WEBVTT - Bloomberg Surveillance TV: December 23, 2024 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.360 with Lisa Bromwitz and a Marie Hordern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.440 are live on Bloomberg Television weekday mornings from six to 0:00:27.520 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:35.840 Bloomberg Terminal and the Bloomberg Business app. 0:00:36.280 --> 0:00:39.080 We begin this hour with stocks rising as traders boost 0:00:39.080 --> 0:00:42.680 fed rate cut bet after cooler inflation data. Michael o'rouric 0:00:42.680 --> 0:00:45.720 of Jones trading is cautious, writing not only are stocks 0:00:45.760 --> 0:00:48.239 expensive in their own right, but they are also at 0:00:48.240 --> 0:00:52.440 the most expensive levels versus treasuries in twenty two years. 0:00:52.720 --> 0:00:55.320 Michael joins us. Now, Michael, good morning, and thank you 0:00:55.360 --> 0:00:57.760 so much for joining us on this holiday week. Merry 0:00:57.800 --> 0:01:00.560 Christmas and happy holidays to you and your family. So, 0:01:00.880 --> 0:01:03.840 if you think stocks are very expensive, now what are 0:01:03.840 --> 0:01:04.760 you doing? Are you selling? 0:01:06.560 --> 0:01:08.240 I think you just have to be more selective. 0:01:08.800 --> 0:01:11.040 The S and P five hundred equal weight is trades 0:01:11.080 --> 0:01:13.360 at a significant discount to the S and P five hundred, 0:01:13.760 --> 0:01:17.160 so of course that expensive nature within the S and 0:01:17.160 --> 0:01:17.639 P five. 0:01:17.520 --> 0:01:19.479 Hundred, it's all off the top end in the megan 0:01:19.560 --> 0:01:20.280 cap stocks. 0:01:20.680 --> 0:01:23.200 And I think obviously we've had a tremendous two year 0:01:23.280 --> 0:01:26.840 run here, we have a new presidential administration coming in. 0:01:26.920 --> 0:01:29.640 You can expect a lot of volatility. So they're definitely 0:01:29.760 --> 0:01:33.080 a pocket. A lot of numerous value stocks out there 0:01:33.120 --> 0:01:34.720 in the market in places you can invest. 0:01:35.080 --> 0:01:36.520 You just have to be a lot more. 0:01:36.440 --> 0:01:41.000 Selective, and I'd be cautious about chasing the S and 0:01:41.040 --> 0:01:42.240 P five hundred itself. 0:01:42.480 --> 0:01:44.320 You talked about Trump in your note, and you said, 0:01:44.360 --> 0:01:46.560 in the midst of the post election euphoria, the equity 0:01:46.600 --> 0:01:50.240 market forgot that Trump is volatility bullish. Not only is 0:01:50.280 --> 0:01:52.920 Trump willing to break a few eggs to make an omelet, 0:01:53.120 --> 0:01:55.600 he will break a few extra simply because he again, 0:01:55.800 --> 0:01:58.200 was the market reminded of that scarlet mention at the 0:01:58.200 --> 0:02:00.360 top of the show we almost had a government chuck out. 0:02:00.640 --> 0:02:02.760 Was the market reminded of that last week? 0:02:03.720 --> 0:02:06.160 I think it was, and I think people are starting 0:02:06.160 --> 0:02:08.800 to realize, while you know, a lot of The rally 0:02:08.840 --> 0:02:11.800 pins the election has been this, we're going to cut spending, 0:02:11.840 --> 0:02:14.520 we're gonna cut regulations, we're going to keep our tax cuts, 0:02:14.520 --> 0:02:17.640 and we're going to grow GDP and you know, you 0:02:17.680 --> 0:02:20.840 go through this government shutdown or potentially you know, you know, 0:02:20.880 --> 0:02:24.320 we risk the government shut down here, and you're like, 0:02:24.919 --> 0:02:27.400 you have to just remember, there's there's a lot it's 0:02:27.480 --> 0:02:30.359 it's not an easy path to achieve those goals. Those 0:02:30.360 --> 0:02:32.960 are great goals to try to achieve. It's you know, 0:02:33.000 --> 0:02:34.720 I love it, it's ambitious, and I hope we do 0:02:34.800 --> 0:02:37.280 achieve it. But you're not gonna It's Washington, d C. 0:02:37.440 --> 0:02:39.320 You're not going to get there in a straight path. 0:02:39.639 --> 0:02:42.160 And the market shouldn't price all that in right away, 0:02:42.400 --> 0:02:44.560 which is essentially what we've start to do in the 0:02:44.919 --> 0:02:46.000 equity markets. 