WEBVTT - Bloomberg Surveillance TV: October 29th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordernt. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.840 Terminal and the Bloomberg Business app. 0:00:35.840 --> 0:00:36.120 BMP. 0:00:36.240 --> 0:00:39.280 Parabart, a trading unit taking a third quarter hit from 0:00:39.280 --> 0:00:43.200 sering dead. Adding to recent concerns about private credit, Depak 0:00:43.240 --> 0:00:45.919 Puri of Deutsche Bank Private Bank joins us now for more. 0:00:45.960 --> 0:00:47.400 Deepak, Good morning, sir Morny. 0:00:47.520 --> 0:00:49.320 Look, I think David Solomon did a decent job of 0:00:49.400 --> 0:00:52.879 joining a very very big line between systemic risk and 0:00:52.920 --> 0:00:55.520 credit concerns. They're still concerns I think about a turn 0:00:55.520 --> 0:00:59.400 in the credit cycle. Do you share them? Maybe epithodically? 0:00:59.480 --> 0:01:02.600 Right, So seen one of these, you know, inducing credit 0:01:02.720 --> 0:01:05.840 risk every now and then come out for me, Jonathan. 0:01:05.920 --> 0:01:08.520 The biggest risk is this year we've seen two really 0:01:08.520 --> 0:01:11.920 big supply sharks, and we still don't know the full 0:01:12.000 --> 0:01:13.160 term ramifications. 0:01:13.319 --> 0:01:15.280 I'm talking about tariffs and labor supply. 0:01:15.720 --> 0:01:18.000 So once you have those two, you know, I think 0:01:18.000 --> 0:01:21.080 twenty twenty six might be a better test case for 0:01:21.480 --> 0:01:25.080 these kind of supply sharks and their unintended consequences. As 0:01:25.120 --> 0:01:28.800 for now, I think, you know, episodic news with regards 0:01:28.880 --> 0:01:32.240 to credit, I'll take it really episodically. 0:01:32.319 --> 0:01:34.039 Well, at least one of them might be lulling this 0:01:34.120 --> 0:01:37.119 federal reserve into early interest rate reductions. The feed seems 0:01:37.120 --> 0:01:39.000 confused at the moment. We know we've seen it in 0:01:39.040 --> 0:01:42.160 the data, massive step down and pay ross growth. Got that? 0:01:42.480 --> 0:01:46.040 What's behind it? Demand or supply? Which one is it? 0:01:46.560 --> 0:01:49.160 I think labor market is one of those conditions where 0:01:49.440 --> 0:01:52.400 demand adjust to supply in a way. So if the 0:01:52.440 --> 0:01:57.200 supply of you know, workers is reducing, I think demand 0:01:57.280 --> 0:01:59.360 is going to start adjusting to it. And what we're 0:01:59.400 --> 0:02:03.760 seeing is this automation drive from companies that is hurting, 0:02:03.960 --> 0:02:04.240 you know. 0:02:04.160 --> 0:02:06.920 The oral supply. What is also a little bit disturbing 0:02:07.000 --> 0:02:07.200 is the. 0:02:07.200 --> 0:02:10.720 Government shutdown, because I think it sort of exacerbates the 0:02:11.440 --> 0:02:12.239 labor market. 0:02:12.040 --> 0:02:14.560 Can typically depack as you know, and Amory Slaffa, because 0:02:14.560 --> 0:02:17.120 typically we look right through this. It doesn't matter. It's 0:02:17.120 --> 0:02:19.760 a bump in the road, growth comes back. Basically, it's 0:02:19.760 --> 0:02:22.560 growth delayed and not derailed. Sure, the longer it goes on, 0:02:22.680 --> 0:02:23.919 you start to change your thoughts on that. 0:02:24.360 --> 0:02:28.079 I think, yes, primarily because it's after a while it 0:02:28.160 --> 0:02:32.480 becomes exponential in terms of the output activity. So the 0:02:32.520 --> 0:02:35.440 first few weeks, i mean, the consensus is ten basis 0:02:35.480 --> 0:02:39.880 points of economic output gets reduced. But after a certain point, 0:02:39.960 --> 0:02:42.720 let's say this ends up being mid November, you're going 0:02:42.720 --> 0:02:46.200 to start seeing more concerns with regards to the you know, 0:02:46.240 --> 0:02:49.560 the impact it's having on broader economy, and then obviously 0:02:49.600 --> 0:02:51.519 they'll have an impact on the labor market. 