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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Lisa A.
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Speaker 3: and always on Bloomberg dot Com, the Bloomberg Terminal, and
Speaker 3: the Bloomberg Business App. A real question around where we
Speaker 3: are in terms of the rally and whether it has
Speaker 3: legs and joining us to really get into that. As
Speaker 3: Animaletti head of Active Equity, it all spring global investments
Speaker 3: before we get into and welcome this question of do
Speaker 3: we end up with just a stock picking market? Can
Speaker 3: you pile in and get some sort of sense of
Speaker 3: relief from the rally that seems to only be gaining steam.
Speaker 4: It's a great question, Lisa, and I think the hardest
Speaker 4: part for investors is do I stay on the sidelines
Speaker 4: or not? And we were talking earlier. Is the market
Speaker 4: really pulled and drawn by emotion? And it is, it
Speaker 4: always has been, and so investors have to fight that
Speaker 4: emotion every step of the way and remain disciplined. And
Speaker 4: I think despite all of the kind of chaos that's
Speaker 4: happening around us and outside of us, within the economy,
Speaker 4: with the FED, with global global unrest, I think it's
Speaker 4: brought a lot of focus to our investment teams, and
Speaker 4: what they're looking at is the narrow focus on which
Speaker 4: stocks you want to own. Investors, when you're out of
Speaker 4: the market, you have to be really careful about when
Speaker 4: you get in. What I tell people is, regardless if
Speaker 4: you know overall there's negativity or positivity, you really want
Speaker 4: to always have some allocation in equities.
Speaker 3: So let's pick some stocks in Vidia, Meta, Tesla.
Speaker 2: You like all the popular ones.
Speaker 3: No, I'm just wondering, I mean, how do you basically
Speaker 3: understand what valuation even means at a time when things
Speaker 3: are going to the moon based on promise of future invention.
Speaker 4: Yeah, you know, I mean, I think what's been really
Speaker 4: interesting is the flow in that we're seeing into equities
Speaker 4: is going into index funds, right most most importantly, and
Speaker 4: when that happens, investors are buying more of the big
Speaker 4: names and paying a lot more for those names. That's
Speaker 4: just the way it works. And so in a way,
Speaker 4: active managers are a little bit trying to not fight
Speaker 4: that trend. We own some of those names too, but
Speaker 4: we're also trying to find those names that haven't been recognized.
Speaker 4: We're really you know, like mining for a gold right now.
Speaker 4: There are opportunities that do exist out there.
Speaker 5: In an emotional market. Where do value stocks come in?
Speaker 4: Yeah, it's a great question, Eila. And you know, as
Speaker 4: you saw in the beginning part actually last year, when
Speaker 4: the markets really started to kind of pay attention to value,
Speaker 4: there were good reasons for it. Multiples were compressing, and
Speaker 4: that's when investors went to value. I like to think
Speaker 4: about it, like, don't discriminate between value and growth, right,
Speaker 4: you can buy high quality goods at a good price.
Speaker 4: So I kind of like to say, I like to
Speaker 4: shop at sax or Nemans just don't like to pay
Speaker 4: full price. I kind of think our investment teams like
Speaker 4: to do the same thing, right. They want to buy
Speaker 4: quality companies, but they want to pay a good price
Speaker 4: for them, and there's real opportunity to do that now.
Speaker 4: So I would say, don't discriminate between value and growth.
Speaker 3: I just wonder what does even value mean? Yeah, I mean, honestly, no,
Speaker 3: I'm serious. I was talking to some people saying that
Speaker 3: basically conservative stocks, defensive stocks, value stocks, everything's tech.
Speaker 2: I mean, that's basically what everyone is saying.
Speaker 3: So at what point do you start to say, well,
Speaker 3: maybe we're just falling behind. And if you own the
Speaker 3: broader index, well at least you'll catch the stories that
Speaker 3: might come out of nowhere and blow up the index.
Speaker 4: Yeah, it's a great point. And you know, over the years,
Speaker 4: you know, people have categorized value and growth separately, but
Speaker 4: as you know, we've had big industries change from you know,
Speaker 4: we've seen energy via value industry and energy be a
Speaker 4: growth industry, and so I think investors have to kind
Speaker 4: of frame that up. And I think Lisa, you did
Speaker 4: really well. Any category, any company can move from value
Speaker 4: to growth at any time, which is why we kind
Speaker 4: of face the individual stocks, individual companies and look at
Speaker 4: what we're paying for them.
Speaker 3: Just quickly the here going into the second half, we've
Speaker 3: gotten a lot of reassessments, a lot of people are
Speaker 3: just getting more bullish. That seems to be the theme
Speaker 3: pretty much across the board, with the exception of Mike Wilson.
Speaker 3: But I'm wondering from your van to point, how you're
Speaker 3: shifting either the names or your thesis heading into December.
Speaker 4: Yeah, it's a great question, Lisa, because clearly, I think
Speaker 4: the last time I was on the show, I said
Speaker 4: we expected the rally to kind of either spread down
Speaker 4: market cap, which we have started to see a little bit.
Speaker 4: We would expect that to continue. If the rally is
Speaker 4: going to continue, investors are going to flow more broadly
Speaker 4: into the market. But again, I think our investment team's
Speaker 4: focus is looking for those unique opportunities, trimming names where
Speaker 4: the valuation just doesn't make sense, because what we do
Speaker 4: is all about risk versus reward and really trying to
Speaker 4: set up our investors to protect them against big risk
Speaker 4: and focus on reward over time, because again, the future's
Speaker 4: pretty foggy.
Speaker 3: All right, well, Ammelili, thank you so much in the
Speaker 3: foggy future after the fog has luckily passed for us
Speaker 3: in the New York City and Melardia of All Spring,
Speaker 3: thank you so much.
Speaker 2: Joining us now.
Speaker 3: Jan Start Vague, founder and CEO of Exante Data and
Speaker 3: market reader agains. What's your takeaway that we do have
Speaker 3: these divergent central banks. Is it just a matter of
Speaker 3: the US getting out front, having a cycle that it
Speaker 3: had to deal with first, and everybody else catching up,
Speaker 3: or is this truly a splintering of the biggest global
Speaker 3: economies at a time of great transition.
