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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: We are thrilled to get you started. In the seven

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Speaker 2: o'clock Wall Street Time Hour with David Rosenberg of Rosenberger Research,

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Speaker 2: absolutely definitive at Merrill. Let me explain why David Rosenberg

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Speaker 2: was definitive years ago. He would put out a report Paul,

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Speaker 2: and it wasn't patre on it. It was like the you know,

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Speaker 2: like build in Germany with half dressed women on page

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Speaker 2: three is where you got the real Rosenberg, not half

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Speaker 2: t us women. You got his inflation's dissection. Okay. He

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Speaker 2: would have every single line item of inflation lined up

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Speaker 2: that became famous at Rosenberg and joins us this morning

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Speaker 2: on the quality of our new inflation. David, what is

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Speaker 2: the character of this inflation in twenty twenty five.

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Speaker 3: Well, it's a real dichotomy, Tom, and a bit of

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Speaker 3: a head scratcher, especially from the numbers that we got

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Speaker 3: in July from the CPI and the PPI because you know,

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Speaker 3: we're all expecting that the tariff impact is going to

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Speaker 3: hit the good sector. But was really puzzling in both

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Speaker 3: reports was the fact that service sector inflation isn't going away.

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Speaker 3: And I think that's a bit of a problem for

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Speaker 3: the Fed. I still think that, you know, the trend,

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Speaker 3: the trend in inflation, we'll be heading lower. I wrote

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Speaker 3: a report talking about something very nebulous otherwise known as

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Speaker 3: the quantity theory of money in my daily yesterday, going

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Speaker 3: through money supply growth which is starting to cool off,

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Speaker 3: and money velocity which is flattening and in relation to

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Speaker 3: where the real economy is, and then solving for inflation,

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Speaker 3: and we're going to be getting towards the target are

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Speaker 3: probably below, but not for another.

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Speaker 4: Six to twelve months.

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Speaker 3: So it's a trend, but it's not a present big reality,

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Speaker 3: but it's out there.

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Speaker 2: As we had stimulus in three Olivia Blanchard calls it

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Speaker 2: the Biden stimulus, the back stimulus of COVID. I mean,

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Speaker 2: is it just simply, David, as you say, you delay

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Speaker 2: a disinflationarycall out eighteen months? Ay? Is it because of

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Speaker 2: the stimulus of mister Trump's new legislation just passed.

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Speaker 3: Well, you know what everybody calls stimulus from the big

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Speaker 3: beautiful bill really isn't stimulus from the status quo. The

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Speaker 3: biggest chunk of that was just maintaining the tax cuts

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Speaker 3: from twenty seventeen in the personal sector. And then you

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Speaker 3: could argue that the bells and whistles mostly from the

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Speaker 3: depreciation allowance benefit insofar as that improves the capital spending picture,

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Speaker 3: that is supply side growth that you would hope with

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Speaker 3: generally productivity, which is antithetical.

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Speaker 4: To an inflation view.

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Speaker 3: So I don't really look at the fiscal side as

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Speaker 3: being a source of inflation. Of course, the greater supply

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Speaker 3: that we're seeing benchmarked against expectations is what's caused the

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Speaker 3: back end of the yield curve to remain so elevated.

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Speaker 3: But the inflation that we're seeing primarily is coming from

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Speaker 3: the tariffs. For anybody that thinks that tariffs will not

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Speaker 3: be at least near term inflationary seem to ignore the

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Speaker 3: fact that it's the importer on record in the United

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Speaker 3: States that actually pays the duty.

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Speaker 4: Then the question is how's it going to get distributed

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Speaker 4: through the supply chain.

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Speaker 3: But I said the head scratcher, and it's just you know,

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Speaker 3: one month's worth the data. But I was really surprised

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Speaker 3: in July to see how stubborn the service sector was,

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Speaker 3: because that's a part of the economy that I've been

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Speaker 3: cooling off. But those inflation numbers across most of the services,

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Speaker 3: not just shelter. We're a big upside surprise last month.

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Speaker 3: I'm just hoping that it's not going to be sustained.

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Speaker 2: David.

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Speaker 5: Economic growth remainder this year going into next year. I

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Speaker 5: think most folks are expecting it to continue to soften

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Speaker 5: but still be some reasonable growth.

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Speaker 6: How do you think about GDP, Well.

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Speaker 3: You know, everybody is, I guess, redefined what reasonable is

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Speaker 3: or what J. Powell describes as solid when we're barely

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Speaker 3: running the economy so far this year, barely over a

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Speaker 3: one percent annual rate. I mean, when I started the

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Speaker 3: business in the mid eighties, you got down to a

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Speaker 3: one handle on real GDP growth and people were talking

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Speaker 3: about reasonable. People were talking about stall speed and then

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Speaker 3: asking what the recession going to start. So the economy,

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Speaker 3: I think, is sputtering. It's not even you know, without

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Speaker 3: the proliferation of AI data centers and all the technology

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Speaker 3: spending related to general AI, the economy would actually be

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Speaker 3: in recession right now. That's been really the only underpinning,

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Speaker 3: the only impetus to growth so far this year. So

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Speaker 3: I'm thinking that the economy is going I don't see

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Speaker 3: what the catalyst is going to be. Even with the

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Speaker 3: big beautiful bill, it's not going to be adding a

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Speaker 3: whole lot to growth a little bit, and I think

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Speaker 3: that the tariff uncertainty is still going to be a

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Speaker 3: big element that's going to provide an overhang on the

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Speaker 3: economy going forward. And the Fat's going to be deliberately

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Speaker 3: slow to cut interest rates, so that's going to have

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Speaker 3: an impact negatively on the credit sensitive sectors of the economy.

