1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,760 Speaker 1: us live on YouTube, joining. 6 00:00:27,480 --> 00:00:31,240 Speaker 2: Us, Savanda Schlitz and Paps Blue Ribbon. Jim Bianco, I 7 00:00:31,240 --> 00:00:33,239 Speaker 2: believe is with us all right now? Rich, do we 8 00:00:33,280 --> 00:00:36,320 Speaker 2: have mister Bianco? Okay, we do, Thank you Rich Truman 9 00:00:36,400 --> 00:00:40,919 Speaker 2: for that. This morning, Jim Bianco is nailed the sticky 10 00:00:41,080 --> 00:00:45,479 Speaker 2: inflation call. We get an update, Jim, like good news 11 00:00:45,479 --> 00:00:49,000 Speaker 2: this morning. Futures up twenty five. We're getting knocked around 12 00:00:49,080 --> 00:00:54,000 Speaker 2: here in immense emotional volatility. What does the Bianco view 13 00:00:54,160 --> 00:00:54,880 Speaker 2: on inflation? 14 00:00:56,400 --> 00:00:59,520 Speaker 3: That it's still sticky and that you're staring the sea 15 00:00:59,600 --> 00:01:02,800 Speaker 3: signs that even people are starting to become nervous about it. 16 00:01:02,880 --> 00:01:07,520 Speaker 3: The surveys like Michigan and the Conference Board are showing 17 00:01:07,520 --> 00:01:10,640 Speaker 3: that people are expecting even higher levels of inflation. The 18 00:01:10,720 --> 00:01:13,840 Speaker 3: FED might call that being a bit unanchored. And I 19 00:01:13,880 --> 00:01:15,959 Speaker 3: think that it's going to, you know, stay with us 20 00:01:16,000 --> 00:01:18,120 Speaker 3: and be a problem now now that they've said that 21 00:01:18,600 --> 00:01:21,440 Speaker 3: it's a three percent three and a half percent problem. 22 00:01:21,480 --> 00:01:24,480 Speaker 3: It is not an eight ten or Zimbabwe problem, but 23 00:01:24,600 --> 00:01:26,880 Speaker 3: even still a three three and a half percent problem 24 00:01:27,000 --> 00:01:29,840 Speaker 3: means that interest rates, even though the bond market is 25 00:01:29,920 --> 00:01:33,360 Speaker 3: rallied down the four point three, you know, we don't 26 00:01:33,360 --> 00:01:35,600 Speaker 3: have a whole lot more on the downside to go 27 00:01:35,680 --> 00:01:37,640 Speaker 3: if we've got such that kind of sticky inflation. 28 00:01:37,959 --> 00:01:41,479 Speaker 2: How will the FED adapt to our new I love 29 00:01:41,520 --> 00:01:46,720 Speaker 2: this phrase fiscal space. How does the FED adapt to 30 00:01:47,160 --> 00:01:51,480 Speaker 2: you know, forget about the legislation overnight and the ramifications 31 00:01:51,520 --> 00:01:54,240 Speaker 2: of X numbers of zillions of dollars a debt added 32 00:01:54,280 --> 00:01:57,760 Speaker 2: on where we are now, how do they adapt to 33 00:01:57,800 --> 00:01:59,720 Speaker 2: our fiscal policy? 34 00:02:00,040 --> 00:02:02,400 Speaker 3: Well, I'll answer the question by saying I hope they adapt, 35 00:02:02,480 --> 00:02:05,480 Speaker 3: because their attitude right now has been what we have 36 00:02:05,560 --> 00:02:07,200 Speaker 3: to wait and see, and we have to sit on 37 00:02:07,240 --> 00:02:09,880 Speaker 3: our hands and see what happens with tariffs, and see 38 00:02:09,919 --> 00:02:13,520 Speaker 3: what happens with the budget and then kind of assess 39 00:02:13,560 --> 00:02:16,120 Speaker 3: it from there. And that's why the market doesn't expect 40 00:02:16,120 --> 00:02:19,839 Speaker 3: the FED to move until June at the earliest. At 41 00:02:19,840 --> 00:02:22,560 Speaker 3: this point, so I think the FED is going to 42 00:02:22,639 --> 00:02:26,160 Speaker 3: have to learn to adjust that there is a plan 43 00:02:26,360 --> 00:02:29,480 Speaker 3: out there. By this administration, And it isn't just a 44 00:02:29,520 --> 00:02:33,280 Speaker 3: bunch of disconnected things like you know, tariffs or a 45 00:02:33,400 --> 00:02:37,080 Speaker 3: sovereign wealth fund or demanding that Europe pay for it 46 00:02:37,200 --> 00:02:40,360 Speaker 3: more security so that we could relieve our own defense budget. 47 00:02:40,919 --> 00:02:43,600 Speaker 3: It's what I've been talking about for the last couple 48 00:02:43,639 --> 00:02:46,160 Speaker 3: of weeks. It's the mar Alago Plan. That is the plan, 49 00:02:46,520 --> 00:02:49,960 Speaker 3: and we're getting all the phases of that plan. And 50 00:02:50,000 --> 00:02:52,160 Speaker 3: the idea is to lower the value of the dollar, 51 00:02:52,600 --> 00:02:55,000 Speaker 3: is to bring the US into a more competitive position, 52 00:02:55,520 --> 00:02:57,680 Speaker 3: is to relieve us of the debt burden and bring 53 00:02:57,720 --> 00:03:00,480 Speaker 3: down interest rates. But right now the Fed seems to 54 00:03:00,480 --> 00:03:02,919 Speaker 3: think like there's kind of three random things that are 55 00:03:02,919 --> 00:03:06,040 Speaker 3: happening side by side and hasn't put that together. Once 56 00:03:06,080 --> 00:03:08,520 Speaker 3: they do, hopefully they'll understand the plan. 57 00:03:09,760 --> 00:03:12,880 Speaker 4: So it's interesting. Jim Torston slockover to Apollo's out with 58 00:03:12,880 --> 00:03:14,760 Speaker 4: a note this morning and just kind of talking about 59 00:03:14,760 --> 00:03:21,040 Speaker 4: the reverse of globalization. He calls it segmentations and talking 60 00:03:21,040 --> 00:03:25,560 Speaker 4: about how that puts structural upper pressure on inflation, goods, 61 00:03:25,680 --> 00:03:29,400 Speaker 4: inflation in labor, keeping interest rate structurally higher for longer. 62 00:03:30,760 --> 00:03:32,720 Speaker 4: How do you think about that? Is that something that 63 00:03:32,720 --> 00:03:34,960 Speaker 4: can be a real headwind for global economy. 64 00:03:36,000 --> 00:03:38,560 Speaker 3: Oh, I think it is a headwind for the global economy, 65 00:03:38,600 --> 00:03:41,640 Speaker 3: and it will be for both that and inflation. Torston's 66 00:03:41,680 --> 00:03:43,960 Speaker 3: right about that. It will put upward pressure on inflation. 67 00:03:44,040 --> 00:03:46,960 Speaker 3: And if you look at the global economy, especially if 68 00:03:46,960 --> 00:03:49,400 Speaker 3: you look at the European economy, they're not doing very 69 00:03:49,440 --> 00:03:53,000 Speaker 3: well right now. The Chinese economy is not doing well 70 00:03:53,040 --> 00:03:56,360 Speaker 3: at all right now. Though the bright spot in the 71 00:03:56,400 --> 00:03:59,440 Speaker 3: globe is United States, at least at the top line, 72 00:03:59,520 --> 00:04:02,120 Speaker 3: the state's economy is stronger than most of the other 73 00:04:02,200 --> 00:04:06,440 Speaker 3: developed countries and it continues to do well. But that segmentation, 74 00:04:06,640 --> 00:04:09,920 Speaker 3: or that deglobalization as it was called before, that that's 75 00:04:09,960 --> 00:04:12,920 Speaker 3: been underway now pretty much since the financial crisis and 76 00:04:13,000 --> 00:04:16,200 Speaker 3: got accelerated post COVID, and I suspect we're going to 77 00:04:16,279 --> 00:04:20,400 Speaker 3: continue to see that happen. That's the impetus behind tariffs. 78 00:04:20,440 --> 00:04:23,640 Speaker 3: And why President Trump keeps talking about we have unfair 79 00:04:23,680 --> 00:04:26,080 Speaker 3: deals is that he's trying to correct that. But that 80 00:04:26,120 --> 00:04:27,640 Speaker 3: means we're going to see more segmentation. 