Speaker 6: I think there's an element of both, right. So, clearly
Speaker 6: the US started to recover quicker, the stimulus was more
Speaker 6: aggressive in the US, and therefore the US cycle has
Speaker 6: been more front loaded, right. And then we have economies
Speaker 6: such as the eurosone economy where the stimulus was slower
Speaker 6: and more drawn out. And we are having a situation
Speaker 6: now where inflation is actually having moral mentioned in the
Speaker 6: Eurozone than in the US. And therefore the ECB cannot
Speaker 6: do any pausing. The ECB has to sickle that that's
Speaker 6: going to go every single meeting, right, and they are
Speaker 6: highly likely to be hiking in July and probably September
Speaker 6: and maybe even further than that. Right. So this is
Speaker 6: the first time for a while where we've seen monetary
Speaker 6: policy divergence in a way that's going to support the Euro.
Speaker 6: We saw a big, big move yesterday, and then I
Speaker 6: think if we scan the globe, right, then there's some
Speaker 6: special issues around China.
Speaker 3: Right.
Speaker 6: So I think one data point that's very important this
Speaker 6: year is that we've had a China reopening. We have
Speaker 6: had some recovery in certain sectors in China, right, but
Speaker 6: there's no inflation pressure in China.
Speaker 7: Right.
Speaker 6: If we compared to other countries that have reopened, we
Speaker 6: are not seeing any inflation pressure in China that resembles
Speaker 6: what we've seen in other reopening situations, and that's really important.
Speaker 6: And this is also a sort of evidence that there's
Speaker 6: something structurally different in the Chinese economy. And one thing
Speaker 6: that I think investors are not paying enough attention to
Speaker 6: is that there's been a massive structural shift in terms
Speaker 6: of the capital flow that's coming into China.
Speaker 8: Right.
Speaker 6: It used to be the case that people just wanted
Speaker 6: to invest in China, build manufacturing capacity in China, but
Speaker 6: that foreign direct investment from companies has slowed very, very dramatically,
Speaker 6: and that has not recovered after reopening. So that's a
Speaker 6: structural shift that's very important for everything, including the Chinese currency.
Speaker 8: Right.
Speaker 9: What do you make of China's attempts to get more
Speaker 9: and more trade occur in the one Are they attempting
Speaker 9: to over time become a competitor the dollar in terms
Speaker 9: of reserve currency. Is this just going to be a small,
Speaker 9: tiny part of world trade or is it? Where do
Speaker 9: you stand on that?
Speaker 6: So China is a huge part of global trade in
Speaker 6: terms of the goods moving around, right, But they've been
Speaker 6: attempting to get that stuff invoiced in local currency and
Speaker 6: try to create competition to the dollar. But look at
Speaker 6: how the yuan has been trading this year, Right, were
Speaker 6: up over the last two days, But the big trend
Speaker 6: has been the Chinese currency has underperformed very dramatically, consistent
Speaker 6: with monetary policy being one of the easiest in the world. Right,
Speaker 6: they have not been any tightening related to the inflation
Speaker 6: dynamic that I spoke about, Right, So we have a
Speaker 6: situation where from a trade perspective, China is in a
Speaker 6: very strong position and could argue Okay, we dominate many many.
Speaker 10: Types of trade.
Speaker 6: We should have a reserve currency aspect, right, But when
Speaker 6: you look at the acid side, nobody wants to buy
Speaker 6: the Chinese bonds. That literally outflows from Chinese bonds almost
Speaker 6: every single month. Even central banks around the world are
Speaker 6: starting to reduce CNY holdings, right, So it doesn't have
Speaker 6: the reserve currency aspect on the acid side. It's only
Speaker 6: on the trade that you can make the argument. And
Speaker 6: that's why that goal that the Chinese have is not
Speaker 6: so easy to achieve.
Speaker 9: Yeah, that makes a lot of sense. And where do
Speaker 9: you see Japan playing out? I think that's the country
Speaker 9: we're seeing actually get a lot of benefit from people
Speaker 9: moving away from China and their power in the regions
Speaker 9: important and clearly their stock market's done very well. Where
Speaker 9: do you see Japan playing out in terms of the
Speaker 9: global economy?
Speaker 6: Yes, so I think if you sort of look at
Speaker 6: a situation where global multi nationals are getting more cautious
Speaker 6: about investing aggressively in China, where are they going to
Speaker 6: build capacity?
Speaker 8: Right?
Speaker 6: So, there's a number of countries in Asia that have
Speaker 6: manufacturing histories. Japan is one of them, Koreas another one
Speaker 6: of them. There's new work countries like Taiwan and obviously
Speaker 6: Thailand and Vietnam too, and closer to the US, Mexico
Speaker 6: is benefiting from that. Right, So we do have a
Speaker 6: number of emergent markets that are going to stand to
Speaker 6: benefit from that. Japan has a bit of a special case.
Speaker 6: They have their own demographications and so forth. But clearly
Speaker 6: the NICK is now moving in a way that's very interesting,
Speaker 6: and it's a very ironic situation. You have inflation in
Speaker 6: Japan that is running around five percent. In terms of
Speaker 6: the momentum we're seeing on core and financial conditions are easy, right,
Speaker 6: bandiels are pecked at zero effectively, right, and equity and
Speaker 6: this is going higher, the end is going weaker, right,
Speaker 6: So eventually this to create a problem with the Bank
Speaker 6: of Japan that they have to deal with.
Speaker 3: Given all of this, does it make sense that people
Speaker 3: are just looking at the divergences and saying, I guess
Speaker 3: there's only one thing to do, go into big tech.
Speaker 3: I mean that basically was the theme of the week.
Speaker 3: Go into big tech, go into the euro. Those were
Speaker 3: the two trades of the week. Do they have lasting power?
Speaker 6: So I get to ask, if not every day. Certainly
Speaker 6: every week we get asked about, Okay, is the AI
Speaker 6: trend the bubble?
Speaker 8: Right?
Speaker 6: Is it overdone? There are certain companies where the evaluations
Speaker 6: look pretty crazy, right, But I have to say, take
Speaker 6: a step back. We think about this technology, what kind
Speaker 6: of incredible changes it's going to create in the economy, right,
Speaker 6: and then we think about how relatively young this excitement
Speaker 6: about this trend is likely only really a couple of
Speaker 6: months in so given how big the structural shift these
Speaker 6: technologies are going to create, I don't think we've run
Speaker 6: for very long in terms of investors really getting involved
Speaker 6: in these trends. Like I track global capital flows very carefully.
Speaker 6: Like one thing I track is, Okay, what is the
Speaker 6: foreign money that's come into you as tech in the
Speaker 6: last couple of months. It's actually very limited, right, So
Speaker 6: it seems like foreign investors have kind of missed the
Speaker 6: AI the terbo charge rally, and I wouldn't rule out
Speaker 6: that they're going to come in later. So I think
Speaker 6: it's tour to fade it. And then I was saying,
Speaker 6: in terms of other themes, emergent markets had a very
Speaker 6: good run, right, So there are other asset classes that
Speaker 6: are on the move that have perhaps been forgotten about
Speaker 6: for many, many years. So it's not just tech. I
Speaker 6: would say the emergent market trends are pretty interesting and
Speaker 6: certainly something we've been watching.