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Speaker 3: And it's not as if the rest of the world

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Speaker 3: is actually operating at a very high level of economic

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Speaker 3: activity that's going to come back and bite the export set.

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Speaker 3: So I think the economy is going to remain very

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Speaker 3: weak through the balance of this year and the next year.

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Speaker 3: The only question is for the FED is is demand

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Speaker 3: weakening and relation to what's happening on the supply side,

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Speaker 3: because the supply side is also weakening alongside the demand side,

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Speaker 3: and you know from an inflation standpoint, it's how those

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Speaker 3: two curves demand a supply and the broad economy, how

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Speaker 3: they're interacting, that's going to determine what the inflation outlook

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Speaker 3: is going to be.

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Speaker 2: David Rosenberg with us, we continue with mister Rosenberg. We

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Speaker 2: welcome all of you across Canada and David's Toronto. Thank

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Speaker 2: you for joining us and the way you listen to

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Speaker 2: us and Serious XM and other outlets as well, Apple CarPlay,

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Speaker 2: Android Auto, Good Morning on YouTube. It's building each and

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Speaker 2: every day, Paul and I just sort of blown away

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Speaker 2: by the whole Google YouTube experience. Subscribe to Bloomberg podcasts

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Speaker 2: is the quickest way to get us and get us

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Speaker 2: often as well. What he said there about ages ago, Paul,

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Speaker 2: where one percent one point x percent economy was stall speed.

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Speaker 2: Why has that talk gone away?

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Speaker 6: I don't hear that.

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Speaker 2: To me. It's a divide between the halves and they

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Speaker 2: have nuts. Yeah, exactly, But I think David's dead on

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Speaker 2: about how the recession language has changed.

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Speaker 5: David, given that backdrop of slower growth percolating inflation, what

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Speaker 5: are we going to hear from FAT chairman j Powell

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Speaker 5: on Friday?

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Speaker 6: From Jackson hol do you think.

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Speaker 3: Well, you know, it's a it's a great question. You know,

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Speaker 3: if this was September the tenth, say, a week before

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Speaker 3: the FMC meeting, given that there's eighty five percent market

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Speaker 3: based odds priced in for a twenty five basis point cut,

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Speaker 3: he would probably acquiesce. But there's still a lot of time,

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Speaker 3: and I don't think that Jay Powell in his mind

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Speaker 3: thinks that we really have an eighty five percent chance

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Speaker 3: of seeing a ray cut. So this is really more

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Speaker 3: of a trade. I think over time, the Fed will

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Speaker 3: cut rates at the right time, probably cut them aggressively

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Speaker 3: in the next year, but again at the right time.

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Speaker 3: I have a tough time believing that he's going to

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Speaker 3: be talking dubvishly, at least relative to what's priced in.

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Speaker 3: I would expect to see on Friday morning those eighty

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Speaker 3: five percent market based odds of a September rate cut.

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Speaker 3: I think they will be dial back. And I say

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Speaker 3: that because, you know, everybody seems to believe that, because

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Speaker 3: the thesis of the Jackson Olsymposium is about the labor market.

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Speaker 3: Everybody seems to think, well, you know, we had a

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Speaker 3: pukey July non form perial number downward revisions to the

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Speaker 3: previous two months, so it's got to be duvish.

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Speaker 4: But I think what's going to come out of it.

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Speaker 3: Mostly is a sign that, yes, labor demand is on

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Speaker 3: the decline, but guess what, and this is what I

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Speaker 3: mentioned before, labor supply is also on the decline. How

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Speaker 3: those two wash out is going to depend on what

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Speaker 3: the Fed's reaction function is going to be.

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Speaker 4: So I think that there's going to be a lot

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Speaker 4: of surprises.

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Speaker 3: I think that he's not going to sound uber hawkish,

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Speaker 3: but I think that benchmark.

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Speaker 4: Against US priced in.

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Speaker 3: I think there will be disappointment, and I think there's

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Speaker 3: actually a good chance despite all the political pressure, because

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Speaker 3: you've got to FED chairman, he'll be gone after May.

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Speaker 3: He is going to be determined to preserve his legacy

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Speaker 3: and I think he's going to block out the noise

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Speaker 3: from the White House. So my sense is that and

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Speaker 3: this is from a Bond bull, but I think over

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Speaker 3: the near term the outlook is clouded. I think that

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Speaker 3: although you have some descents, and remember that Vulcar, you know,

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Speaker 3: back in the mid eighties would sometimes face a meeting

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Speaker 3: with at least three descents, so that could happen, but

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Speaker 3: the chairman is usually in control, and I have a

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Speaker 3: tough time believing that he's going to sound as dumpish

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Speaker 3: as what the markets have priced in right now.

