1 00:00:13,840 --> 00:00:17,079 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,160 --> 00:00:19,800 Speaker 1: My name is Mike Reagan, I'm a senior editor at Bloomberg, 3 00:00:19,920 --> 00:00:23,319 Speaker 1: and I'm Valdonna, hired across asset reporter with Bloomberg. And 4 00:00:23,400 --> 00:00:26,120 Speaker 1: this week on the show, Well, it was the first 5 00:00:26,120 --> 00:00:28,680 Speaker 1: time in more than two decades that the Federal Reserve 6 00:00:28,760 --> 00:00:32,160 Speaker 1: raised interest rates by half a percentage point. But all 7 00:00:32,200 --> 00:00:34,640 Speaker 1: it took was just a little hint of dovishness from 8 00:00:34,720 --> 00:00:38,800 Speaker 1: chair j Palell to get the stock market roaring. He 9 00:00:38,880 --> 00:00:42,200 Speaker 1: indicated it's unlikely that the federal increase rates by seventy 10 00:00:42,280 --> 00:00:45,680 Speaker 1: five basis points during this cycle and the SMP shot 11 00:00:45,720 --> 00:00:49,120 Speaker 1: up about three. So is that it is that all 12 00:00:49,120 --> 00:00:51,040 Speaker 1: it took to set up bottom in the stock market. 13 00:00:51,640 --> 00:00:54,360 Speaker 1: We'll talk about it this week with a Wall Street strategist. 14 00:00:54,720 --> 00:00:57,640 Speaker 1: But first, Vildanna, I have to ask one thing before 15 00:00:57,640 --> 00:01:01,280 Speaker 1: we get started, All Ears, did you have any nicknames 16 00:01:01,280 --> 00:01:04,920 Speaker 1: in high school? Um? Why wait wait wait stop stop 17 00:01:04,920 --> 00:01:10,360 Speaker 1: stop stop? Do not reveal your high school nicknames? Why 18 00:01:09,440 --> 00:01:13,959 Speaker 1: you don't understand why? At this point of the show, 19 00:01:14,880 --> 00:01:18,640 Speaker 1: the veteran podcast co host and listener of What Goes Up, 20 00:01:19,520 --> 00:01:23,520 Speaker 1: nicknames are a very valuable commodity on this podcast. I 21 00:01:23,520 --> 00:01:28,080 Speaker 1: think we got about a hundred reviews on Apple podcasts 22 00:01:28,240 --> 00:01:31,840 Speaker 1: when I promised to reveal my high school nickname and 23 00:01:31,959 --> 00:01:35,640 Speaker 1: I realized we are ratings and reviews have slowed down 24 00:01:35,680 --> 00:01:37,559 Speaker 1: on Apple podcast, so I think we need to leverage 25 00:01:37,600 --> 00:01:40,520 Speaker 1: your high school nickname. How long are you holding your hostage? 26 00:01:40,720 --> 00:01:42,920 Speaker 1: A hundred more ratings. I think I got about seventy 27 00:01:43,240 --> 00:01:47,640 Speaker 1: ratings on the on Apple podcast. So go ahead, listeners, 28 00:01:47,680 --> 00:01:49,760 Speaker 1: if you want to hear Voldonna's high school nickname, you 29 00:01:49,840 --> 00:01:52,000 Speaker 1: have to go and give us a rating on Apple podcast. 30 00:01:52,080 --> 00:01:55,360 Speaker 1: We're not saying it has to be a five star rating. Uh, 31 00:01:55,440 --> 00:01:57,720 Speaker 1: even though you know, maybe maybe that's what you want 32 00:01:57,720 --> 00:01:59,520 Speaker 1: to give us. I don't know, but go rate, rate, 33 00:01:59,560 --> 00:02:01,840 Speaker 1: review the show and I think we get a hundred more. 34 00:02:01,880 --> 00:02:06,720 Speaker 1: Will will reveal you're holding the listeners hostage. No, no, no, 35 00:02:06,880 --> 00:02:10,840 Speaker 1: I'll have to go and click that five stars, however 36 00:02:10,919 --> 00:02:12,720 Speaker 1: many stars you want to click. I'm not saying it 37 00:02:12,720 --> 00:02:17,239 Speaker 1: has to be five stars, not making any prerequisites. I 38 00:02:17,400 --> 00:02:19,679 Speaker 1: will have no idea what they actually hit, how many 39 00:02:19,680 --> 00:02:21,840 Speaker 1: stars they hit, but it's going to get the numbers 40 00:02:21,880 --> 00:02:25,600 Speaker 1: going so more listeners can find the show and Uh, 41 00:02:25,880 --> 00:02:27,560 Speaker 1: find out what you think about it, especially if you 42 00:02:27,600 --> 00:02:30,280 Speaker 1: have a good a good review for us. You know 43 00:02:30,320 --> 00:02:33,360 Speaker 1: who else we're holding hostage our guest this week. I 44 00:02:33,360 --> 00:02:37,840 Speaker 1: realized this week he's probably having second thoughts about about 45 00:02:37,840 --> 00:02:40,800 Speaker 1: English but joining this podcast. Yeah exactly. Oh, he might 46 00:02:40,840 --> 00:02:44,160 Speaker 1: not even be on the zoom call anymore. I think 47 00:02:44,160 --> 00:02:47,320 Speaker 1: he's still there. He is. I want to welcome Jeremy's 48 00:02:47,360 --> 00:02:50,040 Speaker 1: here and he's senior portfolio manager and head of private 49 00:02:50,080 --> 00:02:53,600 Speaker 1: client US Equities at ubs ASCID Management. Jeremy, welcome to 50 00:02:53,639 --> 00:02:57,000 Speaker 1: the show. Thanks for having me out. And if you 51 00:02:57,000 --> 00:02:59,919 Speaker 1: need a nickname for me. The other jay Z works 52 00:03:00,120 --> 00:03:03,880 Speaker 1: is fine, that's pretty good. One, that's really good. All right, 53 00:03:03,919 --> 00:03:05,640 Speaker 1: you'll be jay Z the rest of the rest of 54 00:03:05,639 --> 00:03:09,760 Speaker 1: this podcast. But tell us, you know, what is your 55 00:03:09,840 --> 00:03:14,840 Speaker 1: takeaway from this FED meeting this week? I mean, obviously, 56 00:03:14,880 --> 00:03:18,280 Speaker 1: a relief rally in the market. Uh SMP up three 57 00:03:18,919 --> 00:03:22,639 Speaker 1: in a matter of minutes after Pal indicated that seventy 58 00:03:22,680 --> 00:03:25,760 Speaker 1: basis points was most likely off the table. Also some 59 00:03:25,840 --> 00:03:28,680 Speaker 1: comments suggesting that, you know, a soft landing in the 60 00:03:28,720 --> 00:03:35,240 Speaker 1: economy amid rising FED rates is not necessarily unthinkable. Uh. 61 00:03:35,520 --> 00:03:37,680 Speaker 1: You know, he indicated to be tricky but he doesn't 62 00:03:37,680 --> 00:03:40,840 Speaker 1: think it's possible. I mean, was it just that was 63 00:03:40,960 --> 00:03:43,280 Speaker 1: a real relief rally. Do you think we'll give it 64 00:03:43,320 --> 00:03:47,200 Speaker 1: all back in coming days or we're um or is 65 00:03:47,240 --> 00:03:49,320 Speaker 1: that really the type of thing that could help the 66 00:03:49,360 --> 00:03:53,119 Speaker 1: market set a bottom after this ugly start to a year. Look, 67 00:03:53,120 --> 00:03:55,120 Speaker 1: I think the markets are going to remain shoppy, but 68 00:03:55,720 --> 00:03:58,600 Speaker 1: I do think that the Federals are being very clear 69 00:03:58,640 --> 00:04:02,840 Speaker 1: that they're not con conto inflating far more aggressive tightening 70 00:04:03,320 --> 00:04:06,240 Speaker 1: was certainly helpful in terms of thinking about the future 71 00:04:06,240 --> 00:04:09,280 Speaker 1: path of monetary policy and just reducing what a lot 72 00:04:09,320 --> 00:04:12,880 Speaker 1: of investors fear is a policy mistake tightening too quickly 73 00:04:13,080 --> 00:04:15,960 Speaker 1: in the context of a slowing economy. I also think 74 00:04:16,000 --> 00:04:19,239 Speaker 1: one of the statements that was really interesting was that 75 00:04:19,680 --> 00:04:22,480 Speaker 1: you know, Federal you know s Propell said that he 76 00:04:22,600 --> 00:04:26,160 Speaker 1: will strive to avoid adding uncertainty to what is already 77 00:04:26,200 --> 00:04:29,720 Speaker 1: an extraordinarily challenging and uncertain time. Right. So it's not 78 00:04:29,800 --> 00:04:31,720 Speaker 1: just that they didn't tighten as much or they're not 79 00:04:31,760 --> 00:04:35,799 Speaker 1: contemplating tightening as much as feared, but it was also 80 00:04:35,920 --> 00:04:38,640 Speaker 1: they want to be predictable, They want to be very 81 00:04:38,720 --> 00:04:42,560 Speaker 1: clear on what they're doing and not surprised the market, 82 00:04:42,839 --> 00:04:45,360 Speaker 1: and so to the extent that the market already has 83 00:04:45,480 --> 00:04:47,640 Speaker 1: lots of things to worry about that are hard to predict, 84 00:04:47,839 --> 00:04:51,240 Speaker 1: write the war in Ukraine, COVID outbreaks in China, out 85 00:04:51,279 --> 00:04:53,760 Speaker 1: just you know, will we see peak inflation in the 86 00:04:53,839 --> 00:04:56,080 Speaker 1: first half of this year? You know, the Federal Reserve 87 00:04:56,120 --> 00:05:00,840 Speaker 1: is trying to reduce one of those uncertainties. Jermy, can 88 00:05:00,839 --> 00:05:04,720 Speaker 1: you talk about the idea of I mean, wouldn't Pal 89 00:05:04,920 --> 00:05:08,000 Speaker 1: sort of want the idea of a seventy five basis 90 00:05:08,120 --> 00:05:10,920 Speaker 1: point hike at least like floating out there as this 91 00:05:11,000 --> 00:05:14,920 Speaker 1: sort of fear because it helps tighten financial conditions. Whereas 92 00:05:14,920 --> 00:05:18,240 Speaker 1: if we have stocks and other risky acids rallying, financial 93 00:05:18,240 --> 00:05:21,880 Speaker 1: conditions are are are going to to ease or loosen. 