WEBVTT - Equities Price in Volatility 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.000 us live on YouTube. 0:00:27.040 --> 0:00:29.000 Today, we're going to get back to meat and potatoes, 0:00:29.040 --> 0:00:33.120 and that, of course means equity strategy. Julian Emmanuel's definitive 0:00:33.159 --> 0:00:36.360 what you don't know inside Global Wall Street Baseball Working 0:00:36.400 --> 0:00:38.480 for Ed Heyman, he's got the advantage of the whole 0:00:38.479 --> 0:00:42.360 evercore ISI game. But what's important is he puts out 0:00:42.800 --> 0:00:47.040 a note every morning on the earnings season and how 0:00:47.040 --> 0:00:51.080 we're doing. We have them for an extended conversation this morning, Julian. 0:00:51.159 --> 0:00:54.040 That research note you put out, how are we doing 0:00:54.080 --> 0:00:58.160 on revenue and earnings growthiness and surprises. 0:00:59.200 --> 0:01:02.160 Let's call it good, not great sort of, you know, uh, 0:01:02.280 --> 0:01:07.800 double digit close, you're nudging towards double digit. There's a 0:01:07.840 --> 0:01:10.440 hope that by the end of the season that we'll 0:01:10.480 --> 0:01:15.480 be right there. Revenue solid, you know, nudging towards five percent, 0:01:15.520 --> 0:01:21.360 which is pretty darn good, but in general it's probably 0:01:21.440 --> 0:01:24.920 less than expected. We kind of thought that the surprises, 0:01:24.959 --> 0:01:28.200 and the biggest aspect is the strengthen the dollar that 0:01:28.480 --> 0:01:31.920 sort of dampened and you're certainly seeing in a commentary. 0:01:32.240 --> 0:01:35.720 But again with the dollar, the question here is what's 0:01:35.760 --> 0:01:36.880 the sense of permanence. 0:01:37.120 --> 0:01:39.360 You get to stand at the table with Ed Hymen. 0:01:39.520 --> 0:01:42.240 He's got the black Charby and he's marking up you know, 0:01:42.319 --> 0:01:45.679 the famous Ed Hymen reports. Do you and mister Hymen 0:01:45.920 --> 0:01:49.600 extrapolate out this earnings excellence. 0:01:49.480 --> 0:01:54.840 We do for US twenty twenty five looks like it's 0:01:54.920 --> 0:01:58.880 going to be in the neighborhood of ten percent double digit. 0:01:59.000 --> 0:02:03.600 Yeah, that's Wall Street, That's right, exactly, So, Julian, I mean, 0:02:03.800 --> 0:02:05.960 you know, for the longest time, technology has been the 0:02:06.080 --> 0:02:10.000 driver of this market. Can we still expect technology broadly 0:02:10.040 --> 0:02:12.360 defined to lead this market higher? 0:02:12.680 --> 0:02:16.440 Well, we think the answer broadly is yes. But just 0:02:16.480 --> 0:02:20.760 getting back to earnings for a moment. The positivity around 0:02:20.760 --> 0:02:24.080 twenty twenty five is that and we started to see 0:02:24.080 --> 0:02:26.400 this happen at the end of twenty twenty four. Is 0:02:26.440 --> 0:02:29.120 the other four hundred and ninety three stocks in the 0:02:29.200 --> 0:02:32.960 S and P five hundred have started contributing to positive 0:02:33.000 --> 0:02:36.320 earnings growth, and that's something we expect but on balance, 0:02:36.520 --> 0:02:39.600 when you think about how bull market sort of evolves, 0:02:39.680 --> 0:02:42.400 and you think about the stages of a bull market, 0:02:42.600 --> 0:02:43.360 and what we've. 0:02:43.240 --> 0:02:45.639 Yet to see is that stage. 0:02:45.280 --> 0:02:50.120 Of capital markets enthusiasm and element of emotion and fomo, 0:02:50.240 --> 0:02:54.840 which happens towards the latter stages of every bull market 0:02:55.160 --> 0:02:58.480 that tends to be led by technology the leaders, and 0:02:58.520 --> 0:02:59.960 we think we'll get there at some point. 0:03:00.840 --> 0:03:02.840 We had some pretty good performance in January coming out 0:03:02.840 --> 0:03:05.840 of some of the European markets, which typically lagged the US. 0:03:05.840 --> 0:03:08.280 So it's suggest that maybe some of the non tech 0:03:09.040 --> 0:03:11.840 aspects of the market, maybe some investors looking for value 0:03:12.240 --> 0:03:14.880 in January. Is that something that's got some legs? 0:03:14.880 --> 0:03:16.200 Do you think so? 0:03:16.360 --> 0:03:20.760 To us, that is a geopolitical dependence right there. There's 0:03:20.760 --> 0:03:25.240 no question about the fact that given the really the 0:03:25.320 --> 0:03:28.800 runaway moving the dollar into the end of last year, 0:03:29.120 --> 0:03:33.480 we started getting questions from longer term value investors, is 0:03:33.520 --> 0:03:36.240 it time? When's it time to start shifting? And we've 0:03:36.320 --> 0:03:39.280 seen that we think you're going to need the catalyst. 0:03:39.320 --> 0:03:42.520 The dollar has started to stabilize, which is a positive, 0:03:42.920 --> 0:03:44.880 but we think that you're going to need to see 0:03:44.880 --> 0:03:46.960 a little bit more of a geopolitical catat. 