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Speaker 2: Us, Savanda Schlitz and Paps Blue Ribbon. Jim Bianco, I
Speaker 2: believe is with us all right now? Rich, do we
Speaker 2: have mister Bianco? Okay, we do, Thank you Rich Truman
Speaker 2: for that. This morning, Jim Bianco is nailed the sticky
Speaker 2: inflation call. We get an update, Jim, like good news
Speaker 2: this morning. Futures up twenty five. We're getting knocked around
Speaker 2: here in immense emotional volatility. What does the Bianco view
Speaker 2: on inflation?
Speaker 3: That it's still sticky and that you're staring the sea
Speaker 3: signs that even people are starting to become nervous about it.
Speaker 3: The surveys like Michigan and the Conference Board are showing
Speaker 3: that people are expecting even higher levels of inflation. The
Speaker 3: FED might call that being a bit unanchored. And I
Speaker 3: think that it's going to, you know, stay with us
Speaker 3: and be a problem now now that they've said that
Speaker 3: it's a three percent three and a half percent problem.
Speaker 3: It is not an eight ten or Zimbabwe problem, but
Speaker 3: even still a three three and a half percent problem
Speaker 3: means that interest rates, even though the bond market is
Speaker 3: rallied down the four point three, you know, we don't
Speaker 3: have a whole lot more on the downside to go
Speaker 3: if we've got such that kind of sticky inflation.
Speaker 2: How will the FED adapt to our new I love
Speaker 2: this phrase fiscal space. How does the FED adapt to
Speaker 2: you know, forget about the legislation overnight and the ramifications
Speaker 2: of X numbers of zillions of dollars a debt added
Speaker 2: on where we are now, how do they adapt to
Speaker 2: our fiscal policy?
Speaker 3: Well, I'll answer the question by saying I hope they adapt,
Speaker 3: because their attitude right now has been what we have
Speaker 3: to wait and see, and we have to sit on
Speaker 3: our hands and see what happens with tariffs, and see
Speaker 3: what happens with the budget and then kind of assess
Speaker 3: it from there. And that's why the market doesn't expect
Speaker 3: the FED to move until June at the earliest. At
Speaker 3: this point, so I think the FED is going to
Speaker 3: have to learn to adjust that there is a plan
Speaker 3: out there. By this administration, And it isn't just a
Speaker 3: bunch of disconnected things like you know, tariffs or a
Speaker 3: sovereign wealth fund or demanding that Europe pay for it
Speaker 3: more security so that we could relieve our own defense budget.
Speaker 3: It's what I've been talking about for the last couple
Speaker 3: of weeks. It's the mar Alago Plan. That is the plan,
Speaker 3: and we're getting all the phases of that plan. And
Speaker 3: the idea is to lower the value of the dollar,
Speaker 3: is to bring the US into a more competitive position,
Speaker 3: is to relieve us of the debt burden and bring
Speaker 3: down interest rates. But right now the Fed seems to
Speaker 3: think like there's kind of three random things that are
Speaker 3: happening side by side and hasn't put that together. Once
Speaker 3: they do, hopefully they'll understand the plan.
Speaker 4: So it's interesting. Jim Torston slockover to Apollo's out with
Speaker 4: a note this morning and just kind of talking about
Speaker 4: the reverse of globalization. He calls it segmentations and talking
Speaker 4: about how that puts structural upper pressure on inflation, goods,
Speaker 4: inflation in labor, keeping interest rate structurally higher for longer.
Speaker 4: How do you think about that? Is that something that
Speaker 4: can be a real headwind for global economy.
Speaker 3: Oh, I think it is a headwind for the global economy,
Speaker 3: and it will be for both that and inflation. Torston's
Speaker 3: right about that. It will put upward pressure on inflation.
Speaker 3: And if you look at the global economy, especially if
Speaker 3: you look at the European economy, they're not doing very
Speaker 3: well right now. The Chinese economy is not doing well
Speaker 3: at all right now. Though the bright spot in the
Speaker 3: globe is United States, at least at the top line,
Speaker 3: the state's economy is stronger than most of the other
Speaker 3: developed countries and it continues to do well. But that segmentation,
Speaker 3: or that deglobalization as it was called before, that that's
Speaker 3: been underway now pretty much since the financial crisis and
Speaker 3: got accelerated post COVID, and I suspect we're going to
Speaker 3: continue to see that happen. That's the impetus behind tariffs.
Speaker 3: And why President Trump keeps talking about we have unfair
Speaker 3: deals is that he's trying to correct that. But that
Speaker 3: means we're going to see more segmentation.