Speaker 3: Yeahzonoid Veig of Exante Data and Market Reader, thank you
Speaker 3: so much for.
Speaker 2: Being with us.
Speaker 3: Set joining us now, especially at a moment of huge debate,
Speaker 3: is Congressman French Hill, Republican from Arkansas, and I want
Speaker 3: to start there, especially welcome by the way to New York.
Speaker 3: I want to start there, especially because there is this
Speaker 3: increasing fight among House Republicans right now about whether to
Speaker 3: cut spending much more substantially, maybe raising a question around
Speaker 3: whether we have to discuss the faulting again in a
Speaker 3: couple of months. Where do you weigh in on this?
Speaker 3: How concerned are you?
Speaker 7: Well, we have our fiscal constraint deal that we struck
Speaker 7: between House Republicans and President Trump, I mean President Biden,
Speaker 7: and that's put in place and that governs the top
Speaker 7: line for appropriations, and now both the House and Center
Speaker 7: are working to pass those twelve appropriations bills and that'll
Speaker 7: be what tees up, as you say, a spending fight
Speaker 7: this fall, potentially as we attempt to pass all twelve
Speaker 7: of those bills at the agreed upon a level in
Speaker 7: the Fiscal Restraint Measure or below, and so that's the issue.
Speaker 7: But let's be clear, discretionary spending is forty percent higher
Speaker 7: than it was just before the pandemic. So we're spending
Speaker 7: two trillion dollars more per year on spending in this
Speaker 7: country than we were before the pandemic. And so there's
Speaker 7: an effort, and I think we've made that clear that
Speaker 7: we should lower that rate of spending growth and cap
Speaker 7: it and that's what we did in this bill.
Speaker 3: Although Greg Valiere, who is on earlier of AGF, was
Speaker 3: saying that he's been in this business a long time
Speaker 3: and he's ever seen anything like this, to agree on
Speaker 3: spending a certain amount and then retracting it to essentially say, Okay,
Speaker 3: well maybe not.
Speaker 7: That's not what the deal is, that's not what the do.
Speaker 7: I think this has gotten exaggerated in the press. These
Speaker 7: are spending caps, these are ceilings, and so the appropriators
Speaker 7: now take those numbers and write the spending bills in
Speaker 7: each department of cabinet government and they can spend up
Speaker 7: to that amount. That's the goal, and we've set the
Speaker 7: goal of if we're going to spend this spending curve down.
Speaker 7: We don't want to do supplemental appropriations. We want to
Speaker 7: make the government live within this enormous budget that we have.
Speaker 3: Do you think that it's worth threatening another default?
Speaker 7: Potentially, think anybody's threatening another default. I think what you
Speaker 7: see is if you don't pass those appropriations bills, then
Speaker 7: you're confronted with an f y twenty four fiscal twenty
Speaker 7: four continuing resolution, which I don't think anybody in Congress wants,
Speaker 7: because you freeze spending at the current level, but you
Speaker 7: get all the policies that are frozen too, and members
Speaker 7: of Congress like to debate in the appropriations process, both
Speaker 7: those spending levels and the policies that go with them.
Speaker 7: And you can't do any new starts when you have
Speaker 7: a continuing resolution. So you can't start construction on a
Speaker 7: new nuclear submarine if you have a continuing resolution. So
Speaker 7: it's not in the best interests of the government to
Speaker 7: have a continuing resolution. But that's why I don't see
Speaker 7: it as a default debate at all. It's more of
Speaker 7: a typical government shut down type debate, if you want
Speaker 7: to use that term, on whether we're going to have
Speaker 7: appropriated funds approved across both Houses of Congress, or if
Speaker 7: we're going to be confronted with a continuing resolution?
Speaker 3: Have you ever seen the Republican Party as split as
Speaker 3: it is right now. We've been talking about this for
Speaker 3: a while, but perhaps the prosecution former President Trump has
Speaker 3: brought this into even colder relief, just because you have
Speaker 3: people lining up behind him and other people saying, wait
Speaker 3: for some information to come out.
Speaker 2: Where do you stand on this?
Speaker 7: On are you talking about still talking about spending?
Speaker 11: You're talking about.
Speaker 12: President talking about President Yeah, President Trump, Well.
Speaker 7: Look, I think he made this situation a lot worse
Speaker 7: by the way he handled the interactions with the government
Speaker 7: regarding the Presidential Records Act. So I think he's made
Speaker 7: the situation a lot more challenging. I do believe that
Speaker 7: we need complete reform on how we handled classified informations.
Speaker 7: We just saw the news this morning with this young
Speaker 7: man National guardsman out on Cape cod Is facing sixty
Speaker 7: years in prison for releasing and distributing classified information. I
Speaker 7: think this sends a lot of confusing messages to the
Speaker 7: American people. We didn't make sure those rules are fair
Speaker 7: clear and that presidents abide by them and everybody else
Speaker 7: in the government abides by them.
Speaker 13: So if I think about the if I think about
Speaker 13: that issue specifically, it's clear that there have been more
Speaker 13: than several people who have had issues with documents. So
Speaker 13: whether or not that's more egregious for him than other
Speaker 13: people led is yet to be determined, But clearly we
Speaker 13: need to do something with that. Is that just because
Speaker 13: we're so far behind in what we're doing with our
Speaker 13: paper versus digital? Is that just because we just don't
Speaker 13: have a clear view on what really is classified and
Speaker 13: how classified it needs to be.
Speaker 7: It's such a good question. In fact, we declassified in
Speaker 7: the House Intelligence Committee the other day the instances of this.
Speaker 7: The National Archives reported to us in a hearing that
Speaker 7: they have found classified material in over eighty eighty different
Speaker 7: former members of Congress records at their local university or
Speaker 7: wherever their store, and that they've found classified information in
Speaker 7: unclassified file boxes from every president from President Reagan on.
Speaker 7: So this tells me as a former White House staffer,
Speaker 7: I can remember vigorously the pack up process on leaving
Speaker 7: the administration in January nineteen ninety three. What was in
Speaker 7: a classified box and what wasn't out of my office?
Speaker 7: So we have rules, but I think we need to
Speaker 7: improve training. And you raise a point of do we
Speaker 7: classify too much information? Do we declassify information effectively and
Speaker 7: communicate that and the difference between digital as in the
Speaker 7: case of Missus Clinton and paper. So I think there's
Speaker 7: work to be done here. It doesn't excuse anyone's behavior
Speaker 7: on this topic, though, Well.
