WEBVTT - Bloomberg Surveillance TV: September 24th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordernt. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.000 Terminal and the Bloomberg Business app. What a run we've 0:00:37.040 --> 0:00:39.560 had for the equity market twenty eight, all time highs 0:00:39.560 --> 0:00:41.560 on the S and P five hundred and the rally 0:00:42.040 --> 0:00:45.280 just keep on climbing. Rick Worster, the president and CEO 0:00:45.400 --> 0:00:48.159 of Charles Swap, joins us now to discuss Welcome to 0:00:48.159 --> 0:00:50.040 the program sir, it's going to see you most of you. 0:00:50.159 --> 0:00:52.120 Welcome back. Rick, It's always good to see you. What 0:00:52.200 --> 0:00:54.240 a year has been already for twenty five, still got 0:00:54.280 --> 0:00:56.080 three or four months left. Can you frame for us 0:00:56.120 --> 0:00:58.640 how engage your clients have been over the last year. 0:00:58.840 --> 0:01:01.360 Our clients are very much gage so our trading activity 0:01:01.400 --> 0:01:03.800 this year has generally been about thirty percent higher than 0:01:03.880 --> 0:01:06.040 last year. So clients are in the market, they're invested. 0:01:06.800 --> 0:01:10.039 I've been in about fifteen of our retail branches in 0:01:10.040 --> 0:01:11.720 the last couple of weeks, and I was in Princeton, 0:01:11.720 --> 0:01:13.600 New Jersey yesterday and I asked the client how they 0:01:13.600 --> 0:01:17.160 were feeling, and I think they synthesize what our investors 0:01:17.200 --> 0:01:20.399 are feeling really well. They said, I'm happy, but I'm nervous, 0:01:20.800 --> 0:01:22.759 and they're happy because markets are at all time high. 0:01:22.840 --> 0:01:25.280 Their balances have never been higher, but they're looking at 0:01:25.360 --> 0:01:27.959 valuations and wondering, you know, am I. 0:01:27.920 --> 0:01:28.560 Going to be okay? 0:01:28.640 --> 0:01:31.240 So it's a great time because they're looking to us 0:01:31.280 --> 0:01:33.440 for advice and they're coming in and they're talking to 0:01:33.520 --> 0:01:38.160 us and they're hearing from our experts. But it's you know, overall, 0:01:38.160 --> 0:01:39.520 are happy because markets are up. 0:01:39.760 --> 0:01:42.160 What do you think the dominant anxiety is at the moment. 0:01:42.319 --> 0:01:44.280 We've been trying to ask this question. Is it the 0:01:44.280 --> 0:01:46.280 anxiety to get out? Do you have to do some 0:01:46.319 --> 0:01:48.600 hand holding or is it the fear of missing out? 0:01:48.760 --> 0:01:50.960 Are they looking to lean in a little bit more aggressively. 0:01:51.400 --> 0:01:53.880 I think our clients are generally engaged and invested so 0:01:53.920 --> 0:01:57.120 I think it's more I have more wealth now than 0:01:57.120 --> 0:02:00.960 I anticipated. Markets have done better than I thought. Do 0:02:01.000 --> 0:02:03.080 I need to be worried about valuations and should I 0:02:03.160 --> 0:02:05.880 be getting out? I think interestingly, as it relates to 0:02:05.920 --> 0:02:08.840 the bond market, we're seeing a lot more interest in 0:02:08.960 --> 0:02:12.640 bonds now because with rates coming down, investors are wondering, 0:02:12.840 --> 0:02:14.520 do I need to go out the curve. I've been 0:02:14.560 --> 0:02:17.640 living off my purchase money fund, but the yields on 0:02:17.639 --> 0:02:18.960 that are coming down. Do I need to go out 0:02:19.000 --> 0:02:21.799 the curve and lock in higher yields? So that's been 0:02:21.800 --> 0:02:24.480 a topic of hot debate among our clients as well. 0:02:24.280 --> 0:02:26.960 The sort of elusive money on the sidelines that we 0:02:27.000 --> 0:02:29.679 talk about that's supposed to rush back into everything else, 0:02:29.680 --> 0:02:31.119 particularly the long end of the yield curve. 