174 00:08:23,160 --> 00:08:25,680 Speaker 8: the consumer in the fourth quarter of this year, and 175 00:08:25,760 --> 00:08:29,640 Speaker 8: that again is something that could probably keep a lid 176 00:08:29,880 --> 00:08:31,679 Speaker 8: on the rising years in the US. 177 00:08:32,000 --> 00:08:35,120 Speaker 6: Does that give you more conviction to buy in the 178 00:08:35,240 --> 00:08:38,480 Speaker 6: government bond space and less conviction to buy on the 179 00:08:38,600 --> 00:08:40,679 Speaker 6: credit side of things that might be more affected by 180 00:08:40,720 --> 00:08:41,199 Speaker 6: the weakness. 181 00:08:42,679 --> 00:08:44,559 Speaker 8: That seems to be where you would want to put 182 00:08:44,600 --> 00:08:46,319 Speaker 8: your money in. If you think that there's going to 183 00:08:46,320 --> 00:08:49,240 Speaker 8: be a meaningful slowdown in growth in twenty twenty four. 184 00:08:49,640 --> 00:08:53,400 Speaker 8: We've always had a recession in twenty twenty four. We're 185 00:08:53,480 --> 00:08:57,480 Speaker 8: moving perhaps away from a recession in the early part 186 00:08:57,520 --> 00:08:59,839 Speaker 8: to more the mid part of the year. But you know, 187 00:09:00,000 --> 00:09:04,000 Speaker 8: so if the recession is still very much in the cards, 188 00:09:04,200 --> 00:09:06,959 Speaker 8: and if that were to play out, I think you 189 00:09:06,960 --> 00:09:11,439 Speaker 8: should start seeing a moderation in yields or the sell 190 00:09:11,480 --> 00:09:12,440 Speaker 8: off in years we've seen. 191 00:09:12,320 --> 00:09:12,880 Speaker 5: At the back end. 192 00:09:12,920 --> 00:09:15,040 Speaker 1: It's about v I got to buy a bullet piece 193 00:09:15,440 --> 00:09:19,760 Speaker 1: on the curve, which maturity, full faith and credit right 194 00:09:19,840 --> 00:09:21,800 Speaker 1: now is most attractive for price. 195 00:09:21,640 --> 00:09:22,720 Speaker 5: Up yield down. 196 00:09:25,080 --> 00:09:28,760 Speaker 8: The front end is definitely very attractive. The market, in 197 00:09:28,880 --> 00:09:32,960 Speaker 8: my view, is fully priced in for high for longer 198 00:09:33,080 --> 00:09:36,160 Speaker 8: from the Fed, So we're basically pressing for the Fed 199 00:09:36,240 --> 00:09:40,680 Speaker 8: on hold until perhaps the second second half of nets 200 00:09:40,720 --> 00:09:44,480 Speaker 8: year and only modest cuts after that point on. So 201 00:09:44,600 --> 00:09:47,760 Speaker 8: in this sort of context, it probably feels that the 202 00:09:47,960 --> 00:09:50,240 Speaker 8: place you want to be is the very front end, 203 00:09:50,280 --> 00:09:53,079 Speaker 8: because if the market, if the economy does start to 204 00:09:53,120 --> 00:09:56,280 Speaker 8: slow down, the FED starts to pivot towards easy or 205 00:09:56,360 --> 00:09:59,400 Speaker 8: easier policy, then you're going to see the front and start. 206 00:09:59,240 --> 00:10:01,800 Speaker 2: To rally as it's going to catch up and get 207 00:10:01,800 --> 00:10:14,520 Speaker 2: the view from Selkschen Sabato a jape there joining us 208 00:10:14,559 --> 00:10:17,120 Speaker 2: around a table. Christina Hoop, a chief Global market strategist 209 00:10:17,480 --> 00:10:19,280 Speaker 2: at Invesco. Christina, good morning to you. 210 00:10:19,520 --> 00:10:20,000 Speaker 9: Good morning. 211 00:10:20,080 --> 00:10:23,559 Speaker 2: We also need to talk about union disputes UAW, the 212 00:10:23,640 --> 00:10:26,640 Speaker 2: Detroit Big Three. Can you tell me from your perspective, 213 00:10:26,760 --> 00:10:28,439 Speaker 2: is that just a headline risk we're reading in the 214 00:10:28,440 --> 00:10:31,800 Speaker 2: papers right now. Is that a symptom of a broader, stronger, 215 00:10:32,200 --> 00:10:34,120 Speaker 2: hot labor market in America that's going to lead to 216 00:10:34,480 --> 00:10:35,920 Speaker 2: higher cost for some of these companies. 217 00:10:36,559 --> 00:10:40,319 Speaker 9: Well, I would argue that it's more likely the latter, 218 00:10:41,080 --> 00:10:44,600 Speaker 9: and that's because we saw Walmart's announcement last week about 219 00:10:44,880 --> 00:10:49,360 Speaker 9: lower wages for new employees. I think actually, because the 220 00:10:49,520 --> 00:10:52,800 Speaker 9: labor market has eased a bit, it's tight, but it's 221 00:10:52,840 --> 00:10:56,720 Speaker 9: not as tight that what we're seeing with the UAW 222 00:10:57,360 --> 00:11:00,839 Speaker 9: is probably more of a rear view mirror issue than 223 00:11:00,920 --> 00:11:03,000 Speaker 9: what we have ahead of us in terms of what 224 00:11:03,120 --> 00:11:05,120 Speaker 9: I expect to be moderating wage growth. 