81 00:04:27,880 --> 00:04:30,640 Speaker 2: Jim Mianco, We've had a series of conversations. If you're 82 00:04:30,680 --> 00:04:33,200 Speaker 2: just joining us, James Bianco with us from Chicago, threat 83 00:04:33,200 --> 00:04:36,479 Speaker 2: he could be with Us with Jim Bianco Research. Jim, 84 00:04:36,480 --> 00:04:39,640 Speaker 2: I I look at the last couple of days of 85 00:04:39,720 --> 00:04:42,720 Speaker 2: conversations and a lot of people are yeah, yeah, but 86 00:04:43,080 --> 00:04:46,240 Speaker 2: we're cautious and it's the politics and all that. A 87 00:04:46,279 --> 00:04:50,520 Speaker 2: headline out three minutes ago Elon Musk will attend Trump 88 00:04:50,640 --> 00:04:55,120 Speaker 2: Cabinet meeting today that according to Fox News Jim Bianco, 89 00:04:55,320 --> 00:04:58,400 Speaker 2: how do you participate in the market, in the stock 90 00:04:58,520 --> 00:05:02,240 Speaker 2: market given the slow we're all having right now? 91 00:05:03,640 --> 00:05:06,440 Speaker 3: Well, that is the thing you want to definitely get yourself, 92 00:05:06,480 --> 00:05:10,160 Speaker 3: you know, away from, is getting bogged down into all 93 00:05:10,200 --> 00:05:13,760 Speaker 3: of these situations, whether you know there's this or that 94 00:05:13,760 --> 00:05:15,640 Speaker 3: that's happening, or even the mar A Lago cord. I 95 00:05:15,680 --> 00:05:18,839 Speaker 3: think you'd want to take a longer term perspective and 96 00:05:19,040 --> 00:05:21,800 Speaker 3: to decide what you like what you don't like. Now, 97 00:05:22,000 --> 00:05:24,359 Speaker 3: not that I've said that, I'll give a note of caution. 98 00:05:25,000 --> 00:05:27,480 Speaker 3: The other problem that the stock market has, while I 99 00:05:27,520 --> 00:05:31,200 Speaker 3: think it's having indigestion more than anything else, is we 100 00:05:31,279 --> 00:05:34,640 Speaker 3: started the year with very high valuations in the market, 101 00:05:34,720 --> 00:05:38,880 Speaker 3: and the Max seven stocks had extremely high valuations. They 102 00:05:38,920 --> 00:05:41,040 Speaker 3: need everything to go right. When you have those kind 103 00:05:41,120 --> 00:05:44,200 Speaker 3: of valuations, you know, to put it into you know, 104 00:05:44,360 --> 00:05:47,599 Speaker 3: in baseball terms, you need to score eight runs, and 105 00:05:47,640 --> 00:05:50,680 Speaker 3: if you score six runs, that's not enough, even though 106 00:05:50,720 --> 00:05:54,040 Speaker 3: six runs sounds like a lot, because that's the problem when. 107 00:05:53,880 --> 00:05:54,919 Speaker 2: You have high valuation. 108 00:05:55,480 --> 00:05:58,640 Speaker 3: And that, I think is why we're starting to see 109 00:05:58,680 --> 00:06:01,800 Speaker 3: people be more cautious more than anything else, is those 110 00:06:01,880 --> 00:06:04,800 Speaker 3: type of issues, and it gets kind of wrapped up 111 00:06:04,839 --> 00:06:06,360 Speaker 3: into you know, the news flow of the day. 112 00:06:06,960 --> 00:06:09,160 Speaker 4: Jim, we're about ninety percent of the way through the 113 00:06:09,320 --> 00:06:12,640 Speaker 4: SP five hundred reporting season here obviously, and Video big, big, 114 00:06:12,680 --> 00:06:14,760 Speaker 4: big name after the close. What have you learned from 115 00:06:14,760 --> 00:06:15,239 Speaker 4: the earnings? 116 00:06:16,320 --> 00:06:18,440 Speaker 3: Yeah, and Video's the biggest name. But the earnings numbers 117 00:06:18,480 --> 00:06:21,880 Speaker 3: have looked great so far. The year over year earnings 118 00:06:21,920 --> 00:06:23,760 Speaker 3: numbers for the fourth quarter to fourth quarter for the 119 00:06:23,800 --> 00:06:25,520 Speaker 3: S and P five hundred is running around twelve or 120 00:06:25,600 --> 00:06:29,800 Speaker 3: thirteen percent. That's been a very good number. Even sales, 121 00:06:30,279 --> 00:06:33,719 Speaker 3: which is kind of an analogous to nominal GDP because 122 00:06:33,720 --> 00:06:36,479 Speaker 3: they're like trillions of dollars of sales is five and 123 00:06:36,520 --> 00:06:39,520 Speaker 3: a half percent, and so these numbers have been looking 124 00:06:39,600 --> 00:06:42,440 Speaker 3: very good. Now that I've said that, remember that those 125 00:06:42,480 --> 00:06:44,599 Speaker 3: are the numbers they report it. They don't have much 126 00:06:44,880 --> 00:06:48,479 Speaker 3: forward guidance. But even the companies are offering guidance that 127 00:06:48,600 --> 00:06:51,919 Speaker 3: is somewhat positive right now, So that is that is 128 00:06:51,920 --> 00:06:54,159 Speaker 3: a good thing, but that is also running into that 129 00:06:54,240 --> 00:06:57,200 Speaker 3: high valuation thing. So even though those numbers might be good, 130 00:06:57,200 --> 00:06:58,320 Speaker 3: they might not be good enough. 131 00:06:58,560 --> 00:07:02,040 Speaker 2: Jim way too early from Simiaco. Thank you so much 132 00:07:02,520 --> 00:07:03,240 Speaker 2: for joining us. 133 00:07:08,120 --> 00:07:11,680 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 134 00:07:11,760 --> 00:07:14,960 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 135 00:07:15,000 --> 00:07:18,680 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 136 00:07:18,800 --> 00:07:20,320 Speaker 1: watch us live on YouTube. 137 00:07:20,680 --> 00:07:23,680 Speaker 2: Shassuma Couladi out of New Mexico with all sorts of 138 00:07:23,760 --> 00:07:28,880 Speaker 2: other attributes at I Capital, the woman who absolutely nailed 139 00:07:29,160 --> 00:07:32,240 Speaker 2: the bolt market. We protect the copyright of our guests. 140 00:07:32,640 --> 00:07:35,920 Speaker 2: Get anastasia amorrosis note from my Capital. You're not going 141 00:07:35,960 --> 00:07:39,200 Speaker 2: to get it from us. And once again you mince 142 00:07:39,520 --> 00:07:44,120 Speaker 2: no words. You just say this is transitory. Why is 143 00:07:44,160 --> 00:07:45,600 Speaker 2: the gloom crew wrong? 144 00:07:46,400 --> 00:07:49,320 Speaker 5: Well, I think the gloom crew has been looking for 145 00:07:49,360 --> 00:07:51,600 Speaker 5: an excuse to do you risk and they've been hanging 146 00:07:51,600 --> 00:07:55,080 Speaker 5: onto this narrative of a growth scare. But Tom, let's 147 00:07:55,160 --> 00:07:57,560 Speaker 5: unpack the growth scare and the inflation scare that we 148 00:07:57,800 --> 00:08:00,600 Speaker 5: had in the last couple of weeks, and growth scare 149 00:08:00,600 --> 00:08:04,000 Speaker 5: has been due to soft data or surveys or consumer 150 00:08:04,080 --> 00:08:08,360 Speaker 5: confidence slumping to you know, significantly lower levels. But guess what, 151 00:08:08,440 --> 00:08:11,320 Speaker 5: Consumers have been gloomy for some time. In fact, for 152 00:08:11,360 --> 00:08:13,240 Speaker 5: the last two or three years, we've been in this 153 00:08:13,360 --> 00:08:16,800 Speaker 5: broad range of depressed consumer confidence. But has that actually 154 00:08:16,840 --> 00:08:20,080 Speaker 5: stopped the US economy has spent. Has that stopped that 155 00:08:20,160 --> 00:08:23,280 Speaker 5: same consumer from spending? Not really. And then the other 156 00:08:23,360 --> 00:08:28,000 Speaker 5: thing that the gloom crew has worried about is inflation 157 00:08:28,120 --> 00:08:30,840 Speaker 5: and the inflation expectations popping from five point two percent 158 00:08:30,880 --> 00:08:34,000 Speaker 5: to six percent in the latest consumer confidence survey. Well, 159 00:08:34,280 --> 00:08:36,080 Speaker 5: maybe it's the price of eggs, maybe it's the fear 160 00:08:36,120 --> 00:08:38,960 Speaker 5: of tariffs, But we don't have six percent inflation. We're 161 00:08:39,080 --> 00:08:41,480 Speaker 5: likely to have two point six percent year of year 162 00:08:41,600 --> 00:08:45,199 Speaker 5: core PC inflation reported this Friday. So I think the 163 00:08:45,200 --> 00:08:48,439 Speaker 5: softness of economic data is an excuse. What's really happening 164 00:08:48,480 --> 00:08:51,559 Speaker 5: is the technicals, it's the sentiment, it's the retail trader 165 00:08:51,640 --> 00:08:54,760 Speaker 5: is really stepping back. But that is a process time 166 00:08:54,760 --> 00:08:56,760 Speaker 5: and that's why I say it's transtory. It doesn't last, 167 00:08:56,920 --> 00:08:59,880 Speaker 5: it doesn't fundamentally change the outlook, it doesn't last forever. 