0:02:31.160 --> 0:02:32.440 Is that actually happening well? 0:02:32.639 --> 0:02:35.240 I think if you look at our clients, the percentage 0:02:35.280 --> 0:02:38.000 that they keep in either cash or purchase money funds 0:02:38.360 --> 0:02:42.520 has stayed relatively stable. Now the dollar amount has grown 0:02:42.560 --> 0:02:45.440 because their wealth has grown so significantly with the market 0:02:45.440 --> 0:02:47.440 increase in the last couple of years. So from a 0:02:47.440 --> 0:02:49.400 dollar standpoint, there is a lot of cast sitting on 0:02:49.440 --> 0:02:51.800 the sideline. But at the same time, it's roughly the 0:02:51.840 --> 0:02:54.120 same percentage that they've always kept because they want it 0:02:54.120 --> 0:02:58.760 for safety needs, or they wanted to they're purchasing a house, 0:02:58.800 --> 0:03:01.760 whatever it may be. I want's see a big story 0:03:01.800 --> 0:03:03.840 around cast sitting on the sidelines at the moment. 0:03:03.960 --> 0:03:06.240 Do you notice a really big difference in how your 0:03:06.280 --> 0:03:09.519 clients trade depending on their age, depending on their generation. 0:03:09.720 --> 0:03:14.680 For example, older individuals tend to go to megacaps, younger 0:03:14.720 --> 0:03:16.440 individuals just straight bitcoin. 0:03:17.600 --> 0:03:21.120 Well, we spend a lot of time talking with our 0:03:21.160 --> 0:03:23.839 younger investors, and we have thirty five hours a week 0:03:23.840 --> 0:03:26.720 of live education and training to try to get investors 0:03:26.720 --> 0:03:29.360 to think about the difference between an equity and a 0:03:29.400 --> 0:03:31.880 coin and to make sure they're making the right investment 0:03:31.880 --> 0:03:37.040 decision for them. You know, I do worry about younger investors, 0:03:37.480 --> 0:03:41.240 and crypto has been something that's done exceptionally well, but 0:03:41.280 --> 0:03:42.960 I want to make sure we want to make sure 0:03:43.000 --> 0:03:45.640 that young investors also know about the power of equities 0:03:45.640 --> 0:03:48.240 over the long term. And then investing generally is something 0:03:48.280 --> 0:03:50.200 that you want to do for the long term. Certainly 0:03:50.240 --> 0:03:52.600 you want to you can trade and take on positions, 0:03:53.120 --> 0:03:55.880 but you shouldn't expect quick hits all the time. And 0:03:55.920 --> 0:03:58.440 I think we want to make sure that young investors 0:03:58.800 --> 0:03:59.480 are aware of that. 0:03:59.560 --> 0:04:02.080 But I've read you appreciate in this country the buys 0:04:02.120 --> 0:04:05.000 to invest, the bus to act, the bus to take 0:04:05.000 --> 0:04:07.640 a bet. In the UK has so some numbers recently 0:04:07.680 --> 0:04:10.120 about how much consumers were investing, but how much of 0:04:10.160 --> 0:04:13.160 it was just going to really really low yield stuff 0:04:13.760 --> 0:04:16.320 like cash funds, stuff like that. There isn't the same 0:04:16.400 --> 0:04:19.479 bias to invest in equities and risk that I've seen 0:04:19.520 --> 0:04:21.280 growing up in the UK that exists here. What do 0:04:21.320 --> 0:04:23.279 you think that comes from in America? And how do 0:04:23.320 --> 0:04:24.400 we continue to nurture it? 0:04:24.560 --> 0:04:24.680 Well? 0:04:24.720 --> 0:04:26.880 I think it's great, and not only has it been great, 0:04:27.000 --> 0:04:30.040 it's getting even better. If you look at millennials, they're 0:04:30.080 --> 0:04:32.440 forty percent more likely to be invested by the age 0:04:32.440 --> 0:04:36.360 of twenty one than gen zers. So it's happening with 0:04:36.560 --> 0:04:40.599 younger investors as well, and we're trying to engage them 0:04:40.880 --> 0:04:45.560 where they are. We go to the YouTube TikTok Instagram 0:04:45.760 --> 0:04:48.040 and we put out videos about the power of compounding 0:04:48.240 --> 0:04:50.840 and we try to get them interested in investing because 0:04:50.880 --> 0:04:53.920 if you start young and become an investor, hopefully