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Speaker 5: David, are you surprised that the equity market have rebounded

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Speaker 5: the way that they have coming off thus one of

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Speaker 5: those terarf concerns.

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Speaker 6: Earlier in this year, and if so, does what does

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Speaker 6: that tell you?

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Speaker 3: It tells me that there is a ton of speculation

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Speaker 3: in the marketplace, especially as it relates to the productivity

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Speaker 3: and return on investment assumptions coming from the technology boom.

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Speaker 3: So you know, we're reliving to some extent, not fully,

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Speaker 3: to some extent, what happened late nineteen nineties. This usually

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Speaker 3: happens after a major shift in the technology curve. The

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Speaker 3: markets get way ahead of themselves, and I think that

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Speaker 3: that's been a big part of it. Of course, you've

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Speaker 3: also seen the market broadened out, even in this very

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Speaker 3: weak economic environment. I mean, it's not a recession but

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Speaker 3: one percent plus growth, But you've seen the market broaden out.

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Speaker 4: I think a lot of that has come.

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Speaker 3: Most recently from this view that the Fed is going

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Speaker 3: to ride the cavalry and start cutting interest rates next month.

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Speaker 3: I think that's where the folly might be but you know,

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Speaker 3: I'm taking a look at this market, you know, and

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Speaker 3: look at where real rates are, you know, roughly two

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Speaker 3: hundred basis points benchmarked against what like a pe multiple

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Speaker 3: forward of round twenty three. You know, if this says

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Speaker 3: not a bubble in the equity market, and I know

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Speaker 3: that people view that as a very emotional word. If

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Speaker 3: it's not a bubble, it's a giant sud. Okay, So

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Speaker 3: we're just back into a psychology of a bubble mentalities

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Speaker 3: that pertains to the broad equity market.

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Speaker 2: David, thank you so much for a morning briefing. And

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Speaker 2: Alicia Levine coming up. Mister Rosenberg with Rosenberg Research. Stay

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Speaker 2: with us. More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us Live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 2: Michael Greer with US now headed US Policy, Morgan Stanley.

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Speaker 2: She walked in and she's got a sentence in her

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Speaker 2: note Paul in English. I couldn't understand it. Let's go

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Speaker 2: to French, where I really can't understand it. Note to

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Speaker 2: plugand preoccupacion a leo xuel a lie a capacity to

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Speaker 2: release reverse repo. Enough, Okay, let's go a week at

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Speaker 2: short term your study. And this is percolating out there

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Speaker 2: in the IRA Jersey world. We're doing T bills for

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Speaker 2: a new fiscal deficit. How does that fold over into

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Speaker 2: what I call the short term trust market, the repo market.

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Speaker 7: Now, what's been interesting about this is if you think

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Speaker 7: about the rebuilt market being drained as well as the

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Speaker 7: Treasury General account is coming down when they refill the

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Speaker 7: Treasury General Account, which they have to do post Ovva,

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Speaker 7: you're going to actually be pulling liquidity out of the

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Speaker 7: financial system. So what that What does that mean? Means

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Speaker 7: get more volatility on the short end. And we've had

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Speaker 7: a fed that Cince Yellen has been doubling down right

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Speaker 7: on short end issuance, right on T bills. You had

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Speaker 7: Trump be initially critical of that essence. Now all in

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Speaker 7: and then we have sort of this move with this

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Speaker 7: pro crypto policy, right, So try to pull it all

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Speaker 7: together here where if you do have more stable coin,

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Speaker 7: or if you do have more digital assets that are

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Speaker 7: linked right or anchored to the dollar, you have to

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Speaker 7: have more T bil issuance. So this is going to

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Speaker 7: be a continued trend in rbs.

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Speaker 2: So there's an explosion of T bills three months, three.

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Speaker 7: Month t bills, yeah, three months and under three.

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Speaker 2: Months and under Paul help me here, there's an explosion

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Speaker 2: of T bills and you're saying money comes out of

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Speaker 2: the system. In the old commercial paper days, that was

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Speaker 2: not good, right, right? Is this something or listen, you

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Speaker 2: know people like me who don't understand this. Is this

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Speaker 2: something we should start thinking about it.

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Speaker 7: So there's two things you have to think about if

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Speaker 7: we're if we're gonna just let's keep it to a

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Speaker 7: two month window right now. If you're thinking about September,

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Speaker 7: if and a October potential government shutdown, right, and you

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Speaker 7: have you have more T bill issuance pulling liquidity out

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Speaker 7: potential government shutdown. They can't issue conditions stay tight, Okay.

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Speaker 7: Once they start spending that OBBBA money, then the liquidity

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Speaker 7: issues start to loosen up. I don't think the twenty

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Speaker 7: five basis point. If there's a twenty five basis point

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Speaker 7: cut in September is going to really offset that tightness.

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Speaker 7: And then in the next two months, So I do

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Speaker 7: think we should be ready for more volatile market in

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Speaker 7: this you know, two month window.

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Speaker 2: I say, Paul, this is why Bessett wants us to

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Speaker 2: go through four or five six rake cups. Yeah, I

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Speaker 2: mean it's the real reason.

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Speaker 5: Do you think a government shutdown is likely possible?