225 00:11:05,440 --> 00:11:08,240 Speaker 1: You I have a shingle from Cornell, which is somewhat argue, 226 00:11:08,280 --> 00:11:11,320 Speaker 1: the number one labor economics program in the country. Good 227 00:11:11,360 --> 00:11:15,560 Speaker 1: morning everyone from Northwestern as well. This is not Walter 228 00:11:15,760 --> 00:11:18,920 Speaker 1: Ruther's uaw is it to explain to us right now 229 00:11:19,440 --> 00:11:22,480 Speaker 1: your view, Christine, with all your study at Cornell and 230 00:11:22,600 --> 00:11:25,520 Speaker 1: the atomization of the American labor economy, is it legit 231 00:11:25,800 --> 00:11:27,439 Speaker 1: or can there be a reunionization? 232 00:11:28,480 --> 00:11:32,120 Speaker 9: Well, there certainly can be areas, and we've seen moves 233 00:11:32,160 --> 00:11:38,000 Speaker 9: in different industries towards more unionization. But the reality is 234 00:11:38,080 --> 00:11:40,160 Speaker 9: that that is a function of the tightness of the 235 00:11:40,240 --> 00:11:44,360 Speaker 9: labor market, and directionally the labor market is getting less tight, 236 00:11:44,760 --> 00:11:47,719 Speaker 9: and so I would anticipate we see less of this 237 00:11:47,880 --> 00:11:51,400 Speaker 9: activity in the future. This was a very unique environment 238 00:11:51,440 --> 00:11:53,280 Speaker 9: that we've lived in in the last few years, and 239 00:11:53,360 --> 00:11:57,040 Speaker 9: it really has opened the door to the potential for unionization. 240 00:11:57,520 --> 00:11:59,960 Speaker 9: But I think going forward it will be very specif 241 00:12:00,280 --> 00:12:01,360 Speaker 9: industries where we see this. 242 00:12:01,440 --> 00:12:04,559 Speaker 6: Happening rear view, Mirrord. To me, that's fascinating the idea 243 00:12:04,559 --> 00:12:06,400 Speaker 6: that you're saying that this is not going to be 244 00:12:06,559 --> 00:12:08,640 Speaker 6: what we're going to see going forward. And so from 245 00:12:08,679 --> 00:12:11,640 Speaker 6: your vantage point, what does that mean in terms of 246 00:12:11,920 --> 00:12:14,199 Speaker 6: the last mile of inflation that we were talking about 247 00:12:14,480 --> 00:12:16,040 Speaker 6: and how quickly, oh we can get back to the 248 00:12:16,120 --> 00:12:18,280 Speaker 6: two percent, how much conviction you can have to go 249 00:12:18,440 --> 00:12:20,760 Speaker 6: back into longer term bonds, Well, the. 250 00:12:20,960 --> 00:12:23,760 Speaker 9: Last mile is going to be hard, but I do 251 00:12:24,040 --> 00:12:27,760 Speaker 9: believe that we are very much on that disinflationary trend. 252 00:12:28,320 --> 00:12:31,720 Speaker 9: Not every data point is going to support that narrative, 253 00:12:32,160 --> 00:12:36,080 Speaker 9: but that will be the case. And actually I'll point 254 00:12:36,120 --> 00:12:38,560 Speaker 9: to something that came out last week. The Chicago Fed 255 00:12:38,679 --> 00:12:44,640 Speaker 9: economists put out a note utilizing their model. They anticipate 256 00:12:44,760 --> 00:12:48,120 Speaker 9: will get close to the Fed's target by the middle 257 00:12:48,200 --> 00:12:51,640 Speaker 9: of twenty twenty four without a recession. Now, my opinion 258 00:12:51,760 --> 00:12:53,599 Speaker 9: is it'll be a bumpy landing, but it won't be 259 00:12:53,679 --> 00:12:54,640 Speaker 9: an actual recession. 260 00:12:54,880 --> 00:12:56,480 Speaker 6: So there are two schools of thought with this, and 261 00:12:56,559 --> 00:12:59,000 Speaker 6: it's really highlighted by the Morgan Stanley view of things 262 00:12:59,480 --> 00:13:01,880 Speaker 6: and then the sort of Jim Bianco view of things. 263 00:13:02,120 --> 00:13:05,040 Speaker 6: Increasingly the JP Morgan view of things. As they ratchet 264 00:13:05,120 --> 00:13:08,160 Speaker 6: up some of their yield forecasts that when we go 265 00:13:08,400 --> 00:13:13,040 Speaker 6: back to something more normal, bonds will maybe have lower 266 00:13:13,120 --> 00:13:15,800 Speaker 6: yields than they have now, but not significantly. Morgan Stanley 267 00:13:15,880 --> 00:13:18,959 Speaker 6: is the loan bul right, they're going out there. Matt Hornbach, 268 00:13:19,000 --> 00:13:20,480 Speaker 6: who is a friend of the show, has said no, 269 00:13:20,800 --> 00:13:23,480 Speaker 6: he still has conviction by now this is the time 270 00:13:23,559 --> 00:13:25,600 Speaker 6: to do it. Are you in agreement with that. 271 00:13:26,160 --> 00:13:28,160 Speaker 9: Well, I would argue it is so hard to market 272 00:13:28,240 --> 00:13:32,160 Speaker 9: time so that it makes sense to at least start 273 00:13:32,400 --> 00:13:36,600 Speaker 9: to increase exposure now, even if one is not sure 274 00:13:37,440 --> 00:13:40,480 Speaker 9: that we've actually hit the peak. I think this is 275 00:13:40,520 --> 00:13:44,199 Speaker 9: a time to be starting to increase allocations. 