you'll 0:04:53.960 --> 0:04:56.200 stick with it and you'll build wealth. It's the single 0:04:56.240 --> 0:04:58.040 best way to build wealth in our country is to 0:04:58.080 --> 0:05:01.400 be an investor, and young people are embracing it far 0:05:01.440 --> 0:05:04.119 more than prior generations, which is outstanding to see. 0:05:04.279 --> 0:05:06.960 It used to be that all those opportunities were in 0:05:07.000 --> 0:05:10.080 public markets, that you'd get that blockbuster IPO that you'd 0:05:10.120 --> 0:05:12.240 want to get exposed to. Now a lot of is 0:05:12.279 --> 0:05:15.520 staying private. How are you thinking about offering opportunities in 0:05:15.560 --> 0:05:17.720 private markets for customers coming forward from here? 0:05:17.800 --> 0:05:20.640 What kind of things are they looking to do. Yeah, 0:05:20.839 --> 0:05:24.919 it's an interesting question. There's a lot more private companies 0:05:25.200 --> 0:05:28.560 than there used to be and fewer public companies, and 0:05:28.640 --> 0:05:31.279 so I do think it makes sense to think about 0:05:31.279 --> 0:05:34.760 providing direct access to retail investors to private companies, and 0:05:34.800 --> 0:05:37.480 that's something that we're looking at and thinking about how 0:05:37.520 --> 0:05:40.760 we participate in. But some of these companies are huge. 0:05:40.760 --> 0:05:44.520 You look at the stripes, open Ai, find a Bidio. Yeah, 0:05:44.720 --> 0:05:47.719 they're billion dollar companies, and so I do think retail 0:05:47.760 --> 0:05:50.360 investors ought to be able to are to be able 0:05:50.400 --> 0:05:52.680 to invest in them. And at the same time, there's 0:05:52.720 --> 0:05:55.599 probably people sitting at that company that would love liquidity 0:05:55.640 --> 0:05:58.080 for their stock positions. So I think there's a market 0:05:58.080 --> 0:05:58.760 to be made there. 0:05:58.960 --> 0:06:01.159 How much do you think that it's isolated in companies 0:06:01.440 --> 0:06:02.520 versus real assets? 0:06:02.520 --> 0:06:03.400 And I say that at. 0:06:03.320 --> 0:06:06.320 A time when we're talking about the reindustrialization of the 0:06:06.400 --> 0:06:09.320 United States and the idea that there could be actually 0:06:09.360 --> 0:06:10.680 some move behind it for the. 0:06:10.600 --> 0:06:11.680 First time in a long time. 0:06:11.720 --> 0:06:13.880 I mean, how much is that part of what you're 0:06:13.920 --> 0:06:15.120 looking to give access to. 0:06:15.080 --> 0:06:17.240 Clients real assets? 0:06:17.360 --> 0:06:18.560 Yes, well, I think. 0:06:20.520 --> 0:06:22.680 Real assets have been a great way to invest in 0:06:22.680 --> 0:06:27.200 our country. And the main thing we focus on is 0:06:28.120 --> 0:06:32.160 differentiating between productive assets and speculative assets, and I think 0:06:32.360 --> 0:06:37.360 real assets are productive assets, and so it's a great 0:06:37.400 --> 0:06:38.920 way for a client to get invested. 0:06:39.320 --> 0:06:41.640 Are you concerned about You keep talking about the coin 0:06:41.800 --> 0:06:44.839 and you're concerned about it and actually the productive versus unproductive. 0:06:45.120 --> 0:06:46.760 Do you think that that's actually. 0:06:46.560 --> 0:06:49.080 A point of concern right now in markets? The amount 0:06:49.160 --> 0:06:50.880 of involvement in the crypto space. 