0:02:51.560 --> 0:02:53.880 So I would not be completely you. 0:02:53.760 --> 0:02:56.480 Know, negating the fact that, yes, over the years, whenever 0:02:56.520 --> 0:02:59.080 we have a government shutdown, it tends to be you know, 0:02:59.160 --> 0:03:00.640 short lived and painless. 0:03:01.160 --> 0:03:02.440 This time it might be different. 0:03:02.760 --> 0:03:05.440 I'm only laughing because you say the word disturbing, which 0:03:05.480 --> 0:03:08.399 I also find disturbing. The market is creating fresh all 0:03:08.440 --> 0:03:12.040 time high. It's clearly ignoring it. Besides the impacting on 0:03:12.080 --> 0:03:15.200 the economy, how long could this federal reserver investors go 0:03:15.320 --> 0:03:16.560 without economic data. 0:03:17.600 --> 0:03:21.880 Well, they have shown tremendous resilience students to drive their 0:03:21.919 --> 0:03:26.639 policy without much but because they're using anecdotal evidence as 0:03:26.680 --> 0:03:29.600 to get a grasp on where the economy is. And 0:03:29.639 --> 0:03:33.440 I think even there is a gunment shutdown crisis, let's say, 0:03:33.480 --> 0:03:36.440 quote unquote, there's so many other positives that are happening 0:03:36.480 --> 0:03:39.080 in the markets, Henry that I think takes too much 0:03:39.120 --> 0:03:42.360 precedence over gument shutdown. I think the fact that you 0:03:42.400 --> 0:03:47.040 are looking at an AI hyperscale capex spending guidance, which 0:03:47.120 --> 0:03:50.360 might come again a lot better than expected. You have 0:03:50.520 --> 0:03:52.840 a little bit of a framework between the US and 0:03:52.880 --> 0:03:56.400 the Chinese with regards to the trade and tariff. That 0:03:56.480 --> 0:04:00.360 could be potentially a game breaker because within that trade 0:04:00.400 --> 0:04:03.960 and tariff, one of the uncertainties has been the Chinese one, 0:04:04.040 --> 0:04:06.640 you know, because that's really where the bone of contention 0:04:06.840 --> 0:04:09.640 has been. And then, last, but not the least, the Fed. 0:04:10.040 --> 0:04:13.360 There is this expectation maybe the end of QT. You 0:04:13.400 --> 0:04:16.559 look at the SOFA, you know, twenty basis points over 0:04:16.640 --> 0:04:19.320 the FED funds overnight rate, you can argue that there 0:04:19.360 --> 0:04:22.560 is some liquidity tightness where the Fed would be, you know, 0:04:22.760 --> 0:04:24.400 want to. 0:04:23.760 --> 0:04:24.520 Ease some of that. 0:04:24.800 --> 0:04:27.480 So all these three things I think are taking much 0:04:27.720 --> 0:04:30.560 greater presidents over the government shutdown. 0:04:30.600 --> 0:04:32.680 But these three things, it sounds like we have a 0:04:32.720 --> 0:04:36.360 tremendous amount of certainty on the trade story, seems more optimistic. 0:04:36.400 --> 0:04:38.560 With China, we know the Fed is going to cut 0:04:38.640 --> 0:04:40.599 ninety eight percent chance if it's going to be cutting 0:04:40.600 --> 0:04:44.560 interest rates, So what gives the market potentially, well, where 0:04:44.600 --> 0:04:46.920 do you see the market potentially having a little bit 0:04:47.000 --> 0:04:49.440 more of a cautious tone in regards to. 0:04:49.480 --> 0:04:51.920 What Yeah, I think from now to the year end, 0:04:52.080 --> 0:04:55.200 once these three things are not disappointed, right, there's no 0:04:55.320 --> 0:04:58.560 disappointment with these three things. I think the seasonality will 0:04:58.600 --> 0:05:00.960 take over. So from now of the year end, I 0:05:01.000 --> 0:05:03.000 would not be surprised if you see a little bit 0:05:03.080 --> 0:05:05.960 more of this risk taking and then you know investors 0:05:06.040 --> 0:05:09.720 chasing a very high rally market, which is usually the case. 0:05:10.080 --> 0:05:12.760 I think the biggest concern for me is really what 0:05:13.160 --> 0:05:16.120 transpires in the first half of twenty twenty six, where 0:05:16.200 --> 0:05:18.479 you are going to be going through a cyclical sort 0:05:18.480 --> 0:05:21.560 of softness in the markets. And now we'll get to 0:05:21.680 --> 0:05:24.200 know what is the worst outcome with regards to the 0:05:24.320 --> 0:05:24.960 labor markets. 