Speaker 3: To that point, are you concerned about the rhetoric around this,
Speaker 3: that this is an issue of prosecuting the people and
Speaker 3: going after someone just in terms of political interference? Are
Speaker 3: you concerned about how this is raising questions about the
Speaker 3: deep state and reigniting those discussions rather than the discussion
Speaker 3: around how to keep classified document secret?
Speaker 11: You bet, Lisa.
Speaker 7: I mean, when you indict a former president by officials
Speaker 7: of the Justice Department of his opposition party, you're going
Speaker 7: to invite political speculation that it's a political activity, and
Speaker 7: it will absolutely take us off the substance and back
Speaker 7: to that. But I simply I think that everybody ought
Speaker 7: to have clear understanding about how to handle this and
Speaker 7: do it right. And the weaponization of the federal government,
Speaker 7: which you're implying, is the subject of a select committee
Speaker 7: in Congress this year. Because of the top at the
Speaker 7: FBI during the end of the Obama administration. In Trump
Speaker 7: administration has disappointed a lot of people in Congress, it's
Speaker 7: under a tremendous scrutiny. Director Ray is on the hill
Speaker 7: routinely trying to defend that we have fired the people
Speaker 7: who brought you Russia, Russia, Russia. We fired the people
Speaker 7: who we think did wrong in that whole issue around
Speaker 7: Missus Clinton or around mister Trump, and we're trying to
Speaker 7: clean up our act and do the right thing. But
Speaker 7: there is skepticism among the citizens and people in Congress,
Speaker 7: and I think it's a heavy lift. It's as heavy
Speaker 7: a lift as the Church Commission back in the nineteen seventies.
Speaker 7: And it's not hyperbole. So Director Ray has to make
Speaker 7: the reputation of the FBI the one that we all
Speaker 7: know and love over history.
Speaker 3: So you see the onus on the FBI rather than
Speaker 3: on the former president. Change the rhetoric.
Speaker 7: Well, I think the onus is on your point about
Speaker 7: is the deep state potentially in trouble and creating mischief?
Speaker 7: I think it was clear in the Russia investigation and
Speaker 7: Crossfire Hurricane that they were involved, and it was very
Speaker 7: political at the top of the FBI. That's hurt the
Speaker 7: FBI's reputation. I think it's up to Director Way to
Speaker 7: help work with Congress and rebuild that reputation, which then
Speaker 7: I think rebuilds trust through the American people.
Speaker 3: French Hell, thank you so much, Congressman. I really appreciate
Speaker 3: you taking the time with us. The SMP, Homebuilders ETF.
Speaker 3: I'm just looking at this is up twenty seven percent
Speaker 3: so far this year, surging into what the Fed said
Speaker 3: was weakness, surging into a downturn that was going to
Speaker 3: disinflate this economy right now, joining us to answer why
Speaker 3: and who is right.
Speaker 2: And who is wrong?
Speaker 3: John Lavallo, US homebuilders analyst at UBS. So I want
Speaker 3: to start John with a question that I keep asking people,
Speaker 3: is anybody are these homebuilders selling to anybody who's paying
Speaker 3: a seven percent mortgage for that home?
Speaker 14: That's the beauty of what's going on right now. No,
Speaker 14: the simple answer is no, if you're buying a home
Speaker 14: from one of these public homebuilders, you're paying six percent.
Speaker 14: You may be paying five and a half percent. And
Speaker 14: so it's a completely game changing dynamic that's going on
Speaker 14: right now.
Speaker 3: So as we look toward forward, about whether that demand
Speaker 3: can continue. Do you see this momentum or do you
Speaker 3: think that it's been overplayed, that perhaps people are not
Speaker 3: seeing what the FED is seeing, which is people aren't
Speaker 3: going to be able to afford it. All of the
Speaker 3: cash buyers came in, those millennials have moved out of
Speaker 3: the basement, and now it's just getting too expensive.
Speaker 14: Lisa, It's a fascinating dynamic that's going on in the
Speaker 14: market right now. What is really occurring is that there
Speaker 14: is zero existing home supply out there, and the homes
Speaker 14: that are out there are old and they are not
Speaker 14: at the right price points, so there's no competition from
Speaker 14: that side of the market. Go to the other side
Speaker 14: of the market, where you have the private homebuilders, which
Speaker 14: are sixty percent of the market. They can't get land,
Speaker 14: they can't get labor, they can't get financing now, and
Speaker 14: so the demand that's out there, and albeit it's less
Speaker 14: demand than it has been over the past couple of years,
Speaker 14: it's all being channeled towards this group of public homebuilders,
Speaker 14: and that's where we're seeing these massive market market share gains.
Speaker 5: Such an important point about the aging of the housing stock,
Speaker 5: the number of units it takes just to replace deteriorated
Speaker 5: homes underappreciated story for sure. You know, I think the
Speaker 5: real question to me is so much about how interest
Speaker 5: rates are crimping demand, but no one talks about how
Speaker 5: interest rates affect supply. And I think the medium mortgage
Speaker 5: rate in the US right now is around three percent.
Speaker 5: Homeowners have about a three percent mortgage rate. So how
Speaker 5: do you deal with those supply shortages? How as a
Speaker 5: home builder, where do you target?
Speaker 2: Is it the.
Speaker 5: Affordable priced homes, is it the expensive high end homes?
Speaker 5: How do you deal with such a big demand and
Speaker 5: such a short supply.
Speaker 14: Well, Melie, you're spot on. I mean the fact that
Speaker 14: most folks have mortgages that are struck at a much
Speaker 14: lower rate than prevailing seven percent rate today. Making that
Speaker 14: swap out into another home, the math gets tricky and
Speaker 14: some more people are sort of locked in place, so
Speaker 14: that supply is not going to loosen up. So as
Speaker 14: a public homebuilder, what we believe is the main place
Speaker 14: to target is this entry level first time buyer where
Speaker 14: really it's a nee based purchase. You're maybe getting married,
Speaker 14: having children, things and life events that necessitate more space,
Speaker 14: and that is where we believe well, that's where the demand,
Speaker 14: the demand currently is, and that's where we believe the
Speaker 14: real kind of tail to this.
Speaker 11: Will be as well.