Speaker 2: Jim Mianco, We've had a series of conversations. If you're
Speaker 2: just joining us, James Bianco with us from Chicago, threat
Speaker 2: he could be with Us with Jim Bianco Research. Jim,
Speaker 2: I I look at the last couple of days of
Speaker 2: conversations and a lot of people are yeah, yeah, but
Speaker 2: we're cautious and it's the politics and all that. A
Speaker 2: headline out three minutes ago Elon Musk will attend Trump
Speaker 2: Cabinet meeting today that according to Fox News Jim Bianco,
Speaker 2: how do you participate in the market, in the stock
Speaker 2: market given the slow we're all having right now?
Speaker 3: Well, that is the thing you want to definitely get yourself,
Speaker 3: you know, away from, is getting bogged down into all
Speaker 3: of these situations, whether you know there's this or that
Speaker 3: that's happening, or even the mar A Lago cord. I
Speaker 3: think you'd want to take a longer term perspective and
Speaker 3: to decide what you like what you don't like. Now,
Speaker 3: not that I've said that, I'll give a note of caution.
Speaker 3: The other problem that the stock market has, while I
Speaker 3: think it's having indigestion more than anything else, is we
Speaker 3: started the year with very high valuations in the market,
Speaker 3: and the Max seven stocks had extremely high valuations. They
Speaker 3: need everything to go right. When you have those kind
Speaker 3: of valuations, you know, to put it into you know,
Speaker 3: in baseball terms, you need to score eight runs, and
Speaker 3: if you score six runs, that's not enough, even though
Speaker 3: six runs sounds like a lot, because that's the problem when.
Speaker 2: You have high valuation.
Speaker 3: And that, I think is why we're starting to see
Speaker 3: people be more cautious more than anything else, is those
Speaker 3: type of issues, and it gets kind of wrapped up
Speaker 3: into you know, the news flow of the day.
Speaker 4: Jim, we're about ninety percent of the way through the
Speaker 4: SP five hundred reporting season here obviously, and Video big, big,
Speaker 4: big name after the close. What have you learned from
Speaker 4: the earnings?
Speaker 3: Yeah, and Video's the biggest name. But the earnings numbers
Speaker 3: have looked great so far. The year over year earnings
Speaker 3: numbers for the fourth quarter to fourth quarter for the
Speaker 3: S and P five hundred is running around twelve or
Speaker 3: thirteen percent. That's been a very good number. Even sales,
Speaker 3: which is kind of an analogous to nominal GDP because
Speaker 3: they're like trillions of dollars of sales is five and
Speaker 3: a half percent, and so these numbers have been looking
Speaker 3: very good. Now that I've said that, remember that those
Speaker 3: are the numbers they report it. They don't have much
Speaker 3: forward guidance. But even the companies are offering guidance that
Speaker 3: is somewhat positive right now, So that is that is
Speaker 3: a good thing, but that is also running into that
Speaker 3: high valuation thing. So even though those numbers might be good,
Speaker 3: they might not be good enough.
Speaker 2: Jim way too early from Simiaco. Thank you so much
Speaker 2: for joining us.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 2: Shassuma Couladi out of New Mexico with all sorts of
Speaker 2: other attributes at I Capital, the woman who absolutely nailed
Speaker 2: the bolt market. We protect the copyright of our guests.
Speaker 2: Get anastasia amorrosis note from my Capital. You're not going
Speaker 2: to get it from us. And once again you mince
Speaker 2: no words. You just say this is transitory. Why is
Speaker 2: the gloom crew wrong?
Speaker 5: Well, I think the gloom crew has been looking for
Speaker 5: an excuse to do you risk and they've been hanging
Speaker 5: onto this narrative of a growth scare. But Tom, let's
Speaker 5: unpack the growth scare and the inflation scare that we
Speaker 5: had in the last couple of weeks, and growth scare
Speaker 5: has been due to soft data or surveys or consumer
Speaker 5: confidence slumping to you know, significantly lower levels. But guess what,
Speaker 5: Consumers have been gloomy for some time. In fact, for
Speaker 5: the last two or three years, we've been in this
Speaker 5: broad range of depressed consumer confidence. But has that actually
Speaker 5: stopped the US economy has spent. Has that stopped that
Speaker 5: same consumer from spending? Not really. And then the other
Speaker 5: thing that the gloom crew has worried about is inflation
Speaker 5: and the inflation expectations popping from five point two percent
Speaker 5: to six percent in the latest consumer confidence survey. Well,
Speaker 5: maybe it's the price of eggs, maybe it's the fear
Speaker 5: of tariffs, But we don't have six percent inflation. We're
Speaker 5: likely to have two point six percent year of year
Speaker 5: core PC inflation reported this Friday. So I think the
Speaker 5: softness of economic data is an excuse. What's really happening
Speaker 5: is the technicals, it's the sentiment, it's the retail trader
Speaker 5: is really stepping back. But that is a process time
Speaker 5: and that's why I say it's transtory. It doesn't last,
Speaker 5: it doesn't fundamentally change the outlook, it doesn't last forever.