0:06:50.920 --> 0:06:53.240 Well, I think I think crypto could end up being very, 0:06:53.360 --> 0:06:55.479 very valuable, and there's a role for it to play, 0:06:55.760 --> 0:06:59.599 and there's a role for tokenization and the blockchain. What's 0:06:59.640 --> 0:07:03.320 important to us is that investors, particularly young investors, know 0:07:03.400 --> 0:07:06.360 what they're investing in and know why it makes sense 0:07:06.400 --> 0:07:08.840 for them to be invested in it and understand the 0:07:08.880 --> 0:07:11.120 difference between say an equity in a bond, which have 0:07:11.760 --> 0:07:16.040 some positive expected return and they're a productive asset, and 0:07:16.160 --> 0:07:18.560 just understanding the difference between that and a more speculative 0:07:18.600 --> 0:07:22.320 asset like art or baseball cards or crypto, where you 0:07:22.400 --> 0:07:25.360 don't know what the future return is going to be. 0:07:26.040 --> 0:07:28.360 It's not that we don't judge people's investments, and we 0:07:28.400 --> 0:07:30.720 can see a world where crypto is very, very valuable, 0:07:31.000 --> 0:07:34.360 but we want clients to understand the difference between those investments. 0:07:34.800 --> 0:07:37.200 Do you think next year's you're going to have more 0:07:37.520 --> 0:07:41.520 opportunities for either hiring or strategic opportunities because you think 0:07:41.560 --> 0:07:43.920 policy is clearer now out of Washington. 0:07:44.640 --> 0:07:46.840 You know what's driving our hiring is the growth of 0:07:46.880 --> 0:07:50.000 our business. We're growing at a really strong rate. We're 0:07:50.000 --> 0:07:53.840 seeing a lot of engagement from clients. Increasingly they want 0:07:53.880 --> 0:07:57.240 advice from us, they want our help in their financial life, 0:07:58.040 --> 0:08:01.040 and because of that, that's what's driving our growth. It's 0:08:01.080 --> 0:08:02.680 not about what's happening with policy. 0:08:03.120 --> 0:08:05.200 Can I just finish on the potential for partnership on 0:08:05.240 --> 0:08:07.760 private markets? I wanted to watch you that is that 0:08:07.840 --> 0:08:10.960 something you consider a partnership with another firm to offer 0:08:11.000 --> 0:08:11.800 that kind of access. 0:08:12.120 --> 0:08:15.040 I think we would love to see retail investors be 0:08:15.080 --> 0:08:17.400 able to participate in the growth of private companies in 0:08:17.440 --> 0:08:17.880 our country. 0:08:17.960 --> 0:08:19.960 So I would apollo. I've had the same thing from them. 0:08:20.320 --> 0:08:21.640 I'm trying to make a market. 0:08:21.360 --> 0:08:25.400 And and we we and we have KKR, you know, 0:08:25.920 --> 0:08:29.920 fir UH firms like KKR on our platform and that 0:08:30.400 --> 0:08:32.760 our retail investors can invest in. And that's a great 0:08:32.800 --> 0:08:36.600 way to get access to private markets. They're experts state, 0:08:36.679 --> 0:08:39.120 they started the market, they've been in forever. That's a 0:08:39.280 --> 0:08:42.000 very thoughtful way for investors to go be a part 0:08:42.000 --> 0:08:42.800 of private markets. 0:08:46.080 --> 0:08:59.240 Stay with us mulblindex. Savanna's coming up after this as 0:08:59.240 --> 0:09:02.520 the record stock hits some skepticism following some big AI 0:09:02.640 --> 0:09:06.880 investment plans. Barbara rehinhat Our Voya Investment Management remains optimistic, writing, 0:09:06.920 --> 0:09:10.480 we remain overweight equities have been all year. We remain 0:09:10.559 --> 0:09:13.120 overweight the US. Barbara john is now for more. Barbara 0:09:13.120 --> 0:09:15.360 gam moniic, good morning. Let's start with that overweight. Let's 0:09:15.400 --> 0:09:16.959 start with why. What underpins that view? 0:09:17.120 --> 0:09:19.360 Well, I think it's all been about earnings, right, So 0:09:19.840 --> 0:09:22.480 everything that you think about In terms of the equity market, yes, 0:09:22.520 --> 0:09:25.160 has had a massive bounce off of the bottom, but 0:09:25.280 --> 0:09:27.600 more than fifty five percent a bit has been driven 0:09:27.679 --> 0:09:31.040 by earnings, only forty five percent has been driven by multiples. 0:09:31.520 --> 0:09:34.560 As long as companies are delivering on their earnings, the 0:09:34.600 --> 0:09:38.400 equity market seems to be poised to continue to go higher. 