276 00:13:44,320 --> 00:13:44,760 Speaker 10: The vector. 277 00:13:44,920 --> 00:13:46,520 Speaker 5: We brought this up a couple times a day. I'm 278 00:13:46,520 --> 00:13:47,240 Speaker 5: not going to let it up. 279 00:13:47,240 --> 00:13:49,800 Speaker 1: I think it's so important and timely to October sixth, 280 00:13:50,320 --> 00:13:53,280 Speaker 1: and that is the vector of three month annualized non 281 00:13:53,360 --> 00:13:54,120 Speaker 1: farm payrolls. 282 00:13:54,559 --> 00:13:57,640 Speaker 5: Wow, is that moving in a strident direction south. 283 00:13:58,160 --> 00:14:02,079 Speaker 1: Can you frame a negative non firm payroll statistic? 284 00:14:03,840 --> 00:14:06,319 Speaker 9: Well, what I can. I don't have a lot of 285 00:14:06,480 --> 00:14:08,760 Speaker 9: negative things to say right now about the state of 286 00:14:08,800 --> 00:14:12,560 Speaker 9: the labor market. What we have is labor force participation increasing, 287 00:14:13,440 --> 00:14:17,120 Speaker 9: and we have wage growth moderating. That's what I need 288 00:14:17,240 --> 00:14:21,160 Speaker 9: to see. Those are the two most important data points 289 00:14:21,640 --> 00:14:25,160 Speaker 9: within the Job's report in my opinion. Also, if we 290 00:14:25,200 --> 00:14:28,760 Speaker 9: look at jolts and we see the number of job openings, 291 00:14:28,920 --> 00:14:32,160 Speaker 9: they've gone down significantly, all pointing in the right direction 292 00:14:32,560 --> 00:14:35,480 Speaker 9: to maybe not a soft landing, maybe a bumpy landing, 293 00:14:35,720 --> 00:14:40,000 Speaker 9: but one in which we see a moderation in wage growth, 294 00:14:40,080 --> 00:14:43,080 Speaker 9: one in which we see a moderation and inflation going forward. 295 00:14:43,280 --> 00:14:45,720 Speaker 2: Doug cast writes in race is an important question about 296 00:14:45,760 --> 00:14:47,880 Speaker 2: the Detroit three. Let me throw it out you, Christina. 297 00:14:47,880 --> 00:14:51,840 Speaker 2: If I can deglobalization, doesn't it just give these workers 298 00:14:51,880 --> 00:14:55,160 Speaker 2: in Detroit more power, more leverage of their employers. 299 00:14:56,160 --> 00:15:00,240 Speaker 9: Well, one could argue that deglobalization has an impact act 300 00:15:00,320 --> 00:15:03,720 Speaker 9: and serves to boost inflation in a variety of different ways, 301 00:15:03,840 --> 00:15:08,800 Speaker 9: including potentially this way. But the counterbalance, of course is 302 00:15:08,880 --> 00:15:12,640 Speaker 9: technological innovation. So could we get to an environment in 303 00:15:12,760 --> 00:15:16,880 Speaker 9: which we're a bit above the Fed's target in terms 304 00:15:16,880 --> 00:15:20,760 Speaker 9: of inflation for the medium term. Yes, but I think 305 00:15:20,800 --> 00:15:23,240 Speaker 9: the Fed's willing to tolerate that because we also saw 306 00:15:23,280 --> 00:15:25,160 Speaker 9: inflation below target for some time. 307 00:15:25,440 --> 00:15:27,280 Speaker 7: Christina Hooper and Invesco. 308 00:15:30,920 --> 00:15:33,880 Speaker 1: John this is one of my most important conversations over 309 00:15:33,960 --> 00:15:39,480 Speaker 1: the last twelve months. Gentaloni at IMF meetings was stunning. 310 00:15:39,440 --> 00:15:40,240 Speaker 5: How cute he was. 311 00:15:40,400 --> 00:15:43,360 Speaker 2: Let's start that conversation right now with Po Gentiloni, the 312 00:15:43,400 --> 00:15:47,400 Speaker 2: EU Economy Commissioner for the European Commission Commissioner. Want for 313 00:15:47,520 --> 00:15:49,040 Speaker 2: to catch up with you once again, Sarah's been a 314 00:15:49,120 --> 00:15:51,200 Speaker 2: number of months. We've got the new forecast from the 315 00:15:51,200 --> 00:15:53,760 Speaker 2: Commission in front of us right here. Can we start 316 00:15:53,800 --> 00:15:56,760 Speaker 2: with stagflation? Is that the risk for you, sir, from 317 00:15:56,840 --> 00:15:58,960 Speaker 2: your personal assessment or is that the reality? 