0:05:24.960 --> 0:05:25.800 Because we didn't have the. 0:05:25.880 --> 0:05:29.120 Data for the last two three months in totality, so 0:05:29.240 --> 0:05:32.640 what could potentially happen? And I think if this labor 0:05:32.680 --> 0:05:34.880 market statistics are similar to what we have seen in 0:05:34.920 --> 0:05:38.920 the privacy previous years, where June July was the weakness 0:05:38.960 --> 0:05:42.640 and then it started getting better, then it will be okay. However, 0:05:42.839 --> 0:05:44.840 there is a likelihood that it might not be the 0:05:44.960 --> 0:05:47.560 case that way, And in that particular instance, I think 0:05:47.600 --> 0:05:51.120 the markets are neat to recalibrate to a much starker 0:05:52.240 --> 0:05:56.080 economic reality that the economy is slowing more than expected. 0:05:56.120 --> 0:05:57.960 But what do you think the source of that slowdown 0:05:58.040 --> 0:05:59.960 or that selfness as you'd call it for the first time, 0:06:00.320 --> 0:06:02.280 actually is And to what extent will it be offset 0:06:02.360 --> 0:06:05.240 by the massive tax refunds that I keep hearing about 0:06:05.240 --> 0:06:07.920 that are going to kick in in early next year, right. 0:06:07.880 --> 0:06:09.400 I mean it depends. 0:06:09.440 --> 0:06:11.040 I mean we are thinking it's going to be with 0:06:11.160 --> 0:06:14.080 a zero point six to zero point you know, one percent? 0:06:14.440 --> 0:06:16.600 You know right now you look at GDP now then 0:06:16.960 --> 0:06:20.400 now cast from New York FED everything is showing with 0:06:20.520 --> 0:06:21.440 a three handle. 0:06:21.320 --> 0:06:22.440 So it's much better. 0:06:22.880 --> 0:06:25.440 But these things can change quite quickly, so I would 0:06:25.480 --> 0:06:28.440 not be surprised if you start seeing a below potential 0:06:28.920 --> 0:06:31.720 GDP number for the first half of the year, and 0:06:32.200 --> 0:06:34.160 on top of that, you know, there might be some 0:06:34.320 --> 0:06:38.640 concerns about these credit conditions, these credit stresses that are developing, 0:06:39.000 --> 0:06:41.560 becoming a little bit more broader, default rates going up. 0:06:41.600 --> 0:06:45.200 So I think primarily that's one area of concern. And 0:06:45.279 --> 0:06:47.240 then last, but not the least, I would not be 0:06:47.800 --> 0:06:50.440 you know, the lagged and varying effect of the tariff. 0:06:50.800 --> 0:06:54.040 I think the fact that we are having these bilateral 0:06:55.080 --> 0:06:59.200 you know, MOUs does not necessarily mean that the lagged 0:06:59.200 --> 0:07:02.440 effect of for the tariff rate, which is five times 0:07:02.480 --> 0:07:05.120 what you know the world is used to, is not 0:07:05.200 --> 0:07:06.040 going to have an impact. 0:07:06.160 --> 0:07:08.120 Final question from me, in the forty seconds, we've got 0:07:08.200 --> 0:07:12.000 less greater potential for higher stocks or lower bond yards 0:07:12.160 --> 0:07:13.360 in the first half of next year. 0:07:14.880 --> 0:07:15.640 How about neither? 0:07:16.000 --> 0:07:18.280 I think you said, because last time I came in, 0:07:18.520 --> 0:07:21.360 I said, you don't want to be overly bearish, and 0:07:21.600 --> 0:07:23.720 the question was that the markets can go up and 0:07:24.000 --> 0:07:27.560 bonds could rally, and that was in early September. I 0:07:27.640 --> 0:07:29.720 would not be surprised if you see a little bit 0:07:29.760 --> 0:07:31.840 of a bond weakness going up. 0:07:32.120 --> 0:07:33.560 You know, so the yields going well. 0:07:33.680 --> 0:07:36.280 And stock markets having a little bit of a recalibration 0:07:36.880 --> 0:07:38.880 come twenty early parts of twenty twenty. 