Speaker 3: Okay, hold on a second, not to push back, but
Speaker 3: to push back. I mean, I'm thinking about people who
Speaker 3: I know who are creating homes and having babies and
Speaker 3: paying off student loans and dealing with jobs where they
Speaker 3: haven't graduated into more senior levels where they're getting paid
Speaker 3: and they cannot afford any of these houses. I don't
Speaker 3: understand where that demand is going to come from unless
Speaker 3: prices come down.
Speaker 14: Well, that's again, what the public builders are doing, is
Speaker 14: they're making that math work for people and how they're
Speaker 14: doing it. We talked about the mortgage rates, right, but
Speaker 14: they're also they're building smaller footprints, they're building a little
Speaker 14: bit further away from city centers. They're offering fewer skews
Speaker 14: for lack of a better term, so they're becoming much
Speaker 14: more efficient where they can actually you know, incentivize folks
Speaker 14: and help them get into homes.
Speaker 2: But do any bank want to give them loans?
Speaker 3: Like, does anyone want to actually extend credit to a
Speaker 3: home builder at a time when people are worried about
Speaker 3: city centers? Having a complete you know, see change with
Speaker 3: office space not being used and given the fact that
Speaker 3: prices are so high.
Speaker 14: At least that's a great point. And that's the beauty
Speaker 14: of it is that the public homebuilders have captive finance arms,
Speaker 14: so they're offering their own their own you know, incentives
Speaker 14: in house, and they have access to the capital markets
Speaker 14: and that's where they're getting the funding.
Speaker 5: Let's let's kind of turn to the labor market a
Speaker 5: little bit. That supports all this housing construction and also
Speaker 5: what we're seeing in terms of changes of work. My
Speaker 5: first question is has remote work changed the geographical footprint
Speaker 5: of homebuilders right now?
Speaker 14: You know, I don't know that it's changed the geographical footprint,
Speaker 14: but it's really played into the geographical footprint. So if
Speaker 14: you think about the public homebuilders, they are all sort
Speaker 14: of in the Sunshine States or the Golden Horseshoe however
Speaker 14: you want to refer to it, and that's where the
Speaker 14: job growth is, that's where migration is trending. And that's
Speaker 14: been you know, that's been the case for a number
Speaker 14: of years. But I think working remotely has sort of
Speaker 14: exacerbated that shift, and we're seeing more folks move into
Speaker 14: the kind of the sun belt, and so it's really
Speaker 14: sort of playing into the hands of the public home.
Speaker 7: Buildings, right.
Speaker 5: And then just the labor shortages that you know, finding
Speaker 5: people to do all this building.
Speaker 2: How extreme is that?
Speaker 5: Right now? What would you like to see in that
Speaker 5: industry to help get more workers onto the work sites.
Speaker 11: Yeah, it's tough.
Speaker 14: It's really tough. Getting labor is one of the biggest
Speaker 14: challenges out there for the home builders. I think that
Speaker 14: that's where size and scale become increasingly important, and again
Speaker 14: the public home builders are well positioned for that. I
Speaker 14: think what is needed is that this is an industry,
Speaker 14: if you think about it, that hasn't changed in one
Speaker 14: hundred years. We're still building a house the same way
Speaker 14: we did stick framing it on site.
Speaker 5: Oh a, I hear.
Speaker 2: It's a good point. Well not yet home they get built.
Speaker 2: This is actually true, right.
Speaker 3: This is the point is that some jobs you cannot
Speaker 3: replace with artificial intelligence.
Speaker 2: I just want to give you a.
Speaker 3: Viewer rights in so, y'all think millennials went from living
Speaker 3: at home with parents to paying for highly overvalued homes
Speaker 3: with all cash real I mean, there is this element
Speaker 3: of are you joking me that this is sort of
Speaker 3: what's going to continue fueling demand, especially at a time
Speaker 3: when in certain of these Sun Belt areas, insurance companies
Speaker 3: are not covering the housing the housing insurance anymore simply
Speaker 3: because of different weather threats and other things, and people
Speaker 3: are starting.
Speaker 2: To migrate back.
Speaker 3: I mean, at what point do you start to see
Speaker 3: a real softening and potentially housing supply coming back online.
Speaker 14: Well, maybe to take the last part of the question first,
Speaker 14: to get housing supply to come back online, I think
Speaker 14: we're going to see interest rates need to come in
Speaker 14: pretty meaningfully, and that you know, that's anyone's guess, you know,
Speaker 14: I think in order to sort of loosen up if
Speaker 14: you're a homeowner that has a four and a half
Speaker 14: percent mortgage, making that swap into seven percents tough, if
Speaker 14: rates come in, maybe that loosens that up. But I think,
Speaker 14: you know, your question on the millennials is a good one.
Speaker 14: What I would say is that millennials are again reaching
Speaker 14: that prime home ownership age of called you know, thirty
Speaker 14: thirty five years old, and they're having life events and
Speaker 14: I know the math is tough, but to the extent
Speaker 14: that they can make things work, and the public home
Speaker 14: builders on their side trying to make it work. I
Speaker 14: think we're still in for a good market.
Speaker 3: I love that having life events sort of, you know,
Speaker 3: having a kid, get married, doing whatever, moving, getting a job.
Speaker 3: Just quickly to follow up on what you said that
Speaker 3: to get supply to come online, you have to see
Speaker 3: interest rates come in meaningfully. You have to see mortgage
Speaker 3: rates come in meaningfully. Does that mean you expect prices
Speaker 3: to fall when interest rates come in?
Speaker 14: There's just no supply out there, right, And so I
Speaker 14: think that's what's really been booing home prices, and we
Speaker 14: don't expect a big decline at home prices. I think
Speaker 14: if you talk to the public home builders, they'll tell
Speaker 14: you that their average selling prices come in about ten
Speaker 14: percent from the peak, but the peak was high. And
Speaker 14: so if you look nationally, home prices are pretty flat
Speaker 14: on a year to date basis, and we don't see
Speaker 14: a big change in that. So it is a tricky
Speaker 14: scenario to make that sort of affordability equation work. And
Speaker 14: again that's why it's so good to be a public
Speaker 14: home builder today when you can offer that financing.
Speaker 3: John the follow of ubs pitching home builders quite clearly,
Speaker 3: thank you so much for being with us. Subscribe to
Speaker 3: the Bloomberg Surveillance Podcast on Apple, Spotify, and anywhere else
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Speaker 2: Thanks for listening. I'm Lisa Abramowitz, and this is Bloomberg.
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Speaker 6: Now.
Speaker 1: Stay tuned for today's edition of Bloomberg Daybreak. It's your
Speaker 1: daily news podcast, delivering today's top stories to your podcast
Speaker 1: feed by six am Eastern. It's all the news you
Speaker 1: need in just fifteen minutes. The Bloomberg Daybreak podcast. It
Speaker 1: starts right now from.