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Speaker 6: How do you guys thinking about that? Hey handicapping nun?

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Speaker 7: Yeah, I mean I think it's likely. And when we're

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Speaker 7: thinking about the uh, you know know over under on it,

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Speaker 7: I would say, you know, this is probably the most

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Speaker 7: tenuous point for the Democratic Party in recent history, right

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Speaker 7: as far as having a message, a vision, a direction

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Speaker 7: from a cohesive lens. One thing that did not work

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Speaker 7: out for them was when they kept the government open

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Speaker 7: under Schumer earlier this year, right when they when they

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Speaker 7: voted for that continuing resolution, And so it could be

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Speaker 7: potentially politically expedient for them right to hold a hard

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Speaker 7: line is there?

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Speaker 5: I mean, but I don't even know who's the voice

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Speaker 5: of or actually running the Democratic Party in this country

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Speaker 5: right now, no idea. I haven't heard from them since

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Speaker 5: January one.

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Speaker 7: I think that's the feeling from most folks. And so

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Speaker 7: when you see someone like a.

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Speaker 6: Politician, i'd be jumping into that void, wouldn't I.

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Speaker 7: Well, you see someone like Gavin Newsom, you know, taking

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Speaker 7: some punches and people seem on their end, right, we're

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Speaker 7: thinking about the spectrum of politics on that end of

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Speaker 7: the of the spectrum our responding positive. So I see

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Speaker 7: that as a green light for playing hardball in a

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Speaker 7: way that Democrats don't typically do around budget. So this

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Speaker 7: could be one of those outlier moments.

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Speaker 5: If we do get a government shut down in October,

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Speaker 5: is it a couple of days, is it something longer?

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Speaker 6: And how should we think about that?

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Speaker 7: I think the longest we've ever gone is about thirty days,

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Speaker 7: about a month. Eight days is the average eight days?

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Speaker 7: Eight days is the average shutdown? Thirty days. Once you

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Speaker 7: get over that past thirty days, then you start compromising

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Speaker 7: government workers, rent payments, ability to within a paycheck to

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Speaker 7: paycheck type scenario, and Democrats do tend to try to

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Speaker 7: avoid that. So you could see them come back and

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Speaker 7: reopen the government in that window.

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Speaker 2: Link the stock market into your world of US policy

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Speaker 2: or are they de linked?

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Speaker 7: I would say right now they are de linked. I

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Speaker 7: think there's this lookthrough on TEARFF policy than the main driver, right,

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Speaker 7: But for us we want to, you know, dig a

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Speaker 7: little bit deeper and see you know which sectors in

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Speaker 7: industry could be impacted beyond just tariffs. And that's where

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Speaker 7: government shutdown has become important. When you're thinking about the

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Speaker 7: longer term. That's your heavy government contract industries, Defense and healthcare?

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Speaker 8: Are the are the top?

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Speaker 7: Are the top sectors.

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Speaker 2: We just took a poll of one hundred people out

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Speaker 2: on YouTube, and one hundred and two of them did

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Speaker 2: not understand our repo discussion. Yeah, it's amazing. How that?

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Speaker 2: What's it like lecturing people interns at Morgan Stanley on

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Speaker 2: repo market.

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Speaker 7: I try not to, so next time I won't.

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Speaker 2: Okay, this has been Greg. Monica Guerra, thank you for

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Speaker 2: confusing me evermore. She is with Morgan Stanley. Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am. E's durn Listen

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Speaker 1: on Apple, Karplay and Android Otto with the Bloomberg Business app,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We're in Talk Equities with Alisha Levine, head of Investment

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Speaker 2: Strategy Equities B and Why But unfortunately that's not why

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Speaker 2: she was a book. She and I are sharing the

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Speaker 2: youngest Cherub off to college. Paul, do you remember when

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Speaker 2: the youngest cherub went off stuck? That starts junior. The

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Speaker 2: difference here is Alicia Laviv's offspring is taking like real

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Speaker 2: manly courses.

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Speaker 9: Ye, mechanical engineering. I'm frightened.

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Speaker 2: I'm chemistry, physics.

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Speaker 9: Calculus, and thank god, a freshman writing class.

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Speaker 2: Thought is somewhere north of the River sen taking introduction

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Speaker 2: to Catherine Deneuve and the path to Bridget Bardow. There's

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Speaker 2: a difference.

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Speaker 8: That's more fun. That's more fun.

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Speaker 2: We're surviving, aren't we.

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Speaker 8: It's hard. It's the last one is brutal, brutal.

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Speaker 2: It's just like it's like terrible. Well, plus, we're broke

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Speaker 2: because we've paid umpteen million.

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Speaker 8: Dollars, will be working till we're ninety.

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Speaker 2: We're gonna we're never gonna retire. With that said, if

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Speaker 2: I'm in a four to oh one K, I'm hearing

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Speaker 2: lots of go to cash. I don't buy it.

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Speaker 9: You can't buy it. You can't go to cash. We've

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Speaker 9: had this conversation now for several years. The cash trade

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Speaker 9: is very specific when the FED is hiking rates and

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Speaker 9: either the market is experiencing a true selloff. We think

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Speaker 9: what's happening now is your typical air pocket. In the summer,

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Speaker 9: we had this mess rent run up. I mean, at

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Speaker 9: one point NASIK was up fifty six percent from the

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Speaker 9: April eighth lows, the S and P up thirty four percent.