0:07:38.680 --> 0:07:43.120 Six stay with US multile IMPERC surveillance coming up. 0:07:43.520 --> 0:07:54.640 After this, stock sent kaya as investors gear up for 0:07:54.680 --> 0:07:57.640 a crucial week of earnings. Ustin quanav whilst Fargo racing 0:07:57.680 --> 0:07:59.440 his year und price target on the S and P 0:08:00.040 --> 0:08:03.440 from sixty six fifty to seventy one hundred and writing 0:08:03.480 --> 0:08:05.880 the following with a big code this morning calling for 0:08:05.920 --> 0:08:08.880 an everything rally into year end. Coal is the bylow 0:08:08.960 --> 0:08:12.440 quality junk, high beta and small and mid AI capex 0:08:12.560 --> 0:08:16.640 beneficiaries a full risk on trade some joints is now 0:08:16.720 --> 0:08:18.680 for more US and good morning, good morning. I mean 0:08:18.680 --> 0:08:20.320 that's quite a cool So let's get into it. What's 0:08:20.320 --> 0:08:21.400 the source of that's changed for you? 0:08:21.720 --> 0:08:24.600 Yeah, So we see about five potential care lists in 0:08:24.680 --> 0:08:25.200 two year end. 0:08:25.240 --> 0:08:28.240 We're bullish. So those five are seasonality. 0:08:28.320 --> 0:08:31.240 Obviously, November December has been the best two months for 0:08:31.400 --> 0:08:33.560 the SMP, but not just for the SMP, but especially 0:08:33.640 --> 0:08:34.319 for the laggers. 0:08:34.360 --> 0:08:36.520 After texts harvesting in oppo war. 0:08:36.640 --> 0:08:40.000 We typically see laggers rallying in November through January. 0:08:40.640 --> 0:08:41.840 Number two AI cappecks. 0:08:41.880 --> 0:08:44.839 I think we're going to see another upper surprise in 0:08:45.040 --> 0:08:48.840 AI cappacks when Hyperscalars report this week. Number three potential 0:08:49.000 --> 0:08:52.640 Terriffy fund so IBA hearing is going to be next week. 0:08:52.679 --> 0:08:54.839 The ruling is probably going to be in January, and 0:08:55.280 --> 0:08:58.920 there's about sixty percent chance according to betting markets, that 0:08:59.320 --> 0:09:01.640 it gets repealed. And if that happens, we're talking about 0:09:01.640 --> 0:09:04.760 one hundred and sixty billion dollars of terraces collected being 0:09:04.840 --> 0:09:06.880 distributed to the economy, which is going to be a 0:09:06.920 --> 0:09:11.559 huge reflationary. Number four, the OBBB tax return. We estimate 0:09:11.640 --> 0:09:16.040 about eight hundred dollars incremental tax return per filer. This 0:09:16.200 --> 0:09:19.079 upcoming textra thurn season which is going to be ballished 0:09:19.080 --> 0:09:22.280 for the consumer as well. And lastly, potential government reopening 0:09:22.760 --> 0:09:23.880 that's going to be bullished as well. 0:09:24.000 --> 0:09:25.920 Okay, so let's break down some of this. I'm going 0:09:25.960 --> 0:09:28.640 to let Amrie handle everything to do with Washington d C. 0:09:28.920 --> 0:09:31.360 I want to ask you about tech spending, So the 0:09:31.480 --> 0:09:33.599 Capex story and what we're going to hear from the 0:09:33.640 --> 0:09:36.040 major tech plans on Wednesday and Thursday. 0:09:36.520 --> 0:09:37.520 They're spending lots. 0:09:37.760 --> 0:09:39.960 Do they need to report some really robust revenue growth 0:09:39.960 --> 0:09:42.360 alongside that for investors to continue tolerating this. 0:09:43.320 --> 0:09:47.319 I think for Hyperscalers as a group, we're not that 0:09:47.600 --> 0:09:50.360 bolish because they are the capex spenders. They're free cash 0:09:50.360 --> 0:09:53.240 flowers coming down there. Historically, you want to avoid companies 0:09:53.280 --> 0:09:55.680 that are invest that are in an investment cycle, which 0:09:55.720 --> 0:09:59.199 is basically Hyperscalers today. The areas there were more bolish 0:09:59.360 --> 0:10:02.920 is really thex takers, especially the smaller cap companies that 0:10:02.960 --> 0:10:08.360 are really starting to benefit from this Hyperscaler's capex increasing. 