94 00:05:22,080 --> 00:05:25,400 Speaker 1: So can you talk about why he felt the need 95 00:05:26,240 --> 00:05:29,400 Speaker 1: to to quash the idea of a seventy five basis 96 00:05:29,440 --> 00:05:32,760 Speaker 1: point hike. Yeah, I think it's pretty straightforward. I think 97 00:05:32,800 --> 00:05:36,640 Speaker 1: that financial conditions have tightened. Right. We've seen a dramatic 98 00:05:36,720 --> 00:05:40,200 Speaker 1: increase in the two year the ten year, and real 99 00:05:40,279 --> 00:05:43,680 Speaker 1: interest rates that have gone from deeply negative territory just 100 00:05:43,800 --> 00:05:46,680 Speaker 1: three months ago to positive territory from the first time 101 00:05:46,680 --> 00:05:50,159 Speaker 1: since before the pandemic, and so, you know, I think 102 00:05:50,160 --> 00:05:53,760 Speaker 1: that that has a tricky balancing act to handle. I mean, 103 00:05:53,800 --> 00:05:58,480 Speaker 1: we certainly have seen some of the growth indicators soften, 104 00:05:59,080 --> 00:06:01,000 Speaker 1: uh during the first week of this month, with the 105 00:06:01,000 --> 00:06:04,320 Speaker 1: I s M both manufacturing and non manufacturing index, you know, 106 00:06:04,400 --> 00:06:07,359 Speaker 1: coming off the boil. And so I think this was 107 00:06:07,400 --> 00:06:09,680 Speaker 1: just a matter of you know, the Fed saying, look, 108 00:06:09,839 --> 00:06:12,359 Speaker 1: financial conditions are tightening, we have are high on the 109 00:06:12,360 --> 00:06:17,279 Speaker 1: ball in terms of trying to balance our dual mandate 110 00:06:17,640 --> 00:06:21,159 Speaker 1: and that you know, given you know, market positioning, which 111 00:06:21,200 --> 00:06:24,000 Speaker 1: was horrendous right over the last month, with you know, 112 00:06:24,040 --> 00:06:27,760 Speaker 1: the SMP dropping on early ten percent last month. UM, 113 00:06:27,800 --> 00:06:32,000 Speaker 1: this was just the Powell's attempt to try to balance 114 00:06:32,040 --> 00:06:35,279 Speaker 1: and square that equation. You know. Jeremy, you mentioned that 115 00:06:35,320 --> 00:06:38,600 Speaker 1: you think markets will remain choppy on some of the 116 00:06:38,640 --> 00:06:41,840 Speaker 1: outlook notes you sent over to us. Uh, you indicated 117 00:06:41,839 --> 00:06:43,359 Speaker 1: that you think yes, and people probably be in a 118 00:06:43,400 --> 00:06:47,479 Speaker 1: trading range over the next few months. UM, as investors 119 00:06:47,480 --> 00:06:51,279 Speaker 1: wrestle with all these cross currents. Uh, how do you 120 00:06:51,400 --> 00:06:55,000 Speaker 1: play that as a portfolio managers a strategist, I mean, 121 00:06:55,040 --> 00:06:57,280 Speaker 1: is it just kind of hold what you have and 122 00:06:57,839 --> 00:07:01,000 Speaker 1: you know, wait, for this this phase to be overs there. 123 00:07:01,040 --> 00:07:03,960 Speaker 1: You know, it doesn't make sense to try to play 124 00:07:04,000 --> 00:07:06,680 Speaker 1: that range at all, or is that just too risky? 125 00:07:07,120 --> 00:07:09,320 Speaker 1: I think it's hard to sort of a so called 126 00:07:09,320 --> 00:07:11,960 Speaker 1: play the range in terms of the very short term 127 00:07:12,040 --> 00:07:14,880 Speaker 1: just because of the unpredictability of what's happening in some 128 00:07:14,960 --> 00:07:18,120 Speaker 1: of the risk factors that we talked about. UM. Generally, 129 00:07:18,440 --> 00:07:20,560 Speaker 1: you know, we invest for the long term, so we 130 00:07:20,640 --> 00:07:24,160 Speaker 1: own great companies that generate great cash flows and normalized environments, 131 00:07:24,200 --> 00:07:27,000 Speaker 1: and so we don't worry too much about you know, 132 00:07:27,120 --> 00:07:30,520 Speaker 1: thinking about you know, we're in the range of a 133 00:07:30,600 --> 00:07:34,800 Speaker 1: tactical positioning. We are, although when opportunities arise, I think 134 00:07:34,840 --> 00:07:38,840 Speaker 1: that you do want to tilt portfolios to take advantage 135 00:07:38,840 --> 00:07:42,640 Speaker 1: of some areas that could be attractive. Uh, you know, certainly, 136 00:07:42,840 --> 00:07:45,280 Speaker 1: you know, we think and we've been positioned more towards 137 00:07:45,520 --> 00:07:49,760 Speaker 1: the value segments of the market over the past several months, 138 00:07:50,320 --> 00:07:52,640 Speaker 1: believing that we are in a tightening cycle. We are 139 00:07:52,640 --> 00:07:56,280 Speaker 1: in a rising rate environment and with elevated valuations and 140 00:07:56,400 --> 00:07:58,920 Speaker 1: some of the secular growth areas of the market that 141 00:07:59,120 --> 00:08:03,720 Speaker 1: you value reopening plays are you know, the most interesting 142 00:08:03,760 --> 00:08:06,280 Speaker 1: and offer the best reward in the market. So when 143 00:08:06,440 --> 00:08:10,320 Speaker 1: segments within those categories sell off because of you know, 144 00:08:10,400 --> 00:08:14,720 Speaker 1: near term concerns, we get more interested in and tend 145 00:08:14,760 --> 00:08:17,240 Speaker 1: to back those positions. But would you want if I 146 00:08:17,280 --> 00:08:19,920 Speaker 1: just follow up on that and ask, you know, uh, 147 00:08:20,040 --> 00:08:22,240 Speaker 1: what looks like a good value in the market. You know, 148 00:08:22,280 --> 00:08:24,080 Speaker 1: what are the what are the value pockets of the 149 00:08:24,120 --> 00:08:27,600 Speaker 1: market that look attractive at the moment um. But I 150 00:08:27,600 --> 00:08:29,240 Speaker 1: think there's a couple of ways to look at it, right, 151 00:08:29,280 --> 00:08:31,000 Speaker 1: I mean, if you look at it by you know, 152 00:08:31,040 --> 00:08:33,600 Speaker 1: sort of sector and industry, I think it is your 153 00:08:33,600 --> 00:08:38,120 Speaker 1: classic value oriented sectors, So that would be energy, financials, 154 00:08:38,440 --> 00:08:42,080 Speaker 1: you pockets of the consumer discretionary sector, um, where you 155 00:08:42,160 --> 00:08:46,240 Speaker 1: do see you know, just low valuations and just fears 156 00:08:46,559 --> 00:08:50,080 Speaker 1: that the earnings will not be resilient enough and that 157 00:08:50,160 --> 00:08:54,040 Speaker 1: they are you know, potentially value traps. And so you know, 158 00:08:54,080 --> 00:08:57,560 Speaker 1: you look at energy energy right now trading at free 159 00:08:57,559 --> 00:09:00,800 Speaker 1: cash flow yields over ten percent, four per points above 160 00:09:01,160 --> 00:09:03,640 Speaker 1: any other sector in the market. So there's clear fear 161 00:09:03,720 --> 00:09:07,600 Speaker 1: that you know, the oil prices will normalize or go 162 00:09:08,120 --> 00:09:11,760 Speaker 1: be lower over the next six twelve, twenty four months. 163 00:09:11,880 --> 00:09:14,400 Speaker 1: And just given you know how tight oil markets are, 164 00:09:14,559 --> 00:09:17,520 Speaker 1: limited supply just the under investment in the sector for 165 00:09:17,559 --> 00:09:20,120 Speaker 1: the past five to six years. It does look like 166 00:09:20,200 --> 00:09:22,559 Speaker 1: there's you know, even though the sector has done phenomenally 167 00:09:22,600 --> 00:09:25,760 Speaker 1: well over the last twelve to fifteen months or so, 168 00:09:26,040 --> 00:09:28,560 Speaker 1: I think that there's more upside and markets are still 169 00:09:28,880 --> 00:09:31,760 Speaker 1: you know, cautious on the long term outlook. I think 170 00:09:31,760 --> 00:09:36,040 Speaker 1: financials also look attractive here in certain areas. Um You know, 171 00:09:36,160 --> 00:09:39,240 Speaker 1: if what's been interesting is that, you know, the financials 172 00:09:39,240 --> 00:09:41,440 Speaker 1: have traded sort of in line with the tenure treasury 173 00:09:41,480 --> 00:09:44,319 Speaker 1: up until about two months ago, and that's been a 174 00:09:44,400 --> 00:09:47,480 Speaker 1: there's there's been a pretty big disconnect between the performance 175 00:09:47,480 --> 00:09:51,680 Speaker 1: of financials and interest rates, meaning that