Speaker 5: And I actually think we didn't just have a three
Speaker 5: percent pullback in the SMP. We had a median thirteen
Speaker 5: percent pullback in a stock in the SMP. So I
Speaker 5: think we're getting closer to the finish line of this
Speaker 5: pullback earnings.
Speaker 4: We're ninety percent away through the earning cycle here. What
Speaker 4: have you taken away? What have you learned from some
Speaker 4: of the guidance that we've heard from corporate America.
Speaker 5: Yeah, I think generally speaking, corporate America is still optimistic,
Speaker 5: but there's certainly some uncertainty and there's some reservations about
Speaker 5: what's going to happen with tariffs. And you know, look,
Speaker 5: if you look at earnings revisions, they have actually been
Speaker 5: trending lower in the United States, which by the way,
Speaker 5: is in contrast to Europe, it's in contrast to Japan.
Speaker 5: And the reason for that is, you know, we're expecting
Speaker 5: thirteen percent earnings growth this year, but now we have
Speaker 5: to shave off a little bit because we have a
Speaker 5: dollar strength. Then we have to maybe shave off a
Speaker 5: little bit more because we have tariffs and reciprocal tariffs.
Speaker 5: So you know, because of that, the sentiment perhaps was
Speaker 5: not as buoyant as it would have been otherwise, but
Speaker 5: it does not erase the thirteen percent earnings growth we expect.
Speaker 4: Are there sectors that screen well for you right now?
Speaker 5: Well, first of all, I actually think you have to
Speaker 5: stick with what's working right now, and the core core
Speaker 5: theme in the market is actually artificial intelligence. You know,
Speaker 5: I love the fact that in Vision videos today a
Speaker 5: little bit and a little bit along with the sixty
Speaker 5: other analysts that are covering the name. But but look,
Speaker 5: you know, in Vidia gets the last word on what's
Speaker 5: happening with the momentum and artificial intelligence, and I think
Speaker 5: what we've heard from others is already pretty constructive, whether
Speaker 5: it's Meta, whether it's Amazon, whether it's others that are
Speaker 5: continuing to spend on AI, cap BAX and you know,
Speaker 5: to me, the key takeaway from deep Seek actually is
Speaker 5: not that we're not going to need as many chips,
Speaker 5: but it's the fact that more people can skip the
Speaker 5: training phase and actually go to the inference phase. And
Speaker 5: so for that, guess what they're going to need a
Speaker 5: whole lot more semiconductor content. So I think you stick
Speaker 5: with that, and after the pullback that we've had, we've
Speaker 5: actually had, we're nearing some oversold conditions in some of
Speaker 5: the AI software stocks, specifically AI semiconductors. I'm looking at
Speaker 5: that thing still.
Speaker 2: If you're joining us right now on your commune across
Speaker 2: the nation, good morning on Apple CarPlay androd out a
Speaker 2: good morning ninety to nine FM in Boston. Thank you
Speaker 2: for being with us on YouTube. Subscribe to Bloomberg Podcast.
Speaker 2: This digital experiment growing each and every day, Tracy Alloway
Speaker 2: and Joe wis it Thal helping out there without lats?
Speaker 2: Look for that as well a Bloomberg Podcast. Anastasia amorroso
Speaker 2: with us. You bring prodigious mathematics to your research. Note
Speaker 2: you mentioned earlier. Let's discuss this. The SPX is down
Speaker 2: three percent, but when you take out the high flyers,
Speaker 2: the median the center tendency is down thirteen percent. So
Speaker 2: can we say we've had a median correction on our
Speaker 2: way to a median bear market.
Speaker 5: Well, I don't think we're on our way to a
Speaker 5: median bear market, but we have had a meaningful median
Speaker 5: correction of a thirteen and a half percent. And Tom,
Speaker 5: there's another way I like to look at it, which
Speaker 5: is in terms of oversold conditions. And the thing that
Speaker 5: really jumps out of you is the S and P
Speaker 5: did not quite yet hit the oversold level, and neither
Speaker 5: has the NASDAC. But if you look at the MAC
Speaker 5: seven stocks, they're very close to actually hitting that oversold level,
Speaker 5: the relative strength indicator of RSI.
Speaker 2: I want to translate this for you. You're in New Mexico.
Speaker 2: You figure you're going to get a solid bead. Maybe
Speaker 2: you'll sneak out with the bat plus. And in the
Speaker 2: front row is Anastasia Amoso who was eighteen years old
Speaker 2: and did nail box plot analysis. You know, where did
Speaker 2: this girl come from?
Speaker 5: I was always a front and center kind of student.
Speaker 2: I will say, did you have you're too young for
Speaker 2: slide roll twelve or something?
Speaker 4: Of course, of course they knew how to use it.