0:10:08.960 --> 0:10:11.760 The major players right now, even the capex takers, they're 0:10:11.840 --> 0:10:14.360 at full capacity. There are a lot of crumbles that 0:10:14.400 --> 0:10:16.680 are falling off the table, and those crumbles are huge 0:10:16.760 --> 0:10:17.720 for those smaller guys. 0:10:17.960 --> 0:10:19.599 So that's really the group that we like. 0:10:19.760 --> 0:10:22.040 We have a basket of about twenty five smaller cap 0:10:22.120 --> 0:10:23.880 AI capex manificiaries that we like. 0:10:24.920 --> 0:10:27.240 Let's go to tariffs because I think theepest story is 0:10:27.320 --> 0:10:29.240 underappreciated right now in the market and the fact that 0:10:29.320 --> 0:10:33.240 you can have morth of ninety billion dollars having to 0:10:33.320 --> 0:10:35.040 be repaid back. 0:10:34.920 --> 0:10:35.760 To these businesses. 0:10:36.000 --> 0:10:38.880 But the Trump administration basically has other ways to get 0:10:38.920 --> 0:10:42.840 around tariff. So doesn't that get rid of that reimbursement 0:10:42.920 --> 0:10:44.480 because companies are going to have to pay it, just 0:10:44.559 --> 0:10:46.040 it's going to have a different title to it. 0:10:46.559 --> 0:10:46.760 Yeah. 0:10:46.960 --> 0:10:50.240 Well, I think into that event, potential event, that binary event, 0:10:50.559 --> 0:10:54.120 we're going to see some reflation industry because investors will 0:10:54.160 --> 0:10:58.760 want to position for that potential repeal of tariffs. I 0:10:58.800 --> 0:11:01.440 think the New York is obviously be varya bullies for equities, 0:11:01.720 --> 0:11:05.679 rates probably higher and goal higher on physical concerns. But 0:11:05.960 --> 0:11:08.240 in the medium to longer term this could potentially create 0:11:08.280 --> 0:11:09.079 more uncertainty. 0:11:09.400 --> 0:11:11.559 Then there's a shutdown. If the market is struggling off, 0:11:11.640 --> 0:11:13.480 now why would they carryhen it reopens. 0:11:13.679 --> 0:11:17.760 Yeah, I mean government shutdowns historically have been non events basically, 0:11:18.520 --> 0:11:21.240 but coming out of shutdowns we typically see the SMP 0:11:21.520 --> 0:11:25.480 valuing even harder. No news actually has been good news 0:11:25.559 --> 0:11:28.160 for the market because there's no data coming out and 0:11:28.320 --> 0:11:30.360 there's no negative catalysts for the market. 0:11:31.160 --> 0:11:31.640 Even if the. 0:11:31.720 --> 0:11:34.560 Government reopens, there's probably going to be about at least 0:11:34.559 --> 0:11:37.480 two week period where we still don't see much data. 0:11:37.600 --> 0:11:39.559 It's more going to be what computer is saying and 0:11:39.800 --> 0:11:42.640 how the third party data is suggesting. So I think 0:11:42.840 --> 0:11:45.479 that's still a pretty bullish setup for equities. 0:11:45.240 --> 0:11:48.560 Low quality and junk. What is low quality and junk? 0:11:49.800 --> 0:11:55.800 Yeah, so unprofitable tech, so more speculative stocks, some laggers 0:11:55.880 --> 0:11:59.600 that have underperformed, that are really struggling. So we're essentially 0:12:00.080 --> 0:12:03.760 pitching a catchup trade into year end because I think 0:12:03.800 --> 0:12:05.520 it's going to be full risk one into year end. 0:12:05.679 --> 0:12:07.120 You need the FEDER receive to come along for the 0:12:07.240 --> 0:12:10.240 ride and keep signaling more account Yeah, I mean, I think. 