financials haven't kept 176 00:09:51,760 --> 00:09:53,920 Speaker 1: up with the pace of interest rates. And I think 177 00:09:53,920 --> 00:09:55,880 Speaker 1: a lot of this is on fears of a hard 178 00:09:55,960 --> 00:09:58,679 Speaker 1: landing and fears that you know, credit is going to 179 00:09:58,760 --> 00:10:02,680 Speaker 1: be a problem, and that if we do have uh 180 00:10:02,760 --> 00:10:05,199 Speaker 1: an extension of the economic cycle and that that is 181 00:10:05,240 --> 00:10:08,960 Speaker 1: able to orchestrate a soft or soft dish landing, then 182 00:10:09,240 --> 00:10:11,480 Speaker 1: you know, financial should perform very well in this type 183 00:10:11,480 --> 00:10:15,160 Speaker 1: of environment. And then also I think you like a 184 00:10:15,200 --> 00:10:17,600 Speaker 1: lot of the reopening place that are tied to the 185 00:10:17,640 --> 00:10:21,240 Speaker 1: travel industry, the hotel leisure that type of stuff. If 186 00:10:21,280 --> 00:10:23,040 Speaker 1: you could talk about that. I know, we had some 187 00:10:23,120 --> 00:10:26,480 Speaker 1: really good earnings from the likes of Airbnb earlier and 188 00:10:27,040 --> 00:10:29,480 Speaker 1: I think it was earlier this week. Speek feels really long, 189 00:10:29,559 --> 00:10:32,760 Speaker 1: but um, but you to like some of those, right, 190 00:10:33,200 --> 00:10:35,440 Speaker 1: I do? Right, Like, So, if you think about across 191 00:10:35,440 --> 00:10:39,439 Speaker 1: you know, across sectors where there's good value, I would 192 00:10:39,440 --> 00:10:44,160 Speaker 1: say it's in you know, industries where their earnings were 193 00:10:44,200 --> 00:10:48,319 Speaker 1: impaired because of COVID and their catch up trades, because 194 00:10:48,360 --> 00:10:52,720 Speaker 1: the market is skeptical that earnings can reach more you know, 195 00:10:53,160 --> 00:10:56,360 Speaker 1: pre COVID levels anytime in the next couple of years. 196 00:10:56,679 --> 00:10:59,080 Speaker 1: And so if you look at some of the travel 197 00:10:59,720 --> 00:11:03,120 Speaker 1: uh um levered stocks, I mean just bookings last night, 198 00:11:03,360 --> 00:11:06,880 Speaker 1: but up I said that room night growth was thirty 199 00:11:06,920 --> 00:11:10,760 Speaker 1: percent higher than two thousand nineteen levels, and so there 200 00:11:10,840 --> 00:11:16,280 Speaker 1: is significant pent up demand for travel for service oriented industries, 201 00:11:16,960 --> 00:11:19,360 Speaker 1: and largely, you know, I think what investors are really 202 00:11:19,360 --> 00:11:21,560 Speaker 1: wrestling with is that we've had this you know, pull 203 00:11:21,679 --> 00:11:26,200 Speaker 1: forward of demand in segments of the economy and you know, 204 00:11:26,240 --> 00:11:31,600 Speaker 1: technology and many goods producing industries, and we've had you know, 205 00:11:31,640 --> 00:11:34,280 Speaker 1: and that was largely just because consumers had cash and 206 00:11:34,520 --> 00:11:36,800 Speaker 1: they needed we're going to spend it, but they couldn't 207 00:11:36,840 --> 00:11:40,000 Speaker 1: spend it on service oriented industries because of health concerns 208 00:11:40,120 --> 00:11:43,040 Speaker 1: or just restrictions. And so now I think we're seeing 209 00:11:43,280 --> 00:11:46,080 Speaker 1: that reverse and it's not a straight line because we 210 00:11:46,120 --> 00:11:49,480 Speaker 1: don't have you know, uh, we still have COVID to 211 00:11:49,520 --> 00:11:51,640 Speaker 1: deal with, not as much as we did, but we 212 00:11:51,679 --> 00:11:54,600 Speaker 1: still are dealing with some some of the effects of COVID. 213 00:11:55,120 --> 00:11:57,160 Speaker 1: Less so in the United States, but you know, still 214 00:11:57,160 --> 00:12:00,160 Speaker 1: seeing the effects in other parts of the world, especially 215 00:12:00,240 --> 00:12:03,520 Speaker 1: in Asia. Um. But I do think that for patient 216 00:12:03,679 --> 00:12:07,360 Speaker 1: capital that the best risk rewards in the market are 217 00:12:07,440 --> 00:12:12,240 Speaker 1: really on those areas that have seen um, you know, 218 00:12:13,480 --> 00:12:17,160 Speaker 1: you know, disruption from COVID that you know, I don't 219 00:12:17,200 --> 00:12:19,240 Speaker 1: know if it's going to be in three to six months, 220 00:12:19,240 --> 00:12:22,200 Speaker 1: but in two to five years are likely to have 221 00:12:22,520 --> 00:12:24,840 Speaker 1: sort of more normal earnings levels and back to trend 222 00:12:24,880 --> 00:12:28,000 Speaker 1: earnings levels that they saw before COVID. Yeah. I think 223 00:12:28,000 --> 00:12:31,599 Speaker 1: it's an interesting dynamic that pent up sort of bottleneck 224 00:12:31,600 --> 00:12:34,040 Speaker 1: and demand that you mentioned. You know, the flip side 225 00:12:34,040 --> 00:12:36,440 Speaker 1: of the coin of that is just you know, consumers 226 00:12:36,480 --> 00:12:40,280 Speaker 1: having this extraordinary amount of savings that you know, the 227 00:12:40,320 --> 00:12:43,480 Speaker 1: likes of which we really never saw in modern times 228 00:12:43,520 --> 00:12:47,679 Speaker 1: before the pandemic um. So to me, it seems like 229 00:12:47,720 --> 00:12:51,120 Speaker 1: that a corporations to you know, corporations balance sheets are 230 00:12:51,160 --> 00:12:55,599 Speaker 1: are so strong, uh coming out of the pandemic um 231 00:12:55,640 --> 00:13:00,160 Speaker 1: that it seems like, you know, the inflationary environment mean 232 00:13:00,520 --> 00:13:03,319 Speaker 1: um is not as sort of a head as big 233 00:13:03,360 --> 00:13:05,680 Speaker 1: of a headwind as it would be otherwise. If you know, 234 00:13:05,720 --> 00:13:08,440 Speaker 1: if the savings rate had not sort of ballooned the 235 00:13:08,480 --> 00:13:12,679 Speaker 1: way it did during the pandemic, how long do you 236 00:13:12,720 --> 00:13:16,240 Speaker 1: think that lasts? Though? How long can that consumer sort 237 00:13:16,280 --> 00:13:20,000 Speaker 1: of draw down those savings um before we sort of 238 00:13:20,080 --> 00:13:24,800 Speaker 1: normalize back to uh, you know, pre pandemic levels of demand. 239 00:13:24,960 --> 00:13:27,559 Speaker 1: Is it, you know, something that could happen quickly or 240 00:13:27,880 --> 00:13:30,720 Speaker 1: is it something that the last perhaps as long as 241 00:13:30,760 --> 00:13:33,920 Speaker 1: the pandemic lasted. Is there any sense from your end 242 00:13:33,920 --> 00:13:36,920 Speaker 1: of of how long we can count on that consumer 243 00:13:36,960 --> 00:13:40,520 Speaker 1: to have the spending power that they do. Yeah, I 244 00:13:40,559 --> 00:13:45,400 Speaker 1: think the market is overestimating just the probability of the 245 00:13:45,400 --> 00:13:48,120 Speaker 1: consumer retrenching. I think it is because of what as 246 00:13:48,160 --> 00:13:50,559 Speaker 1: you mentioned, there is a good amount of pent up savings, 247 00:13:50,600 --> 00:13:54,920 Speaker 1: but more importantly what the highest correlation to consumer spending 248 00:13:54,920 --> 00:13:58,320 Speaker 1: is simply jobs? Right, If if if you have a job, 249 00:13:58,320 --> 00:14:00,560 Speaker 1: you're going to spend. If your way just are going up, 250 00:14:00,559 --> 00:14:02,080 Speaker 1: you're going to spend a little bit more. If you 251 00:14:02,120 --> 00:14:04,040 Speaker 1: have excess savings, you're gonna spend a little bit more. 252 00:14:04,480 --> 00:14:08,440 Speaker 1: But the main, the main focal point for any analysis 253 00:14:08,520 --> 00:14:11,760 Speaker 1: of the outlook for consumer spending is employment. And right 254 00:14:11,760 --> 00:14:16,000 Speaker 1: now labor demand is by far outstripping labor supply. We 255 00:14:16,040 --> 00:14:19,440 Speaker 1: still have labor force participation rates at well below pre 256 00:14:19,520 --> 00:14:23,320 Speaker 1: pandemic levels because a lot of people were fearful of 257 00:14:23,480 --> 00:14:26,400 Speaker 1: entering the labor market because of COVID or couldn't because 258 00:14:26,400 --> 00:14:29,560 Speaker 1: of child care concerns. And so if we get I mean, 259 00:14:31,120 --> 00:14:33,360 Speaker 1: at the end of the day, you know, the consumer 260 00:14:33,400 --> 00:14:36,680 Speaker 1: can stay resilient, and it's not a matter of working 261 00:14:36,680 --> 00:14:39,600 Speaker 1: off savings in my view, it's a matter of whether 262 00:14:39,760 --> 00:14:43,240 Speaker 1: they stay employed. And I think that you know, even 263 00:14:43,360 --> 00:14:48,480 