168 00:09:00,200 --> 00:09:02,199 Speaker 5: And I actually think we didn't just have a three 169 00:09:02,200 --> 00:09:04,840 Speaker 5: percent pullback in the SMP. We had a median thirteen 170 00:09:04,880 --> 00:09:07,439 Speaker 5: percent pullback in a stock in the SMP. So I 171 00:09:07,480 --> 00:09:10,760 Speaker 5: think we're getting closer to the finish line of this 172 00:09:10,840 --> 00:09:12,640 Speaker 5: pullback earnings. 173 00:09:12,640 --> 00:09:15,120 Speaker 4: We're ninety percent away through the earning cycle here. What 174 00:09:15,200 --> 00:09:16,880 Speaker 4: have you taken away? What have you learned from some 175 00:09:16,920 --> 00:09:19,160 Speaker 4: of the guidance that we've heard from corporate America. 176 00:09:19,280 --> 00:09:22,760 Speaker 5: Yeah, I think generally speaking, corporate America is still optimistic, 177 00:09:22,800 --> 00:09:25,840 Speaker 5: but there's certainly some uncertainty and there's some reservations about 178 00:09:26,040 --> 00:09:28,559 Speaker 5: what's going to happen with tariffs. And you know, look, 179 00:09:28,600 --> 00:09:31,640 Speaker 5: if you look at earnings revisions, they have actually been 180 00:09:31,679 --> 00:09:34,199 Speaker 5: trending lower in the United States, which by the way, 181 00:09:34,240 --> 00:09:36,440 Speaker 5: is in contrast to Europe, it's in contrast to Japan. 182 00:09:36,920 --> 00:09:39,160 Speaker 5: And the reason for that is, you know, we're expecting 183 00:09:39,160 --> 00:09:41,720 Speaker 5: thirteen percent earnings growth this year, but now we have 184 00:09:41,800 --> 00:09:43,600 Speaker 5: to shave off a little bit because we have a 185 00:09:43,640 --> 00:09:45,839 Speaker 5: dollar strength. Then we have to maybe shave off a 186 00:09:45,880 --> 00:09:48,720 Speaker 5: little bit more because we have tariffs and reciprocal tariffs. 187 00:09:48,920 --> 00:09:51,640 Speaker 5: So you know, because of that, the sentiment perhaps was 188 00:09:51,720 --> 00:09:55,040 Speaker 5: not as buoyant as it would have been otherwise, but 189 00:09:55,400 --> 00:09:58,520 Speaker 5: it does not erase the thirteen percent earnings growth we expect. 190 00:09:58,720 --> 00:10:02,040 Speaker 4: Are there sectors that screen well for you right now? 191 00:10:02,760 --> 00:10:05,080 Speaker 5: Well, first of all, I actually think you have to 192 00:10:05,160 --> 00:10:07,600 Speaker 5: stick with what's working right now, and the core core 193 00:10:07,640 --> 00:10:10,720 Speaker 5: theme in the market is actually artificial intelligence. You know, 194 00:10:10,800 --> 00:10:14,160 Speaker 5: I love the fact that in Vision videos today a 195 00:10:14,200 --> 00:10:16,480 Speaker 5: little bit and a little bit along with the sixty 196 00:10:16,520 --> 00:10:19,280 Speaker 5: other analysts that are covering the name. But but look, 197 00:10:19,320 --> 00:10:22,120 Speaker 5: you know, in Vidia gets the last word on what's 198 00:10:22,160 --> 00:10:24,760 Speaker 5: happening with the momentum and artificial intelligence, and I think 199 00:10:24,800 --> 00:10:28,200 Speaker 5: what we've heard from others is already pretty constructive, whether 200 00:10:28,240 --> 00:10:30,360 Speaker 5: it's Meta, whether it's Amazon, whether it's others that are 201 00:10:30,400 --> 00:10:33,120 Speaker 5: continuing to spend on AI, cap BAX and you know, 202 00:10:33,240 --> 00:10:36,240 Speaker 5: to me, the key takeaway from deep Seek actually is 203 00:10:36,720 --> 00:10:38,960 Speaker 5: not that we're not going to need as many chips, 204 00:10:39,000 --> 00:10:42,040 Speaker 5: but it's the fact that more people can skip the 205 00:10:42,120 --> 00:10:45,120 Speaker 5: training phase and actually go to the inference phase. And 206 00:10:45,200 --> 00:10:47,200 Speaker 5: so for that, guess what they're going to need a 207 00:10:47,200 --> 00:10:50,000 Speaker 5: whole lot more semiconductor content. So I think you stick 208 00:10:50,080 --> 00:10:52,760 Speaker 5: with that, and after the pullback that we've had, we've 209 00:10:52,800 --> 00:10:56,360 Speaker 5: actually had, we're nearing some oversold conditions in some of 210 00:10:56,400 --> 00:11:00,560 Speaker 5: the AI software stocks, specifically AI semiconductors. I'm looking at 211 00:11:00,559 --> 00:11:01,000 Speaker 5: that thing still. 212 00:11:01,120 --> 00:11:03,200 Speaker 2: If you're joining us right now on your commune across 213 00:11:03,200 --> 00:11:05,480 Speaker 2: the nation, good morning on Apple CarPlay androd out a 214 00:11:05,559 --> 00:11:09,920 Speaker 2: good morning ninety to nine FM in Boston. Thank you 215 00:11:09,960 --> 00:11:13,559 Speaker 2: for being with us on YouTube. Subscribe to Bloomberg Podcast. 216 00:11:13,880 --> 00:11:17,560 Speaker 2: This digital experiment growing each and every day, Tracy Alloway 217 00:11:17,559 --> 00:11:20,240 Speaker 2: and Joe wis it Thal helping out there without lats? 218 00:11:20,320 --> 00:11:24,120 Speaker 2: Look for that as well a Bloomberg Podcast. Anastasia amorroso 219 00:11:24,760 --> 00:11:29,320 Speaker 2: with us. You bring prodigious mathematics to your research. Note 220 00:11:29,559 --> 00:11:33,600 Speaker 2: you mentioned earlier. Let's discuss this. The SPX is down 221 00:11:33,679 --> 00:11:39,439 Speaker 2: three percent, but when you take out the high flyers, 222 00:11:39,520 --> 00:11:45,880 Speaker 2: the median the center tendency is down thirteen percent. So 223 00:11:45,960 --> 00:11:49,199 Speaker 2: can we say we've had a median correction on our 224 00:11:49,200 --> 00:11:51,040 Speaker 2: way to a median bear market. 225 00:11:51,720 --> 00:11:53,320 Speaker 5: Well, I don't think we're on our way to a 226 00:11:53,360 --> 00:11:56,600 Speaker 5: median bear market, but we have had a meaningful median 227 00:11:56,679 --> 00:11:59,040 Speaker 5: correction of a thirteen and a half percent. And Tom, 228 00:11:59,040 --> 00:12:00,760 Speaker 5: there's another way I like to look at it, which 229 00:12:00,800 --> 00:12:03,680 Speaker 5: is in terms of oversold conditions. And the thing that 230 00:12:03,800 --> 00:12:05,599 Speaker 5: really jumps out of you is the S and P 231 00:12:05,800 --> 00:12:08,480 Speaker 5: did not quite yet hit the oversold level, and neither 232 00:12:08,559 --> 00:12:10,720 Speaker 5: has the NASDAC. But if you look at the MAC 233 00:12:10,880 --> 00:12:15,120 Speaker 5: seven stocks, they're very close to actually hitting that oversold level, 234 00:12:15,160 --> 00:12:17,120 Speaker 5: the relative strength indicator of RSI. 235 00:12:17,240 --> 00:12:19,880 Speaker 2: I want to translate this for you. You're in New Mexico. 236 00:12:20,320 --> 00:12:23,000 Speaker 2: You figure you're going to get a solid bead. Maybe 237 00:12:23,000 --> 00:12:25,520 Speaker 2: you'll sneak out with the bat plus. And in the 238 00:12:25,559 --> 00:12:30,240 Speaker 2: front row is Anastasia Amoso who was eighteen years old 239 00:12:30,240 --> 00:12:33,720 Speaker 2: and did nail box plot analysis. You know, where did 240 00:12:33,720 --> 00:12:34,800 Speaker 2: this girl come from? 241 00:12:35,240 --> 00:12:37,680 Speaker 5: I was always a front and center kind of student. 242 00:12:37,720 --> 00:12:40,200 Speaker 2: I will say, did you have you're too young for 243 00:12:40,320 --> 00:12:43,280 Speaker 2: slide roll twelve or something? 244 00:12:43,480 --> 00:12:46,000 Speaker 4: Of course, of course they knew how to use it. 245 00:12:46,000 --> 00:12:49,079 Speaker 2: Right, I actually knew how to use the calendar. What 246 00:12:49,520 --> 00:12:52,960 Speaker 2: it's like with Lisa here in Anastasia, it's like nerd patrol. 