0:02:46.240 --> 0:02:48.360 And and you know what you're seeing in the bond 0:02:48.400 --> 0:02:49.160 market here. 0:02:49.080 --> 0:02:53.120 Is it's not fully believing everything that the equity market 0:02:53.200 --> 0:02:55.960 is excited about. And that's why you see a ten 0:02:56.040 --> 0:02:57.959 year yield up above four and a half percent. 0:02:58.360 --> 0:03:01.600 Well, speaking of the market pricing in a lot of positivity, 0:03:01.680 --> 0:03:04.520 I look at Tesla shares up about sixty seven percent 0:03:04.919 --> 0:03:08.000 since election date. Elon Musk has really been a tailwind 0:03:08.280 --> 0:03:10.839 for the overall market through Tesla mainly, at what point 0:03:10.880 --> 0:03:12.959 does he become a headwind for the market. 0:03:14.040 --> 0:03:15.600 Well, that's the interesting aspect. 0:03:15.800 --> 0:03:17.800 You know, One thing I find interesting is Elon Musk 0:03:17.800 --> 0:03:21.240 has numerous companies, most of them private. He can benefit 0:03:21.240 --> 0:03:24.320 from a relationship with President Trump through any of those 0:03:24.400 --> 0:03:28.600 ventures as well. So for everyone to just bet on Tesla, 0:03:29.120 --> 0:03:31.600 which you know, you were just talking about the automotive industry, 0:03:31.880 --> 0:03:34.400 there's a lot of challenges out there, it seems like 0:03:34.440 --> 0:03:39.960 a really aggressive, myopic bet. So you know, going forward, 0:03:40.000 --> 0:03:41.760 I think people again they need to be a little 0:03:41.800 --> 0:03:44.800 more pragmatic out there and realized. 0:03:44.880 --> 0:03:47.360 Elon Musk is an influential guy. He's a powerful guy. 0:03:47.720 --> 0:03:50.520 But it does you know, Tesla is not necessarily gonna 0:03:50.560 --> 0:03:53.760 be the biggest beneficiary of Trump's really you know, musk 0:03:53.840 --> 0:03:57.120 relationship with Trump and as we know, sometimes you know 0:03:58.240 --> 0:04:02.119 these relationships President Trump had, they go through rut periods, 0:04:02.320 --> 0:04:04.360 and so again it's really risky you just bet on 0:04:04.360 --> 0:04:09.240 one stock to expect this, you know, this this bromance 0:04:09.240 --> 0:04:09.880 that can give. 0:04:09.760 --> 0:04:11.920 You well you mentioned Tesla, of course, it is a 0:04:11.960 --> 0:04:14.200 low hanging fruit here when you're looking at who would 0:04:14.200 --> 0:04:17.440 benefit from the Trump trade. When it comes to pragmatic 0:04:17.920 --> 0:04:21.440 approaches to challenges, I think about what's going on with 0:04:21.480 --> 0:04:24.520 Honda and Nissan, and Hemery brought this up earlier. This 0:04:25.160 --> 0:04:27.120 as an example of the M and A that we 0:04:27.200 --> 0:04:30.360 can expect from where the markets is, From where you sit, 0:04:30.680 --> 0:04:34.520 is this a pragmatic deal that has positive ramifications for 0:04:34.720 --> 0:04:35.599 US automakers? 0:04:38.040 --> 0:04:41.000 You know, I'm not an automotive industry expert, but I 0:04:41.040 --> 0:04:43.800 do agree with everything you both said about this is 0:04:44.120 --> 0:04:46.280 a deal coming out of weakness. And we know all 0:04:46.320 --> 0:04:48.840 the weakness that's going on in Germany, and of course 0:04:48.880 --> 0:04:52.240 their auto industry is he there. So you're looking at 0:04:52.279 --> 0:04:54.960 a situation where there are a lot of challenges out 0:04:55.000 --> 0:04:58.599 there in this world. And again, you don't want to 0:04:58.640 --> 0:05:02.240 see companies making deals out of weakness, but it's clearly 0:05:02.320 --> 0:05:04.680 that's what's going on here. So you have to think 0:05:04.720 --> 0:05:05.960 there's some risk out there. 