Speaker 1: with that tightening, we're not anywhere close to seeing our 264 00:14:49,040 --> 00:14:54,360 Speaker 1: trenchment in corporate hiring, and so, like, I understand the 265 00:14:54,360 --> 00:14:57,280 Speaker 1: bearish argument that the FED is tightening and that you know, 266 00:14:57,720 --> 00:14:59,920 Speaker 1: the yield curve inverted and that has been a precur 267 00:15:00,000 --> 00:15:04,040 Speaker 1: search of recession, but it seems like in this environment 268 00:15:04,280 --> 00:15:08,360 Speaker 1: the buffer is that consumer and corporate balance sheets are 269 00:15:08,400 --> 00:15:10,520 Speaker 1: in very good shape. We still have a very healthy 270 00:15:10,600 --> 00:15:14,200 Speaker 1: demand for labor. That isn't that is far out of balance, 271 00:15:14,720 --> 00:15:17,280 Speaker 1: and that you know, the spent you know, because consumer 272 00:15:17,320 --> 00:15:20,560 Speaker 1: spending can remain far more resilient for a longer period 273 00:15:20,560 --> 00:15:23,240 Speaker 1: of time because you know, we don't this isn't a 274 00:15:23,280 --> 00:15:26,200 Speaker 1: normal economic cycle. We didn't see, you know, a housing 275 00:15:26,200 --> 00:15:28,240 Speaker 1: boom and bust like we did in two thousand six 276 00:15:28,280 --> 00:15:31,160 Speaker 1: or two thousand seven. We're not seeing a corporate spending 277 00:15:31,240 --> 00:15:33,760 Speaker 1: boom and bust in technology like we did in the 278 00:15:33,800 --> 00:15:37,120 Speaker 1: late nineties. Fundamentals are generally pretty good going into this 279 00:15:37,920 --> 00:15:41,080 Speaker 1: health crisis and pandemic. So I think that, you know, 280 00:15:41,280 --> 00:15:45,360 Speaker 1: the outlook for for UH and the probability of a 281 00:15:45,400 --> 00:15:50,520 Speaker 1: softer landing and longer expansion is fairly high and probably 282 00:15:50,560 --> 00:15:53,760 Speaker 1: higher than market perception. I was just about to ask 283 00:15:53,800 --> 00:15:55,640 Speaker 1: you what your view is and whether or not the 284 00:15:55,640 --> 00:15:59,280 Speaker 1: FED can avoid a hard landing or this UH if 285 00:15:59,280 --> 00:16:02,120 Speaker 1: we can have this softish lending is how I think 286 00:16:02,120 --> 00:16:05,640 Speaker 1: Paul described it this week. Yeah, I mean, look, I 287 00:16:05,960 --> 00:16:08,280 Speaker 1: think that because of what I just mentioned, and just 288 00:16:08,360 --> 00:16:11,360 Speaker 1: because the strength of the consumer and incorporate balance sheets 289 00:16:11,400 --> 00:16:15,040 Speaker 1: and still generally healthy labor markets. You know, there's a 290 00:16:15,080 --> 00:16:17,720 Speaker 1: good chance. I mean, that's that's essentially what Powell said, 291 00:16:17,720 --> 00:16:20,160 Speaker 1: that there's a good chance we don't know, right. I mean, 292 00:16:20,160 --> 00:16:22,680 Speaker 1: there's a lot of risk factors that you know, could 293 00:16:22,880 --> 00:16:27,320 Speaker 1: lead to a you know, moderate downturn um. I don't 294 00:16:27,360 --> 00:16:29,200 Speaker 1: think that if we do see your recession, it would 295 00:16:29,240 --> 00:16:33,640 Speaker 1: be your normal you know, typical you know, markets go down, 296 00:16:34,480 --> 00:16:36,240 Speaker 1: it takes a couple of years to get back to 297 00:16:36,720 --> 00:16:39,560 Speaker 1: you know, back to trend levels of economic activity. It 298 00:16:39,560 --> 00:16:43,600 Speaker 1: will probably be a little bit you know, more shallow um, 299 00:16:43,600 --> 00:16:48,280 Speaker 1: given some of the strong economic momentum that's already you know, 300 00:16:48,520 --> 00:16:51,400 Speaker 1: in the in the U. S. Economy. But I think 301 00:16:51,520 --> 00:16:54,280 Speaker 1: that there's a good chance that we you know, in 302 00:16:54,320 --> 00:16:57,600 Speaker 1: our base case, you know, the economy slows, it doesn't 303 00:16:57,720 --> 00:17:02,840 Speaker 1: roll over, you know, even the outlined and very clearly 304 00:17:02,920 --> 00:17:06,679 Speaker 1: defined you know, hiking path from the Fed, you know, 305 00:17:06,720 --> 00:17:09,920 Speaker 1: we're only going to go to sort of neutral territory 306 00:17:10,320 --> 00:17:13,560 Speaker 1: in terms of FED policy over the next several months. 307 00:17:14,119 --> 00:17:18,119 Speaker 1: And you know, in my view, there's a reasonably good 308 00:17:18,240 --> 00:17:22,600 Speaker 1: chance that the Fed can pause there and once they 309 00:17:22,600 --> 00:17:24,760 Speaker 1: reach you know, levels of around two to and a 310 00:17:24,800 --> 00:17:27,480 Speaker 1: half percent on the FED funds right, and because I 311 00:17:27,520 --> 00:17:32,160 Speaker 1: think that inflation is likely peaking right about now or 312 00:17:32,240 --> 00:17:34,640 Speaker 1: in the next couple of months, and that will see 313 00:17:34,640 --> 00:17:37,920 Speaker 1: lower levels of inflation over the course of the second 314 00:17:37,920 --> 00:17:39,720 Speaker 1: half of the year, and that will give the FED 315 00:17:40,040 --> 00:17:44,760 Speaker 1: an opportunity to you know, uh the ease off in 316 00:17:44,840 --> 00:17:48,119 Speaker 1: terms of it's hiking, increasing the probability of a software landing. 317 00:17:49,480 --> 00:17:52,359 Speaker 1: You know, you mentioned in UH when your notes to 318 00:17:52,440 --> 00:17:56,080 Speaker 1: us that you like high quality companies with pricing power. 319 00:17:56,640 --> 00:18:01,360 Speaker 1: I've been kind of surprised, um at it seems like 320 00:18:01,680 --> 00:18:05,600 Speaker 1: so many companies have that pricing power right now. This week, UM, 321 00:18:05,640 --> 00:18:07,960 Speaker 1: we saw a T and T and Verizon you know, 322 00:18:08,000 --> 00:18:12,200 Speaker 1: either announcing or planning to announce uh increases in mobile 323 00:18:12,840 --> 00:18:15,639 Speaker 1: UH subscription rates, which perhaps that's kind of a no 324 00:18:15,720 --> 00:18:17,560 Speaker 1: brain or a cell phone company is going to be 325 00:18:17,600 --> 00:18:21,280 Speaker 1: able to you know, raise prices arguably more than sort 326 00:18:21,320 --> 00:18:25,960 Speaker 1: of a discretionary um uh consumer company. Where where would 327 00:18:25,960 --> 00:18:29,800 Speaker 1: you expect the pockets of the market to be where 328 00:18:29,800 --> 00:18:32,120 Speaker 1: the pricing power is not robust. Is it as simple 329 00:18:32,160 --> 00:18:37,000 Speaker 1: as sort of you know, frivolous consumer discretionary type of products, 330 00:18:37,080 --> 00:18:40,480 Speaker 1: or is it more complicated than that. Now I think 331 00:18:40,480 --> 00:18:43,840 Speaker 1: that like in general, you know, you would see it 332 00:18:43,880 --> 00:18:46,440 Speaker 1: in sort of some of the names that are are 333 00:18:46,480 --> 00:18:50,080 Speaker 1: really sort of like discounters, right, and where you don't 334 00:18:50,080 --> 00:18:53,680 Speaker 1: have where you're already working on very low margins. And 335 00:18:53,800 --> 00:18:56,600 Speaker 1: so I do think that you know, in pockets of 336 00:18:56,640 --> 00:19:01,600 Speaker 1: consumer discretionary um or very competit it is environments and 337 00:19:01,760 --> 00:19:05,399 Speaker 1: very competitive industries, you're likely to see you less pricing 338 00:19:05,400 --> 00:19:10,000 Speaker 1: power than and see some further margin erosion than other 339 00:19:10,320 --> 00:19:13,600 Speaker 1: you know, other other sectors. But probably it seems like 340 00:19:13,680 --> 00:19:17,880 Speaker 1: most companies are are being you know, have that power 341 00:19:17,920 --> 00:19:22,400 Speaker 1: they a they're able to raise prices pretty aggressively. Um, 342 00:19:22,440 --> 00:19:25,600 Speaker 1: so far is up in your your general impression, Yeah, 343 00:19:25,680 --> 00:19:27,119 Speaker 1: I mean, if you look at the ring season so 344 00:19:27,160 --> 00:19:29,879 Speaker 1: far most companies have reported and you're seeing that you know, 345 00:19:29,920 --> 00:19:33,119 Speaker 1: sales growth is on track to be up about twelve 346 00:19:33,160 --> 00:19:37,520 Speaker 1: percent for the sp earnings up about ten so you know, 347 00:19:38,000 --> 00:19:41,320 Speaker 1: an aggregate, that statement you just made is true. I 348 00:19:41,359 --> 00:19:44,119 Speaker 1: do think though, that we are in a period where 349 00:19:44,480 --> 00:19:46,520 Speaker 1: as you mentioned, right, the consumer still has a good 350 00:19:46,520 --> 00:19:50,480 Speaker 1: amount of savings to spend, and labor markets are strong, 351 00:19:50,520 --> 00:19:53,160 Speaker 1: so we have good economic momentum. What will be more 352 00:19:53,200 --> 00:19:55,840 Speaker 1: interesting to see is how companies have you know, how 353 00:19:55,880 --> 00:19:59,399 Speaker 1: the pricing power holds up as the economy starts to 354 00:20:00,640 --> 00:20:03,600 Speaker 1: and the consumer you know, starts to get a little 355 00:20:03,640 --> 00:20:06,320 Speaker 1: bit more stretched. And so there I think, you know, 356 00:20:06,359 --> 00:20:09,720 Speaker 1: what we try to do in our analysis is really 357 00:20:09,720 --> 00:20:12,760 Speaker 1: look at, you know, do the companies have a mode. 358 00:20:12,800 --> 00:20:17,480 Speaker 1: Are they in industries that have oligopalistic nature to them 359 00:20:17,520 --> 00:20:20,960 Speaker 1: where they don't have where they generally have rational pricing 360 00:20:21,000 --> 00:20:24,080 Speaker 1: across the industry, and you know, are they able to 361 00:20:24,320 --> 00:20:25,879 Speaker 1: do they have enough brand equity where they can and 362 00:20:25,960 --> 00:20:36,480 Speaker 1: raise prices to continue to offset some of the costs. 