Speaker 2: Right, I actually knew how to use the calendar. What
Speaker 2: it's like with Lisa here in Anastasia, it's like nerd patrol.
Speaker 4: I know, it's great stag. How should we think about
Speaker 4: valuation because a lot of strategists will say, that's all
Speaker 4: my clients want to talk about is kind of the
Speaker 4: valuation of the market. How do you kind of frame
Speaker 4: that for your clients.
Speaker 5: I guess I'm a little surprised that's all the clients
Speaker 5: want to talk about, because we have had the multiple
Speaker 5: NSMP twenty one, twenty two times, and you know, there's
Speaker 5: a reason for why that multiple continues to be persistent.
Speaker 5: First of all, we have that two and a half
Speaker 5: two point three percent earnings growth or excuse me, as
Speaker 5: a GDP growth that's not going away, So that's supporting
Speaker 5: the multiple. The other thing, you know, back to the
Speaker 5: AI theme and back to the tech theme. If you
Speaker 5: look at the S and P five found a margin
Speaker 5: twelve and a half percent, it's not bad, but guess
Speaker 5: what it is double that in some of the tech shares.
Speaker 5: And so that's why the margin continues to be elevated.
Speaker 5: So I don't see that as a huge concern provided
Speaker 5: that that softness that we see in soft data doesn't
Speaker 5: actually turn it into a recesion and that's not my
Speaker 5: base case.
Speaker 2: Underpin it with GDP we had earlier Jimbianco linking and
Speaker 2: nominal GDP into revenue growth of companies. Do you have
Speaker 2: the same relationship here where you know we supprise once again,
Speaker 2: there's gloom on this and we surprised with OKGD, which
Speaker 2: leads to solid revenue growth.
Speaker 5: Yeah, I think revenue growth should remain solid. I mean,
Speaker 5: if you look across the pockets of the US economy,
Speaker 5: the unemployment rate is low, wage growth is actually outpacing
Speaker 5: inflation at this rate. So all of that does support consumption,
Speaker 5: which drives revenue growth. Now outside of the US, you know,
Speaker 5: for companies who rely on that revenue growth, outside of
Speaker 5: the US, things are looking up too. I mean Europe
Speaker 5: for example. First of all, they've avoided the Max seven
Speaker 5: exposure and the meltdown, but there's something fundamentally different about
Speaker 5: the European economy, which is they're actually cutting interest rates
Speaker 5: and they've been doing that ahead of the FED. And
Speaker 5: I think that cumulative benefit of rate cuts will start
Speaker 5: to accumulate for Europe. It should turn out turn around
Speaker 5: the housing market, it should turn around the commercial property market.
Speaker 5: So if you have European exposure and your revenues that's
Speaker 5: looking so.
Speaker 2: Global, would that do you get finally a weaker dollar qualth?
Speaker 3: No?
Speaker 5: I don't think so, because the interesting differential is really
Speaker 5: the most important thing that I think will be driving
Speaker 5: the dollar, and tariffs is in the second place to that, look,
Speaker 5: the way I look at it international oftentimes it ends
Speaker 5: up being a trade and I think Europe is a
Speaker 5: good trade right now, given the deal that we're seeing
Speaker 5: with Ukraine and Russia hopefully, you know, given the CB moves.
Speaker 5: But longer term to really invest in Europe or Japan
Speaker 5: or any other place is what I would focus on, tom,
Speaker 5: is what are the leading companies in Europe that are
Speaker 5: tied to artificial intelligence, that are tied to decarb. I
Speaker 5: can't to give us a thing, but I'll give you
Speaker 5: one other idea. And of course you know, the markets
Speaker 5: have already reacted to that, but clearly Europe does have
Speaker 5: to beef up the defense spending as a result of
Speaker 5: the negotiations, and so European defense stocks have have woken
Speaker 5: up and are doing quite well as a result of
Speaker 5: that as well.
Speaker 4: So what are the headwinds here? A lot of folks
Speaker 4: will say the noise coming out of Washington, DC is
Speaker 4: so broad and so consistent that it's hard to really
Speaker 4: look through it and maybe focus on fundamentals. What do
Speaker 4: you say to people like that that are saying, I'm
Speaker 4: just not sure how to play the discussion about tariffs
Speaker 4: and you know, all the other economic policies sit in
Speaker 4: coming out of Washington.
Speaker 5: Look, first of all, this is exactly in line with
Speaker 5: the expectation that we had going into the year. You know,
Speaker 5: the name of the outlook, as we titled it, it
Speaker 5: was the year of solid independings, which are all the
Speaker 5: economic fundamentals that we talked about, but with plenty of wildcars.
Speaker 5: And I called it wildcars because they're exactly that they
Speaker 5: can turn out to be positive, they can turn out
Speaker 5: to be negative. We don't know. But we have to
Speaker 5: focus on is what is the trajectory of the economy.