0:05:06.400 --> 0:05:08.680 When you look at the biggest risks heading into next year, 0:05:08.680 --> 0:05:11.039 obviously the auto industry is one of them. What else 0:05:11.120 --> 0:05:11.920 is on the horizon. 0:05:13.279 --> 0:05:16.239 I just think it's the overall enthusiasm for everything we've 0:05:16.279 --> 0:05:17.799 had such a specuative market. 0:05:18.279 --> 0:05:20.760 Bloomberg has this great article about the wildest. 0:05:20.320 --> 0:05:23.000 Trades of twenty twenty four, and you see that, whether 0:05:23.040 --> 0:05:26.320 it's the leverage ETFs, you know, some of these other 0:05:26.440 --> 0:05:31.880 specutive trades you're seeing out there, paying these significant premiums 0:05:32.040 --> 0:05:34.320 to net asks of value to some of these you know, 0:05:34.360 --> 0:05:39.600 stocks and ETFs out there. There's a lot of optimism 0:05:39.640 --> 0:05:42.040 built into this market right now. And it's not to 0:05:42.080 --> 0:05:45.080 say there's not things to be optimistic about. It's just 0:05:45.440 --> 0:05:47.880 when you start overpaying for them, you open yourself to this 0:05:47.880 --> 0:05:51.760 additional up to this additional risk that you know, if 0:05:51.800 --> 0:05:54.120 there's a bump in the road when your priced for perfection, 0:05:55.040 --> 0:05:56.320 it can be pretty painful. 0:05:56.760 --> 0:05:59.359 And the market right now is pricing in good policy 0:05:59.440 --> 0:06:03.080 from the income the administration, this Trump trade. Yet we 0:06:03.120 --> 0:06:05.920 haven't seen any of that policy yet. His term will 0:06:05.960 --> 0:06:09.039 begin January twentieth. Michael, how are you thinking about the 0:06:09.120 --> 0:06:12.120 sequencing of next year when it comes to things like immigration, 0:06:12.760 --> 0:06:14.240 tax cut, and tariffs. 0:06:15.680 --> 0:06:18.960 Well, I mean that's exactly you know, that's exactly what 0:06:19.000 --> 0:06:23.040 I'm talking about. It's you know, translating this this this 0:06:23.200 --> 0:06:26.720 policy goes to actual policy takes a lot longer than 0:06:26.800 --> 0:06:29.640 the markets obviously pricing at this point in time anyone 0:06:29.720 --> 0:06:33.280 remembers the first Trump administration. He you know, he loves 0:06:33.320 --> 0:06:36.800 to negotiate, he loves to drive a hard bargain, he 0:06:36.880 --> 0:06:37.839 loves to push. 0:06:38.040 --> 0:06:40.760 You know, his opponents to the other end of the table. 0:06:41.120 --> 0:06:43.240 So it's not going to be pretty and you know, 0:06:43.400 --> 0:06:46.080 trying to achieve these goals. So I think I think 0:06:46.120 --> 0:06:48.520 that's a key thing that the market's risking. So when 0:06:48.520 --> 0:06:50.800 you think of the sequence of policies you talk about, 0:06:50.920 --> 0:06:52.720 it's going to take time for all that to play out, 0:06:53.040 --> 0:06:55.080 and again the markets tried to price it all in 0:06:55.120 --> 0:06:57.040 here in the span of two months. 0:06:57.920 --> 0:07:00.760 Mike, I'm thinking about what's going on in the treasury market, 0:07:00.800 --> 0:07:03.040 and on the long end, we've really seen yield steadily 0:07:03.120 --> 0:07:05.040 rise over the last two weeks, and there was some 0:07:05.080 --> 0:07:07.680 relief on Friday, but it does look like yields are 0:07:07.720 --> 0:07:10.560 inching higher once again today and that yield curve continues 0:07:10.600 --> 0:07:12.920 to steepen. How does that set us up for twenty 0:07:13.000 --> 0:07:14.720 twenty five or do you kind of dismiss what we're 0:07:14.720 --> 0:07:15.880 seeing in the final week here. 0:07:17.360 --> 0:07:19.720 I don't dismiss what we're seeing in the final week here. 0:07:20.080 --> 0:07:22.400 I do think the ten year yield is