363 00:20:36,520 --> 00:20:39,320 Speaker 1: You mentioned the earning season, and I actually wanted to 364 00:20:39,320 --> 00:20:42,239 Speaker 1: ask you why you feel the market hasn't held up 365 00:20:42,320 --> 00:20:45,080 Speaker 1: better or didn't hold up better during the earning season 366 00:20:45,119 --> 00:20:47,000 Speaker 1: when we did have all of these reports that were 367 00:20:47,080 --> 00:20:50,800 Speaker 1: largely very good and whether or not you think that's 368 00:20:51,040 --> 00:20:55,160 Speaker 1: largely tied to you know, the macro narratives just being 369 00:20:55,240 --> 00:21:00,200 Speaker 1: so much more overwhelming than anything we've heard from from companies. Yeah, 370 00:21:00,240 --> 00:21:02,359 Speaker 1: I would say one it was the rate backdrop was 371 00:21:02,440 --> 00:21:05,760 Speaker 1: the primary driver. Uh. You know, if you look at 372 00:21:05,800 --> 00:21:09,359 Speaker 1: what didn't work in the stock market the last few weeks, 373 00:21:09,520 --> 00:21:12,240 Speaker 1: it's been you know, the secular growth names that sold 374 00:21:12,240 --> 00:21:14,800 Speaker 1: off a lot more than you know, value and cyclicals, 375 00:21:14,840 --> 00:21:18,240 Speaker 1: and so you know that was directly tied to the 376 00:21:18,359 --> 00:21:20,879 Speaker 1: rise in you know, nominal and real interest rates, I 377 00:21:20,920 --> 00:21:24,560 Speaker 1: think more so than than earnings. I would also note that, 378 00:21:24,680 --> 00:21:29,040 Speaker 1: you know, while earnings were reasonably good in the quarter, 379 00:21:29,280 --> 00:21:34,119 Speaker 1: the level of beats this quarter was well below the 380 00:21:34,240 --> 00:21:38,640 Speaker 1: outsized beats that we saw over the last several quarters. Now, 381 00:21:38,680 --> 00:21:42,040 Speaker 1: it doesn't make me overly concerned because the level of 382 00:21:42,040 --> 00:21:44,439 Speaker 1: beats this quarter is actually pretty normal in line with 383 00:21:44,480 --> 00:21:47,200 Speaker 1: historical averages. It was just that the companies were beating 384 00:21:47,200 --> 00:21:50,240 Speaker 1: by such a wide margin, uh in the last few 385 00:21:50,280 --> 00:21:53,280 Speaker 1: quarters that I think you know, investors sort of have 386 00:21:53,400 --> 00:21:56,359 Speaker 1: muscle memory and said, well, you know, things are beats 387 00:21:56,400 --> 00:21:59,119 Speaker 1: are slowing the aggregate level of growth, this slowing the 388 00:21:59,200 --> 00:22:01,679 Speaker 1: beds raising rates, and you know, putting all of that 389 00:22:01,720 --> 00:22:04,359 Speaker 1: into the into the equation to say, you know, this 390 00:22:04,440 --> 00:22:06,639 Speaker 1: might not be as good in uh time to be 391 00:22:06,800 --> 00:22:10,000 Speaker 1: investing inequities. I also think you also, just last point 392 00:22:10,000 --> 00:22:13,800 Speaker 1: I'll make is you had some pretty high profile margin misses, 393 00:22:14,280 --> 00:22:17,879 Speaker 1: you know with technology companies or you know pull forward 394 00:22:17,960 --> 00:22:21,840 Speaker 1: demand companies like you know a Netflix, um or an Amazon, 395 00:22:22,240 --> 00:22:25,520 Speaker 1: and so from the from that perspective, you know, there 396 00:22:25,720 --> 00:22:29,520 Speaker 1: was I think just concern about Okay, you know, well 397 00:22:29,680 --> 00:22:34,480 Speaker 1: in aggregate companies are handling, are able to pass along 398 00:22:34,560 --> 00:22:38,800 Speaker 1: pricing um, and are seeing reasonably resilient and market demand. 399 00:22:39,440 --> 00:22:43,800 Speaker 1: It's not uniform and so it's not a fewer company 400 00:22:43,840 --> 00:22:45,800 Speaker 1: you know, with a breath of companies beating and the 401 00:22:45,880 --> 00:22:50,080 Speaker 1: level of company beats uh decelerating. I think that just 402 00:22:50,240 --> 00:22:54,320 Speaker 1: added to the rate rise in some of the angsteon markets. Yeah, 403 00:22:54,320 --> 00:22:57,119 Speaker 1: it's a great point about sort of that recency bias. 404 00:22:57,200 --> 00:22:59,360 Speaker 1: You know, it's easy for the market to get used 405 00:22:59,400 --> 00:23:04,360 Speaker 1: to the companies beating and you know reversion back that's 406 00:23:04,400 --> 00:23:09,240 Speaker 1: not normal. Yeah, yeah, yeah, that's it's Uh, that's interesting, Jeremy. 407 00:23:09,280 --> 00:23:12,840 Speaker 1: I'm wondering what you see as what are the risks 408 00:23:12,920 --> 00:23:14,280 Speaker 1: that sort of keep you up at night. You know, 409 00:23:14,280 --> 00:23:18,439 Speaker 1: I'm looking at the news today, it's Thursday. Uh. Leaders 410 00:23:18,440 --> 00:23:22,240 Speaker 1: in China are reiterating the whole notion of the zero 411 00:23:22,320 --> 00:23:26,280 Speaker 1: COVID policy. Um, they're not backing down from that. There's 412 00:23:26,320 --> 00:23:29,840 Speaker 1: a lot of concern about this Russian holiday coming up 413 00:23:29,880 --> 00:23:33,359 Speaker 1: on on May nine, that Russia will really use that 414 00:23:33,440 --> 00:23:35,880 Speaker 1: as an excuse to get very aggressive in this war 415 00:23:35,960 --> 00:23:40,080 Speaker 1: and maybe you know some some real dangerous rhetor coming 416 00:23:40,080 --> 00:23:43,400 Speaker 1: out from them. Is it? Are they the two main risks? 417 00:23:43,440 --> 00:23:47,399 Speaker 1: Do you think China lockdowns in Russia's is that really 418 00:23:48,000 --> 00:23:49,920 Speaker 1: what keeps everyone up at night right now? Or is 419 00:23:49,920 --> 00:23:53,280 Speaker 1: there anything we're missing? I think from you know, a 420 00:23:53,400 --> 00:23:56,399 Speaker 1: very tactical perspective about what's going to drive markets in 421 00:23:56,440 --> 00:23:59,439 Speaker 1: the next week or two. Um, you know that you 422 00:23:59,480 --> 00:24:02,960 Speaker 1: know what's in with the war in Ukraine and the 423 00:24:03,000 --> 00:24:07,200 Speaker 1: Asian Chinese cities, lockdowns are are front and center. I 424 00:24:07,240 --> 00:24:11,639 Speaker 1: would say, looking out a little bit further, and not 425 00:24:11,720 --> 00:24:13,640 Speaker 1: even a lot further tactically, but just over the next 426 00:24:13,640 --> 00:24:15,639 Speaker 1: several months, I would say it's going to be the 427 00:24:15,680 --> 00:24:21,080 Speaker 1: inflation data that drives markets. If we see inflation continuing 428 00:24:21,240 --> 00:24:26,159 Speaker 1: to stay at very elevated levels and not seeing some 429 00:24:26,280 --> 00:24:30,200 Speaker 1: of the declines that you know we're hoping to see, UM, 430 00:24:30,520 --> 00:24:32,719 Speaker 1: then I think that you're gonna start to see expectations 431 00:24:32,720 --> 00:24:35,520 Speaker 1: for the FED tightening to be even more aggressive, and 432 00:24:35,640 --> 00:24:39,000 Speaker 1: that's going to put more pressure on the markets. And 433 00:24:39,040 --> 00:24:42,000 Speaker 1: I think the timing on the inflation data is difficult 434 00:24:42,640 --> 00:24:46,359 Speaker 1: to assess, but we are seeing some signs that inflation 435 00:24:46,760 --> 00:24:51,439 Speaker 1: is in fact peeking, and so I mentioned that, you know, 436 00:24:51,720 --> 00:24:53,080 Speaker 1: I think we're gonna be at a trading