247 00:12:53,040 --> 00:12:56,959 Speaker 4: I know, it's great stag. How should we think about 248 00:12:57,559 --> 00:13:00,439 Speaker 4: valuation because a lot of strategists will say, that's all 249 00:13:00,480 --> 00:13:02,160 Speaker 4: my clients want to talk about is kind of the 250 00:13:02,240 --> 00:13:04,320 Speaker 4: valuation of the market. How do you kind of frame 251 00:13:04,400 --> 00:13:05,160 Speaker 4: that for your clients. 252 00:13:05,600 --> 00:13:07,800 Speaker 5: I guess I'm a little surprised that's all the clients 253 00:13:07,840 --> 00:13:10,080 Speaker 5: want to talk about, because we have had the multiple 254 00:13:10,200 --> 00:13:13,080 Speaker 5: NSMP twenty one, twenty two times, and you know, there's 255 00:13:13,120 --> 00:13:16,080 Speaker 5: a reason for why that multiple continues to be persistent. 256 00:13:16,320 --> 00:13:18,040 Speaker 5: First of all, we have that two and a half 257 00:13:18,040 --> 00:13:20,360 Speaker 5: two point three percent earnings growth or excuse me, as 258 00:13:20,400 --> 00:13:23,520 Speaker 5: a GDP growth that's not going away, So that's supporting 259 00:13:23,559 --> 00:13:25,640 Speaker 5: the multiple. The other thing, you know, back to the 260 00:13:25,640 --> 00:13:27,880 Speaker 5: AI theme and back to the tech theme. If you 261 00:13:27,920 --> 00:13:29,439 Speaker 5: look at the S and P five found a margin 262 00:13:29,480 --> 00:13:31,720 Speaker 5: twelve and a half percent, it's not bad, but guess 263 00:13:31,760 --> 00:13:34,480 Speaker 5: what it is double that in some of the tech shares. 264 00:13:34,760 --> 00:13:37,679 Speaker 5: And so that's why the margin continues to be elevated. 265 00:13:37,760 --> 00:13:41,000 Speaker 5: So I don't see that as a huge concern provided 266 00:13:41,080 --> 00:13:43,680 Speaker 5: that that softness that we see in soft data doesn't 267 00:13:43,679 --> 00:13:45,560 Speaker 5: actually turn it into a recesion and that's not my 268 00:13:45,600 --> 00:13:46,000 Speaker 5: base case. 269 00:13:46,160 --> 00:13:49,160 Speaker 2: Underpin it with GDP we had earlier Jimbianco linking and 270 00:13:49,240 --> 00:13:53,120 Speaker 2: nominal GDP into revenue growth of companies. Do you have 271 00:13:53,160 --> 00:13:56,600 Speaker 2: the same relationship here where you know we supprise once again, 272 00:13:56,640 --> 00:14:00,560 Speaker 2: there's gloom on this and we surprised with OKGD, which 273 00:14:00,640 --> 00:14:02,400 Speaker 2: leads to solid revenue growth. 274 00:14:03,040 --> 00:14:06,079 Speaker 5: Yeah, I think revenue growth should remain solid. I mean, 275 00:14:06,080 --> 00:14:08,960 Speaker 5: if you look across the pockets of the US economy, 276 00:14:09,200 --> 00:14:12,400 Speaker 5: the unemployment rate is low, wage growth is actually outpacing 277 00:14:13,040 --> 00:14:16,160 Speaker 5: inflation at this rate. So all of that does support consumption, 278 00:14:16,320 --> 00:14:19,880 Speaker 5: which drives revenue growth. Now outside of the US, you know, 279 00:14:19,920 --> 00:14:22,160 Speaker 5: for companies who rely on that revenue growth, outside of 280 00:14:22,160 --> 00:14:24,800 Speaker 5: the US, things are looking up too. I mean Europe 281 00:14:24,840 --> 00:14:27,800 Speaker 5: for example. First of all, they've avoided the Max seven 282 00:14:27,960 --> 00:14:31,680 Speaker 5: exposure and the meltdown, but there's something fundamentally different about 283 00:14:31,720 --> 00:14:34,960 Speaker 5: the European economy, which is they're actually cutting interest rates 284 00:14:35,120 --> 00:14:37,320 Speaker 5: and they've been doing that ahead of the FED. And 285 00:14:37,360 --> 00:14:40,960 Speaker 5: I think that cumulative benefit of rate cuts will start 286 00:14:41,000 --> 00:14:44,080 Speaker 5: to accumulate for Europe. It should turn out turn around 287 00:14:44,080 --> 00:14:47,080 Speaker 5: the housing market, it should turn around the commercial property market. 288 00:14:47,360 --> 00:14:50,520 Speaker 5: So if you have European exposure and your revenues that's 289 00:14:50,600 --> 00:14:51,120 Speaker 5: looking so. 290 00:14:51,960 --> 00:14:55,480 Speaker 2: Global, would that do you get finally a weaker dollar qualth? 291 00:14:57,440 --> 00:14:57,720 Speaker 3: No? 292 00:14:58,080 --> 00:15:01,040 Speaker 5: I don't think so, because the interesting differential is really 293 00:15:01,080 --> 00:15:03,240 Speaker 5: the most important thing that I think will be driving 294 00:15:03,240 --> 00:15:07,840 Speaker 5: the dollar, and tariffs is in the second place to that, look, 295 00:15:07,880 --> 00:15:10,640 Speaker 5: the way I look at it international oftentimes it ends 296 00:15:10,680 --> 00:15:13,520 Speaker 5: up being a trade and I think Europe is a 297 00:15:13,560 --> 00:15:16,160 Speaker 5: good trade right now, given the deal that we're seeing 298 00:15:16,160 --> 00:15:20,200 Speaker 5: with Ukraine and Russia hopefully, you know, given the CB moves. 299 00:15:21,240 --> 00:15:24,880 Speaker 5: But longer term to really invest in Europe or Japan 300 00:15:24,920 --> 00:15:27,000 Speaker 5: or any other place is what I would focus on, tom, 301 00:15:27,120 --> 00:15:30,120 Speaker 5: is what are the leading companies in Europe that are 302 00:15:30,160 --> 00:15:34,280 Speaker 5: tied to artificial intelligence, that are tied to decarb. I 303 00:15:34,320 --> 00:15:40,160 Speaker 5: can't to give us a thing, but I'll give you 304 00:15:40,200 --> 00:15:41,880 Speaker 5: one other idea. And of course you know, the markets 305 00:15:41,920 --> 00:15:44,560 Speaker 5: have already reacted to that, but clearly Europe does have 306 00:15:44,640 --> 00:15:47,680 Speaker 5: to beef up the defense spending as a result of 307 00:15:47,720 --> 00:15:51,760 Speaker 5: the negotiations, and so European defense stocks have have woken 308 00:15:51,840 --> 00:15:54,160 Speaker 5: up and are doing quite well as a result of 309 00:15:54,200 --> 00:15:54,600 Speaker 5: that as well. 310 00:15:55,040 --> 00:15:57,240 Speaker 4: So what are the headwinds here? A lot of folks 311 00:15:57,280 --> 00:15:59,680 Speaker 4: will say the noise coming out of Washington, DC is 312 00:15:59,760 --> 00:16:03,280 Speaker 4: so broad and so consistent that it's hard to really 313 00:16:03,280 --> 00:16:05,800 Speaker 4: look through it and maybe focus on fundamentals. What do 314 00:16:05,840 --> 00:16:07,600 Speaker 4: you say to people like that that are saying, I'm 315 00:16:07,600 --> 00:16:10,760 Speaker 4: just not sure how to play the discussion about tariffs 316 00:16:10,760 --> 00:16:13,000 Speaker 4: and you know, all the other economic policies sit in 317 00:16:13,080 --> 00:16:13,880 Speaker 4: coming out of Washington. 318 00:16:14,160 --> 00:16:16,720 Speaker 5: Look, first of all, this is exactly in line with 319 00:16:16,800 --> 00:16:19,200 Speaker 5: the expectation that we had going into the year. You know, 320 00:16:19,240 --> 00:16:21,760 Speaker 5: the name of the outlook, as we titled it, it 321 00:16:21,800 --> 00:16:23,560 Speaker 5: was the year of solid independings, which are all the 322 00:16:23,560 --> 00:16:27,040 Speaker 5: economic fundamentals that we talked about, but with plenty of wildcars. 323 00:16:27,120 --> 00:16:29,480 Speaker 5: And I called it wildcars because they're exactly that they 324 00:16:29,520 --> 00:16:31,440 Speaker 5: can turn out to be positive, they can turn out 325 00:16:31,480 --> 00:16:34,120 Speaker 5: to be negative. We don't know. But we have to 326 00:16:34,200 --> 00:16:36,600 Speaker 5: focus on is what is the trajectory of the economy. 