0:09:38.520 --> 0:09:40.280 The early story for a handful of tech names has 0:09:40.320 --> 0:09:43.920 been absolutely phenomenal. The capex intentions spending plans have been 0:09:43.960 --> 0:09:46.319 phenomenal as well, and at least was talking about just 0:09:46.400 --> 0:09:49.880 moments ago. This market keeps rewarding those spending plans. Are 0:09:49.880 --> 0:09:52.160 we anywhere near the limit of investor tolerance? 0:09:52.280 --> 0:09:53.960 Well, I think you have to put it in context. 0:09:54.280 --> 0:09:56.200 A lot of people are starting to think about, is 0:09:56.200 --> 0:09:59.080 this like the late nineteen nineties bubble where we'd spent 0:09:59.120 --> 0:10:02.160 a lot of money on over investment in fiber, and 0:10:02.640 --> 0:10:04.720 fiber was being light and there was dark fiber still 0:10:04.760 --> 0:10:06.800 to go. But you have to remember many of the 0:10:06.840 --> 0:10:10.080 tech companies that were just propelling the market forward on 0:10:10.120 --> 0:10:12.959 the Nasdaq in the late nineteen nineties didn't have the 0:10:13.080 --> 0:10:16.000 earnings power, didn't have the free cash flow power that 0:10:16.040 --> 0:10:19.320 the companies today have. The AI investment I think is 0:10:19.360 --> 0:10:21.520 just starting to scratch the surface. We see it on 0:10:21.559 --> 0:10:23.920 our teams that we are using AI to help us 0:10:23.960 --> 0:10:27.360 with repetitive tasks, to help us with quarterly commentaries, to 0:10:27.400 --> 0:10:30.600 help us with earnings calls. So we're seeing it lift 0:10:31.000 --> 0:10:33.880 our business in terms of efficiency and in terms of 0:10:33.920 --> 0:10:37.240 productivities per workers. It may take a while for that 0:10:37.400 --> 0:10:40.480 to flow through the economic data. We may see the 0:10:40.480 --> 0:10:44.120 productivity boom five years from now on AI, but we 0:10:44.200 --> 0:10:45.680 do believe it is indeed coming. 0:10:45.840 --> 0:10:49.240 Do you believe it enough to sort of wager on 0:10:49.280 --> 0:10:52.520 the broadening out trend? The idea that the tech advancements 0:10:52.600 --> 0:10:54.840 are not going to be isolated to a handful of 0:10:54.920 --> 0:10:57.480 large companies, but that there is going to be this 0:10:57.559 --> 0:10:59.840 ground sweit of support for the equal weight. 0:11:00.440 --> 0:11:02.400 Lisa, that's a great point, and I think you have 0:11:02.440 --> 0:11:04.480 to look outside of the US to talk about that. 0:11:04.640 --> 0:11:08.079 So this entire year, the emerging markets had been lagging 0:11:08.120 --> 0:11:11.440 behind the US, and even coming off of the April bottom, 0:11:11.600 --> 0:11:14.280 a lot of global markets had come off the bottom, 0:11:14.280 --> 0:11:16.600 but the US was leading the way. Just in the 0:11:16.640 --> 0:11:19.959 past five to six weeks, you've seen this big trend 0:11:19.960 --> 0:11:22.400 that the emerging markets are starting to outperform the US, 0:11:22.720 --> 0:11:26.280 but if you look under the hood, it's really emerging 0:11:26.280 --> 0:11:30.120 market technology stocks are outpacing US technology stocks. It doesn't 0:11:30.120 --> 0:11:33.160 mean that they're not all going up together, but emerging 0:11:33.160 --> 0:11:35.640 markets seem to be taking the lead. I think in 0:11:35.720 --> 0:11:38.840 order to believe in a broadening out of the market, 0:11:39.080 --> 0:11:41.920 you need to see the FED continuing to ease. You 0:11:41.960 --> 0:11:44.720 need to get past this inflation spurt, but you also 0:11:44.840 --> 0:11:48.720 need to get past this low firing, low hiring phase 0:11:48.760 --> 0:11:50.760 that the US is in. There is a little bit 0:11:50.800 --> 0:11:54.600 of nervousness underneath the surface in terms of how long. 0:11:54.400 --> 0:11:56.000 This can continue to go. 0:11:56.679 --> 0:11:58.960 We think that once you get to the beginning of 0:11:59.000 --> 0:12:02.480 next year, got the fiscal stimulus boost from the big 0:12:02.520 --> 0:12:07.079 beautiful