range, but 437 00:24:53,080 --> 00:24:55,280 Speaker 1: I think we're probably closer to the bottom of that 438 00:24:55,440 --> 00:24:58,399 Speaker 1: trading range in the near term than than the top. 439 00:24:58,680 --> 00:25:00,600 Speaker 1: And it's because of the fact, uh you know, you 440 00:25:00,640 --> 00:25:03,560 Speaker 1: have seen use car prices come off the boil, right, 441 00:25:03,600 --> 00:25:05,720 Speaker 1: you have seen sort of a stall in some of 442 00:25:05,720 --> 00:25:10,440 Speaker 1: the commodity price increases, and encouragingly from a from a 443 00:25:11,040 --> 00:25:14,640 Speaker 1: wages perspective, you you are seeing labor force participations start 444 00:25:14,680 --> 00:25:19,840 Speaker 1: to improve and without further meaningful outbreaks of COVID that 445 00:25:19,880 --> 00:25:24,520 Speaker 1: would restrict mobility, uh in in you know, domestically, I 446 00:25:24,560 --> 00:25:27,239 Speaker 1: do think you'll see labor supply improve over time, and 447 00:25:27,440 --> 00:25:32,080 Speaker 1: just the combination of FED tightening and slowing the economy 448 00:25:32,080 --> 00:25:35,560 Speaker 1: a little bit from the demand perspective, and increased supply 449 00:25:35,680 --> 00:25:39,840 Speaker 1: of labor should allow for you know, wage growth at 450 00:25:39,840 --> 00:25:43,240 Speaker 1: a minimum to stop going up and likely to to 451 00:25:43,359 --> 00:25:45,879 Speaker 1: plateau and start trending a little bit lower over the 452 00:25:45,920 --> 00:25:49,359 Speaker 1: next couple of quarters, in more likely the next couple 453 00:25:49,400 --> 00:25:53,919 Speaker 1: of years. You know, Jeremy, we often hear about this 454 00:25:54,000 --> 00:25:56,679 Speaker 1: idea that stocks can be a really good inflation hedge 455 00:25:56,800 --> 00:25:59,200 Speaker 1: because of what we were just talking about companies passing 456 00:25:59,200 --> 00:26:02,920 Speaker 1: on costs. But we have this story earlier this week 457 00:26:02,920 --> 00:26:05,879 Speaker 1: that said, adjusted for inflation, the SMP five dred is 458 00:26:05,920 --> 00:26:09,520 Speaker 1: down in value at an annualized rate of roughly or 459 00:26:09,600 --> 00:26:13,119 Speaker 1: sent any full year since nine. So what do you 460 00:26:13,200 --> 00:26:18,200 Speaker 1: make of the idea that stocks are a good inflation hedge. Yeah, 461 00:26:18,240 --> 00:26:23,640 Speaker 1: I think that down is just a a poor way 462 00:26:23,680 --> 00:26:28,080 Speaker 1: to frame a statistic. Uh that that that shouldn't that 463 00:26:28,200 --> 00:26:31,040 Speaker 1: is misguided, right, I mean in the long run, you know, 464 00:26:31,119 --> 00:26:34,119 Speaker 1: stocks are a very good inflation hedge because they appreciate 465 00:26:34,200 --> 00:26:38,200 Speaker 1: at a level that is much higher than inflation. And 466 00:26:38,840 --> 00:26:41,879 Speaker 1: to the point we were making before, stocks do have pricing. 467 00:26:42,200 --> 00:26:44,800 Speaker 1: You know, many companies do have pricing power and are 468 00:26:44,880 --> 00:26:47,520 Speaker 1: able to offset those costs. I mean, we've seen very 469 00:26:47,520 --> 00:26:50,160 Speaker 1: clearly that bonds are a terrible inflation edge and their 470 00:26:50,200 --> 00:26:53,200 Speaker 1: prices have gone down dramatically as well, you know, inflation 471 00:26:53,240 --> 00:26:56,880 Speaker 1: has risen. I think one of the more underappreciated areas 472 00:26:57,119 --> 00:26:59,920 Speaker 1: of you know, the equity market for long term invest 473 00:27:00,040 --> 00:27:04,040 Speaker 1: you're just looking for inflation protection. Are just your stable, 474 00:27:04,560 --> 00:27:07,879 Speaker 1: lower risk dividend growth stocks, right, I mean if you 475 00:27:07,920 --> 00:27:12,120 Speaker 1: think about, uh, you know, the return you're getting from 476 00:27:12,119 --> 00:27:15,040 Speaker 1: a company that has a two two and a half 477 00:27:15,040 --> 00:27:19,040 Speaker 1: percent dividend yield today moderate pes but grow learnings and 478 00:27:19,040 --> 00:27:23,439 Speaker 1: dividends in the mid to high single digits year after year. Um. 479 00:27:23,520 --> 00:27:26,120 Speaker 1: You know, we're all freaking out that inflation is eight 480 00:27:26,119 --> 00:27:28,800 Speaker 1: percent now on the CPI and six percent on the 481 00:27:29,600 --> 00:27:33,680 Speaker 1: pc E UH indicators. Um. But you know there are 482 00:27:33,720 --> 00:27:37,680 Speaker 1: many companies in the SMP five that you know, historically 483 00:27:37,760 --> 00:27:42,120 Speaker 1: have delivered dividend growth of eight to ten percent every year. Right, 484 00:27:42,160 --> 00:27:45,960 Speaker 1: And so if you're worried about you know, inflation being 485 00:27:46,480 --> 00:27:50,840 Speaker 1: stickier at a mid single digit rate over the next 486 00:27:51,200 --> 00:27:53,480 Speaker 1: you know, three, five, ten years, and what that does 487 00:27:53,520 --> 00:27:57,359 Speaker 1: to your purchasing power by dividend growth stocks, right, you know, 488 00:27:57,440 --> 00:28:01,040 Speaker 1: by bye bye, you know, more stable dividend growth docks 489 00:28:01,040 --> 00:28:05,160 Speaker 1: and consumer staples in health there that consistently grow their 490 00:28:05,160 --> 00:28:07,320 Speaker 1: dividends by to ten percent a year, and you'll have 491 00:28:07,440 --> 00:28:12,440 Speaker 1: that offset relative to high levels of inflation. The aristocrats, 492 00:28:12,480 --> 00:28:31,080 Speaker 1: as they say, the dividend aristocrats. Jeremy, I wonder you 493 00:28:31,119 --> 00:28:35,199 Speaker 1: know you mentioned the notion of inflation being sticky. I 494 00:28:35,240 --> 00:28:37,919 Speaker 1: do think you know, I agree, and everyone seems to 495 00:28:37,920 --> 00:28:41,840 Speaker 1: agree that there are plenty of signs that inflation is piqud. 496 00:28:42,800 --> 00:28:45,760 Speaker 1: But I wonder what happens if we get it sort 497 00:28:45,800 --> 00:28:48,920 Speaker 1: of plateauing out, say later in the year, in the 498 00:28:49,040 --> 00:28:51,360 Speaker 1: in the summer, and into the second half of the year. 499 00:28:51,400 --> 00:28:54,000 Speaker 1: If you know, I don't know CPI is at what 500 00:28:54,080 --> 00:28:56,480 Speaker 1: eight and a half? If it sort of sticks at 501 00:28:56,880 --> 00:29:00,600 Speaker 1: you know, in the fives and PCs sort of sticks 502 00:29:00,600 --> 00:29:05,600 Speaker 1: in the fours or the fives, is that ultimately a 503 00:29:05,680 --> 00:29:08,600 Speaker 1: dangerous situation for equities? If you know, we get to 504 00:29:08,600 --> 00:29:10,600 Speaker 1: the point where we say, well, it's peaked, but it's 505 00:29:10,640 --> 00:29:16,520 Speaker 1: still not normalizing back to two. Um, you know, is 506 00:29:16,560 --> 00:29:19,440 Speaker 1: that sort of a a danger point for equities? Do 507 00:29:19,520 --> 00:29:23,719 Speaker 1: you think? I mean, certainly, if we see more structural 508 00:29:23,840 --> 00:29:27,240 Speaker 1: drivers of higher inflation take hold, like if wage growth 509 00:29:27,280 --> 00:29:31,040 Speaker 1: continues to stay at a very high level and isn't 510 00:29:31,080 --> 00:29:37,160 Speaker 1: trending in a more you know, trending lower, I think 511 00:29:37,200 --> 00:29:40,200 Speaker 1: that is going to lead to a lot more concerns 512 00:29:40,240 --> 00:29:42,120 Speaker 1: that that are reserved, is going to have to high 513 00:29:42,200 --> 00:29:44,960 Speaker 1: interest rates a lot faster. UM. I tend to think 514 00:29:45,120 --> 00:29:48,720 Speaker 1: of inflation and the inflation problems that we're having right now, 515 00:29:49,280 --> 00:29:51,600 Speaker 1: you know, in three buckets. I mean, you have this 516 00:29:51,640 --> 00:29:54,680 Speaker 1: commodity price inflation, which is you know, very clear, and 517 00:29:54,920 --> 00:29:56,880 Speaker 1: it's a high frequency purchase, so it gets a lot 518 00:29:56,880 --> 00:30:00,520 Speaker 1: of you know, airtime. Um. But look, I mean commodity 519 00:30:00,560 --> 00:30:03,640 Speaker 1: prices went from you know, oil prices for example, and 520 00:30:03,720 --> 00:30:06,120 Speaker 1: from sixty dollars a barrel a year ago to over 521 00:30:06,120 --> 00:30:09,320 Speaker 1: a hundred dollars of barrel today. Uh, you know you're 522 00:30:09,360 --> 00:30:12,600 Speaker 1: going to see a deceleration and headline inflation unless commodity 523 00:30:12,600 --> 00:30:14,720 Speaker 1: prices go to a hundreds oil prices to a hundred 524 00:30:14,720 --> 00:30:17,680 Speaker 1: and six hundred and seventy. Right, and so just from 525 00:30:17,720 --> 00:30:19,560 Speaker 1: a year on your change basis, because that's how we 526 00:30:19,600 --> 00:30:23,120 Speaker 1: measure inflation, you know, the commodity complex should start to 527 00:30:23,320 --> 00:30:28,280 Speaker 1: show deceleration of inflation over the next several months and quarters. 