318 00:16:01,320 --> 00:16:04,600 Speaker 11: I think it's too soon to say that we are 319 00:16:04,680 --> 00:16:10,440 Speaker 11: in a stagflation framework. What is clear, I think is 320 00:16:10,880 --> 00:16:15,960 Speaker 11: first that we avoided recession, which was not obvious only 321 00:16:16,720 --> 00:16:22,680 Speaker 11: eight nine months ago. Please consider that, of course the 322 00:16:23,080 --> 00:16:29,920 Speaker 11: Russian war against Ukraine is for the EU an economic issue, 323 00:16:30,000 --> 00:16:35,880 Speaker 11: not only a geopolitical threat. So we address these issues. 324 00:16:35,960 --> 00:16:41,160 Speaker 11: We avoided recession. But indeed growth is zloing. This morning 325 00:16:41,240 --> 00:16:44,720 Speaker 11: we present the forecast, and the forecast is for twenty 326 00:16:44,840 --> 00:16:48,320 Speaker 11: three of growth of zero point eight percent. 327 00:16:49,320 --> 00:16:51,120 Speaker 10: Is this something. 328 00:16:52,520 --> 00:16:56,360 Speaker 11: Of long duration where our estimate is that we will 329 00:16:56,440 --> 00:16:58,960 Speaker 11: have probably a rebound already next year. 330 00:16:59,120 --> 00:17:03,040 Speaker 10: So this is why I would not call it. 331 00:17:05,000 --> 00:17:10,120 Speaker 11: Abruptly tlagflation. It's a moment of easing growth for sure. 332 00:17:10,800 --> 00:17:14,080 Speaker 1: Commissioner Christine Lagard, in a speech in New York in April, 333 00:17:14,760 --> 00:17:18,720 Speaker 1: talked about a need for capital reform, market reform in Europe. 334 00:17:19,280 --> 00:17:22,679 Speaker 1: Obviously there's a primal scream of fiscal reform in Europe 335 00:17:22,720 --> 00:17:26,360 Speaker 1: which you've lived. Is former Prime Minister of Italy. How 336 00:17:26,600 --> 00:17:31,440 Speaker 1: urgent is reform given the war and given the present 337 00:17:32,320 --> 00:17:36,760 Speaker 1: monetary crisis within Europe, I. 338 00:17:36,840 --> 00:17:38,840 Speaker 10: Think it's urgent. 339 00:17:40,720 --> 00:17:44,160 Speaker 11: We also, of course should take into account the fact 340 00:17:44,200 --> 00:17:49,879 Speaker 11: that we are entering in the period where we will have. 341 00:17:51,760 --> 00:17:52,840 Speaker 10: European elections. 342 00:17:54,800 --> 00:18:00,200 Speaker 11: So this is a challenge, a mid term challenge, not 343 00:18:00,400 --> 00:18:03,520 Speaker 11: something that we can solve tomorrow. What we have to 344 00:18:04,119 --> 00:18:10,200 Speaker 11: address now, I mean tomorrow, is the difficulty to find 345 00:18:10,359 --> 00:18:15,119 Speaker 11: the right balance between supporting investments and. 346 00:18:16,600 --> 00:18:17,960 Speaker 10: Addressing inflation. 347 00:18:18,760 --> 00:18:21,800 Speaker 11: We have the privilege and the opportunity to do so 348 00:18:22,480 --> 00:18:26,560 Speaker 11: for the first time in the EU story, having behind 349 00:18:26,680 --> 00:18:32,920 Speaker 11: us a strong, strong, strong tool of common funding, allowing 350 00:18:33,080 --> 00:18:39,639 Speaker 11: also to weaker fiscally member states to invest and to spend. 351 00:18:40,200 --> 00:18:42,560 Speaker 10: This is the main challenge ahead of us. 352 00:18:42,920 --> 00:18:45,680 Speaker 11: But I fully agree with Christine Lagard that we need 353 00:18:46,480 --> 00:18:54,040 Speaker 11: capital markets reform to re gain our competitivity in the 354 00:18:54,119 --> 00:18:55,040 Speaker 11: global markets. 355 00:18:55,720 --> 00:18:58,160 Speaker 6: Given the fact that you talked about this challenge between 356 00:18:58,200 --> 00:19:01,840 Speaker 6: inflation and slowing growth, right now, has the balance of 357 00:19:01,880 --> 00:19:05,880 Speaker 6: those two risks shifted for you and actually become more 358 00:19:05,960 --> 00:19:09,000 Speaker 6: important to see growth and that investment and all sorts 359 00:19:09,080 --> 00:19:13,480 Speaker 6: of roots of something stronger rather than being that much 360 00:19:13,600 --> 00:19:15,760 Speaker 6: more aggressive in fighting inflation. 361 00:19:17,720 --> 00:19:18,440 Speaker 10: Well, inflation. 362 00:19:18,880 --> 00:19:23,520 Speaker 11: In the forecast we presented this morning, we have growth 363 00:19:23,720 --> 00:19:28,080 Speaker 11: easing momentum, but also inflation declining. 364 00:19:28,920 --> 00:19:31,600 Speaker 10: And so you are right that we are in this 365 00:19:32,640 --> 00:19:35,879 Speaker 10: narrow path between these two things. 366 00:19:36,359 --> 00:19:40,760 Speaker 11: I don't think it's easy now to say, okay, we 367 00:19:40,960 --> 00:19:46,240 Speaker 11: want the challenge with inflation, so that as concentrate on 368 00:19:46,960 --> 00:19:51,800 Speaker 11: spending and investments. I think we are near to the 369 00:19:51,920 --> 00:19:56,560 Speaker 11: peak of interest rates, that the decisions will be taken 370 00:19:56,640 --> 00:20:01,000 Speaker 11: of course by the ECB and not by the European Commission. 