0:12:10.240 --> 0:12:12.719 FAT is basically a done deal. They're probably gonna go 0:12:13.679 --> 0:12:16.160 on Wednesday. And if that's the case, I think FAT 0:12:16.320 --> 0:12:19.320 is probably we are in a real easing cycle. 0:12:19.480 --> 0:12:20.720 So the FAED is done. 0:12:20.960 --> 0:12:23.800 It's more fundamentals now, and you know, some of the 0:12:23.920 --> 0:12:26.599 risks that we are seeing that have been proven to 0:12:26.679 --> 0:12:29.640 be less of a risk than what we had expected initially. 0:12:29.880 --> 0:12:32.680 This picture you're painting, I feel like, is the meme 0:12:32.760 --> 0:12:35.839 stock frenzy we saw? Are you expecting almost something like that? 0:12:36.559 --> 0:12:39.439 We could see a little bit of that too, you know, 0:12:39.559 --> 0:12:42.880 we until last week we were seeing some of that 0:12:43.000 --> 0:12:45.600 happening in some of the meme stocks and the retail 0:12:45.679 --> 0:12:50.200 driven names. I think last week was a little weird 0:12:50.640 --> 0:12:54.680 that the setup itself was pretty unfavorable because last week, 0:12:54.720 --> 0:12:56.480 if you think about all the earnings that came out, 0:12:56.520 --> 0:12:59.960 it was mostly regionals and industrials, which were obviously facing 0:13:00.080 --> 0:13:02.840 more headwinds. There was no AI earnings, and we had 0:13:02.880 --> 0:13:07.200 the CPI overhang on Friday, So I think that set up. 0:13:07.280 --> 0:13:10.559 The calendar setup itself was a little shaky. CPI was 0:13:10.760 --> 0:13:14.480 obviously very positive and into this weege where we when 0:13:14.520 --> 0:13:16.800 we were going to hear from all the AI companies, 0:13:16.880 --> 0:13:17.600 We have the FED. 0:13:17.880 --> 0:13:20.560 We also have US China on Friday, So I. 0:13:20.559 --> 0:13:22.800 Think the setup is pretty favorable for us of the 0:13:22.960 --> 0:13:24.000 lower quality stocks. 0:13:24.040 --> 0:13:25.920 If you have seventy one hundred for this year, what 0:13:26.000 --> 0:13:28.439 does that mean for your seventy two hundred target next year? 0:13:28.640 --> 0:13:31.880 Yeah, we're thinking about that. We're going to revisit our 0:13:31.920 --> 0:13:33.400 twenty twenty six numbers. 0:13:34.320 --> 0:13:39.319 I still see sounds like a world spire. Yeah, I 0:13:39.360 --> 0:13:40.920 still seeing more offside to that number. 0:13:41.120 --> 0:13:43.280 We had a guest on the program that said maybe 0:13:43.320 --> 0:13:45.679 we could see a self patch in their staff of 0:13:45.800 --> 0:13:46.280 twenty six. 0:13:46.320 --> 0:13:46.920 You must have had it. 0:13:46.960 --> 0:13:49.559 Maybe I'm right before you. What gives you hope that 0:13:49.640 --> 0:13:51.520 this can continue through twenty six? I'm not going to 0:13:51.559 --> 0:13:53.040 pin you down for a new price target. We'll wait 0:13:53.040 --> 0:13:55.400 for the annual outload. But what gives you hope that's 0:13:55.440 --> 0:13:55.800 the case? 0:13:56.080 --> 0:13:58.480 Yeah, I mean it's really going to be driven by earnings. 0:13:59.160 --> 0:14:01.680 We still see a pretty healthy backdropt for earnings. 0:14:01.720 --> 0:14:05.000 We're forecasting eleven percent growth for twenty six followed by 0:14:05.040 --> 0:14:07.760 another twelve percent in twenty twenty seven. So if that's 0:14:07.800 --> 0:14:10.440 the case, even in multiple staateses thing we're talking about, 0:14:10.679 --> 0:14:13.840 you know, little teens return inequity. 0:14:13.880 --> 0:14:15.559 I'm not going to question the nix because every time 0:14:15.600 --> 0:14:18.079 I do that Wednesday Thursday hits in earning season, the 0:14:18.160 --> 0:14:19.840 tank plans come out and they knock out the park. 0:14:19.880 --> 0:14:22.000 So I won't question the NIX. I do wonder how 0:14:22.040 --> 0:14:24.400 you think about the rest of the world. The international 0:14:24.480 --> 0:14:27.120 stock story had its moment in the sun the first 0:14:27.240 --> 0:14:29.560 quarter of the year. Everything kind of ripped and things 0:14:29.600 --> 0:14:31.760 have settled down. Since where aren't you in the US 0:14:31.880 --> 0:14:32.800 versus the rest of the world. 