so important 0:07:22.440 --> 0:07:25.040 because so many instruments price off that the market prices 0:07:25.080 --> 0:07:26.880 off that. I mean, right now, the S and P 0:07:27.000 --> 0:07:30.320 five hundred earnings yield is about fifty or sixty basis 0:07:30.320 --> 0:07:33.760 points below the treasury yields, as we mentioned earlier, and 0:07:33.880 --> 0:07:36.400 so you're talking about stocks and more expensive relative to 0:07:36.440 --> 0:07:39.840 your quote unquote safe, risk free acid treasuries than they've 0:07:39.880 --> 0:07:42.760 been in twenty two years. That just, you know, is 0:07:42.800 --> 0:07:44.720 an example of the speculative further out there in the 0:07:44.760 --> 0:07:48.440 equity market, what happens if we see this ten year 0:07:48.480 --> 0:07:51.800 yield can chinue your rise and test five percent. Equities 0:07:51.840 --> 0:07:55.320 will undoubtedly see selling pressure if that happens right now, 0:07:55.360 --> 0:07:57.000 I think this is a little bit of a crisis 0:07:57.000 --> 0:07:59.720 of confidence in the Fed, in the manner in which they. 0:07:59.640 --> 0:08:00.920 Reverse course last week. 0:08:01.440 --> 0:08:03.680 Uh, there's also a little comment, you know, obviously concerns 0:08:03.720 --> 0:08:07.080 about inflation up to again and concerns about President Trump 0:08:07.080 --> 0:08:10.080 having inflationary policies. So if we see this ten year 0:08:10.160 --> 0:08:13.280 yield continue rage, you're going to feel that reverberate throughout 0:08:13.520 --> 0:08:16.480 all financial markets. So it's something we want to see 0:08:16.520 --> 0:08:17.280 stabilize here. 0:08:17.560 --> 0:08:20.080 Yeah, what would be the catalyst that would send that 0:08:20.120 --> 0:08:21.600 tenure yield to five percent. 0:08:23.040 --> 0:08:25.040 I think it's everything we've seen, Like you had, the 0:08:25.080 --> 0:08:27.800 FED last week, you know, you know, conclude one hundred 0:08:27.920 --> 0:08:31.560 you know basis point easing cycle while increasing their inflation 0:08:31.680 --> 0:08:35.120 forecast for the next two years. You know, basically, according 0:08:35.120 --> 0:08:38.640 to the forecast they released Wednesday, we're not we'll run 0:08:38.880 --> 0:08:42.160 for above target, you know, above its inflation target for 0:08:42.280 --> 0:08:45.120 six years, which seems kind of ridiculous to be cutting 0:08:45.200 --> 0:08:45.680 rates when. 0:08:45.600 --> 0:08:48.160 You're doing that. So that's one issue. 0:08:48.200 --> 0:08:51.320 Obviously, depending on how all these Trump policies play out, 0:08:51.600 --> 0:08:54.920 Everyone's concerned that they're going to drive inflation, and that's 0:08:54.960 --> 0:08:57.560 that's a lingering fear. So treasuries have really been weak 0:08:58.160 --> 0:09:01.040 send or you know, acted poorly sent just before the election. 0:09:01.520 --> 0:09:03.920 This was just the latest round of the selloff, and 0:09:03.960 --> 0:09:06.079 like I said, we need to see them stabilize. If 0:09:06.080 --> 0:09:08.199 they do push up to five percent, the S and 0:09:08.240 --> 0:09:10.000 P five hundred is going to have a you know, 0:09:10.120 --> 0:09:11.320 significant pressure on it. 0:09:11.559 --> 0:09:13.840 Michael, what's your base case for next year in terms 0:09:13.840 --> 0:09:14.880 of SED cuts. 0:09:16.640 --> 0:09:18.920 I think, you know, I'm gonna go with the forecast 0:09:18.920 --> 0:09:22.520 at fifty basis points at this point, you know, and 0:09:22.600 --> 0:09:24.800 seeing although the Fed seems to change in every quarter. 