371 00:20:01,040 --> 00:20:02,000 Speaker 10: On Interest Rates. 372 00:20:02,960 --> 00:20:07,400 Speaker 11: At the same time, please preserve the good investments. Can 373 00:20:07,480 --> 00:20:15,400 Speaker 11: we do this also in countries without deep financial pockets? Fortunately, yes, 374 00:20:15,800 --> 00:20:20,080 Speaker 11: because we have the eurobonds, this common funding, and this 375 00:20:20,359 --> 00:20:25,560 Speaker 11: is the opportunity we shouldn't miss in the coming months. 376 00:20:25,920 --> 00:20:30,520 Speaker 2: Does that mean you see more potentially, more easy, potentially 377 00:20:30,920 --> 00:20:33,280 Speaker 2: the ability to raise more money PLO? Is that what 378 00:20:33,400 --> 00:20:35,280 Speaker 2: you see further down the line you can come together 379 00:20:35,600 --> 00:20:36,480 Speaker 2: and is she more dere. 380 00:20:38,520 --> 00:20:45,119 Speaker 11: Oh? I see the existing programs that at least until 381 00:20:45,200 --> 00:20:52,640 Speaker 11: twenty twenty six will disburse to member states still more 382 00:20:52,760 --> 00:20:57,000 Speaker 11: than six hundred billion euros of common money. 383 00:20:58,160 --> 00:21:00,360 Speaker 2: Commissioner, we have to leave it there. It was great 384 00:21:00,400 --> 00:21:02,119 Speaker 2: to see you earlier this year in DC, and we 385 00:21:02,160 --> 00:21:04,879 Speaker 2: hope to do it again early next year. Parlo Gentiloni, 386 00:21:04,960 --> 00:21:08,520 Speaker 2: the the Economic Commissioner for the EU Commission. 387 00:21:18,680 --> 00:21:20,879 Speaker 5: Joining us right now, Mandy saying we've got to go 388 00:21:21,000 --> 00:21:22,200 Speaker 5: right to this. It's so important. 389 00:21:22,280 --> 00:21:26,199 Speaker 1: Senior Apple analysts for Bloomberg Intelligence as well, and also 390 00:21:26,640 --> 00:21:30,560 Speaker 1: surveillance tennis expert. Let's digress here, rip up the script 391 00:21:30,680 --> 00:21:33,879 Speaker 1: right now. I could hear people in buildings cheering. That 392 00:21:34,119 --> 00:21:36,440 Speaker 1: was one hell of a final men's tournament. 393 00:21:36,240 --> 00:21:39,600 Speaker 12: Wasn't it. It was? Especially the second set was epic. 394 00:21:39,720 --> 00:21:42,560 Speaker 12: I mean, you don't see those kind of six years old. 395 00:21:43,080 --> 00:21:45,080 Speaker 2: It felt like he was faltering at one point, and 396 00:21:45,119 --> 00:21:46,960 Speaker 2: I've seen this a million times with Novak. It looks 397 00:21:47,000 --> 00:21:49,320 Speaker 2: like he's lost his legs. His fake second set looked 398 00:21:49,359 --> 00:21:51,160 Speaker 2: like he was aging. I was ready to say Novak's 399 00:21:51,200 --> 00:21:54,240 Speaker 2: got old, and then Novak got young again. Meant that 400 00:21:54,280 --> 00:21:55,920 Speaker 2: was kind of the way when the second set. 401 00:21:56,440 --> 00:21:59,920 Speaker 12: The fatigua you know in the response and uh love. 402 00:22:00,200 --> 00:22:02,720 Speaker 12: I mean, the guy is clearly a lot we'll argue 403 00:22:02,760 --> 00:22:05,240 Speaker 12: about it, but he is the goat when it comes 404 00:22:05,320 --> 00:22:08,360 Speaker 12: to the slams, and probably no one can beat his record. 405 00:22:08,240 --> 00:22:10,320 Speaker 1: When he comes off. When he comes off the court, 406 00:22:10,359 --> 00:22:12,160 Speaker 1: he doesn't go I'm going to Disneyland. He goes, I'm 407 00:22:12,160 --> 00:22:14,359 Speaker 1: going to Cooper Tino to buy whatever the new toy is. 408 00:22:14,640 --> 00:22:16,359 Speaker 1: How is this week going to go for Apple? I mean, 409 00:22:16,400 --> 00:22:18,760 Speaker 1: away from the modem news, you got to thumb up 410 00:22:18,800 --> 00:22:21,120 Speaker 1: on all this soare for mister cook andall. 411 00:22:21,480 --> 00:22:24,119 Speaker 12: I think with Apple, you have to think about the 412 00:22:24,240 --> 00:22:27,360 Speaker 12: features they're going to introduce in the phone. And it's 413 00:22:27,520 --> 00:22:30,439 Speaker 12: not a guarantee that we will have a big upgrade cycle. 414 00:22:30,560 --> 00:22:33,080 Speaker 12: That's why these events are so important because time and 415 00:22:33,160 --> 00:22:35,879 Speaker 12: again we have seen the big upgrades come when they 416 00:22:36,000 --> 00:22:39,640 Speaker 12: introduce new features, whether it's a camera or something else 417 00:22:39,720 --> 00:22:42,040 Speaker 12: in the phone. And there has to be that element 418 00:22:42,480 --> 00:22:45,400 Speaker 12: that's going to rush people to you know, upgrade their iPhones. 