bill, you'll have the depreciation right down for companies, 0:12:07.320 --> 0:12:11.400 So you're going to have a much bigger fiscal stimulus 0:12:11.440 --> 0:12:13.720 push once you start to get to the first quarter 0:12:13.760 --> 0:12:14.720 of twenty twenty six. 0:12:14.880 --> 0:12:17.200 This might be a difficult question to answer, And this 0:12:17.280 --> 0:12:19.760 was something I was thinking about yesterday. Is it feasible 0:12:20.200 --> 0:12:23.400 to see a broadening out in terms of which stocks 0:12:23.400 --> 0:12:27.199 are doing better and inflation coming down? And I asked 0:12:27.200 --> 0:12:29.920 this because yesterday and the PMI data showed that actually 0:12:30.000 --> 0:12:32.640 companies were having a harder time passing along the cost 0:12:32.720 --> 0:12:36.359 to their consumers. That means shrinking margins, That means less profitability, 0:12:36.400 --> 0:12:39.120 That means something for investors that's not very positive. 0:12:39.160 --> 0:12:41.960 So are these stories kind of in conflict, Lisa. 0:12:42.000 --> 0:12:43.760 It's a great question, But I think you have to 0:12:43.800 --> 0:12:45.120 take a look not only at. 0:12:45.040 --> 0:12:48.960 Margins, but the level of margins. Margins are extremely. 0:12:48.480 --> 0:12:52.319 High in the US, and yes, companies have not been 0:12:52.360 --> 0:12:55.040 passing on all the price increases from tariffs, but. 0:12:55.040 --> 0:12:56.840 I would say there's always room. 0:12:56.640 --> 0:12:59.440 For negotiation for those to continue to go lower, and 0:12:59.480 --> 0:13:02.319 that would be very well received by the markets. So 0:13:02.400 --> 0:13:04.000 I think I have to take these things in terms 0:13:04.000 --> 0:13:06.720 of context. In terms of it's margins come down from 0:13:06.720 --> 0:13:08.760 twenty seven percent down to twenty five percent. 0:13:09.760 --> 0:13:11.480 Is it really that big of a deal. But it's 0:13:11.520 --> 0:13:12.640 a great question. Barber. 0:13:12.760 --> 0:13:16.880 You said you see productivity with AI actually being an enhancement. 0:13:17.160 --> 0:13:19.480 At the same time you say we're in this low hiring, 0:13:19.600 --> 0:13:21.920 low firing regime when it comes to labor market. Do 0:13:21.920 --> 0:13:24.800 you see companies not hiring because specifically AI. 0:13:25.360 --> 0:13:27.760 No, I think it's more companies are not hiring because 0:13:27.760 --> 0:13:30.520 of a lot of uncertainty, right You've had a lot 0:13:30.559 --> 0:13:32.800 of potential shocks to the economy over the course of 0:13:32.840 --> 0:13:35.880 this year. You had the tariff induced downturn in April, 0:13:35.920 --> 0:13:39.200 which was really significant and very severe. I mean, you 0:13:39.240 --> 0:13:43.520 had very deeply over sold conditions within financial markets. There 0:13:43.520 --> 0:13:45.440 were a lot of crawls that the world was coming 0:13:45.480 --> 0:13:48.000 to an end, you know, big rally off of the bottom. 0:13:48.240 --> 0:13:50.680 But I think that this low hiring, low firing is 0:13:50.760 --> 0:13:53.160 just a matter of companies saying we need to get 0:13:53.160 --> 0:13:54.880 through to the end of the year to get some 0:13:54.920 --> 0:13:58.960 more visibility on earnings. But companies are holding onto workers. 0:13:59.000 --> 0:14:01.760 If they're holding onto work workers, you know it's because 0:14:01.960 --> 0:14:04.400 their sales are in good shape, their earnings in good shape, 0:14:04.440 --> 0:14:07.160 their profit margins are in good shape. So, as far 0:14:07.200 --> 0:14:09.679 as we see it, the low hiring is a lot 0:14:09.679 --> 0:14:14.200 of uncertainty regarding the TIFF's, uncertainty regarding where the FED 0:14:14.280 --> 0:14:17.200 finally settles. But in the end of it, we don't 0:14:17.200 --> 0:14:19.480 see that this is necessarily the beginning of a labor 0:14:19.520 --> 0:14:20.560 market unwind. 