Speaker 5: What is it the trajectory of revenues and earths that
Speaker 5: you talked about, and position yourself around that. Now, from
Speaker 5: the asset allocation perspective, you know, I don't know if
Speaker 5: it's the time to go all in on small caps
Speaker 5: given the uncertainty, but I think it is the time
Speaker 5: to go all in on higher quality domestic companies that
Speaker 5: align with the America First agenda. I think it is
Speaker 5: time to continue with the AI trend. And the other
Speaker 5: thing I would say, private credit, for example, stands out
Speaker 5: has a great opportunity in this environment.
Speaker 2: When you came to America, did you speak English? I
Speaker 2: did you did.
Speaker 5: It wasn't well, it was all right, It was all right, Okay,
Speaker 5: is really not.
Speaker 2: Quite I want you to talk to Americans that have
Speaker 2: never left the country about American exceptionalism. You and I
Speaker 2: talked two days after Putin invaded Ukraine. Whatever, Let's forget
Speaker 2: about the politics right now. It's not fair to you,
Speaker 2: But I want you to talk about this phrase, American exceptionalism.
Speaker 2: Talk to Americans this morning across this nation. What does
Speaker 2: it mean to you?
Speaker 5: It is an exceptional and outstanding place that nowhere else
Speaker 5: can you replicate that. And I do travel globally, you know,
Speaker 5: I immigrate to the US when I was sixteen. But
Speaker 5: nowhere else can you get the same stability of government,
Speaker 5: believe it or not, as you get in the United States.
Speaker 5: Nowhere else can you get this pro business mentality, even
Speaker 5: though we argue about the deregulation here and there, and
Speaker 5: nowhere else, frankly, can you get the same opportunity set
Speaker 5: as you do here. So it is truly truly an
Speaker 5: exceptional place. And this is why when I think about investing,
Speaker 5: you know, yes, while it's tempting to go invest in
Speaker 5: emergent markets or maybe trade around in Europe, and Japan.
Speaker 5: You know, if you are a long term investor, you
Speaker 5: have to focus on the pillars that you know are
Speaker 5: going to be there, and I think the pillars of
Speaker 5: American exceptionalism will be here.
Speaker 2: Sasha, thank you so much. Anasta Amorros, I can't with
Speaker 2: us this morning here. She continues, It's transitory, these challenges
Speaker 2: we have, and she says, get on board in your
Speaker 2: own way, look for her research and I at capital.
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Speaker 2: I've been fine, Seth joins us right now, just absolutely
Speaker 2: fabulous in securities analysis. Let how do you with Graham
Speaker 2: Dot and Cadalive And with both both you and I
Speaker 2: have read cover to cover model out revenue growth of
Speaker 2: seventy percent. I mean with Nvidia, you're not using any
Speaker 2: conventional template, are you?
Speaker 3: No?
Speaker 6: You really got to look at their return on capital,
Speaker 6: which is incredibly strong because they are an intellectual capital
Speaker 6: rather than a financial capital intensive company, and the growth
Speaker 6: is phenomenal, the return on capital is phenomenal. They have
Speaker 6: brought back so much dock that they've pretty much given
Speaker 6: back all of their equity capital, and they still just
Speaker 6: continue to grow in value because they continue to innovate.
Speaker 6: And they are on the cutting edge of AI, which
Speaker 6: is we are in a major multi decade investment cycle
Speaker 6: here that is going to change everything. And I continue
Speaker 6: to quote Tom Siebel, who I believe is the one
Speaker 6: who said that every company he's the founder of C
Speaker 6: three AHI, that every company will be an AI company,
Speaker 6: that every company will use a guy in various aspects
Speaker 6: to optimize their business, to improve productivity, to improve customer interaction.
Speaker 6: So and we are just in the beginning stages of this.
Speaker 2: Okay, the WACC screen, folks, which is my favorite value
Speaker 2: add from mister Bloomberg and mister Secnda. The debt cost
Speaker 2: is zero point three percent, is the weight of debt
Speaker 2: ninety nine point seven percent equity. The ROIC is one
Speaker 2: hundred and fourteen percent per year. This is through a
Speaker 2: Stern Stuart and Net operating profit study as well. Ivan,
Speaker 2: what's your ex access on this. If we all learned
Speaker 2: in school that it's a seven year dividend discount model.
Speaker 2: What's your X axis on an Nvidia? How far out
Speaker 2: can you look? Well, I mean you don't have to.
Speaker 6: You can't just really extrapolate into perpetuity. But they continue,
Speaker 6: they drive. They've invented the GPU, the graphic processing unit,
Speaker 6: which is driving all of AI because what it does.