327 00:16:36,640 --> 00:16:39,080 Speaker 5: What is it the trajectory of revenues and earths that 328 00:16:39,120 --> 00:16:43,440 Speaker 5: you talked about, and position yourself around that. Now, from 329 00:16:43,800 --> 00:16:47,480 Speaker 5: the asset allocation perspective, you know, I don't know if 330 00:16:47,520 --> 00:16:50,080 Speaker 5: it's the time to go all in on small caps 331 00:16:50,120 --> 00:16:52,720 Speaker 5: given the uncertainty, but I think it is the time 332 00:16:52,800 --> 00:16:57,040 Speaker 5: to go all in on higher quality domestic companies that 333 00:16:57,400 --> 00:17:00,920 Speaker 5: align with the America First agenda. I think it is 334 00:17:01,000 --> 00:17:04,920 Speaker 5: time to continue with the AI trend. And the other 335 00:17:04,960 --> 00:17:08,040 Speaker 5: thing I would say, private credit, for example, stands out 336 00:17:08,240 --> 00:17:11,040 Speaker 5: has a great opportunity in this environment. 337 00:17:11,200 --> 00:17:13,920 Speaker 2: When you came to America, did you speak English? I 338 00:17:14,040 --> 00:17:14,720 Speaker 2: did you did. 339 00:17:14,720 --> 00:17:17,480 Speaker 5: It wasn't well, it was all right, It was all right, Okay, 340 00:17:18,840 --> 00:17:20,120 Speaker 5: is really not. 341 00:17:20,119 --> 00:17:22,480 Speaker 2: Quite I want you to talk to Americans that have 342 00:17:22,600 --> 00:17:26,800 Speaker 2: never left the country about American exceptionalism. You and I 343 00:17:26,920 --> 00:17:30,760 Speaker 2: talked two days after Putin invaded Ukraine. Whatever, Let's forget 344 00:17:30,800 --> 00:17:32,800 Speaker 2: about the politics right now. It's not fair to you, 345 00:17:33,119 --> 00:17:37,680 Speaker 2: But I want you to talk about this phrase, American exceptionalism. 346 00:17:38,280 --> 00:17:42,160 Speaker 2: Talk to Americans this morning across this nation. What does 347 00:17:42,200 --> 00:17:42,880 Speaker 2: it mean to you? 348 00:17:43,400 --> 00:17:49,960 Speaker 5: It is an exceptional and outstanding place that nowhere else 349 00:17:50,280 --> 00:17:53,479 Speaker 5: can you replicate that. And I do travel globally, you know, 350 00:17:53,520 --> 00:17:56,399 Speaker 5: I immigrate to the US when I was sixteen. But 351 00:17:56,880 --> 00:18:02,400 Speaker 5: nowhere else can you get the same stability of government, 352 00:18:02,520 --> 00:18:06,040 Speaker 5: believe it or not, as you get in the United States. 353 00:18:06,160 --> 00:18:11,320 Speaker 5: Nowhere else can you get this pro business mentality, even 354 00:18:11,359 --> 00:18:15,200 Speaker 5: though we argue about the deregulation here and there, and 355 00:18:15,600 --> 00:18:18,879 Speaker 5: nowhere else, frankly, can you get the same opportunity set 356 00:18:19,119 --> 00:18:21,679 Speaker 5: as you do here. So it is truly truly an 357 00:18:21,720 --> 00:18:24,919 Speaker 5: exceptional place. And this is why when I think about investing, 358 00:18:25,359 --> 00:18:28,879 Speaker 5: you know, yes, while it's tempting to go invest in 359 00:18:28,880 --> 00:18:32,160 Speaker 5: emergent markets or maybe trade around in Europe, and Japan. 360 00:18:32,640 --> 00:18:34,720 Speaker 5: You know, if you are a long term investor, you 361 00:18:34,800 --> 00:18:37,400 Speaker 5: have to focus on the pillars that you know are 362 00:18:37,400 --> 00:18:39,119 Speaker 5: going to be there, and I think the pillars of 363 00:18:39,160 --> 00:18:40,719 Speaker 5: American exceptionalism will be here. 364 00:18:41,160 --> 00:18:44,560 Speaker 2: Sasha, thank you so much. Anasta Amorros, I can't with 365 00:18:44,760 --> 00:18:48,520 Speaker 2: us this morning here. She continues, It's transitory, these challenges 366 00:18:48,560 --> 00:18:51,480 Speaker 2: we have, and she says, get on board in your 367 00:18:51,520 --> 00:18:54,800 Speaker 2: own way, look for her research and I at capital. 368 00:18:55,200 --> 00:18:59,080 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 369 00:18:59,119 --> 00:19:02,639 Speaker 1: starting at seven eight on Applecarplay and Android Auto with 370 00:19:02,720 --> 00:19:05,719 Speaker 1: the Bloomberg Business app. You can also listen live on 371 00:19:05,800 --> 00:19:09,440 Speaker 1: Amazon Alexa from our flagship New York station. Just say 372 00:19:09,600 --> 00:19:11,760 Speaker 1: Alexa play Bloomberg eleven thirty. 373 00:19:12,040 --> 00:19:14,720 Speaker 2: I've been fine, Seth joins us right now, just absolutely 374 00:19:14,720 --> 00:19:20,280 Speaker 2: fabulous in securities analysis. Let how do you with Graham 375 00:19:20,320 --> 00:19:22,719 Speaker 2: Dot and Cadalive And with both both you and I 376 00:19:22,720 --> 00:19:26,840 Speaker 2: have read cover to cover model out revenue growth of 377 00:19:26,960 --> 00:19:31,280 Speaker 2: seventy percent. I mean with Nvidia, you're not using any 378 00:19:31,320 --> 00:19:34,160 Speaker 2: conventional template, are you? 379 00:19:34,200 --> 00:19:34,240 Speaker 3: No? 380 00:19:34,440 --> 00:19:36,480 Speaker 6: You really got to look at their return on capital, 381 00:19:36,520 --> 00:19:40,320 Speaker 6: which is incredibly strong because they are an intellectual capital 382 00:19:40,400 --> 00:19:44,439 Speaker 6: rather than a financial capital intensive company, and the growth 383 00:19:44,480 --> 00:19:47,399 Speaker 6: is phenomenal, the return on capital is phenomenal. They have 384 00:19:47,520 --> 00:19:49,960 Speaker 6: brought back so much dock that they've pretty much given 385 00:19:50,000 --> 00:19:52,280 Speaker 6: back all of their equity capital, and they still just 386 00:19:52,720 --> 00:19:55,639 Speaker 6: continue to grow in value because they continue to innovate. 387 00:19:55,800 --> 00:19:58,960 Speaker 6: And they are on the cutting edge of AI, which 388 00:19:59,040 --> 00:20:04,600 Speaker 6: is we are in a major multi decade investment cycle 389 00:20:04,640 --> 00:20:07,920 Speaker 6: here that is going to change everything. And I continue 390 00:20:07,920 --> 00:20:10,440 Speaker 6: to quote Tom Siebel, who I believe is the one 391 00:20:10,440 --> 00:20:12,479 Speaker 6: who said that every company he's the founder of C 392 00:20:12,560 --> 00:20:15,760 Speaker 6: three AHI, that every company will be an AI company, 393 00:20:15,840 --> 00:20:19,399 Speaker 6: that every company will use a guy in various aspects 394 00:20:19,440 --> 00:20:25,359 Speaker 6: to optimize their business, to improve productivity, to improve customer interaction. 395 00:20:26,680 --> 00:20:29,960 Speaker 6: So and we are just in the beginning stages of this. 396 00:20:30,040 --> 00:20:33,600 Speaker 2: Okay, the WACC screen, folks, which is my favorite value 397 00:20:33,640 --> 00:20:37,119 Speaker 2: add from mister Bloomberg and mister Secnda. The debt cost 398 00:20:37,400 --> 00:20:40,280 Speaker 2: is zero point three percent, is the weight of debt 399 00:20:40,680 --> 00:20:44,679 Speaker 2: ninety nine point seven percent equity. The ROIC is one 400 00:20:44,760 --> 00:20:47,480 Speaker 2: hundred and fourteen percent per year. This is through a 401 00:20:47,480 --> 00:20:52,600 Speaker 2: Stern Stuart and Net operating profit study as well. Ivan, 402 00:20:52,680 --> 00:20:55,640 Speaker 2: what's your ex access on this. If we all learned 403 00:20:55,840 --> 00:20:59,920 Speaker 2: in school that it's a seven year dividend discount model. 