0:14:33.120 --> 0:14:36.120 Yeah, I think ye still looks more favorable in terms 0:14:36.120 --> 0:14:37.000 of the AI story. 0:14:37.280 --> 0:14:38.320 I mean the rest of the world. 0:14:38.400 --> 0:14:41.400 We could potentially see a catchup trade there too, if 0:14:41.480 --> 0:14:44.840 we start to see the manufacturing cycle really turn. But 0:14:44.960 --> 0:14:48.040 the areas that we are more bullish are really around? 0:14:48.120 --> 0:14:51.040 AI is the one thing that makes you nervous given 0:14:51.080 --> 0:14:52.600 how bully she said, I mean, we've been through all 0:14:52.600 --> 0:14:54.680 the bill case. Is the one thing that just sort 0:14:54.720 --> 0:14:55.840 of nickels at you a little bit? 0:14:56.080 --> 0:14:58.960 Yeah, I mean I think Hyperscalers probably because their free 0:14:59.000 --> 0:15:04.440 cashwow is coming down and they are the biggest companies 0:15:04.560 --> 0:15:06.840 in the SMB five hundreds. So if you start to 0:15:06.920 --> 0:15:10.080 see more of a rotation type of true redlant broadening 0:15:10.160 --> 0:15:12.680 out with everything rallying, then that's not going to be 0:15:12.800 --> 0:15:14.960 good for the SMP at the index level. 0:15:15.320 --> 0:15:18.720 Stay with us more Bloomberg surveillance coming up after this. 0:15:27.640 --> 0:15:30.960 Katie Kaminski of Oupha Simplex Group writing the rally inequities 0:15:30.960 --> 0:15:34.920 has been relatively broad based, with big tech slightly outperforming. 0:15:35.000 --> 0:15:37.320 Katie joins us now for more Katie, Welcome to the program. 0:15:37.480 --> 0:15:39.800 Jan Caffrey of JP Morgan kicked off the program with 0:15:39.960 --> 0:15:42.280 us and said, you don't want to find this ball market? 0:15:42.560 --> 0:15:43.120 Do you agree? 0:15:44.400 --> 0:15:46.960 I have to agree, And actually you have to start 0:15:47.000 --> 0:15:49.920 asking yourself the question, what are the things that could. 0:15:49.880 --> 0:15:52.760 Be a sort of a stop for this big. 0:15:52.760 --> 0:15:55.720 Rally that we've seen, And there isn't anything that's obvious. 0:15:55.840 --> 0:15:59.480 I think I am watching though what FED commentary will 0:15:59.520 --> 0:16:01.760 be this week, just given the fact that we don't 0:16:01.840 --> 0:16:05.080 have data for future meetings. So I think that is 0:16:05.240 --> 0:16:08.440 one potential curve ball. But in general, earnings are good, 0:16:08.600 --> 0:16:11.400 growth is good, and the trend has been very strong. 0:16:11.800 --> 0:16:13.680 From a technical perspective. 0:16:13.520 --> 0:16:15.840 Kedy, that's the equity market. The equity market is pricing 0:16:15.880 --> 0:16:18.480 at a rebound in economic growth. I wonder what you 0:16:18.600 --> 0:16:21.760 think the bond market is pricing. Because this rally, particularly 0:16:21.880 --> 0:16:24.280 long end, coming out of the summer of surprise many 0:16:24.360 --> 0:16:26.760 what do you think explains it well? 0:16:26.800 --> 0:16:29.440 I think you know, bonds have really been focused on 0:16:29.960 --> 0:16:34.640 sort of potential rate cuts and seeing more creative inflation 0:16:34.840 --> 0:16:37.400 data is also very positive for bonds, especially on the 0:16:37.440 --> 0:16:40.440 long end. I think an interesting point is we haven't 0:16:40.520 --> 0:16:43.560 seen a steepener. We've seen sort of a pause in 0:16:43.680 --> 0:16:47.440 that particular move in bond movements, which which means basically 0:16:47.560 --> 0:16:51.120 that you're seeing a flatter yield curve. So I think 0:16:51.520 --> 0:16:54.920 bonds are very focused on rate cuts and that has 0:16:54.960 --> 0:16:59.080 been pretty consistent, but trend signals have not been very 0:16:59.120 --> 0:17:02.160 good at timing those moves in bonds, and there haven't 0:17:02.240 --> 0:17:05.920 been sort of very strong themes to follow, except for 0:17:06.000 --> 0:17:08.199 that bonds have been slightly up, so I'd say it's 0:17:08.200 --> 0:17:10.200 still a little tricky to trade bonds. 