0:09:26.040 --> 0:09:28.280 But I think we have a very strong economy. I'm 0:09:28.280 --> 0:09:32.000 surprised they cut rates as they did. You know, GDP 0:09:32.120 --> 0:09:34.760 for this quarter is tracking three percent. GDP last quarter 0:09:34.880 --> 0:09:38.440 was three percent. When you think about the you know, 0:09:38.480 --> 0:09:40.760 the higher rate environment in the past two years, it 0:09:40.800 --> 0:09:43.400 has not slowed the economy. So when the Fed keep 0:09:43.440 --> 0:09:46.800 sitting we're restricted. You know, I'm not seeing it. You're 0:09:46.840 --> 0:09:50.640 not seeing the unemployment rates four point two percent, which 0:09:50.679 --> 0:09:52.360 is basically at the Fed's want run target. 0:09:52.880 --> 0:09:53.840 So it's it's. 0:09:53.679 --> 0:09:55.439 Really hard to predict what the Fed's going to do 0:09:55.480 --> 0:09:57.960 because they keep moving their policy goals around and it 0:09:58.000 --> 0:10:00.560 doesn't seem to be tied to the movements within the economy. 0:10:00.800 --> 0:10:01.720 So hire for longer. 0:10:01.840 --> 0:10:04.920 In twenty twenty five, Michael Ourk and Jones Trading, thank 0:10:04.960 --> 0:10:07.040 you so much for joining us. Happy holidays and New 0:10:07.120 --> 0:10:07.560 Year to you. 0:10:15.960 --> 0:10:18.760 Joining us now is Clint Henderson of The Point Sky. Clint, 0:10:18.800 --> 0:10:20.679 it is good to speak with you. Ann, Marie and 0:10:20.720 --> 0:10:22.800 I are in the office because it is a Monday 0:10:22.880 --> 0:10:25.720 and we still have two days ago before Christmas. Talk 0:10:25.800 --> 0:10:28.480 a little bit about the calendar effect because with the 0:10:28.520 --> 0:10:32.080 holidays on Wednesday this year, it means there isn't a 0:10:32.160 --> 0:10:34.440 natural long weekend for people to take, and maybe that 0:10:34.559 --> 0:10:36.679 spreads the travel out a little bit here. 0:10:37.520 --> 0:10:38.760 Yeah, that's certainly helping. 0:10:39.440 --> 0:10:43.400 Interestingly, though, the Sunday after Thanksgiving we saw the highest 0:10:43.600 --> 0:10:49.000 single day ever, so that didn't really impact Thanksgiving travel, 0:10:49.040 --> 0:10:51.560 and we're expecting record breaking crowds. I will say the 0:10:51.559 --> 0:10:55.520 airlines got through the busiest part of the lead up 0:10:55.559 --> 0:11:00.280 to Christmas fairly well, despite a few storms, so that's 0:11:00.320 --> 0:11:03.880 good news. And I do think the airlines in general 0:11:04.040 --> 0:11:07.360 are in better position. They're staffed up, they have the 0:11:07.360 --> 0:11:10.200 planes they need, they have the people they need to 0:11:10.280 --> 0:11:13.640 get things moving quickly, and they seem to be able 0:11:13.679 --> 0:11:16.880 to recover from storms better right now too. So barring 0:11:17.000 --> 0:11:20.480 a major storm like we saw in twenty twenty two, 0:11:21.160 --> 0:11:24.480 fingers crossed will get through the holidays with flying colors. 0:11:24.720 --> 0:11:27.200 Yeah, so far, no major storm at the moment, and 0:11:27.240 --> 0:11:30.720 also good news, no shutdown either, so everyone can get 0:11:30.760 --> 0:11:33.040 through airport security the way that you would expect them 0:11:33.040 --> 0:11:36.360 to during a busy holiday season. People are obviously traveling 0:11:36.360 --> 0:11:39.880 to visit family or go home, but they're also going 0:11:39.920 --> 0:11:42.080 away on vacation. Where are they going to Clint? 0:11:42.960 --> 0:11:44.120 So it's really interesting. 0:11:44.160 --> 0:11:47.920 We've seen the usual suspects are obviously very popular. Los Angeles, 0:11:48.040 --> 0:11:51.000 New York has been going through some incredible record breaking 0:11:51.040 --> 0:11:54.040 crowds the big cities in the US and also places 0:11:54.080 --> 0:11:58.439 like Florida and Cancoon. But we're now seeing really interesting 0:11:58.520 --> 0:12:02.520 data that suggests Americans are going much further. They seem 0:12:02.559 --> 0:12:05.880 to be being inspired by TikTok and Instagram to really 0:12:06.320 --> 0:12:07.080 get out there and have a. 0:12:07.080 --> 0:12:08.560 Little bit more exotic travel. 