419 00:22:45,720 --> 00:22:46,760 Speaker 12: And it's not a guarantee. 420 00:22:46,840 --> 00:22:48,440 Speaker 2: Well, this is a problem because they've been able to 421 00:22:48,560 --> 00:22:52,520 Speaker 2: dress up poor unit growth with higher average selling prices. 422 00:22:52,600 --> 00:22:54,840 Speaker 2: So if there isn't a big upgrade where they're going 423 00:22:54,920 --> 00:22:56,680 Speaker 2: to get the higher sp from. 424 00:22:56,880 --> 00:22:59,840 Speaker 12: And that's never a good strategy to you know, extract 425 00:23:00,040 --> 00:23:03,240 Speaker 12: more in terms of making people pay more because you 426 00:23:03,400 --> 00:23:06,080 Speaker 12: reduce your install base. I mean, look right now, Apples 427 00:23:06,160 --> 00:23:09,800 Speaker 12: install base isn't growing now for them to take market share, 428 00:23:10,119 --> 00:23:13,520 Speaker 12: they really need that new phone that everyone is excited about. 429 00:23:13,600 --> 00:23:16,560 Speaker 12: And they are one company that hasn't talked about generative 430 00:23:16,560 --> 00:23:19,800 Speaker 12: AI or large anglid models. You would argue a lot 431 00:23:19,880 --> 00:23:23,720 Speaker 12: of the inferencing for those generative AI has to be 432 00:23:23,800 --> 00:23:27,000 Speaker 12: done on Apple phones. They haven't even mentioned a word 433 00:23:27,119 --> 00:23:30,520 Speaker 12: about large anglid models or generative AI on any of 434 00:23:30,600 --> 00:23:31,080 Speaker 12: their calls. 435 00:23:31,240 --> 00:23:34,560 Speaker 6: So what's at stake in terms of the new creations 436 00:23:34,760 --> 00:23:36,359 Speaker 6: in this new iPhone? 437 00:23:36,480 --> 00:23:36,600 Speaker 12: Right? 438 00:23:36,840 --> 00:23:39,639 Speaker 6: What could they really move the needle with? Is it 439 00:23:39,800 --> 00:23:42,240 Speaker 6: that much better of a camera We've done that before. 440 00:23:42,520 --> 00:23:44,600 Speaker 6: Is it just a faster kind of charging device? 441 00:23:45,040 --> 00:23:45,280 Speaker 10: Eh? 442 00:23:45,480 --> 00:23:48,560 Speaker 12: Okay, what could it be? Well, so they've shown their 443 00:23:48,680 --> 00:23:52,359 Speaker 12: Vision Pro demo, and clearly spatial computing is where the 444 00:23:52,440 --> 00:23:54,760 Speaker 12: next leg of computing is going to grow. I mean, 445 00:23:55,240 --> 00:23:57,800 Speaker 12: I'm not betting on meadow wars, but clearly there's an 446 00:23:57,880 --> 00:24:01,480 Speaker 12: argument to be made that similar to variables, you could 447 00:24:01,560 --> 00:24:03,680 Speaker 12: get a big pop in terms of you know, the 448 00:24:03,760 --> 00:24:08,040 Speaker 12: vision Pro devices and how it really expands the Apple ecosystem. 449 00:24:08,240 --> 00:24:10,879 Speaker 12: In the end, it's about the Apple ecosystem and the 450 00:24:10,960 --> 00:24:13,359 Speaker 12: vertical integration that they've been able to do. Over the 451 00:24:13,440 --> 00:24:14,280 Speaker 12: last two decades. 452 00:24:14,400 --> 00:24:16,200 Speaker 6: So in other words, you're saying that instead of having 453 00:24:16,240 --> 00:24:18,960 Speaker 6: a laptop or a basic computer, we're going to put 454 00:24:19,000 --> 00:24:21,760 Speaker 6: on goggles and have our phones and be able to 455 00:24:21,800 --> 00:24:23,399 Speaker 6: walk around and be in a computer. 456 00:24:24,840 --> 00:24:28,080 Speaker 12: You could argue that is the future, but that's not imminent, like, 457 00:24:28,160 --> 00:24:31,159 Speaker 12: it's not near term. It's all about what is it 458 00:24:31,320 --> 00:24:34,000 Speaker 12: that they can do in terms of expanding the scope 459 00:24:34,040 --> 00:24:36,800 Speaker 12: of your iPhone to really tailor it to the next 460 00:24:36,920 --> 00:24:38,639 Speaker 12: leg of computing. And that's why I bring in the 461 00:24:38,720 --> 00:24:42,679 Speaker 12: generative AI aspect because Qualcom has argued you are going 462 00:24:42,720 --> 00:24:45,200 Speaker 12: to run your large anguige model on your phone, You're 463 00:24:45,240 --> 00:24:46,840 Speaker 12: not going to do it on your cloud. That's what 464 00:24:47,000 --> 00:24:50,119 Speaker 12: inferencing is all about. And Apple hasn't mentioned anything around it. 465 00:24:50,240 --> 00:24:53,400 Speaker 12: So this event is quite important for Smart German's territory. 