Speaker 6: Originally the GPU turned digital information into visual information that
Speaker 6: we saw on a screen. And then they reverse that
Speaker 6: and they take visual information and turn it into digital information,
Speaker 6: which is how the large language learning models work. And
Speaker 6: this will continue to happen faster and faster, with higher
Speaker 6: resolution and more depth, and create these visual pictures that
Speaker 6: are driving the computer learning process and also continuing to
Speaker 6: digest process more and more information, more and more data.
Speaker 2: Paul, I've never seen this. The cap ax is three
Speaker 2: billion YEP. Cash from operations is fifty nine billion, three
Speaker 2: divided by fifty nine I've never seen that.
Speaker 4: Yeah, just extraordinary income statement. So Ivan, I'm sure your
Speaker 4: clients are asking you, Okay, how else do I play this?
Speaker 4: I can't have all my eggs in this Nvidia basket
Speaker 4: if I believe in this AI thing, how else do
Speaker 4: I play it?
Speaker 6: Well, I'm glad you asked that, because two other stocks
Speaker 6: I happen to like that I think are under the
Speaker 6: radar AI plays data center plays are land Bridge and
Speaker 6: Texas Specific Land. They own property and infrastructure that can
Speaker 6: provide power and water, which is the three things that
Speaker 6: are needed for a data center. You need space, you
Speaker 6: need power, and you need water and connectivity. So I
Speaker 6: think both land Bridge and Texas Specific Land are really
Speaker 6: incredible long term data center and AI place.
Speaker 2: I mean, you got to come on once every ten days, Paul.
Speaker 2: You hear the name the TPL Texas Specific Land Corporation,
Speaker 2: Does it sound like a time share? It's selling you
Speaker 2: selling your Corpus Christy or Galveston condos.
Speaker 4: Look at this, I've never heard of this company before,
Speaker 4: but the name actually tells you what they do. Texas
Speaker 4: Pecific Land Corporation owns tracks of land in Texas. Get
Speaker 4: this previously the property of the Texas and Pacific Rail
Speaker 4: Rate Company. So you're literally Ivan telling me I got
Speaker 4: to own the land on which this stuff's going to
Speaker 4: be built.
Speaker 2: Right.
Speaker 6: Yes, And first of all, every other day you hear
Speaker 6: about new investments in data centers. First of all, Microsoft's
Speaker 6: kicked it off. This year with increasing their data center
Speaker 6: and AI CAPBAX from fifty billion to eighty building billion.
Speaker 6: Then Meta came out with projecting sixty to sixty five
Speaker 6: billion in capital investments in AI in daydata centers this year,
Speaker 6: Google seventy five billion, Amazon one hundred billion. And then
Speaker 6: you know, you saw the launch of Project Stargate, which
Speaker 6: is starting off with one hundred billion and ranning on
Speaker 6: five hundred billion over the next four years. And then
Speaker 6: Apple said yesterday that Monday that they are investing five
Speaker 6: hundred billion in the next fight in the US between manufacturing,
Speaker 6: processor development, and AI and data centers. So the you know,
Speaker 6: you're looking at trillions of dollars in capital investments over
Speaker 6: the next ten years.
Speaker 2: This is Tyler Glover. They got one hundred and eleven
Speaker 2: employees one one one. I even fines it brilliant on
Speaker 2: TP already thirty seven percent per year over the last
Speaker 2: ten years. And it's not just about the AI moon
Speaker 2: shot that we've seen the last.
Speaker 4: Two years exactly. I've watched some many other themes that
Speaker 4: you talk to your clients about here, because again, if
Speaker 4: you think about the equity market performance twenty twenty three,
Speaker 4: twenty twenty four, more than twenty percent gains in SMP
Speaker 4: five hundred, and a lot of books are saying, man,
Speaker 4: is this market out over at skis? How do you
Speaker 4: kind of frame opportunities in twenty five?
Speaker 6: Well, we are still in the you know, we're in
Speaker 6: the golden age of equities. The equity market is the
Speaker 6: place to be. More and more people are investing in
Speaker 6: stocks and that will continue. And that's the look. You look,
Speaker 6: over time, the best way to create wealth has been
Speaker 6: in the stock market. Whether you go past ten years,
Speaker 6: twenty years, one hundred years, in two hundred years, stocks
Speaker 6: have been the best place outperformed pretty much over the
Speaker 6: long term every other asset class.
Speaker 4: So are there sectors? Is is it a technology weighted outlook?
Speaker 2: There?
Speaker 4: Ivan, because that has been one of the areas that
Speaker 4: have worked so well for investors for well, yeah, a
Speaker 4: couple of decades now, one could I right.
Speaker 6: Since the beginning of time, technology has moved society forward
Speaker 6: and will continue to do so. In the internet, the
Speaker 6: cell phone, the tablet, the personal computer, high speed networks,
Speaker 6: and now AI. You know that these trends continue to
Speaker 6: emerge and then they continue to grow and they drive
Speaker 6: everything in society forward.