0:14:21.000 --> 0:14:23.560 But don't we already have certainty for the most part, 0:14:23.680 --> 0:14:26.040 the tariff levels are set. We know the direction of travel, 0:14:26.120 --> 0:14:27.560 We know the direction of travel of FED. 0:14:27.960 --> 0:14:30.160 What is so uncertain about this environment right now. 0:14:30.360 --> 0:14:32.560 I think that when you're thinking about the tariff levels, 0:14:32.800 --> 0:14:35.040 there's been a lot of negotiating on them. They were 0:14:35.040 --> 0:14:38.000 set at very high levels, then they got negotiated down. 0:14:38.240 --> 0:14:40.920 There's always room when there's negotiations. You've got to think 0:14:40.960 --> 0:14:43.240 that is their potential that they're going to go lower. 0:14:43.600 --> 0:14:46.120 If the US hits much of a soft patch. Let's 0:14:46.120 --> 0:14:48.880 just say this low hiring, low firing, starts to go 0:14:48.960 --> 0:14:52.120 into either an inflationary surge or if you get into 0:14:52.120 --> 0:14:55.880 this environment where you have maybe the low hiring and 0:14:55.920 --> 0:14:57.200 the firing starts. 0:14:56.920 --> 0:14:57.440 To go up. 0:14:58.080 --> 0:15:00.600 I think that the FED and I think the administration 0:15:00.640 --> 0:15:03.360 would likely respond to that. They have a midterm election 0:15:03.480 --> 0:15:06.400 coming up in twenty twenty six. The clock starts actually 0:15:06.480 --> 0:15:10.880 this November, and they want an economy that is briskly 0:15:10.920 --> 0:15:13.000 growing for the midterm elections. 0:15:13.120 --> 0:15:15.160 I think it's already started to be fair. I was 0:15:15.160 --> 0:15:17.880 looking at the PMIS yesterday. Imagery level is not great, 0:15:17.920 --> 0:15:20.480 new orders not great. I was hoping things would pick up. 0:15:20.520 --> 0:15:22.480 Don't see many signs of it. The ability to pass 0:15:22.480 --> 0:15:24.920 through high prices to consumers, but to push back there too. 0:15:26.080 --> 0:15:28.480 But consumer spending has been relatively strong speed. 0:15:28.720 --> 0:15:30.720 I'm just looking at the PMS yesterday. I think it 0:15:30.760 --> 0:15:33.280 was a hope that in September things would pick up 0:15:33.280 --> 0:15:35.840 and reaccelerate. I just haven't seen that yet. I hope 0:15:35.840 --> 0:15:37.600 that it's backed up by other data points, just don't 0:15:37.640 --> 0:15:38.160 see it yet. 0:15:38.200 --> 0:15:40.080 Well, I think the consumer has been acting like this. 0:15:40.200 --> 0:15:42.640 They kind of go through these spurts. They spend for 0:15:42.880 --> 0:15:45.080 back to school, then they kind of go into hibernation, 0:15:45.280 --> 0:15:47.560 then they spend for the holidays. Right, so the consumer 0:15:47.600 --> 0:15:49.200 has been looking for a lot of deals for a 0:15:49.240 --> 0:15:52.040 long time. This has to of course, you know, think 0:15:52.080 --> 0:15:54.360 through this. You know, this period of where you've got 0:15:54.360 --> 0:15:58.520 some uncertainty around inflation and higher prices do scare consumers, right, 0:15:58.560 --> 0:16:00.600 they start to look for better bargains. They go for 0:16:00.920 --> 0:16:03.680 you know, off label brands. But I would say once 0:16:03.720 --> 0:16:06.120 you start to go go through for the holiday shopping, 0:16:06.160 --> 0:16:09.360 you may have a lull for October and November, but 0:16:09.720 --> 0:16:12.480 let's start looking at those kind of after Thanksgiving sales. 0:16:16.360 --> 0:16:19.840 Stay with us. More Bloomberg surveillance coming up after this 0:16:29.160 --> 0:16:31.840 stops wrising as Ali Baba becomes the latest tech firm 0:16:31.880 --> 0:16:35.000 to ramp up AI spending. Peter Chief Academy Writing AI 0:16:35.480 --> 0:16:39.040 is only the second or third inc maybe even the 0:16:39.080 --> 0:16:42.600 top of the first. The issue is whether valuations are 0:16:42.600 --> 0:16:44.760 in the eighth inech pechoin just now for more peak 0:16:44.760 --> 0:16:46.960 of morning, good morning, good to see it. Let's just 0:16:46.960 --> 0:16:49.640 talk about the spending plants. What's your reaction been to 0:16:49.680 --> 0:16:51.840 the news that's come from Oracle in the last week, 0:16:51.880 --> 0:16:54.720 from Nvidia in the past few days, from Ali Baba 0:16:54.800 --> 0:16:55.520 from this morning. 