0:17:09.960 --> 0:17:12.600 This year, Katy has been tricky to track the correlations. 0:17:12.720 --> 0:17:15.280 Everything seems to be rallying and give the same time stalks, 0:17:15.320 --> 0:17:19.400 bonds and predcious metals too, until very very recently, when 0:17:19.440 --> 0:17:21.240 the gold trades down it to one whap. Do you 0:17:21.320 --> 0:17:23.680 see that as an isolated story in its own asset 0:17:23.720 --> 0:17:26.000 class or does it speak to something else happening somewhere. 0:17:27.240 --> 0:17:29.720 Well, I think gold is something we really should watch 0:17:29.760 --> 0:17:32.440 because it's the only thing that's telling us something interesting 0:17:32.600 --> 0:17:35.160 right now. I think you know, you've seen this very 0:17:35.320 --> 0:17:37.960 strong gold theme for the past couple of months, and 0:17:38.040 --> 0:17:40.119 you have to start asking yourself how much of this 0:17:40.359 --> 0:17:44.200 is an over extended rally and you know, deleveraging out 0:17:44.280 --> 0:17:46.480 of sort of what has been a very profitable trade, 0:17:46.840 --> 0:17:49.119 and how much of it is a shift in sentiment 0:17:49.280 --> 0:17:52.520 about concerns because I often see gold as something that 0:17:52.600 --> 0:17:55.880 people use to hedge their concern for things like inflation, 0:17:56.520 --> 0:17:58.960 and you know, the recent moves in gold could give 0:17:59.000 --> 0:18:02.000 you pause that something might be changing that we haven't 0:18:02.040 --> 0:18:03.320 really understood yet, Well. 0:18:03.240 --> 0:18:05.600 What could be changing Is the market just feeling better 0:18:05.640 --> 0:18:08.760 about the geopolitical situation and the trade narrative coming from 0:18:08.760 --> 0:18:09.639 the Trump administration. 0:18:11.040 --> 0:18:13.600 I think that's the case, So maybe it's a change 0:18:13.640 --> 0:18:16.040 in sentiment, but it also could be And this is 0:18:16.160 --> 0:18:19.640 the one kind of wild card question is like, let's 0:18:19.680 --> 0:18:22.320 say that we have a little bit of a pause 0:18:22.400 --> 0:18:24.800 from the FED. That would affect real rates, which also 0:18:24.840 --> 0:18:27.879 affects gold prices. So I think, you know, gold is 0:18:27.920 --> 0:18:30.000 an interesting one. It's the only thing that's kind of 0:18:30.119 --> 0:18:32.920 moving in a different direction right now. So some of 0:18:32.960 --> 0:18:36.320 it could be sentiment drifting more positive. That means everything 0:18:36.440 --> 0:18:39.560 is kind of in the same direction, but you know, 0:18:39.680 --> 0:18:40.440 we'll have to see. 0:18:40.600 --> 0:18:41.920 It is something to pay attention to. 0:18:42.119 --> 0:18:44.119 Okay, there's a lot of catalysts just this in this 0:18:44.400 --> 0:18:47.040 In this week alone, we have tech earnings, the FED meeting, 0:18:47.119 --> 0:18:49.520 and of course the President sitting down with Shijipang. 0:18:49.560 --> 0:18:51.040 What are you most acutely focused on? 0:18:52.160 --> 0:18:55.080 I would say I think the rhetoric around China has 0:18:55.160 --> 0:18:58.520 been very important. I mean, you saw those moves. It 0:18:58.760 --> 0:19:01.560 has the ability to move the market, and it is 0:19:01.640 --> 0:19:04.240 a theme that the market has been concerned and focused 0:19:04.280 --> 0:19:07.120