Speaker 2: For global Wall Street this morning. Want to treat Ivan
Speaker 2: find Seth through this senior partner, Chief Investment Officer Tegriss
Speaker 2: Financial Partners, always with a different view out of Boston University,
Speaker 2: which is a good and beautiful thing. Probably studied was
Speaker 2: v Body a few years ago. We welcome you on
Speaker 2: your morning commute across the nation on YouTube, our new
Speaker 2: digital product YouTube, you know, the YouTube podcast growing each
Speaker 2: and every day. Really humbled by the international growth there,
Speaker 2: but also domestically in your office at home. Please more
Speaker 2: of Ivan finds us right now, Ivan, you were at
Speaker 2: BU I assume as v Body and corporate finance to
Speaker 2: the finance textbooks work right now given the skew to
Speaker 2: Meg seven.
Speaker 6: Well, you know what they say every you know, it's
Speaker 6: a new economy, but the same old economics still apply,
Speaker 6: So the same math, the same calculations, while we can
Speaker 6: do it better and faster using computers and using AI,
Speaker 6: write reports quicker and get more information faster and disseminated faster.
Speaker 6: So the speed, so the way things happen still goes
Speaker 6: back to the beginning and hasn't changed. The speed which
Speaker 6: things happen will continue to accelerate and accelerate and accelerate.
Speaker 2: I mean, I got green and the screen Ivan, But
Speaker 2: the fact is I got belief and strung by MasterCard, Facebook,
Speaker 2: I call it Facebook Meta Ivan. For me, I call it,
Speaker 2: I call it Facebook. Strung by Apple. Discuss Apple right now.
Speaker 2: How do you have a strung by? Given the China gloom,
Speaker 2: how do you do that? Ivan?
Speaker 6: Well, of all, they had a pullback app in iPhone
Speaker 6: sales in China, but they are working on now. They
Speaker 6: are seeing them now a pickup in iPhone sales. iPhone
Speaker 6: sales and the halo effect that it has to the
Speaker 6: Apple ecosystem, which drives services sales will continue to grow
Speaker 6: and Apple Intelligence will be also a powerful growth driver
Speaker 6: for Apple and for Apple services. You know, the Apple
Speaker 6: Apple has an over two billion in an installed user
Speaker 6: base that you know goes through the upgrade cycle, goes
Speaker 6: to the additional services cycle. And what's fascinating is that
Speaker 6: him Cook said years ago that Apple as great as
Speaker 6: the iPhone is and all and the iPad and all
Speaker 6: of the Apple products are. Him Cook said several years
Speaker 6: ago that Apple's biggest contribution to society will be in healthcare.
Speaker 6: And you know they have the fitness app, a lot
Speaker 6: of healthcare data in the in their their apps and
Speaker 6: their products. They are just launched a new UH earphones
Speaker 6: with a heart rate monitor. So there's a lot to
Speaker 6: do in healthcare and health monitoring and health optimization that
Speaker 6: I will believe you will see from Apple, which is
Speaker 6: a whole new category you know, of growth and the
Speaker 6: ability to and and then it goes back to AI
Speaker 6: with the ability to detect and cure the disease AI
Speaker 6: and to speed up drug discovery. You know, companies like
Speaker 6: Aluminum which use AI, use in Vidia's GPUs to map
Speaker 6: genomes and UH the ability for DNA analysis and to
Speaker 6: do things to do tests that used to take weeks
Speaker 6: now can take a day. So AI and technology drives
Speaker 6: every aspect forward.
Speaker 4: Ivan, how do you get comfortable with if you the
Speaker 4: China risk for Apple, I just for a lot of folks,
Speaker 4: it's just hard to get the arms around in this
Speaker 4: global geopolitics.
Speaker 6: Well, it's always going to be a risk somewhere, and
Speaker 6: but geopolitical risks exists, and they do get a lot
Speaker 6: of headlines. But if you look, they haven't really affected
Speaker 6: the market since the start of the Ukrainian Russian War
Speaker 6: that you know, the market really wasn't affected even the
Speaker 6: tragic situation in Israel, it didn't affect the market. So
Speaker 6: they exist, and they have to be folks, you know,
Speaker 6: geopolitical issues and risks exist, and they have to be,
Speaker 6: you know, taken into consideration. But like I say, no
Speaker 6: matter what happens in the world, when Tim Cook gets
Speaker 6: up every morning, the first thing he thinks about is
Speaker 6: how to sell more iPhones. Say you know Mary Barratt
Speaker 6: m when she gets up every morning, the first thing
Speaker 6: she thinks about is how to sell more cars. And
Speaker 6: you saw today GM just announced a twenty five percent
Speaker 6: dividend increase and an additional six billion dollar share we
Speaker 6: purchase authormization that comes from confidence in your business, confidence
Speaker 6: in your business outlook, confidence in your cash flow, that
Speaker 6: they will be able to manage terriff issues which do
Speaker 6: affect the auto industry a lot.