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Speaker 9: That is a hit, that is those are historic runs

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Speaker 9: and so you're hitting the typical air pocket. Well, well,

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Speaker 9: you know what will J. Powell deliver on Friday? Will

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Speaker 9: he be hawkisht of You know, it's not going to

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Speaker 9: be fifty I think this is just noise. You know,

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Speaker 9: earnings number are going up. Corporate America has been much

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Speaker 9: more resilient than feared, and some numbers are going higher

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Speaker 9: for twenty twenty five and twenty twenty six. Ultimately, like

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Speaker 9: other times, this will be a buying opportunity.

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Speaker 5: What did you make of the earning season that we

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Speaker 5: just completed. Kind of came in better than expected, although

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Speaker 5: maybe the bar was lowered for.

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Speaker 6: The street, but the numbers came in pretty solid.

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Speaker 9: The numbers came in very solid, about twelve percent when

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Speaker 9: about four percent was expected. As part of the reason

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Speaker 9: you had that tour and run in the market because

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Speaker 9: the earnings were just solid and coming in as a

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Speaker 9: result of that, you know, the first half of the

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Speaker 9: year came in much better than expected. Lowered expectations for sure,

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Speaker 9: but lowered to a point where it matched why the

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Speaker 9: market dropped so much, you know, in March and April,

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Speaker 9: and so you're having numbers also moving higher for the

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Speaker 9: rest of the year. I think it's not talked about,

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Speaker 9: actually what's going on in financial sector. The numbers are

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Speaker 9: going higher there, that's not reflected in Nasdaq, and that's

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Speaker 9: part of what the run has been about has been

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Speaker 9: financials as well. We spent a lot of time talking

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Speaker 9: about tech, bright shiny object everybody owns them, you know,

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Speaker 9: so therefore vulnerable. But financials have been terrific also as

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Speaker 9: well as industrials.

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Speaker 5: Mentioned I see in just kind of your sectors, utilities

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Speaker 5: and industrials.

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Speaker 6: Is that kind of the.

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Speaker 5: I don't know, bringing stuff back to America and manufacturing

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Speaker 5: and just kind of all that.

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Speaker 9: It's the data center build out, data, it's the data

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Speaker 9: center build out. Of course, if the FED is cutting

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Speaker 9: utilities will do well.

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Speaker 8: Also simply on the interest rate play.

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Speaker 9: But we're really looking at a structural change in the

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Speaker 9: US economy where capital is flowing. I think what hasn't

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Speaker 9: been talked about is the One Big Beautiful Bill. We

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Speaker 9: talk about tariffs night and day, but we haven't talked

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Speaker 9: about the incentives buried in the One Big Beautiful Bill

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Speaker 9: for data center build up, for capex, and investment in structures.

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Speaker 9: In the most recent earning season, two hundred and seventy

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Speaker 9: five companies mentioned that the tax provisions within the bill

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Speaker 9: are going to be positive for their earnings and for

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Speaker 9: their businesses, and that has really been under the radar,

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Speaker 9: and it's sort of a shocking way. It's part of

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Speaker 9: the part of the reason numbers are moving higher.

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Speaker 2: Alicia Levina this Bank of New York be and wife,

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Speaker 2: thrilled that she could be with us today. The problem

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Speaker 2: I have with the gloom over the build on obviously

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Speaker 2: it's an unknown unknown we really don't know about it

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Speaker 2: is essentially with the profit generation of these companies a portion,

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Speaker 2: if not all, of their capex. It's not it's a

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Speaker 2: rounding error, but it's not that big a deal. We

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Speaker 2: don't understand the scale of their profit.

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Speaker 9: So there is so much cash flow and profit in

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Speaker 9: these companies.

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Speaker 8: The scale of.

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Speaker 9: The capex this year, it's about three hundred and seventy

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Speaker 9: billion dollars. Very interestingly, that's also the tax the tax

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Speaker 9: benefit from the one Big Beautiful Bill in twenty twenty

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Speaker 9: six about four hundred billion dollars. It also equates to

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Speaker 9: the tariff hit, which is a tax of three hundred

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Speaker 9: and seventy billion dollars. So they're upsetting each other, right,

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Speaker 9: the tariff hit, which is a tax, and the spending

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Speaker 9: that these companies are doing. So there was a reduction

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Speaker 9: and free cash flow margin for the Magnificent seven because

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Speaker 9: of that, But ultimately these companies can handle it and

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Speaker 9: their margins remain high. So in a sense, you're getting

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Speaker 9: paid to wait to see if this works.

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Speaker 2: Paul, this is not nineteen ninety nine. You and I

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Speaker 2: keep saying.

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Speaker 5: That, Yeah, having been there in nineteen ninety nine pumping

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Speaker 5: out those companies.

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Speaker 6: Back in the day.

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Speaker 5: Alicia, you know, what do you think the FED should

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Speaker 5: do for the remainder this year going into next.

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Speaker 8: So I think, well, I think they will cut.