0:12:08.840 --> 0:12:11.520 Tokyo is actually one of the top cities according to 0:12:11.600 --> 0:12:15.680 Chase this year for international travel, which is really interesting. 0:12:15.960 --> 0:12:18.280 The strong US dollar is certainly helping. 0:12:18.559 --> 0:12:20.440 I think that's going to really push up numbers in 0:12:20.559 --> 0:12:23.640 Europe as well, since the euro has been falling lately. 0:12:23.720 --> 0:12:27.400 So look for some international bargains. I just booked myself 0:12:27.440 --> 0:12:30.839 a trip in January to Portugal. Incredible what you can 0:12:30.920 --> 0:12:33.600 get because the US dollar is so strong right now. 0:12:34.280 --> 0:12:36.400 And then, don't sleep on shoulder season travel. A lot 0:12:36.400 --> 0:12:39.640 of people are traveling now well into winter and then 0:12:39.720 --> 0:12:42.680 of course for the shoulder season which we love, which 0:12:42.760 --> 0:12:47.199 is spring and fall, and people are spending longer away. 0:12:47.240 --> 0:12:49.560 That's a new survey we just did found people are 0:12:49.559 --> 0:12:51.800 spending five and a half days as opposed to four 0:12:51.840 --> 0:12:53.880 and a half days like they used to. So people 0:12:53.920 --> 0:12:56.160 are going further and they're going for longer. 0:12:56.559 --> 0:12:58.480 Why are they spending longer? Is that they feel that 0:12:59.000 --> 0:13:00.840 is it? The strong us do feel like their money 0:13:00.840 --> 0:13:02.680 can stretch them that much longer on a trip. 0:13:03.280 --> 0:13:04.440 I do think that's part of it. 0:13:04.480 --> 0:13:07.800 I also think people are really into experiences now, as 0:13:07.880 --> 0:13:10.840 you're sound bite alluded to. And I think the other 0:13:11.200 --> 0:13:13.400 interesting thing is people can work from home now, so 0:13:13.679 --> 0:13:15.920 they're tacking on a day or two two business trips 0:13:15.920 --> 0:13:18.120 that they might not have in the past because they 0:13:18.120 --> 0:13:20.080 have to be in the office. So you know, you're 0:13:20.120 --> 0:13:22.800 in the office today, but I'm able to work from home, 0:13:22.880 --> 0:13:25.440 and I think more and more people have been able 0:13:25.480 --> 0:13:27.040 to do that, So you're seeing the amount of time 0:13:27.040 --> 0:13:28.719 they're spending away stretched a bit. 0:13:29.080 --> 0:13:32.000 Clint, any viewers that are preparing to travel this week, 0:13:32.000 --> 0:13:33.040 what's your number one tip? 0:13:33.920 --> 0:13:35.920 Have the airline app installed on your phone. 0:13:35.960 --> 0:13:37.559 Not only is that how you're going to get Wi 0:13:37.559 --> 0:13:40.199 Fi and entertainment on the plane. You can track your flights, 0:13:40.240 --> 0:13:42.280 see if it's on time, see where your plane is 0:13:42.280 --> 0:13:45.160 coming from. And finally that's where they're going to offer 0:13:45.200 --> 0:13:48.560 you cheap upgrades, so you beat out e lead travelers 0:13:48.600 --> 0:13:50.240 like me, so you can get a cheap upgrade to 0:13:50.280 --> 0:13:50.840 first class. 0:13:50.880 --> 0:13:52.559 So who doesn't want that as a Christmas gift? 0:13:53.120 --> 0:13:53.560 I love that. 0:13:54.200 --> 0:13:56.400 What about luggage, That's a big issue here, And I 0:13:56.440 --> 0:13:58.920 know that this might sound kind of trivial, but you know, 0:13:58.960 --> 0:14:01.040 we're all trying to get by bringing it on as 0:14:01.080 --> 0:14:03.000 a carry on, and yet when you get to the 0:14:03.080 --> 0:14:06.240 airport and you're at the gate, they make you check 0:14:06.280 --> 0:14:08.000 it in anyway at the gate they say, oh, well 0:14:08.000 --> 0:14:10.280 wave the fees, but that's you know, everyone's trying to 0:14:10.280 --> 0:14:13.120 avoid that scenario. Any advice on that front. 