404 00:20:59,760 --> 00:21:03,800 Speaker 2: What's your X axis on an Nvidia? How far out 405 00:21:03,840 --> 00:21:08,080 Speaker 2: can you look? Well, I mean you don't have to. 406 00:21:08,240 --> 00:21:13,119 Speaker 6: You can't just really extrapolate into perpetuity. But they continue, 407 00:21:13,680 --> 00:21:19,560 Speaker 6: they drive. They've invented the GPU, the graphic processing unit, 408 00:21:19,960 --> 00:21:23,000 Speaker 6: which is driving all of AI because what it does. 409 00:21:23,400 --> 00:21:29,040 Speaker 6: Originally the GPU turned digital information into visual information that 410 00:21:29,080 --> 00:21:31,919 Speaker 6: we saw on a screen. And then they reverse that 411 00:21:32,040 --> 00:21:35,800 Speaker 6: and they take visual information and turn it into digital information, 412 00:21:35,920 --> 00:21:40,200 Speaker 6: which is how the large language learning models work. And 413 00:21:42,320 --> 00:21:46,880 Speaker 6: this will continue to happen faster and faster, with higher 414 00:21:47,040 --> 00:21:52,760 Speaker 6: resolution and more depth, and create these visual pictures that 415 00:21:52,800 --> 00:21:57,280 Speaker 6: are driving the computer learning process and also continuing to 416 00:21:57,440 --> 00:22:00,960 Speaker 6: digest process more and more information, more and more data. 417 00:22:01,040 --> 00:22:03,760 Speaker 2: Paul, I've never seen this. The cap ax is three 418 00:22:03,800 --> 00:22:09,119 Speaker 2: billion YEP. Cash from operations is fifty nine billion, three 419 00:22:09,119 --> 00:22:13,920 Speaker 2: divided by fifty nine I've never seen that. 420 00:22:14,119 --> 00:22:18,520 Speaker 4: Yeah, just extraordinary income statement. So Ivan, I'm sure your 421 00:22:18,520 --> 00:22:21,600 Speaker 4: clients are asking you, Okay, how else do I play this? 422 00:22:21,720 --> 00:22:24,719 Speaker 4: I can't have all my eggs in this Nvidia basket 423 00:22:24,760 --> 00:22:28,960 Speaker 4: if I believe in this AI thing, how else do 424 00:22:29,000 --> 00:22:29,399 Speaker 4: I play it? 425 00:22:30,240 --> 00:22:32,520 Speaker 6: Well, I'm glad you asked that, because two other stocks 426 00:22:32,560 --> 00:22:34,240 Speaker 6: I happen to like that I think are under the 427 00:22:34,359 --> 00:22:38,040 Speaker 6: radar AI plays data center plays are land Bridge and 428 00:22:38,119 --> 00:22:43,520 Speaker 6: Texas Specific Land. They own property and infrastructure that can 429 00:22:43,640 --> 00:22:47,359 Speaker 6: provide power and water, which is the three things that 430 00:22:47,400 --> 00:22:49,600 Speaker 6: are needed for a data center. You need space, you 431 00:22:49,640 --> 00:22:54,560 Speaker 6: need power, and you need water and connectivity. So I 432 00:22:54,600 --> 00:22:58,040 Speaker 6: think both land Bridge and Texas Specific Land are really 433 00:22:58,080 --> 00:23:02,560 Speaker 6: incredible long term data center and AI place. 434 00:23:02,800 --> 00:23:05,600 Speaker 2: I mean, you got to come on once every ten days, Paul. 435 00:23:05,920 --> 00:23:10,240 Speaker 2: You hear the name the TPL Texas Specific Land Corporation, 436 00:23:10,600 --> 00:23:13,520 Speaker 2: Does it sound like a time share? It's selling you 437 00:23:13,840 --> 00:23:17,000 Speaker 2: selling your Corpus Christy or Galveston condos. 438 00:23:17,280 --> 00:23:19,840 Speaker 4: Look at this, I've never heard of this company before, 439 00:23:19,920 --> 00:23:22,960 Speaker 4: but the name actually tells you what they do. Texas 440 00:23:23,000 --> 00:23:26,840 Speaker 4: Pecific Land Corporation owns tracks of land in Texas. Get 441 00:23:26,880 --> 00:23:30,560 Speaker 4: this previously the property of the Texas and Pacific Rail 442 00:23:30,600 --> 00:23:34,000 Speaker 4: Rate Company. So you're literally Ivan telling me I got 443 00:23:34,000 --> 00:23:35,960 Speaker 4: to own the land on which this stuff's going to 444 00:23:36,040 --> 00:23:36,520 Speaker 4: be built. 445 00:23:36,600 --> 00:23:36,840 Speaker 2: Right. 446 00:23:37,800 --> 00:23:41,200 Speaker 6: Yes, And first of all, every other day you hear 447 00:23:41,240 --> 00:23:45,440 Speaker 6: about new investments in data centers. First of all, Microsoft's 448 00:23:45,560 --> 00:23:48,439 Speaker 6: kicked it off. This year with increasing their data center 449 00:23:48,560 --> 00:23:52,040 Speaker 6: and AI CAPBAX from fifty billion to eighty building billion. 450 00:23:52,480 --> 00:23:57,640 Speaker 6: Then Meta came out with projecting sixty to sixty five 451 00:23:57,680 --> 00:24:01,040 Speaker 6: billion in capital investments in AI in daydata centers this year, 452 00:24:01,680 --> 00:24:07,640 Speaker 6: Google seventy five billion, Amazon one hundred billion. And then 453 00:24:08,080 --> 00:24:14,399 Speaker 6: you know, you saw the launch of Project Stargate, which 454 00:24:14,480 --> 00:24:17,159 Speaker 6: is starting off with one hundred billion and ranning on 455 00:24:17,400 --> 00:24:20,159 Speaker 6: five hundred billion over the next four years. And then 456 00:24:20,440 --> 00:24:25,440 Speaker 6: Apple said yesterday that Monday that they are investing five 457 00:24:25,520 --> 00:24:30,200 Speaker 6: hundred billion in the next fight in the US between manufacturing, 458 00:24:30,520 --> 00:24:35,159 Speaker 6: processor development, and AI and data centers. So the you know, 459 00:24:35,160 --> 00:24:39,359 Speaker 6: you're looking at trillions of dollars in capital investments over 460 00:24:39,359 --> 00:24:41,240 Speaker 6: the next ten years. 461 00:24:41,560 --> 00:24:44,440 Speaker 2: This is Tyler Glover. They got one hundred and eleven 462 00:24:44,480 --> 00:24:48,560 Speaker 2: employees one one one. I even fines it brilliant on 463 00:24:48,680 --> 00:24:52,920 Speaker 2: TP already thirty seven percent per year over the last 464 00:24:52,920 --> 00:24:55,240 Speaker 2: ten years. And it's not just about the AI moon 465 00:24:55,320 --> 00:24:56,880 Speaker 2: shot that we've seen the last. 466 00:24:56,640 --> 00:25:00,320 Speaker 4: Two years exactly. I've watched some many other themes that 467 00:25:00,359 --> 00:25:03,119 Speaker 4: you talk to your clients about here, because again, if 468 00:25:03,160 --> 00:25:06,280 Speaker 4: you think about the equity market performance twenty twenty three, 469 00:25:06,440 --> 00:25:09,200 Speaker 4: twenty twenty four, more than twenty percent gains in SMP 470 00:25:09,320 --> 00:25:11,680 Speaker 4: five hundred, and a lot of books are saying, man, 471 00:25:11,800 --> 00:25:13,600 Speaker 4: is this market out over at skis? How do you 472 00:25:13,680 --> 00:25:15,640 Speaker 4: kind of frame opportunities in twenty five? 473 00:25:17,040 --> 00:25:19,879 Speaker 6: Well, we are still in the you know, we're in 474 00:25:19,960 --> 00:25:22,800 Speaker 6: the golden age of equities. The equity market is the 475 00:25:22,840 --> 00:25:25,680 Speaker 6: place to be. More and more people are investing in 476 00:25:26,160 --> 00:25:30,280 Speaker 6: stocks and that will continue. And that's the look. You look, 477 00:25:30,320 --> 00:25:33,800 Speaker 6: over time, the best way to create wealth has been 478 00:25:33,920 --> 00:25:36,680 Speaker 6: in the stock market. Whether you go past ten years, 479 00:25:36,720 --> 00:25:41,080 Speaker 6: twenty years, one hundred years, in two hundred years, stocks 480 00:25:41,119 --> 00:25:45,000 Speaker 6: have been the best place outperformed pretty much over the 481 00:25:45,040 --> 00:25:47,159 Speaker 6: long term every other asset class. 482 00:25:48,480 --> 00:25:52,960 Speaker 4: So are there sectors? Is is it a technology weighted outlook? 483 00:25:53,000 --> 00:25:53,160 Speaker 2: There? 484 00:25:53,160 --> 00:25:55,040 Speaker 4: Ivan, because that has been one of the areas that 485 00:25:55,080 --> 00:25:57,520 Speaker 4: have worked so well for investors for well, yeah, a 486 00:25:57,560 --> 00:25:59,119 Speaker 4: couple of decades now, one could I right. 487 00:25:59,280 --> 00:26:02,679 Speaker 6: Since the beginning of time, technology has moved society forward 488 00:26:02,720 --> 00:26:06,159 Speaker 6: and will continue to do so. In the internet, the 489 00:26:06,560 --> 00:26:10,919 Speaker 6: cell phone, the tablet, the personal computer, high speed networks, 490 00:26:12,160 --> 00:26:16,480 Speaker 6: and now AI. You know that these trends continue to 491 00:26:16,520 --> 00:26:19,440 Speaker 6: emerge and then they continue to grow and they drive 492 00:26:20,240 --> 00:26:22,040 Speaker 6: everything in society forward. 