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Speaker 9: I think they'll cut twenty five basis points in September,

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Speaker 9: because ultimately what's happening in the labor market will outweigh

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Speaker 9: what's happening on the inflation front. The bump in inflation,

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Speaker 9: for the most part we've heard from the FED is

438
00:23:59,400 --> 00:24:02,000
Speaker 9: going to be They don't say it's transitory, but they're

439
00:24:02,000 --> 00:24:05,399
Speaker 9: saying it's transitory. One time hit is the same missk translatory.

440
00:24:05,640 --> 00:24:08,840
Speaker 9: You know, a slow down in the economy is not

441
00:24:09,000 --> 00:24:10,919
Speaker 9: something that the Feds can be able to stomach. And

442
00:24:10,960 --> 00:24:13,760
Speaker 9: the labor market is now at a lower equilibrium rate.

443
00:24:14,240 --> 00:24:15,960
Speaker 8: Harder to play with that, right.

444
00:24:16,320 --> 00:24:18,720
Speaker 9: If your equally room rate on hiring is one hundreds

445
00:24:18,720 --> 00:24:20,680
Speaker 9: of hundred, twenty thousand jobs and now you're down to

446
00:24:20,720 --> 00:24:23,280
Speaker 9: something like fifty to seventy thousand, you just don't have

447
00:24:23,280 --> 00:24:26,000
Speaker 9: as much margin for error. So they're going to cut.

448
00:24:26,200 --> 00:24:29,160
Speaker 9: And they've taken hikes off the table. So the Fed

449
00:24:29,240 --> 00:24:33,159
Speaker 9: is cutting. The market's near all time highs. The economy

450
00:24:33,240 --> 00:24:38,080
Speaker 9: is getting this bolus of investments into the AI infrastructure

451
00:24:38,200 --> 00:24:42,240
Speaker 9: and in industrials, so we think you have a cyclical upswing.

452
00:24:42,359 --> 00:24:44,960
Speaker 9: The pmis have not caught up yet, we think they will.

453
00:24:45,359 --> 00:24:47,440
Speaker 2: I got to get two things in you. The first

454
00:24:47,520 --> 00:24:51,040
Speaker 2: one is the basic idea of investment for our viewers

455
00:24:51,400 --> 00:24:54,240
Speaker 2: and our listeners is simple. I'm in it for the

456
00:24:54,359 --> 00:24:57,679
Speaker 2: long haul, how do you look over the horizon to

457
00:24:57,800 --> 00:24:59,680
Speaker 2: twenty six or twenty seven right now?

458
00:24:59,680 --> 00:25:02,160
Speaker 9: Look, we always have a twelve to eighteen month horizon,

459
00:25:02,680 --> 00:25:06,040
Speaker 9: and even the scare of let's call it early April

460
00:25:06,480 --> 00:25:10,119
Speaker 9: is something that our clients in BNY Wealth are well

461
00:25:10,520 --> 00:25:12,879
Speaker 9: used to. If you think about the last ten years,

462
00:25:12,920 --> 00:25:17,040
Speaker 9: we've had five twenty percent drawdowns or more, and every

463
00:25:17,040 --> 00:25:19,879
Speaker 9: single one of those times have been an epic buying opportunity.

464
00:25:20,000 --> 00:25:23,240
Speaker 9: So the long haul is you add when you can,

465
00:25:23,400 --> 00:25:26,800
Speaker 9: when you have liquidity or cash, and you don't sell

466
00:25:26,840 --> 00:25:29,600
Speaker 9: because you always sell it the low, always for on YouTube.

467
00:25:29,600 --> 00:25:31,720
Speaker 2: I've got my cell phone, a man, Alicia, let's cut

468
00:25:31,720 --> 00:25:34,760
Speaker 2: to the chase. Are you following your children on your

469
00:25:34,840 --> 00:25:36,560
Speaker 2: iPhone at school?

470
00:25:36,760 --> 00:25:38,159
Speaker 8: I will never answer that question.

471
00:25:38,640 --> 00:25:41,840
Speaker 2: I went to the fifth When I went to school,

472
00:25:41,920 --> 00:25:44,000
Speaker 2: my parents didn't know I was at the sink or

473
00:25:44,000 --> 00:25:47,639
Speaker 2: at t Loggis in Boulder, right, I mean, they didn't

474
00:25:47,680 --> 00:25:50,359
Speaker 2: know what we were doing. I just sent a text,

475
00:25:50,480 --> 00:25:53,240
Speaker 2: no TV, We're not are do you allow a TV

476
00:25:53,320 --> 00:25:54,280
Speaker 2: in the dorm room?

477
00:25:54,640 --> 00:25:57,320
Speaker 8: It wasn't my choice. We have roommates, you have you

478
00:25:57,520 --> 00:25:57,920
Speaker 8: have a.

479
00:25:57,840 --> 00:25:59,960
Speaker 2: TV in the dorm room at Cornell.

480
00:26:00,160 --> 00:26:02,480
Speaker 8: It's not a wave thing. It's an I thing. I don't,

481
00:26:02,720 --> 00:26:03,640
Speaker 8: my child doesn't.

482
00:26:04,280 --> 00:26:06,639
Speaker 2: It's just Paul. It's just different.