466 00:24:53,600 --> 00:24:56,239 Speaker 1: But let's channel man deep thing right now. Is there 467 00:24:56,280 --> 00:24:59,359 Speaker 1: any discussion about what happens after cook? Is there like 468 00:24:59,400 --> 00:25:03,040 Speaker 1: a succession or an envelope in a desk, or like 469 00:25:03,359 --> 00:25:04,760 Speaker 1: like how long does he keep this going? 470 00:25:05,119 --> 00:25:07,760 Speaker 12: I mean really, right now, they're at a crossroads where 471 00:25:07,840 --> 00:25:12,439 Speaker 12: supply chain diversification is paramount for investors and until they 472 00:25:12,560 --> 00:25:16,320 Speaker 12: fix this in terms of Apple actually diversifying their supply chains. 473 00:25:16,440 --> 00:25:19,520 Speaker 12: Tim Cook is the guy to you know, make to 474 00:25:19,640 --> 00:25:20,359 Speaker 12: facilitate that. 475 00:25:20,720 --> 00:25:23,639 Speaker 7: Is this buzz about Huawei's new phone legit? Do you 476 00:25:23,680 --> 00:25:25,080 Speaker 7: appreciate that? Bus Well? 477 00:25:25,320 --> 00:25:28,359 Speaker 12: I think it's very hard for Huawei to embed the 478 00:25:28,560 --> 00:25:33,040 Speaker 12: latest leading a note chip because look, China government has 479 00:25:33,119 --> 00:25:36,240 Speaker 12: thrown a lot of money in terms of building semiconductor manufacturing, 480 00:25:36,640 --> 00:25:41,960 Speaker 12: but for them to get all the pieces right chip, packaging, assembly, everything, 481 00:25:42,080 --> 00:25:45,800 Speaker 12: it's very hard. And we know semiconductor manufacturing is very iterative. 482 00:25:45,880 --> 00:25:48,679 Speaker 12: That's why TSMC is finding it hard to replicate their 483 00:25:48,720 --> 00:25:52,199 Speaker 12: fab outside of time on. So I have my doubts 484 00:25:52,240 --> 00:25:54,280 Speaker 12: in terms of the phone being as good as an 485 00:25:54,320 --> 00:25:55,000 Speaker 12: iPhone or. 486 00:25:55,359 --> 00:25:57,480 Speaker 2: Even if it's not as good, Yes, say it's three 487 00:25:57,600 --> 00:26:00,719 Speaker 2: years back. Let's say it's like the iPhone twelve. 488 00:26:01,040 --> 00:26:01,359 Speaker 7: Whatever. 489 00:26:02,119 --> 00:26:04,440 Speaker 2: Are we missing the mood of a country shifting away 490 00:26:04,560 --> 00:26:07,879 Speaker 2: from Apple, That's what I'm trying to identify. And if 491 00:26:07,920 --> 00:26:09,800 Speaker 2: there is a mood shift, does it really matter whether 492 00:26:09,840 --> 00:26:11,480 Speaker 2: it's the equivalent of the iPhone twelve? 493 00:26:11,800 --> 00:26:15,840 Speaker 12: But why would consumers want a phone that's equivalent to 494 00:26:15,920 --> 00:26:19,479 Speaker 12: iPhone twelve? As a consumer Chinese consumer, you want your 495 00:26:19,600 --> 00:26:22,439 Speaker 12: hands on the latest gadget, and we know they're very 496 00:26:22,480 --> 00:26:24,000 Speaker 12: savvy with all their app used. 497 00:26:24,080 --> 00:26:25,800 Speaker 2: If I wanted a better phone, wouldn't I just get 498 00:26:25,840 --> 00:26:28,159 Speaker 2: a Samsung. There's a reason I buy this, and it's 499 00:26:28,240 --> 00:26:31,040 Speaker 2: not just because it's a decent phone. The Samsung is 500 00:26:31,119 --> 00:26:33,520 Speaker 2: arguably a better phone, as a better camera has done 501 00:26:33,560 --> 00:26:35,880 Speaker 2: for ages, But I don't buy the Samsung. The reason 502 00:26:35,920 --> 00:26:38,520 Speaker 2: I buy this beyond the technology that it has. I've 503 00:26:38,520 --> 00:26:39,920 Speaker 2: had it for a long long time. I'm a part 504 00:26:39,920 --> 00:26:42,080 Speaker 2: of the ecosystem. It's really really sticky. But also at 505 00:26:42,080 --> 00:26:45,480 Speaker 2: the same time, there's some brand recognition associated with this 506 00:26:45,760 --> 00:26:47,840 Speaker 2: even here in the United States, and I'm wondering whether 507 00:26:48,280 --> 00:26:50,760 Speaker 2: that's changed in China, whether that's really the brand you 508 00:26:50,840 --> 00:26:52,360 Speaker 2: want to carry anymore. 509 00:26:52,680 --> 00:26:55,040 Speaker 12: I don't think so. I think you're going to see 510 00:26:55,200 --> 00:26:59,000 Speaker 12: a rush to upgrade, especially from Chinese consumers, before there 511 00:26:59,119 --> 00:27:02,880 Speaker 12: is an explicit ban, let's say. And in my opinion, 512 00:27:03,400 --> 00:27:08,400 Speaker 12: everyone gravitates towards the perceived attractiveness of Apple, and it's 513 00:27:08,440 --> 00:27:11,400 Speaker 12: because of the ecosystem. It's a software, it's everything that's 514 00:27:11,520 --> 00:27:13,679 Speaker 12: vertically integrated about an Apple ecosystem. 