493 00:26:22,359 --> 00:26:24,440 Speaker 2: For global Wall Street this morning. Want to treat Ivan 494 00:26:24,520 --> 00:26:28,520 Speaker 2: find Seth through this senior partner, Chief Investment Officer Tegriss 495 00:26:28,920 --> 00:26:33,359 Speaker 2: Financial Partners, always with a different view out of Boston University, 496 00:26:33,359 --> 00:26:35,840 Speaker 2: which is a good and beautiful thing. Probably studied was 497 00:26:35,920 --> 00:26:38,560 Speaker 2: v Body a few years ago. We welcome you on 498 00:26:38,600 --> 00:26:42,040 Speaker 2: your morning commute across the nation on YouTube, our new 499 00:26:42,080 --> 00:26:46,480 Speaker 2: digital product YouTube, you know, the YouTube podcast growing each 500 00:26:46,520 --> 00:26:49,680 Speaker 2: and every day. Really humbled by the international growth there, 501 00:26:49,680 --> 00:26:53,200 Speaker 2: but also domestically in your office at home. Please more 502 00:26:53,240 --> 00:26:56,119 Speaker 2: of Ivan finds us right now, Ivan, you were at 503 00:26:56,240 --> 00:26:59,879 Speaker 2: BU I assume as v Body and corporate finance to 504 00:27:00,080 --> 00:27:04,000 Speaker 2: the finance textbooks work right now given the skew to 505 00:27:04,080 --> 00:27:05,160 Speaker 2: Meg seven. 506 00:27:06,280 --> 00:27:09,280 Speaker 6: Well, you know what they say every you know, it's 507 00:27:09,320 --> 00:27:12,680 Speaker 6: a new economy, but the same old economics still apply, 508 00:27:13,640 --> 00:27:18,240 Speaker 6: So the same math, the same calculations, while we can 509 00:27:18,280 --> 00:27:21,960 Speaker 6: do it better and faster using computers and using AI, 510 00:27:22,840 --> 00:27:28,479 Speaker 6: write reports quicker and get more information faster and disseminated faster. 511 00:27:28,600 --> 00:27:32,960 Speaker 6: So the speed, so the way things happen still goes 512 00:27:33,000 --> 00:27:35,760 Speaker 6: back to the beginning and hasn't changed. The speed which 513 00:27:35,800 --> 00:27:39,640 Speaker 6: things happen will continue to accelerate and accelerate and accelerate. 514 00:27:39,640 --> 00:27:41,840 Speaker 2: I mean, I got green and the screen Ivan, But 515 00:27:41,880 --> 00:27:46,360 Speaker 2: the fact is I got belief and strung by MasterCard, Facebook, 516 00:27:46,440 --> 00:27:49,399 Speaker 2: I call it Facebook Meta Ivan. For me, I call it, 517 00:27:49,800 --> 00:27:53,640 Speaker 2: I call it Facebook. Strung by Apple. Discuss Apple right now. 518 00:27:53,800 --> 00:27:57,160 Speaker 2: How do you have a strung by? Given the China gloom, 519 00:27:57,359 --> 00:27:58,399 Speaker 2: how do you do that? Ivan? 520 00:27:59,400 --> 00:28:03,720 Speaker 6: Well, of all, they had a pullback app in iPhone 521 00:28:03,720 --> 00:28:07,840 Speaker 6: sales in China, but they are working on now. They 522 00:28:07,840 --> 00:28:11,320 Speaker 6: are seeing them now a pickup in iPhone sales. iPhone 523 00:28:11,359 --> 00:28:15,240 Speaker 6: sales and the halo effect that it has to the 524 00:28:15,359 --> 00:28:20,200 Speaker 6: Apple ecosystem, which drives services sales will continue to grow 525 00:28:20,640 --> 00:28:25,119 Speaker 6: and Apple Intelligence will be also a powerful growth driver 526 00:28:25,280 --> 00:28:29,479 Speaker 6: for Apple and for Apple services. You know, the Apple 527 00:28:30,240 --> 00:28:33,640 Speaker 6: Apple has an over two billion in an installed user 528 00:28:33,720 --> 00:28:36,639 Speaker 6: base that you know goes through the upgrade cycle, goes 529 00:28:36,880 --> 00:28:41,880 Speaker 6: to the additional services cycle. And what's fascinating is that 530 00:28:43,160 --> 00:28:45,880 Speaker 6: him Cook said years ago that Apple as great as 531 00:28:45,880 --> 00:28:49,320 Speaker 6: the iPhone is and all and the iPad and all 532 00:28:49,360 --> 00:28:52,440 Speaker 6: of the Apple products are. Him Cook said several years 533 00:28:52,440 --> 00:28:56,480 Speaker 6: ago that Apple's biggest contribution to society will be in healthcare. 534 00:28:56,960 --> 00:28:59,880 Speaker 6: And you know they have the fitness app, a lot 535 00:28:59,880 --> 00:29:04,719 Speaker 6: of healthcare data in the in their their apps and 536 00:29:04,800 --> 00:29:10,680 Speaker 6: their products. They are just launched a new UH earphones 537 00:29:10,760 --> 00:29:13,800 Speaker 6: with a heart rate monitor. So there's a lot to 538 00:29:13,800 --> 00:29:17,600 Speaker 6: do in healthcare and health monitoring and health optimization that 539 00:29:18,560 --> 00:29:21,760 Speaker 6: I will believe you will see from Apple, which is 540 00:29:21,800 --> 00:29:25,120 Speaker 6: a whole new category you know, of growth and the 541 00:29:25,200 --> 00:29:28,120 Speaker 6: ability to and and then it goes back to AI 542 00:29:28,360 --> 00:29:31,840 Speaker 6: with the ability to detect and cure the disease AI 543 00:29:32,160 --> 00:29:36,240 Speaker 6: and to speed up drug discovery. You know, companies like 544 00:29:36,680 --> 00:29:41,560 Speaker 6: Aluminum which use AI, use in Vidia's GPUs to map 545 00:29:41,920 --> 00:29:47,360 Speaker 6: genomes and UH the ability for DNA analysis and to 546 00:29:47,520 --> 00:29:50,960 Speaker 6: do things to do tests that used to take weeks 547 00:29:51,280 --> 00:29:56,360 Speaker 6: now can take a day. So AI and technology drives 548 00:29:56,480 --> 00:29:57,600 Speaker 6: every aspect forward. 549 00:29:57,840 --> 00:30:01,520 Speaker 4: Ivan, how do you get comfortable with if you the 550 00:30:01,720 --> 00:30:04,360 Speaker 4: China risk for Apple, I just for a lot of folks, 551 00:30:04,480 --> 00:30:06,880 Speaker 4: it's just hard to get the arms around in this 552 00:30:07,200 --> 00:30:08,560 Speaker 4: global geopolitics. 553 00:30:09,720 --> 00:30:12,800 Speaker 6: Well, it's always going to be a risk somewhere, and 554 00:30:12,920 --> 00:30:16,120 Speaker 6: but geopolitical risks exists, and they do get a lot 555 00:30:16,160 --> 00:30:19,040 Speaker 6: of headlines. But if you look, they haven't really affected 556 00:30:19,040 --> 00:30:22,280 Speaker 6: the market since the start of the Ukrainian Russian War 557 00:30:22,440 --> 00:30:24,920 Speaker 6: that you know, the market really wasn't affected even the 558 00:30:25,000 --> 00:30:28,160 Speaker 6: tragic situation in Israel, it didn't affect the market. So 559 00:30:28,880 --> 00:30:32,920 Speaker 6: they exist, and they have to be folks, you know, 560 00:30:33,000 --> 00:30:35,800 Speaker 6: geopolitical issues and risks exist, and they have to be, 561 00:30:35,920 --> 00:30:41,000 Speaker 6: you know, taken into consideration. But like I say, no 562 00:30:41,080 --> 00:30:44,240 Speaker 6: matter what happens in the world, when Tim Cook gets 563 00:30:44,320 --> 00:30:46,560 Speaker 6: up every morning, the first thing he thinks about is 564 00:30:46,960 --> 00:30:49,760 Speaker 6: how to sell more iPhones. Say you know Mary Barratt 565 00:30:50,200 --> 00:30:52,320 Speaker 6: m when she gets up every morning, the first thing 566 00:30:52,400 --> 00:30:55,440 Speaker 6: she thinks about is how to sell more cars. And 567 00:30:55,480 --> 00:30:58,520 Speaker 6: you saw today GM just announced a twenty five percent 568 00:30:58,600 --> 00:31:02,800 Speaker 6: dividend increase and an additional six billion dollar share we 569 00:31:02,920 --> 00:31:06,680 Speaker 6: purchase authormization that comes from confidence in your business, confidence 570 00:31:06,720 --> 00:31:10,080 Speaker 6: in your business outlook, confidence in your cash flow, that 571 00:31:10,160 --> 00:31:13,640 Speaker 6: they will be able to manage terriff issues which do 572 00:31:13,760 --> 00:31:15,160 Speaker 6: affect the auto industry a lot. 573 00:31:15,280 --> 00:31:17,480 Speaker 2: Right, I've got to leave it there. Thank you so 574 00:31:17,560 --> 00:31:19,960 Speaker 2: much for coming on, particularly wisdom on Nvidia and is 575 00:31:20,000 --> 00:31:22,960 Speaker 2: strung by I should point out on generous motives as well. 576 00:31:23,000 --> 00:31:26,840 Speaker 2: I'm in fine seth with tigers this morning. 