483
00:26:06,640 --> 00:26:07,520
Speaker 6: Gotta let them go in.

484
00:26:08,160 --> 00:26:09,480
Speaker 2: I went with a slide rule.

485
00:26:10,960 --> 00:26:14,199
Speaker 8: We did not major in mechanical engineering.

486
00:26:14,840 --> 00:26:19,280
Speaker 2: Yeah, we'll see Alisha. My deepest sympathies. I hope, I

487
00:26:19,320 --> 00:26:23,399
Speaker 2: hope the marriage survives. And also good good, good day

488
00:26:23,400 --> 00:26:27,760
Speaker 2: to year after thought in Cordell stay with us. More

489
00:26:27,880 --> 00:26:38,199
Speaker 2: from Bloomberg Surveillance coming up after this.

490
00:26:38,200 --> 00:26:42,120
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

491
00:26:42,160 --> 00:26:45,159
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

492
00:26:45,200 --> 00:26:48,160
Speaker 1: Auto with the Bloomberg Business app. You can also watch

493
00:26:48,280 --> 00:26:51,199
Speaker 1: us live every weekday on YouTube and always on the

494
00:26:51,240 --> 00:26:52,320
Speaker 1: Bloomberg terminal.

495
00:26:52,560 --> 00:26:55,280
Speaker 2: You're right too at the newspapers and Lisa Matteo. She's

496
00:26:55,320 --> 00:26:58,240
Speaker 2: in a three a M locked and loaded Lisa Audio.

497
00:26:58,440 --> 00:26:59,760
Speaker 8: Yeah, I gotta catch up for not doing it the

498
00:27:00,119 --> 00:27:00,480
Speaker 8: few days.

499
00:27:00,520 --> 00:27:02,720
Speaker 10: Okay, so we've been talking about the struggles of the

500
00:27:02,800 --> 00:27:06,760
Speaker 10: luxury sector, right Well, Louis Vauton is betting on cosmetics.

501
00:27:06,920 --> 00:27:09,240
Speaker 10: They're hoping that it's going to help out. At select

502
00:27:09,280 --> 00:27:12,320
Speaker 10: stores worldwide this month, you can buy It's lat but

503
00:27:12,640 --> 00:27:16,040
Speaker 10: a b EA ut is that right, Louis Vautan line

504
00:27:16,320 --> 00:27:21,600
Speaker 10: close enough? Eight eyeshadow palettes, ten lip bombs, fifty five lipsticks.

505
00:27:21,760 --> 00:27:22,880
Speaker 8: Are you ready for the prices?

506
00:27:22,920 --> 00:27:23,160
Speaker 4: Sure?

507
00:27:23,240 --> 00:27:25,800
Speaker 10: Okay, here we go. The scented lipstick one hundred and

508
00:27:25,840 --> 00:27:29,440
Speaker 10: sixty dollars. Okay, that's double that of a similar offering

509
00:27:29,520 --> 00:27:33,760
Speaker 10: from Airmez, three times a price of Chanel the ipalt

510
00:27:34,080 --> 00:27:40,560
Speaker 10: two hundred fifty. I go to CVS, pay ten fifteen bucks.

511
00:27:41,040 --> 00:27:43,640
Speaker 10: I don't know, fifteen bucks. This is a premium product.

512
00:27:43,920 --> 00:27:46,520
Speaker 10: It is, And if you want, like the high end,

513
00:27:46,800 --> 00:27:50,160
Speaker 10: you can spend three thousand dollars and get a monogrammed

514
00:27:50,280 --> 00:27:52,320
Speaker 10: canvas mini trunk.

515
00:27:52,200 --> 00:27:54,320
Speaker 8: To keep all your lips working.

516
00:27:54,440 --> 00:27:55,959
Speaker 2: Right now? Is your sense?

517
00:27:56,160 --> 00:27:56,320
Speaker 10: You know?

518
00:27:56,640 --> 00:28:01,800
Speaker 2: Isn't a quiet luxury thing? Yeah, it's supposed it's quiet.

519
00:28:02,119 --> 00:28:03,359
Speaker 8: No, it's definitely not.

520
00:28:04,000 --> 00:28:06,760
Speaker 10: But yes, if you have the money to spare, then

521
00:28:06,920 --> 00:28:11,159
Speaker 10: that's what I guess for you exactly. But I mean

522
00:28:11,160 --> 00:28:14,000
Speaker 10: they've been trying different things, you know, the cafes, the chocolates,

523
00:28:14,080 --> 00:28:16,640
Speaker 10: So this is just another kind of sector to boost

524
00:28:17,320 --> 00:28:21,919
Speaker 10: some interest in luxury. Okay, this news out. This is

525
00:28:21,920 --> 00:28:24,000
Speaker 10: from the Washington Post, a month before it was set

526
00:28:24,000 --> 00:28:25,960
Speaker 10: to be banned. The White House has launched an account

527
00:28:26,040 --> 00:28:30,080
Speaker 10: on TikTok. Yes, the ban was course due to national

528
00:28:30,080 --> 00:28:33,200
Speaker 10: concert security concerns, set to go on effect September seventeenth

529
00:28:33,240 --> 00:28:36,439
Speaker 10: unless it sold to a US fire. But yesterday the

530
00:28:36,440 --> 00:28:39,000
Speaker 10: White House became its latest user.