Speaker 15: The Bloomberg Interactive Brokers Studios. This is Bloomberg Day Rank
Speaker 15: for Friday, June sixteenth.
Speaker 16: Coming up today, Stocks around the world are on track
Speaker 16: for their best week since March.
Speaker 15: The Bank of Japan skirts global trends and holds it
Speaker 15: stimulus in place.
Speaker 16: Chinese President she Jenping meets with Microsoft founder Bill.
Speaker 15: Gates, and Adobe is the latest tech company to ride
Speaker 15: the AI rally, the.
Speaker 8: New York command charge, and the stabbing death of another
Speaker 8: subway writer was released without bail, plus deadly tornadoes in Texas, Panandletown.
Speaker 8: I'm Michael Barr.
Speaker 11: Oh Ahead, I'm John.
Speaker 17: Staff, Sharon Sports, Ricky Bawler and xandersshoftlish on sixty teens
Speaker 17: at the US Open.
Speaker 11: The metsos the Cardinals tonight.
Speaker 8: The Yankees are in Boston.
Speaker 18: That's all straight Ahead on Bloomberg Day Break, the business
Speaker 18: news you need to starn your day in just one
Speaker 18: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business.
Speaker 11: App, and everywhere you get your podcasts. Good morning, I'm
Speaker 11: Nathan Hager.
Speaker 15: And I'm Amy Morris. Here are the stories we're following today.
Speaker 16: Stocks enter the final day of this week on a
Speaker 16: winning streak. The S and P five hundred has risen
Speaker 16: for six straight days, and it now tops the forty
Speaker 16: four hundred level. The Dow is up almost twenty percent
Speaker 16: from mid September low, while the Nasdaq one hundred hit
Speaker 16: its highest level since March of twenty twenty two thanks
Speaker 16: to Apple, Nvidia, and Microsoft and e Toro Global market
Speaker 16: strategist Ben Laylor thinks this rally has legs.
Speaker 19: I think the tech rally is completely justified. I mean
Speaker 19: will see the earning value where the earnings growth thumbers
Speaker 19: turning up, whether it's AI, whether it's cost cutting, whether
Speaker 19: it's investors looking for defensive growth. I think this rally
Speaker 19: is increasingly well balanced.
Speaker 16: Ben Ledler and Etro notes global stocks are on track
Speaker 16: for their best week since March, but trading today could
Speaker 16: come with plenty of twists. In turns, we will see
Speaker 16: a massive number of options contracts expire today in what
Speaker 16: is known as quadruple witching.
Speaker 15: And Nathan the Federal Reserve remains largely in focus on
Speaker 15: the heels of this rally, bets that the Central Bank
Speaker 15: will soon end its tightening cycle. Our fueling optimism, we
Speaker 15: make it more clues Today, Saint Louis FED President Jim
Speaker 15: Bullard and FED Governor Chris Wallers speak in Norway. Today,
Speaker 15: Richmond FED President Tom Barkin speaks on inflation at an
Speaker 15: event in Maryland this morning.
Speaker 16: Well, so far, Amy every FED decision in this tightening
Speaker 16: cycle's been unanimous, and now Larry Summers warns diverging views
Speaker 16: that the central Bank could blow it off course. We
Speaker 16: spoke with the former Treasury Secretary for the latest edition
Speaker 16: of Bloomberg Wall Street Week.
Speaker 20: I found the Fed's action a little bit confusing. This
Speaker 20: meeting felt like it was driven as much by the
Speaker 20: internal political dynamics of the FED as by any consistent
Speaker 20: and coherent reading of the economic situation, and that was
Speaker 20: a bit disturbing to me.
Speaker 16: Those comments from Larry Summers come after the FED paused
Speaker 16: rate hikes for the first time in fifteen months. Stay
Speaker 16: tuned for more of that conversation coming up shortly on
Speaker 16: the program.
Speaker 2: Central banks.
Speaker 15: Meanwhile, also in focus in Asia over night, the Bank
Speaker 15: of Japan held its stimulus measures in place. As Bloomberg
Speaker 15: Daybreak anchor Brian Curtis tells us, the BOJ is waiting
Speaker 15: for more sustainable inflation.
Speaker 21: Governor Kazuo, who waded A left, unchanged the boj's negative
Speaker 21: interest rate and yield curve control program. Yen immediately weakened
Speaker 21: against the dollar. Not that there was much doubt to
Speaker 21: any of this, as it was predicted by forty four
Speaker 21: of forty seven economists we surveyed. Governor Huwaita has said
Speaker 21: the cost of prematurely tightening policy could damage Japan's nascent
Speaker 21: inflation trend and he's not willing to risk it. Still,
Speaker 21: speculation rumbles on that a tweak may be coming in July.
Speaker 21: Brian Curtis, Bloomberg Daybreak.
Speaker 18: Thank you, Brian.
Speaker 16: Turning to geopolitics now, Secretary of State Anthony Blincoln remains
Speaker 16: on track to travel to China this weekend. The nation's
Speaker 16: top diplomat will be in Beijing Sunday. He'll speak with
Speaker 16: several top Chinese officials during his two day visit, including
Speaker 16: a possible meeting with China's President she Jinping.
Speaker 15: Meantime, President she has already met with another big name.
Speaker 15: Microsoft founder Bill Gates sat down with China's president in Beijing.
Speaker 15: She told the billionaire that China is willing to work
Speaker 15: with the world on technology innovation and pandemic prevention.
Speaker 16: Loimi Henry Kissinger is weighing in on geopolitics tied to China,
Speaker 16: The former Secretary of State says a military conflict over
Speaker 16: Taiwan is probable. That's if the current trajectory remains unchanged.
Speaker 16: The one hundred year old diplomat sat down for a
Speaker 16: wide ranging conversation with Bloomberg's editor in chief John Micklfwaite on.
Speaker 22: The current prajictary of religions. I think some military conflict
Speaker 22: is probable, but I also think the current trajectory of
Speaker 22: religion must be alded.
Speaker 16: You can hear the full conversation with former Secretary of
Speaker 16: State Henry Kissinger on Bloomberg Television. We'll have it for
Speaker 16: you tonight at eight pm Eastern. Listen on demand on
Speaker 16: the Bloomberg Talks podcast. You can find that at Apple, Spotify,
Speaker 16: and anywhere else you get your podcasts.
Speaker 15: Turning back to the markets, now, we're seeing shares of
Speaker 15: Adobe gaining this morning. They're up more than three percent
Speaker 15: in early trading. The company is raising its full year
Speaker 15: outlook on optimism that artificial intelligence will spur software demand.