577 00:31:33,000 --> 00:31:36,920 Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekday 578 00:31:36,960 --> 00:31:40,360 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto. 579 00:31:40,400 --> 00:31:43,200 Speaker 1: With the Bloomberg Business app. You can also watch us 580 00:31:43,240 --> 00:31:47,120 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal. 581 00:31:47,240 --> 00:31:49,760 Speaker 2: The daily look at the front pages the Lisa Mateara 582 00:31:49,840 --> 00:31:53,640 Speaker 2: Report without any discussion of Nvidia. What do you got, Lisa? 583 00:31:53,680 --> 00:31:55,440 Speaker 7: Okay, So this is a new report about the highest 584 00:31:55,520 --> 00:31:59,000 Speaker 7: rated celebrity owned restaurants. Paul, You're gonna appreciate this. 585 00:31:59,080 --> 00:31:59,280 Speaker 4: Look. 586 00:31:59,320 --> 00:32:02,160 Speaker 7: Trip Advisor Google looked at those five star reviews John 587 00:32:02,240 --> 00:32:05,240 Speaker 7: bon Jovi's JBJ Soul Kitchen. 588 00:32:05,360 --> 00:32:05,640 Speaker 2: Wow. 589 00:32:05,800 --> 00:32:08,520 Speaker 7: Yeah, Red Bank, New Jersey. It also has it's four locations, 590 00:32:08,520 --> 00:32:12,120 Speaker 7: so red Bank, Tom's River, two on college campuses, Ruckers 591 00:32:12,200 --> 00:32:15,160 Speaker 7: and New Jersey City University. But the reason they like 592 00:32:15,200 --> 00:32:17,880 Speaker 7: it it's a nonprofit opened in twenty eleven with his wife. 593 00:32:18,000 --> 00:32:20,960 Speaker 7: No prices on the menu, they just suggest like a donation. 594 00:32:21,360 --> 00:32:23,480 Speaker 7: So it's created to help those with food and security. 595 00:32:23,560 --> 00:32:27,200 Speaker 7: So they're saying, great food, great service, commitment to the community. 596 00:32:27,200 --> 00:32:30,400 Speaker 4: It's a win win. So it's a community restaurant. It's 597 00:32:30,400 --> 00:32:33,320 Speaker 4: a community cool. Red Bank is a nice foody town. 598 00:32:33,440 --> 00:32:36,040 Speaker 2: By the figure out a road trip there, I'm sure 599 00:32:36,080 --> 00:32:37,320 Speaker 2: it's like a no brain who. 600 00:32:37,200 --> 00:32:39,280 Speaker 4: Go there all the time love Red Bank. We have to, 601 00:32:39,640 --> 00:32:40,520 Speaker 4: but you kind of check it out. 602 00:32:40,520 --> 00:32:42,080 Speaker 7: I still have. I've heard about it and I have 603 00:32:42,120 --> 00:32:42,640 Speaker 7: to check it out. 604 00:32:42,720 --> 00:32:45,200 Speaker 2: They said, one hundred ninety eight two hundred and twelve 605 00:32:45,800 --> 00:32:49,720 Speaker 2: meals have been served, forty three percent paid with donations. 606 00:32:49,960 --> 00:32:52,720 Speaker 7: It's incredible. Even people who can't afford they can eat there. 607 00:32:52,720 --> 00:32:54,560 Speaker 7: And then if hey, if they want to work and 608 00:32:54,600 --> 00:32:56,560 Speaker 7: like do something, they kind of, you know, do things 609 00:32:56,600 --> 00:32:59,280 Speaker 7: like that. So it's a really really really good concept. 610 00:32:59,520 --> 00:33:00,360 Speaker 4: I love it. 611 00:33:01,840 --> 00:33:05,160 Speaker 7: Okay, So this one Jersey Strong exactly, This one from 612 00:33:05,200 --> 00:33:08,480 Speaker 7: the Washington Post caught my eye. More Canadian coffee shops. 613 00:33:08,480 --> 00:33:11,120 Speaker 7: They're changing the name of a popular drink on their menu, 614 00:33:11,280 --> 00:33:18,960 Speaker 7: so the Americano is now the Canadiano. Okay, protesting Trump's tariffs, 615 00:33:18,960 --> 00:33:21,000 Speaker 7: you know, they expected to take back next month. 616 00:33:22,240 --> 00:33:23,440 Speaker 4: Also, shop owners. 617 00:33:23,240 --> 00:33:25,680 Speaker 7: Saying they don't want to become like this political place, 618 00:33:25,800 --> 00:33:28,200 Speaker 7: but they want to stand up for their country. So 619 00:33:28,240 --> 00:33:31,120 Speaker 7: that's why they're doing this. I didn't realize because some 620 00:33:31,120 --> 00:33:34,000 Speaker 7: people are protesting. They're saying, well, you're changing the origin 621 00:33:34,080 --> 00:33:37,160 Speaker 7: because it actually originated US soldiers in Italy doing World 622 00:33:37,160 --> 00:33:39,520 Speaker 7: War Two. They complained that the espresso was too strong, 623 00:33:40,280 --> 00:33:44,480 Speaker 7: so they put water water, they cut it with water, 624 00:33:44,560 --> 00:33:47,480 Speaker 7: and so it became Cafe Americano, which is my favorite 625 00:33:47,520 --> 00:33:48,320 Speaker 7: drink in the country. 626 00:33:50,520 --> 00:33:51,320 Speaker 2: Coffee. 627 00:33:52,440 --> 00:33:54,640 Speaker 7: Yes, but it was just stand up because you've heard 628 00:33:54,640 --> 00:33:57,200 Speaker 7: like the hockey fans right booing at the national anthemic game. 629 00:33:57,240 --> 00:34:00,360 Speaker 7: So this is just kind of another thing in the. 630 00:34:00,360 --> 00:34:03,760 Speaker 2: President's comments in the last twelve hours in trade. Yeah, 631 00:34:03,920 --> 00:34:06,280 Speaker 2: I don't when does it go away? I don't see 632 00:34:06,280 --> 00:34:07,200 Speaker 2: it drifting away. 633 00:34:07,320 --> 00:34:08,000 Speaker 7: We shall see. 634 00:34:08,000 --> 00:34:10,840 Speaker 4: It's supposed to remember the whole French fry thing became 635 00:34:11,040 --> 00:34:14,200 Speaker 4: what was a patriot. 636 00:34:14,320 --> 00:34:18,359 Speaker 7: It's it's along the same thing, the same thing. We've 637 00:34:18,400 --> 00:34:20,319 Speaker 7: been talking a lot about weight loss, drugs, right, curb 638 00:34:20,320 --> 00:34:23,319 Speaker 7: and your appetite. Yes, we have and you know that, 639 00:34:23,440 --> 00:34:26,279 Speaker 7: but it's also prosing a risk to curbing sales at 640 00:34:26,280 --> 00:34:29,879 Speaker 7: top companies. You heard Cheesecake Factory carried doctor Pepper. They 641 00:34:29,920 --> 00:34:32,240 Speaker 7: all said that it's going to change the consumer behavior. 642 00:34:32,280 --> 00:34:34,920 Speaker 7: And this is something we've been talking about. Even Molson 643 00:34:35,000 --> 00:34:38,520 Speaker 7: Core said it because it says it's changing people's drinking behavior. 644 00:34:39,080 --> 00:34:42,319 Speaker 7: What's different is that these companies didn't actually mention that 645 00:34:42,400 --> 00:34:44,960 Speaker 7: on last year's report, so they're mentioning it on this 646 00:34:45,040 --> 00:34:47,839 Speaker 7: year's report to show. Hey, the significance is still a deal. 647 00:34:47,960 --> 00:34:49,759 Speaker 7: It's still a deal. I mean, Walmart said about two 648 00:34:49,840 --> 00:34:52,800 Speaker 7: years ago that it's going to affect how people buy food. 649 00:34:52,880 --> 00:34:54,759 Speaker 7: But yeah, this is this is the thing. 650 00:34:54,880 --> 00:34:55,600 Speaker 4: They were companies. 651 00:34:55,640 --> 00:34:59,600 Speaker 2: You're starting to do the newspapers this morning. Thank you 652 00:35:00,719 --> 00:35:01,319 Speaker 2: so much. 653 00:35:01,680 --> 00:35:06,520 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 654 00:35:06,640 --> 00:35:10,920 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 655 00:35:11,040 --> 00:35:14,520 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 656 00:35:14,600 --> 00:35:18,640 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 657 00:35:18,640 --> 00:35:22,040 Speaker 1: can also watch us live every weekday on YouTube and 658 00:35:22,239 --> 00:35:23,960 Speaker 1: always on the Bloomberg terminal