531
00:28:39,080 --> 00:28:39,640
Speaker 8: Take a listen.

532
00:28:40,400 --> 00:28:46,520
Speaker 5: Every day I wake up determined to deliver a better

533
00:28:46,640 --> 00:28:49,280
Speaker 5: life for the people all across this nation.

534
00:28:50,000 --> 00:28:52,360
Speaker 2: I am your voice.

535
00:28:52,880 --> 00:28:56,080
Speaker 8: And that was the first post White House tiktak account launched.

536
00:28:56,120 --> 00:29:00,000
Speaker 10: The video montage images of him, UFC head Dana White,

537
00:29:00,160 --> 00:29:05,120
Speaker 10: law enforcement officers, American workers. So yes, that launched just

538
00:29:05,160 --> 00:29:07,800
Speaker 10: as a band is getting secked to go certain effect.

539
00:29:07,760 --> 00:29:09,000
Speaker 2: Sort of ominous music.

540
00:29:09,360 --> 00:29:12,960
Speaker 8: Yes, very very very ominous, very honest.

541
00:29:13,320 --> 00:29:15,200
Speaker 10: Okay, this is for you know, the moms and dad's

542
00:29:15,240 --> 00:29:17,080
Speaker 10: getting ready to ship the kids off to college.

543
00:29:17,120 --> 00:29:19,560
Speaker 8: You know, the dorm room. It's all about the dorm room,

544
00:29:19,640 --> 00:29:20,240
Speaker 8: right kill.

545
00:29:20,640 --> 00:29:24,080
Speaker 10: Chipotle knows it, and they know college kids because college

546
00:29:24,160 --> 00:29:28,840
Speaker 10: kids love Chipotle. Okay, so they're targeting them. They have

547
00:29:29,240 --> 00:29:32,640
Speaker 10: a pro a promo like a what do you call

548
00:29:32,720 --> 00:29:36,479
Speaker 10: collab with Urban Outfitters, a product line that has a

549
00:29:36,600 --> 00:29:38,400
Speaker 10: nearly one hundred dollars blanket.

550
00:29:38,560 --> 00:29:41,920
Speaker 8: You can get a lamp, a Chipotle themed water bottle, pillow.

551
00:29:41,840 --> 00:29:45,840
Speaker 10: Bean bag chairs that are just under three hundred dollars each,

552
00:29:46,360 --> 00:29:50,040
Speaker 10: all for your kids to decorate their dorm room with Chipotle.

553
00:29:50,120 --> 00:29:54,640
Speaker 10: There's even a doormat that says, leave my Chipotle here.

554
00:29:54,920 --> 00:29:57,280
Speaker 2: Everybody bought a beanbag shirt and no one said in

555
00:29:57,360 --> 00:30:00,680
Speaker 2: it it's just like you mus it.

556
00:30:00,960 --> 00:30:04,160
Speaker 10: Looks it, does it does? They even have a new

557
00:30:04,240 --> 00:30:07,880
Speaker 10: loyalty program for these college students. It called Chipotle You.

558
00:30:08,440 --> 00:30:11,280
Speaker 10: So you can earn points so you can get free food,

559
00:30:11,440 --> 00:30:13,840
Speaker 10: or you can even get enough points to wave the

560
00:30:13,840 --> 00:30:17,160
Speaker 10: guacamole fee, which is key. You have to because there's

561
00:30:17,160 --> 00:30:19,760
Speaker 10: an extra fee if you want them. There's a fee,

562
00:30:20,280 --> 00:30:21,200
Speaker 10: so you get the point.

563
00:30:21,640 --> 00:30:25,480
Speaker 2: You get that. Do you know what the highlight is

564
00:30:25,880 --> 00:30:30,160
Speaker 2: across some Afterthoughts dorm place where she's in Europe. Yes,

565
00:30:30,440 --> 00:30:36,040
Speaker 2: there's a bubble Tea place for stores away and Missus Kingston's.

566
00:30:36,080 --> 00:30:39,200
Speaker 2: All that matters is bubble Tea is close.

567
00:30:39,440 --> 00:30:42,040
Speaker 8: Okay, I know it's all about the Chipotle.

568
00:30:43,280 --> 00:30:45,680
Speaker 2: I've never heard of bubble Tea. First thing that Lisa

569
00:30:45,720 --> 00:30:47,480
Speaker 2: Matteo in the newspapers.

570
00:30:47,480 --> 00:30:52,880
Speaker 1: Here This is the Bloomberg Surveillance podcast available on Apple Spotify,

571
00:30:53,000 --> 00:30:56,800
Speaker 1: and anywhere else you get your podcasts. Listen live each

572
00:30:56,800 --> 00:31:00,880
Speaker 1: week day, seven to ten am Eastern on Bloomberg, the

573
00:31:00,960 --> 00:31:05,000
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

574
00:31:05,000 --> 00:31:08,360
Speaker 1: can also watch us live every weekday on YouTube and

575
00:31:08,600 --> 00:31:10,320
Speaker 1: always on the Bloomberg terminal