0:16:55.680 --> 0:16:58.000 You know, it's all queer. That spending is still going away, 0:16:58.720 --> 0:17:00.760 you know it's coming in. Reminds me a little bit 0:17:00.800 --> 0:17:02.960 though too. At some point, remember when you had to 0:17:03.000 --> 0:17:04.960 have a Chinese plan, and if you had a China plan, 0:17:04.960 --> 0:17:07.399 you announced your China plan, your stock's fight ten percent. 0:17:07.680 --> 0:17:09.960 So we're in that sort of moment where everyone who 0:17:09.960 --> 0:17:12.639 announces plans to spend is rewarded. And if you announce 0:17:12.640 --> 0:17:14.080 that you're going to spend ten billion, your stock goes 0:17:14.160 --> 0:17:16.560 up twenty billion. Why wouldn't it you? So I haven't 0:17:16.720 --> 0:17:18.959 yet seen that change. I think at some point we're 0:17:18.960 --> 0:17:21.119 getting closer. People are starting to poke more holes in this. 0:17:21.359 --> 0:17:23.320 And separately from that, though, I am watching what Bob 0:17:23.440 --> 0:17:25.640 is doing separately, because when I look at everything that's 0:17:25.640 --> 0:17:28.520 going on in the world trade tariffs, etc. China has 0:17:28.560 --> 0:17:31.400 control over the rarest critical minerals. We have control over 0:17:31.400 --> 0:17:34.399 the AI chips and data. China is trying to work 0:17:34.440 --> 0:17:36.480 their way, and it's encouraging that they're using in video chips. 0:17:36.480 --> 0:17:37.840 But I think that's going to be a real battle 0:17:37.840 --> 0:17:38.400 line to be drawn. 0:17:38.480 --> 0:17:39.800 What I s builed on that. Do you think the 0:17:39.880 --> 0:17:42.040 US is at a disadvantage. 0:17:42.760 --> 0:17:44.640 I think the US has a huge advantage right now 0:17:44.640 --> 0:17:46.840 in terms of chips. I think China has this big 0:17:46.880 --> 0:17:49.439 advantage in terms of the processing and refining of rare 0:17:49.520 --> 0:17:51.960 erst and critical minerals. We're taking some steps, whether it's 0:17:51.960 --> 0:17:55.440 investments in ticker symbol MP, there's noise about more investments 0:17:55.480 --> 0:17:58.480 of those sorts, whether it's antimomy lithium. I'm sure there's 0:17:58.480 --> 0:18:01.679 going to be ensure, you know, enrich new clear, enriched 0:18:01.800 --> 0:18:04.200 uranium investments. Those are things that we're doing to try 0:18:04.200 --> 0:18:07.199 and defeat that. But that's a multi year product. And 0:18:07.240 --> 0:18:09.040 then at the same time, it felt like China was 0:18:09.119 --> 0:18:11.800 going to be very easy to work with in terms 0:18:11.840 --> 0:18:14.159 of dealing with Nvidia. They seem to be setting a 0:18:14.200 --> 0:18:16.240 line in the sand where they're going to be we 0:18:16.280 --> 0:18:17.640 want to use Huawei more and more. 0:18:17.680 --> 0:18:19.160 So that's what I'm watching most carefully. 0:18:19.200 --> 0:18:21.640 There's a lot to impact there. You mentioned that, yes, 0:18:21.680 --> 0:18:24.320 the Chinese government has been pushing their tech giants to 0:18:24.440 --> 0:18:28.280 invest in domestic companies and domestic chips, and yet well 0:18:28.280 --> 0:18:31.200 you just mentioned was Ali Baba. They're using Nvidia supplies 0:18:31.280 --> 0:18:34.159 and they actually have a new project with robotics that 0:18:34.200 --> 0:18:39.280 they're also really relying on in Vidia for their supplies. 0:18:39.400 --> 0:18:42.200 So how feasible is what the Chinese government asking. 0:18:41.920 --> 0:18:44.160