Speaker 15: We get those details from Bloomberg's Charlie Pellett.
Speaker 11: Adobe is the longtime top seller of software for creative professionals.
Speaker 11: It is adding generative AI features throughout its products. Last week,
Speaker 11: the company unveiled enterprise level subscriptions for the new tools,
Speaker 11: which include legal assurance against copyright claims. In New York.
Speaker 11: Charlie Pellett Bloomberg Daybreak.
Speaker 16: All right, Charlie, thanks, we have news on Bank of
Speaker 16: America this morning. We're told the firm's commercial banking unit
Speaker 16: is seeing a surge in new clients.
Speaker 11: In Bloomberg's Doug Krisner has that story.
Speaker 12: It follows the failure of several regional banks in the
Speaker 12: US during March. Biave says its commercial banking unit had
Speaker 12: an increase of fifty five percent in new clients in
Speaker 12: the month of May compared to last year, and the
Speaker 12: momentum is expected to continue. Bank of America saying the
Speaker 12: unit is on track to report fifty percent growth in
Speaker 12: customer editions for all of twenty twenty three. That would
Speaker 12: be up from thirty five percent in new relationships last year,
Speaker 12: and as a result, Bank of America is planning to
Speaker 12: bulk up staffing to keep up with demand. This will
Speaker 12: include hiring senior bankers from outside firms in New York.
Speaker 12: I'm Doug Prisner, Bloomberg Daybreak.
Speaker 2: Thank you, Doug Walt.
Speaker 15: Disney losing a top executive, the company's chief financial officer
Speaker 15: taking a family medical leave of absence, stepping down from
Speaker 15: a role as the war at the world's largest entertainment company.
Speaker 15: Disney says Christine McCarthy will be replaced on an interim
Speaker 15: basis by Kevin Lansbury, the CFO of Disney's Theme Parks Division.
Speaker 2: And this is Bloomberg.
Speaker 16: Time now to take a look at some of the
Speaker 16: other stories making news in New York and around the
Speaker 16: world with Bloomberg's Michael Varr.
Speaker 11: Good morning, Michael, Good Morning.
Speaker 8: Nathan, a twenty year old man accused in Tuesday's deadly
Speaker 8: subway stabbing of a passenger in Brooklyn, was released without bail.
Speaker 8: Jordan Williams was charged with manslaughter and criminal possession of
Speaker 8: a weapon and the death of a homeless man, thirty
Speaker 8: six year old Victor Wade Rogo. Witnesses Rogo was harassing
Speaker 8: subway riders and at one point punched William's girlfriend before
Speaker 8: the deadly stabbing. William's attorney, Jason Goldman, told ABC seven,
Speaker 8: it is a clear case of self defense.
Speaker 11: You have two choices right now.
Speaker 23: You can sit there and get assaulted and your friends
Speaker 23: or family or loved ones can get assaulted and seriously injured.
Speaker 23: Or you can fight back and get arrested and maybe
Speaker 23: get charged, Maybe you go to rikers, maybe get released.
Speaker 23: So you know, what are you supposed to do.
Speaker 8: William's mother says that her son cares about life and
Speaker 8: is extremely remorseful a deadly outbreak of severe weather. At
Speaker 8: least three people are dead and more than one hundred
Speaker 8: injured in the Texas panhandled town of Perryton, a mobile
Speaker 8: home park took a direct hint. Perrington Fire Chief Paul.
Speaker 23: Dutcher searching these areas, searching the briefield see making sure
Speaker 23: we've got people gathered up.
Speaker 8: Tornadoes were also reported from Oklahoma to Michigan. At least
Speaker 8: fifteen people were killed and ten others were hurt after
Speaker 8: a bus carrying more than two dozen people crashed into
Speaker 8: a semi truck in Manitoba, Canada. Authorities say the bus
Speaker 8: crossed the westbound lanes of Highway One and was crossing
Speaker 8: the eastbound lanes when it collided with the semi. As
Speaker 8: drama continues with Republicans in the House, the country is
Speaker 8: potentially headed for another showdown on government funding in October.
Speaker 8: Bloomberg's Aaed Baxter reports.
Speaker 24: Even though a bi partisan bill raised the deat ceiling
Speaker 24: while cutting spending passed earlier this month, this is another
Speaker 24: battle of funding, another round. Senator Lindsey Graham says not
Speaker 24: looking good.
Speaker 11: The chance of passing all the appropriation bills.
Speaker 12: For the House and centergree on numbers almost zero.
Speaker 24: Graham says, there is a big divide between the two
Speaker 24: chambers of the legislature in San Francisco. I'm at Baxter
Speaker 24: Bloomberg Daybreak.
Speaker 8: The Supreme Court, in a seven to two decision upheld
Speaker 8: a landmark law giving Native American families priority in the
Speaker 8: adoption of Native children. A white Texas couple had challenged
Speaker 8: the law as discriminatory on the basis of race. Global
Speaker 8: News twenty four hours a day, powered by more than
Speaker 8: twenty seven hundred journalists nantilists in over one hundred twenty countries.
Speaker 8: How Michael Barr, this is Bloomberg, Nathan.
Speaker 16: Thank you, Michael. Time now for the Bloomberg Sports Update.
Speaker 16: Bronte by Tri State out he Good morning, John Stashwer.
Speaker 11: Good morning, Nathan.
Speaker 17: US Open courses are traditionally known to be extremely challenging,
Speaker 17: even for the best golfers of the world. Not really.
Speaker 17: The case of the La Country Club, ideal conditions led
Speaker 17: to two historic rounds of sixty two Ricky Fowler and
Speaker 17: Xander Shoffley. There had only been one sixty two ever
Speaker 17: in any major. Brandon Grace six years ago at the
Speaker 17: PGA Shofley was bogey free. Fowler set a record with
Speaker 17: ten verdies. He made five birdie putts of more than
Speaker 17: ten feet.
Speaker 25: I didn't really know or see any scores, and then
Speaker 25: I saw that Xander was at seven at that point.
Speaker 25: Sure if he even knew where I was or anything,
Speaker 25: but it was kind of cool to to see if
Speaker 25: he did see he you know, kind of latched on
Speaker 25: and we were, you know, taking off of it.