515 00:27:13,720 --> 00:27:16,680 Speaker 6: So how does the ambassador of Tim Cook address some 516 00:27:16,840 --> 00:27:19,439 Speaker 6: of the concerns that have been expressed in share prices, 517 00:27:19,520 --> 00:27:22,879 Speaker 6: if expressed by analysts at this launch or even in 518 00:27:22,960 --> 00:27:25,320 Speaker 6: the next couple of weeks. If he wants to maintain 519 00:27:25,440 --> 00:27:29,399 Speaker 6: that kind of enthusiasm within China, will also maybe shifting 520 00:27:29,520 --> 00:27:30,679 Speaker 6: and diversifying some of. 521 00:27:30,680 --> 00:27:31,680 Speaker 2: That risk well. 522 00:27:31,760 --> 00:27:34,640 Speaker 12: So they clearly have to work with the Chinese government, 523 00:27:34,760 --> 00:27:36,920 Speaker 12: and so far Apple has done a pretty good job. 524 00:27:37,000 --> 00:27:39,200 Speaker 12: I mean, there is no other mega tech company that 525 00:27:39,280 --> 00:27:42,399 Speaker 12: has twenty percent revenue exposure to the Chinese and market, 526 00:27:42,520 --> 00:27:45,080 Speaker 12: and so to give Apple credit, they have been able 527 00:27:45,160 --> 00:27:48,040 Speaker 12: to work through the issues. But clearly I think from 528 00:27:48,080 --> 00:27:52,159 Speaker 12: a China perspective, they want that local company Huawei to 529 00:27:52,600 --> 00:27:54,960 Speaker 12: start making the phones, and that's why they're investing so much. 530 00:27:55,359 --> 00:27:57,159 Speaker 1: This is on American We got to change from Apple 531 00:27:57,200 --> 00:27:59,200 Speaker 1: over the Pumpkin. I mean this is a design. I 532 00:27:59,200 --> 00:28:01,040 Speaker 1: saw this like three were times this weekend. 533 00:28:01,320 --> 00:28:02,159 Speaker 5: You know how we rush it. 534 00:28:02,240 --> 00:28:06,119 Speaker 1: We get Christmas decorations out like November one. Meg Turrell 535 00:28:06,200 --> 00:28:08,680 Speaker 1: over at CNN with a action photo out on Twitter. 536 00:28:08,800 --> 00:28:12,200 Speaker 5: Thank you Meg. Their medical correspondent Pumpkins. 537 00:28:12,440 --> 00:28:16,520 Speaker 1: Now, it's fifty days to Halloween, John, you buy the 538 00:28:16,720 --> 00:28:17,360 Speaker 1: orb right now. 539 00:28:17,760 --> 00:28:19,639 Speaker 5: It's not going to make it carved a run car. 540 00:28:19,760 --> 00:28:21,119 Speaker 7: It's an American illness, isn't it. 541 00:28:21,440 --> 00:28:24,440 Speaker 5: It's what Lisa help me here? When should we be 542 00:28:24,560 --> 00:28:25,439 Speaker 5: buying the. 543 00:28:26,640 --> 00:28:27,359 Speaker 7: I'm all with you. 544 00:28:27,680 --> 00:28:31,320 Speaker 6: In terms of early decorations, pumpkins are just it's fall 545 00:28:31,640 --> 00:28:34,960 Speaker 6: and they grow in fall, so they are harvesting pumpkins. 546 00:28:35,040 --> 00:28:37,720 Speaker 12: But also this is like a pre Halloween prochise, sort of. 547 00:28:37,840 --> 00:28:41,000 Speaker 6: Like celebrating fall. And I can get behind the idea 548 00:28:41,040 --> 00:28:42,720 Speaker 6: of that because you can see the leaves starting to 549 00:28:42,880 --> 00:28:45,320 Speaker 6: change when you go, you know, outside of the city. 550 00:28:45,440 --> 00:28:48,920 Speaker 6: So I'm just saying I have that last year. I 551 00:28:49,080 --> 00:28:51,880 Speaker 6: just I do agree though that pulling out, you know, 552 00:28:51,960 --> 00:28:55,400 Speaker 6: the Easter bunny after Christmas is sort of crazy. 553 00:28:55,760 --> 00:28:57,680 Speaker 7: January one, Yeah, January. 554 00:28:57,320 --> 00:28:58,959 Speaker 6: One, all of a sudden, those like marshmallow. 555 00:28:59,360 --> 00:29:06,800 Speaker 5: It's funny buying roses. You don't want to buyer it's. 556 00:29:06,720 --> 00:29:12,200 Speaker 2: Expensive now you want to buy them a day offtend 557 00:29:12,400 --> 00:29:12,680 Speaker 2: Thank you. 558 00:29:13,280 --> 00:29:14,920 Speaker 7: I keep seeing bloomberget satogens. 559 00:29:15,320 --> 00:29:19,120 Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and 560 00:29:19,280 --> 00:29:23,400 Speaker 1: anywhere else you get your podcasts. Listen live every weekday 561 00:29:23,760 --> 00:29:27,200 Speaker 1: starting at seven am Eastern on Bloomberg dot Com, the 562 00:29:27,360 --> 00:29:31,840 Speaker 1: iHeartRadio app Tune in and the Bloomberg Business App. You 563 00:29:31,920 --> 00:29:36,000 Speaker 1: can watch us live on Bloomberg Television and always. I'm 564 00:29:36,000 --> 00:29:39,920 Speaker 1: the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, and 565 00:29:40,120 --> 00:29:41,640 Speaker 1: this is Bloomberg