528 00:30:28,760 --> 00:30:30,960 Speaker 1: I mean in terms of you know, the second bucket 529 00:30:31,000 --> 00:30:33,240 Speaker 1: is goods, right, Like we've just seen a huge amount 530 00:30:33,440 --> 00:30:37,719 Speaker 1: of goods price inflation, not service price inflation, because demand 531 00:30:37,760 --> 00:30:40,240 Speaker 1: for goods was so high during the pandemic and now 532 00:30:40,280 --> 00:30:42,960 Speaker 1: that we're seeing, as we talked about, like really strong 533 00:30:43,040 --> 00:30:46,320 Speaker 1: demand for travels, a shift in spending from goods to services. 534 00:30:46,720 --> 00:30:50,640 Speaker 1: The bands for goods is declining. Um. But the sticky 535 00:30:50,680 --> 00:30:53,680 Speaker 1: point there is that we are still seeing manufacturing centers 536 00:30:53,680 --> 00:30:57,280 Speaker 1: and supply chain bottlenecks because of COVID related issues UH 537 00:30:57,320 --> 00:31:01,480 Speaker 1: in in zero policy to zero COVID season in China, 538 00:31:01,600 --> 00:31:04,960 Speaker 1: and so the timing is tricky. But I still think that, 539 00:31:05,160 --> 00:31:09,560 Speaker 1: you know, markets are forward looking, and you know, if 540 00:31:09,600 --> 00:31:14,120 Speaker 1: you think that the primary driver of the inflation that 541 00:31:14,160 --> 00:31:18,080 Speaker 1: we're seeing is mostly COVID related, right because you know, 542 00:31:18,080 --> 00:31:22,240 Speaker 1: the commodity shock, the goods inflation, and labor and wages, 543 00:31:22,840 --> 00:31:26,760 Speaker 1: then if we do see relief from COVID and limited 544 00:31:26,880 --> 00:31:33,280 Speaker 1: mobility restrictions and more uniform global trends of COVID UH improving, 545 00:31:33,800 --> 00:31:36,920 Speaker 1: then I think that the outlook for the broader based 546 00:31:36,960 --> 00:31:42,920 Speaker 1: inflation both domestically and globally will be you know, structurally lower, 547 00:31:43,200 --> 00:31:45,320 Speaker 1: and that people will have a lot more comfort that 548 00:31:45,680 --> 00:31:49,040 Speaker 1: even if it transit from a transitory perspective that falls 549 00:31:49,040 --> 00:31:51,560 Speaker 1: from eight to five and stays there for a little bit, 550 00:31:51,800 --> 00:31:54,680 Speaker 1: if it's because of COVID trends that are sticking that 551 00:31:54,720 --> 00:31:58,280 Speaker 1: are you know, that are that are stickier or problematic 552 00:31:58,480 --> 00:32:01,160 Speaker 1: or cropping up, then I think that you know, the 553 00:32:01,800 --> 00:32:04,440 Speaker 1: investors will not be thrilled about it, but they'll look 554 00:32:04,440 --> 00:32:06,840 Speaker 1: past it. If it's really structural that we're seeing signs 555 00:32:06,840 --> 00:32:09,080 Speaker 1: of a wage price spiral and then there's just a 556 00:32:09,120 --> 00:32:11,960 Speaker 1: lot more bargaining power for labor and we don't get 557 00:32:11,960 --> 00:32:14,520 Speaker 1: the increase in labor force participation, then I think it's 558 00:32:14,520 --> 00:32:16,720 Speaker 1: a much more problematic for equities because then I think 559 00:32:16,720 --> 00:32:18,800 Speaker 1: you're gonna have to see them more aggressive. That it 560 00:32:18,840 --> 00:32:21,320 Speaker 1: sounds like you're you're kind of expecting the former rather 561 00:32:21,400 --> 00:32:24,200 Speaker 1: than the ladder. Though I guess I am with a 562 00:32:24,200 --> 00:32:28,120 Speaker 1: lot of concern that the timing could be you know, 563 00:32:28,280 --> 00:32:30,040 Speaker 1: it might not be the next couple of months, it 564 00:32:30,040 --> 00:32:31,720 Speaker 1: could be the next couple of quarters. It might not 565 00:32:31,800 --> 00:32:33,360 Speaker 1: be the next couple of quarters, it could be the 566 00:32:33,400 --> 00:32:35,400 Speaker 1: next couple of years. Right, So that I think the 567 00:32:35,440 --> 00:32:38,000 Speaker 1: timing is the trickiest part. Which makes me, you know, 568 00:32:38,120 --> 00:32:42,120 Speaker 1: more cautious on the overall outlook, is particularly in the 569 00:32:42,160 --> 00:32:45,400 Speaker 1: near term, because I just think that at the end 570 00:32:45,400 --> 00:32:47,960 Speaker 1: of the day, you know, it's you know, we've all 571 00:32:48,080 --> 00:32:56,680 Speaker 1: been underestimating the duration of COVID uh you know, related disruptions, 572 00:32:56,800 --> 00:32:59,880 Speaker 1: and so because of you know, just out of that, 573 00:33:00,120 --> 00:33:03,120 Speaker 1: out of that hubress, I would say that I think 574 00:33:03,160 --> 00:33:06,280 Speaker 1: we all need to to be a little bit of humble, 575 00:33:06,360 --> 00:33:10,080 Speaker 1: diversify your portfolios, not take huge tilts based on a 576 00:33:10,160 --> 00:33:14,160 Speaker 1: single core view, but not getting overly negative as well. 577 00:33:16,120 --> 00:33:18,000 Speaker 1: And Jeremy, just to round things out, I know we 578 00:33:18,000 --> 00:33:21,640 Speaker 1: were talking about whether or not, UM, we could potentially 579 00:33:21,640 --> 00:33:24,400 Speaker 1: be bottoming right now, and I wanted to ask you 580 00:33:24,400 --> 00:33:26,120 Speaker 1: what sorts of signals you look for. I know a 581 00:33:26,160 --> 00:33:29,320 Speaker 1: lot of people turn to technicals, others look at sentiments. 582 00:33:29,320 --> 00:33:31,520 Speaker 1: So what are you looking for to see signs that 583 00:33:31,560 --> 00:33:35,040 Speaker 1: we potentially could be forming a bottom look. I think 584 00:33:35,080 --> 00:33:39,080 Speaker 1: that you know, sentiment certainly got very extreme. If you 585 00:33:39,120 --> 00:33:44,400 Speaker 1: look at the you know AI bullish bearish indicators, UM. Historically, 586 00:33:44,400 --> 00:33:47,080 Speaker 1: when you reach the level of bearishness that we reached 587 00:33:47,280 --> 00:33:50,760 Speaker 1: last month, that forward returns are generally, you know, well 588 00:33:50,880 --> 00:33:55,360 Speaker 1: above average. So that's a decent signal, UM. But you know, 589 00:33:55,440 --> 00:33:57,240 Speaker 1: at the end of the day, I really think it's 590 00:33:57,480 --> 00:33:59,280 Speaker 1: you know, as we talked about, it's going to be 591 00:33:59,320 --> 00:34:02,280 Speaker 1: the you know, the outlook for inflation. And so I 592 00:34:02,320 --> 00:34:06,040 Speaker 1: think the next couple of months indications of c P 593 00:34:06,200 --> 00:34:10,200 Speaker 1: I p p I UH cour PC price index inflation 594 00:34:10,760 --> 00:34:13,640 Speaker 1: is going to be critical in terms of just the 595 00:34:13,719 --> 00:34:17,799 Speaker 1: short term movements of markets. UH. If the market thinks 596 00:34:17,800 --> 00:34:20,720 Speaker 1: that inflation is stickier and that bed is still well 597 00:34:20,760 --> 00:34:25,520 Speaker 1: behind the curve. Um, there's likely still you know, more downside. 598 00:34:25,520 --> 00:34:28,040 Speaker 1: And the reason I think that you know, we've seen 599 00:34:28,280 --> 00:34:31,120 Speaker 1: as sort of like as much downside as we've had 600 00:34:31,160 --> 00:34:34,120 Speaker 1: already this year is because you know, the composition of 601 00:34:34,160 --> 00:34:38,239 Speaker 1: the SMP over the last several years has has shifted 602 00:34:38,600 --> 00:34:41,280 Speaker 1: and you have a lot more concentration and secular growth 603 00:34:41,320 --> 00:34:44,719 Speaker 1: names within the index, and they're the most vulnerable to 604 00:34:45,560 --> 00:34:48,400 Speaker 1: arising interest rates because their long duration plays within the 605 00:34:48,400 --> 00:34:51,359 Speaker 1: equity market and they're gonna be more sensitive to interest rates. 606 00:34:51,440 --> 00:34:55,440 Speaker 1: And so from that perspective, I think it's really you know, inflation. Inflation. 