0:14:13.679 --> 0:14:15.840 Yeah, you know, I'm team carry on, so I hate 0:14:15.920 --> 0:14:18.960 checking baggage. But during Christmas when I come from New 0:14:19.040 --> 0:14:21.400 York to California, I bring presents with me, so I 0:14:21.400 --> 0:14:23.520 do check bags. And you know what, I got an 0:14:23.560 --> 0:14:25.600 Apple air tag for the first time in my life. 0:14:25.680 --> 0:14:27.560 You know, we've been writing about this and talking about 0:14:27.600 --> 0:14:30.360 it for years. My team loves it, but it's the 0:14:30.360 --> 0:14:32.680 first time I've used it, and that is really cool. 0:14:32.800 --> 0:14:36.240 And now with the air tags, some airlines allow you 0:14:36.280 --> 0:14:39.320 to share the location with the airline, so if your 0:14:39.480 --> 0:14:42.560 luggage gets lost, so maybe I have to look more 0:14:42.600 --> 0:14:45.800 into checking luggage in the future and try not to 0:14:45.840 --> 0:14:48.480 be the last to board, pay for that extra seat, 0:14:48.800 --> 0:14:50.200 get the airline credit cards so. 0:14:50.160 --> 0:14:52.080 You can be among the first to board that plane. 0:14:52.560 --> 0:14:55.160 Talking your book, Clint Henderson of The Points Guy, thank 0:14:55.200 --> 0:14:56.200 you so much for joining us. 0:14:56.280 --> 0:14:57.080 Really appreciate it. 0:15:06.280 --> 0:15:09.360 Jonathan Miller of Miller Samuel is staying optimistic. He says, 0:15:09.800 --> 0:15:12.400 while we don't expect sales to rise to normal levels, 0:15:12.440 --> 0:15:14.520 they will be hired than last year. Those who can 0:15:14.600 --> 0:15:17.360 afford to buy at higher rates will probably do so. 0:15:17.720 --> 0:15:20.040 Mortgage rates will probably end up lower than they start 0:15:20.040 --> 0:15:24.360 in a year, but not low. Jonathan joins us. Now, so, Jonathan, 0:15:24.560 --> 0:15:27.120 you have actually noticed an uptic in existing home sales, 0:15:27.120 --> 0:15:31.320 in particular in high end markets in places like New York. 0:15:32.880 --> 0:15:35.640 Yes, that's actually been the story if you think about it. 0:15:35.720 --> 0:15:39.400 Many potential home buyers have been waiting for about three 0:15:39.480 --> 0:15:45.960 years since the initial FED moves, and I think time 0:15:46.120 --> 0:15:48.680 is sort of running out for people as life moves on. 0:15:49.760 --> 0:15:54.240 We're already seeing in contract activity and some of the 0:15:54.320 --> 0:15:58.960 markets that we cover really begin rising it back in 0:15:59.000 --> 0:16:02.080 the summer, not just after the election, but of course 0:16:02.320 --> 0:16:04.800 on the National Front. Existing home sales for the last 0:16:04.800 --> 0:16:09.480 couple of months have been up, which means that you know, 0:16:09.760 --> 0:16:13.040 with all the sort of people holding waiting for lower rates, 0:16:13.320 --> 0:16:17.119 I still think there's a thinking that, you know, perhaps 0:16:17.360 --> 0:16:19.560 a year from now rates will still be a little 0:16:19.560 --> 0:16:23.800 bit lower, and those that can afford to buy are buying. 0:16:23.880 --> 0:16:31.240 The challenge is supply. Supply. Supply continues to be a problem. 0:16:31.520 --> 0:16:33.680 It's less of a problem in the Sun Belt states 0:16:33.720 --> 0:16:38.880 where there's been a lot more development activity, but still, 0:16:39.600 --> 0:16:41.800 you know, a year from now, I think housing prices 0:16:41.800 --> 0:16:44.400 are going to be higher than they are today, and 0:16:44.440 --> 0:16:46.760 so you have to sort of, you know, make the 0:16:46.840 --> 0:16:50.520 decision of do you wait for rates to come down 0:16:50.600 --> 0:16:53.320 at some point? If they will, it doesn't feel like 0:16:53.400 --> 0:16:57.000 it with the incoming administration's economic policies. 