Speaker 2: Right, I've got to leave it there. Thank you so
Speaker 2: much for coming on, particularly wisdom on Nvidia and is
Speaker 2: strung by I should point out on generous motives as well.
Speaker 2: I'm in fine seth with tigers this morning.
Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto.
Speaker 1: With the Bloomberg Business app. You can also watch us
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.
Speaker 2: The daily look at the front pages the Lisa Mateara
Speaker 2: Report without any discussion of Nvidia. What do you got, Lisa?
Speaker 7: Okay, So this is a new report about the highest
Speaker 7: rated celebrity owned restaurants. Paul, You're gonna appreciate this.
Speaker 4: Look.
Speaker 7: Trip Advisor Google looked at those five star reviews John
Speaker 7: bon Jovi's JBJ Soul Kitchen.
Speaker 2: Wow.
Speaker 7: Yeah, Red Bank, New Jersey. It also has it's four locations,
Speaker 7: so red Bank, Tom's River, two on college campuses, Ruckers
Speaker 7: and New Jersey City University. But the reason they like
Speaker 7: it it's a nonprofit opened in twenty eleven with his wife.
Speaker 7: No prices on the menu, they just suggest like a donation.
Speaker 7: So it's created to help those with food and security.
Speaker 7: So they're saying, great food, great service, commitment to the community.
Speaker 4: It's a win win. So it's a community restaurant. It's
Speaker 4: a community cool. Red Bank is a nice foody town.
Speaker 2: By the figure out a road trip there, I'm sure
Speaker 2: it's like a no brain who.
Speaker 4: Go there all the time love Red Bank. We have to,
Speaker 4: but you kind of check it out.
Speaker 7: I still have. I've heard about it and I have
Speaker 7: to check it out.
Speaker 2: They said, one hundred ninety eight two hundred and twelve
Speaker 2: meals have been served, forty three percent paid with donations.
Speaker 7: It's incredible. Even people who can't afford they can eat there.
Speaker 7: And then if hey, if they want to work and
Speaker 7: like do something, they kind of, you know, do things
Speaker 7: like that. So it's a really really really good concept.
Speaker 4: I love it.
Speaker 7: Okay, So this one Jersey Strong exactly, This one from
Speaker 7: the Washington Post caught my eye. More Canadian coffee shops.
Speaker 7: They're changing the name of a popular drink on their menu,
Speaker 7: so the Americano is now the Canadiano. Okay, protesting Trump's tariffs,
Speaker 7: you know, they expected to take back next month.
Speaker 4: Also, shop owners.
Speaker 7: Saying they don't want to become like this political place,
Speaker 7: but they want to stand up for their country. So
Speaker 7: that's why they're doing this. I didn't realize because some
Speaker 7: people are protesting. They're saying, well, you're changing the origin
Speaker 7: because it actually originated US soldiers in Italy doing World
Speaker 7: War Two. They complained that the espresso was too strong,
Speaker 7: so they put water water, they cut it with water,
Speaker 7: and so it became Cafe Americano, which is my favorite
Speaker 7: drink in the country.
Speaker 2: Coffee.
Speaker 7: Yes, but it was just stand up because you've heard
Speaker 7: like the hockey fans right booing at the national anthemic game.
Speaker 7: So this is just kind of another thing in the.
Speaker 2: President's comments in the last twelve hours in trade. Yeah,
Speaker 2: I don't when does it go away? I don't see
Speaker 2: it drifting away.
Speaker 7: We shall see.
Speaker 4: It's supposed to remember the whole French fry thing became
Speaker 4: what was a patriot.
Speaker 7: It's it's along the same thing, the same thing. We've
Speaker 7: been talking a lot about weight loss, drugs, right, curb
Speaker 7: and your appetite. Yes, we have and you know that,
Speaker 7: but it's also prosing a risk to curbing sales at
Speaker 7: top companies. You heard Cheesecake Factory carried doctor Pepper. They
Speaker 7: all said that it's going to change the consumer behavior.
Speaker 7: And this is something we've been talking about. Even Molson
Speaker 7: Core said it because it says it's changing people's drinking behavior.
Speaker 7: What's different is that these companies didn't actually mention that
Speaker 7: on last year's report, so they're mentioning it on this
Speaker 7: year's report to show. Hey, the significance is still a deal.
Speaker 7: It's still a deal. I mean, Walmart said about two
Speaker 7: years ago that it's going to affect how people buy food.
Speaker 7: But yeah, this is this is the thing.
Speaker 4: They were companies.
Speaker 2: You're starting to do the newspapers this morning. Thank you
Speaker 2: so much.
Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the
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