607 00:34:55,480 --> 00:34:58,960 Speaker 1: Inflation is what we uh, we're worried about as our 608 00:34:59,239 --> 00:35:02,960 Speaker 1: as our top three um and uh we'll assess as 609 00:35:02,960 --> 00:35:09,640 Speaker 1: we moved along. Jay Z, great stuff, really appreciating anyway, 610 00:35:09,719 --> 00:35:12,919 Speaker 1: but that I think it's time. It's that time. It's 611 00:35:12,960 --> 00:35:15,879 Speaker 1: time ye tell the people what time it is. It's 612 00:35:15,920 --> 00:35:19,480 Speaker 1: time for the craziest thing in market. All right, I'm 613 00:35:19,480 --> 00:35:24,440 Speaker 1: gonna get started for once, I'll get started. So, Uh, 614 00:35:24,480 --> 00:35:29,040 Speaker 1: there was a news report on a TV station in China, 615 00:35:29,560 --> 00:35:32,120 Speaker 1: um in let me make shureg at the city right 616 00:35:32,200 --> 00:35:37,120 Speaker 1: hang Zoo, which is where Ali Baba is headquarters. And 617 00:35:37,160 --> 00:35:40,560 Speaker 1: this TV report said a gentleman by the name of 618 00:35:40,680 --> 00:35:46,680 Speaker 1: Ma was arrested, and instantly the market assumed it was 619 00:35:46,760 --> 00:35:51,520 Speaker 1: Jack Ma and sold off aggressively shares the value Baba. 620 00:35:51,520 --> 00:35:54,799 Speaker 1: I'm sorry, detained, not arrested. We've had discussions about this. 621 00:35:54,840 --> 00:35:59,600 Speaker 1: He was detained, not arrested, the Chinese translator and I 622 00:35:59,640 --> 00:36:03,399 Speaker 1: had to this question about this anyway, Ali Baba sold off. 623 00:36:04,040 --> 00:36:06,600 Speaker 1: So to play the prices right with this one, how 624 00:36:06,680 --> 00:36:10,400 Speaker 1: much do you think uh investors getting the wrong ma 625 00:36:11,920 --> 00:36:14,920 Speaker 1: uh in the news mixed up? How much do you 626 00:36:14,920 --> 00:36:17,960 Speaker 1: think that lopped off of the value of value Baba 627 00:36:18,000 --> 00:36:23,000 Speaker 1: in a matter of minutes, are going first market cap 628 00:36:23,160 --> 00:36:26,840 Speaker 1: US dollar market cap. I'm gonna go with five billion, 629 00:36:27,600 --> 00:36:30,040 Speaker 1: all right, I'm gonna keep a poker face, Jeremy, how 630 00:36:30,120 --> 00:36:32,960 Speaker 1: much do you think the wrong Ma cost Ali Baba 631 00:36:33,000 --> 00:36:37,399 Speaker 1: in a few short minutes. I'm gonna take the over 632 00:36:37,840 --> 00:36:40,560 Speaker 1: if we're playing price right. So yeah, that's that's why, 633 00:36:41,640 --> 00:36:44,719 Speaker 1: that's why he's a strategist. He does so. So you're 634 00:36:44,760 --> 00:36:49,440 Speaker 1: you'll take twenty five billion and one dollars I exactly, 635 00:36:50,040 --> 00:36:55,319 Speaker 1: that's good. The over was good? Was six billion? Was? Though? 636 00:36:57,920 --> 00:37:00,439 Speaker 1: I think you read the story? Did you read the story? Did? 637 00:37:00,520 --> 00:37:03,400 Speaker 1: But but the story came out on like Monday or something, 638 00:37:03,400 --> 00:37:08,160 Speaker 1: which honestly feels like it was three years ago. Billion 639 00:37:08,239 --> 00:37:11,240 Speaker 1: vaporized in a matter of minutes, but it all came back. 640 00:37:11,440 --> 00:37:14,640 Speaker 1: So um, I don't know, there's a lesson there somewhere 641 00:37:14,800 --> 00:37:18,800 Speaker 1: to make sure you got your your maths straight before 642 00:37:18,840 --> 00:37:23,120 Speaker 1: you sell. I don't know. Quite a remarkable story, though, 643 00:37:23,160 --> 00:37:24,840 Speaker 1: how about you hold on it? What's what's the craziest 644 00:37:24,840 --> 00:37:28,040 Speaker 1: thing you saw this week? Had tip to Matt Levine 645 00:37:28,040 --> 00:37:30,480 Speaker 1: who wrote about this, But there's this amazing story in 646 00:37:30,520 --> 00:37:33,239 Speaker 1: the Wall Street Journal about n f T s and 647 00:37:33,239 --> 00:37:37,680 Speaker 1: how sales and interest has has totally been dropping off recently. 648 00:37:38,080 --> 00:37:41,279 Speaker 1: And so there's this one tidbit that really really struck me. 649 00:37:42,400 --> 00:37:44,120 Speaker 1: The story says, an n f T of the first 650 00:37:44,160 --> 00:37:47,480 Speaker 1: tweet from Twitter co founder Jack Dorsey sold in March 651 00:37:47,719 --> 00:37:52,240 Speaker 1: of last year for two point nine million to Sina Estavi, 652 00:37:52,440 --> 00:37:55,719 Speaker 1: who is a chief executive at a blockchain company in Malaysia. 653 00:37:56,480 --> 00:37:59,480 Speaker 1: Earlier this year, he put the n f T up 654 00:37:59,760 --> 00:38:05,360 Speaker 1: for auction, and he didn't get any bids above fourteen 655 00:38:05,520 --> 00:38:10,200 Speaker 1: thousand dollars. Remember he paid two point nine million four 656 00:38:11,920 --> 00:38:14,360 Speaker 1: you know, and some people might find it crazy that 657 00:38:14,440 --> 00:38:17,919 Speaker 1: someone's willing to pay fourteen thousand for this thing. Yeah, 658 00:38:18,000 --> 00:38:21,920 Speaker 1: good point, that's pretty good. Although I see the the 659 00:38:22,280 --> 00:38:26,320 Speaker 1: the crypto punks and the board apes. They're still selling. 660 00:38:26,800 --> 00:38:28,279 Speaker 1: I think those are. I guess they are your blue 661 00:38:28,360 --> 00:38:30,360 Speaker 1: chip n f T s right there. They seem to 662 00:38:30,400 --> 00:38:34,600 Speaker 1: still be selling for six figures. Yeah, so I don't know. 663 00:38:35,040 --> 00:38:39,520 Speaker 1: They are the uh, the the Apple and the Amazon 664 00:38:39,560 --> 00:38:41,000 Speaker 1: of the n f T world. I suppose we're not 665 00:38:41,000 --> 00:38:44,240 Speaker 1: Amazon so much anymore. But anyway, cheremy, you see anything 666 00:38:44,320 --> 00:38:48,480 Speaker 1: crazy this week? That's the end of the second week 667 00:38:48,480 --> 00:38:50,960 Speaker 1: of earning season, the busiest week of earning season. So 668 00:38:51,239 --> 00:38:54,000 Speaker 1: my my brain is mush by the end of the week. 669 00:38:54,560 --> 00:38:58,239 Speaker 1: So I'm gonna pass. I'm the crazy things I don't 670 00:38:58,280 --> 00:39:00,360 Speaker 1: just think I've seen. Probably the last week is the 671 00:39:00,360 --> 00:39:02,799 Speaker 1: the Mets throwing a five pitch or no hitter with 672 00:39:03,040 --> 00:39:05,240 Speaker 1: taking out a picture after five innings and eight pitches. 673 00:39:05,680 --> 00:39:09,880 Speaker 1: Oh yeah, As as a Phillies fan, I uh uh 674 00:39:10,120 --> 00:39:11,880 Speaker 1: that one hurt. That one hurt. I just went to 675 00:39:11,960 --> 00:39:15,120 Speaker 1: that game. Actually, yeah, that was we had a group 676 00:39:15,120 --> 00:39:17,200 Speaker 1: outing of Bloomberg to that game. I'm glad I missed it, 677 00:39:17,239 --> 00:39:20,480 Speaker 1: though five pitch really found. I'm glad you did. I'm 678 00:39:20,520 --> 00:39:24,080 Speaker 1: sure you're glad you five pictured no hitter. I wonder 679 00:39:24,120 --> 00:39:27,200 Speaker 1: if that. I wonder what the most pictures ever used 680 00:39:27,200 --> 00:39:28,840 Speaker 1: in a no hitter is. That's got to be getting 681 00:39:28,880 --> 00:39:30,960 Speaker 1: close to it. That's pretty I'll to look that one up. 682 00:39:32,920 --> 00:39:35,520 Speaker 1: Five and that counts a five picture no hitter will 683 00:39:35,520 --> 00:39:37,600 Speaker 1: allow that. That's a That's probably the craziest thing I 684 00:39:37,600 --> 00:39:41,319 Speaker 1: saw this week too. Anyway, jay Z, great to get 685 00:39:41,360 --> 00:39:44,480 Speaker 1: your perspective on markets. Really appreciate your time, and I 686 00:39:44,480 --> 00:39:48,080 Speaker 1: hope we can bring you back some day. Great, happy 687 00:39:48,160 --> 00:39:57,920 Speaker 1: to do it. Thanks so much for joining us What 688 00:39:58,040 --> 00:40:00,080 Speaker 1: Goes Up. We'll be back next week and so. And 689 00:40:00,120 --> 00:40:02,440 Speaker 1: you can find us on the Bloomberg Terminal website and 690 00:40:02,600 --> 00:40:05,840 Speaker 1: app or wherever you get your podcasts. We love it 691 00:40:05,840 --> 00:40:07,600 Speaker 1: if you took the time to rate and review the 692 00:40:07,600 --> 00:40:10,480 Speaker 1: show on Apple Podcasts so more listeners can find us. 693 00:40:10,880 --> 00:40:12,920 Speaker 1: And you can find us on Twitter, follow me at 694 00:40:12,960 --> 00:40:17,440 Speaker 1: Bring Anonymous, Boldanda Hierrich is at Bilbonna Hierrich. You can 695 00:40:17,480 --> 00:40:21,440 Speaker 1: also follow Bloomberg Podcasts at podcasts What Goes Up is 696 00:40:21,480 --> 00:40:24,719 Speaker 1: produced by Stacy Wong. The head of Bloomberg Podcast is 697 00:40:24,719 --> 00:40:27,879 Speaker 1: Francesco Levie. Thanks for listening, See you next time.