0:16:57.080 --> 0:16:59.200 So you mentioned the sun Belt and this idea that 0:16:59.440 --> 0:17:03.520 it is the inventory that's available. People point to that 0:17:03.560 --> 0:17:05.679 and say that they want to go move to somewhere 0:17:05.720 --> 0:17:09.120 where perhaps housing is more affordable. But it's misleading though 0:17:09.119 --> 0:17:11.840 when you look at supply increases as well, because we're 0:17:11.840 --> 0:17:14.959 coming off a pretty low base. How often is it 0:17:14.960 --> 0:17:18.200 that people go over and realize actually, the picture here 0:17:18.640 --> 0:17:21.000 is very different from what they had anticipated, and if 0:17:21.000 --> 0:17:24.480 you compared to say, five, ten years ago, it's completely different. 0:17:25.440 --> 0:17:25.640 Yeah. 0:17:25.680 --> 0:17:30.760 I think post pandemic, there's still an expectation by consumers 0:17:30.760 --> 0:17:34.280 when they go from say the Northeast or California to 0:17:34.320 --> 0:17:38.160 the sun Belt, that they're going to get a very 0:17:38.240 --> 0:17:43.040 low price and the affordability is going to be dramatically improved. However, 0:17:43.080 --> 0:17:46.160 that's been where a lot of the price appreciation has 0:17:46.200 --> 0:17:50.840 been concentrated. You know, as people with work from home, 0:17:51.600 --> 0:17:55.520 are you looking at other places to be situated. One 0:17:55.560 --> 0:17:58.760 of the things that we're seeing in, for example, markets 0:17:58.840 --> 0:18:02.200 like Florida's actually South Florida, is. 0:18:02.080 --> 0:18:04.280 That the the. 0:18:03.840 --> 0:18:08.720 Higher end threshold, meaning pricing north of say a million dollars. 0:18:08.840 --> 0:18:12.919 Not to be cavalier, but the numbers is we're seeing 0:18:12.960 --> 0:18:18.560 a tremendous uptick in activity. Perhaps that has more to 0:18:18.640 --> 0:18:24.280 do with elevated financial markets than it does to more 0:18:24.400 --> 0:18:27.200 you know, the factor of higher mortgage rates. 0:18:27.240 --> 0:18:30.400 Jonathan, Given the fact that there are higher mortgage rates, 0:18:30.520 --> 0:18:33.440 are there deals to be had on the price when 0:18:33.480 --> 0:18:34.520 going out and buying home. 0:18:37.280 --> 0:18:40.000 I think the I think the simple answer to that 0:18:40.200 --> 0:18:40.720 is no. 0:18:42.880 --> 0:18:47.280 But and that's because even in markets where inventory is 0:18:47.400 --> 0:18:53.800 rising or there's parody with pre pandemic conditions, the demand 0:18:53.960 --> 0:18:57.320 is still pretty strong that people have been kept on 0:18:57.440 --> 0:19:01.000 hold for several years. So we're still seeing bidding wars. 0:19:01.480 --> 0:19:05.560 We're still seeing a fairly tight market. We're just not 0:19:05.800 --> 0:19:09.200 seeing a lot of discounting going on. And I think 0:19:09.560 --> 0:19:12.560 I think that's what consumers, you know, we're hoping for. 0:19:13.359 --> 0:19:16.480 And you expect an uptick in twenty twenty five. Where 0:19:16.640 --> 0:19:18.960 exactly do you think we can see an uptick in 0:19:19.000 --> 0:19:19.320 some of. 0:19:19.280 --> 0:19:23.199 This, Well, you know, the basic math is where the 0:19:23.240 --> 0:19:27.200 inventory is the tightest, that's where you're going to see the. 0:19:27.119 --> 0:19:28.520 Most uptick in price. 0:19:30.119 --> 0:19:33.119 You know, I would say that the biggest uptick in 0:19:33.200 --> 0:19:35.040 price is not going to be in the sun Belt. 0:19:35.080 --> 0:19:38.200 It's going to be to the north of that because 0:19:38.200 --> 0:19:41.720 that's where not as much new product has. 0:19:41.560 --> 0:19:43.280 Been built to come into the market. 0:19:43.359 --> 0:19:47.880 That's one of the challenges in markets in the sun 0:19:47.920 --> 0:19:51.800 Belt is that there's been more new construction as developers 0:19:51.840 --> 0:19:56.360 are anticipating the boom coming off the pandemic, and. 0:19:56.880 --> 0:19:59.440