Speaker 17: Both Fowler and Shoffley have been chasing their first career
Speaker 17: Major victory after numerous close calls. Although Fowler had been
Speaker 17: in a deep slump the last two years, he had
Speaker 17: not even qualified to play the Open. Dustin Johnson in
Speaker 17: twenty sixteen Open winner only two shots behind the co
Speaker 17: leaders and Rory McElroy, whose only Open victory was twelve
Speaker 17: years ago, trails by three round two. Today, the public
Speaker 17: money to help build a new stadium in Las Vegas
Speaker 17: and the Oakland A's now a done deal. It still
Speaker 17: needs the approval of the owners, but Baseball comventioner Rob
Speaker 17: Manford said he feels sorry for A's fans whether there
Speaker 17: was no community sports to keep the team in Oakland.
Speaker 17: Yankees and the Red Sox s Night at Fenway, Yanks
Speaker 17: first visit to Boston, Mets host the Cardinals, who are
Speaker 17: fifteen games under five hundred. Homer Jones has passed away
Speaker 17: a speedy Giants receiver in the late nineteen sixties, and
Speaker 17: after a touchdown, Jones made history becoming the first to
Speaker 17: then spike the ball. Homer Jones was eighty two. John
Speaker 17: Stashedward Bloomberg's.
Speaker 10: Wort from coast to coast, from New York to San Francisco,
Speaker 10: Boston to Washington, DC, nationwide on SYRIASXAM, the Bloomberg Business app,
Speaker 10: and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning,
Speaker 10: I'm Nathan Hager. It has been quite the week on
Speaker 10: Wall Street. We are coming off six straight winning sessions
Speaker 10: for stocks. We saw mixed US inflation report. Headline prices
Speaker 10: cooled while core inflation rose. Traders saw that as dubvish,
Speaker 10: and finally we got a pause in rate hikes from
Speaker 10: the Federal Reserve, the first time they did not raise
Speaker 10: rates in fifteen months. Let's take stock of it all
Speaker 10: now with Larry Summers, the Bloomberg News contributor and former
Speaker 10: US Treasury Secretary, sat down for a conversation with Bloomberg's
Speaker 10: Romain Bomstick. Let's listen in to part of that right.
Speaker 26: Now, Larry, let's talk about the FED meeting more importantly.
Speaker 26: That FED pause not necessarily a surprise, but do you
Speaker 26: think it was appropriate?
Speaker 11: I'm not sure.
Speaker 20: I found the Fed's action a little bit confusing. I
Speaker 20: understand the arguments for not hiking at this meeting, but
Speaker 20: those arguments wouldn't point towards signaling to further rate increases.
Speaker 20: They wouldn't point towards significantly revising the forecast towards a
Speaker 20: stronger economy and more inflation. I understand the arguments for
Speaker 20: having gone the other way, but I don't really understand
Speaker 20: the internal consistency of an approach of pausing at this
Speaker 20: meeting but then signaling to further rate hikes down the road,
Speaker 20: and signaling that they no longer expect unemployment to increase
Speaker 20: nearly as much as they used to expect it. So
Speaker 20: this meeting felt like it was driven as much by
Speaker 20: the internal political dynamics of the FED as by any
Speaker 20: consistency and cohar and reading of the economic situation, and
Speaker 20: that was a bit disturbing.
Speaker 26: They raised some of their economic projections or at least
Speaker 26: they improved a little bit here, but you still have
Speaker 26: a market that seems to be betting on this idea
Speaker 26: of a recession, the idea that the FED itself may
Speaker 26: have actually overtightened, or at least is on its way
Speaker 26: to doing.
Speaker 20: That, That would not be my best guess. I think
Speaker 20: it's very hard to read. But my best guess is
Speaker 20: that the consumer, which is seventy percent of the economy,
Speaker 20: appears to be running really quite strong at this point.
Speaker 20: We've got very strong employment data, much faster.
Speaker 11: Than population growth.
Speaker 20: The indicators on wages are a bit mixed, but the
Speaker 20: ones that seem most reliable to me that adjusts for
Speaker 20: changes in the composition of the labor force, are showing
Speaker 20: substantial strength. So I don't see the idea that we've
Speaker 20: got a durable reduction in inflation clearly established, nor do
Speaker 20: I see clear evidence of a slowing coming. So in
Speaker 20: that context, I think the Fed has probably got to
Speaker 20: maintain a posture of moving towards restraint. But I think
Speaker 20: that they ought to decide what their balancing of risks is,
Speaker 20: and I was struck that the balancing of risks that
Speaker 20: was implicit in not moving this time was kind of
Speaker 20: inconsistent with the balancing of risks that was signaled by
Speaker 20: the two tightenings and by the forecast revisions.
Speaker 26: I want to go overseas to China. They had a
Speaker 26: much different policy meeting coming out of the People's Bank
Speaker 26: of China cut And there's been a lot of discussion
Speaker 26: here Larry about the health of the Chinese economy and
Speaker 26: light of the data we've gotten and a lot of
Speaker 26: some of the reports by Bloomberg and others that they
Speaker 26: are considering fiscal or at least some sort of economic
Speaker 26: stimulus measures to get that economy going back again.
Speaker 20: I think the Chinese have a very difficult set of
Speaker 20: challenges ahead of them. They're very serious financial overhangs coming
Speaker 20: out of what's happening in real estate. I take a
Speaker 20: somewhat more medium term view of it. And what's an
Speaker 20: economy about. Economy is about people and it's about capital.
Speaker 20: And what we know is that the number of births
Speaker 20: in China has fallen by almost fifty percent in the
Speaker 20: last six years, and we know that Bloomberg reported that
Speaker 20: the number of millionaires leaving China was kind of high,
Speaker 20: high by historical standards and high by global standards. So
Speaker 20: whether it's a supply of people investment in new capital,
Speaker 20: I think you've got some fundamental bets that aren't running
Speaker 20: that positive.
Speaker 27: This is Bloomberg Daybreak Today, your morning brief on the
Speaker 27: story's making news from Wall Street to Washington and beyond.
Speaker 15: Look for us on your podcast feed by six am
Speaker 15: Eastern each morning, on Apple, Spotify, and anywhere else you
Speaker 15: get your podcasts.
Speaker 27: You can also listen live each morning starting at five
Speaker 27: am Wall Street time on Bloomberg eleven three to zero
Speaker 27: in New York, Bloomberg ninety nine to one in Washington,
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Speaker 27: ninety sixty in San Francisco.
Speaker 15: Our flagship New York station is also available on your
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Speaker 27: Plus listen coast to coast on the Bloomberg Business This app,
Speaker 27: serious XM Channel one nineteen, the iHeartRadio app, and on.
Speaker 11: Bloomberg dot Com. I'm Nathan Hager and I'm Amy Morris.
Speaker 15: Join us again tomorrow morning for all the news you
Speaker 15: need to start your day right here on Bloomberg Daybreak