0:03:46.680 --> 0:03:48.680 Okay, you go back to the thirteen hundred, so the 0:03:48.760 --> 0:03:51.920 fourteenth century. That's when Ed Heyman was writing for CJ. Lawrence. 0:03:52.280 --> 0:03:55.360 You use the word repetitively of all these worries out 0:03:55.400 --> 0:03:59.680 there of unlikely, it's unlikely the Fed is going to 0:03:59.680 --> 0:04:02.440 screw up, it's unlikely we're going to see this, it's 0:04:02.560 --> 0:04:05.600 unlikely we're seeing. Explain to us that how we should 0:04:05.680 --> 0:04:09.720 handle all these unlikelyes. We're juggling every day. There'll be 0:04:09.760 --> 0:04:11.200 a new one tomorrow. I don't know what it's going 0:04:11.280 --> 0:04:11.480 to be. 0:04:11.640 --> 0:04:15.160 Well, if you look at the headlines, there was a 0:04:15.200 --> 0:04:18.359 new one about twelve hours ago at the press press 0:04:18.400 --> 0:04:21.800 conference between President Trump and. 0:04:21.680 --> 0:04:23.760 Now do with the unlikelies, we're drowning. 0:04:23.800 --> 0:04:27.520 And what we do is what we've done for a 0:04:27.600 --> 0:04:30.480 number of years now, and try and parse out the 0:04:30.520 --> 0:04:35.640 noise as much as possible and concentrate on the fact that, 0:04:35.800 --> 0:04:40.239 as you said moments ago, we're going to have close 0:04:40.279 --> 0:04:43.840 to double digit earnings growth and all those stocks are 0:04:43.880 --> 0:04:46.120 expensive valuation alone. 0:04:46.200 --> 0:04:47.880 It does not end the ball mark. 0:04:47.800 --> 0:04:49.760 Buried in your note Hymen doesn't get down to the 0:04:49.839 --> 0:04:52.279 bottom of the Julian Mmanual note it's just too long 0:04:52.320 --> 0:04:57.440 and too dense. You go right at share buybacks, explain 0:04:57.480 --> 0:04:59.960 to us, I mean forget about Apple, there's others share 0:05:00.120 --> 0:05:01.800 buybacks and Coopertino right. 0:05:03.000 --> 0:05:06.720 Absolutely, So when you think about buybacks and you think 0:05:06.760 --> 0:05:10.680 about this world we're living in of uncertainties and likelies 0:05:10.720 --> 0:05:15.159 and unlikelies, the question is, how do you manage an 0:05:15.279 --> 0:05:20.640 environment where, by definition, you're going to have greater volatility? Okay, 0:05:21.040 --> 0:05:23.880 and even if we didn't have this political environment, at 0:05:23.920 --> 0:05:28.240 these valuations, you're likely to have greater volatility. The answer 0:05:28.560 --> 0:05:31.440 is you want to own companies that can buy back 0:05:31.480 --> 0:05:36.080 their shifts, because that defines the concept of volatility managed on. 0:05:36.000 --> 0:05:37.760 A Wednesday in New York. The nights are good. Just 0:05:37.839 --> 0:05:40.760 the sun is setting later. Yes, I'm losing how that 0:05:40.960 --> 0:05:43.120 is like after five pm. We welcome all of you 0:05:43.240 --> 0:05:46.400 across nation on your communites. Good morning on Apple, Carblay, 0:05:46.600 --> 0:05:50.440 Good morning on Android, Auto, Google out with Earninge's Lisa 0:05:50.520 --> 0:05:53.159 nailed that. We'll talk about that here in a moment, 0:05:53.400 --> 0:05:55.720 and we say good morning on YouTube as well. Subscribe 0:05:55.760 --> 0:06:00.200 to Bloomberg Podcast. They mentioned podcasts three times in the 0:06:00.200 --> 0:06:03.560 Google bellt yester. They didn't mention us no, I kept 0:06:03.640 --> 0:06:05.760 I kept. Sorry, I sat there with a beverage of 0:06:05.800 --> 0:06:08.599 my choice. Imoy, come on, mentioned Blueberg's surveillance. 0:06:08.800 --> 0:06:12.440 Yeah, they didn't growing, Julie, how do you feel about 0:06:12.480 --> 0:06:15.560 valuation in this marketplace? I mean, you can make the 0:06:15.680 --> 0:06:18.440 argument that this is really rich market. Now if I 0:06:18.440 --> 0:06:21.200 pull out the mag seven maybe less so should I 0:06:21.200 --> 0:06:22.040 be concerned about that? 0:06:22.480 --> 0:06:23.800 You should be concerned about that? 0:06:24.000 --> 0:06:28.320 And actually, for us, virtually every conversation we have with 0:06:28.400 --> 0:06:33.200 clients basically starts with walk us through the parameters evaluation. 0:06:33.760 --> 0:06:37.520 And my concern with the evolution of the bull market 0:06:37.560 --> 0:06:40.880 is when that stops being question number one or two, 0:06:41.400 --> 0:06:44.320 then we're going to be concerned. But look, there's no 0:06:44.600 --> 0:06:47.120 getting around the concept of history, and we are not 0:06:47.240 --> 0:06:50.159 believers of the idea it's different this time. 0:06:50.480 --> 0:06:51.760 You can make a. 0:06:51.720 --> 0:06:54.920 Lot of cases for why it could be, but we 0:06:54.960 --> 0:06:59.320 are at, you know, the highest levels of valuation in 0:06:59.720 --> 0:07:01.880 the last number of decades. 0:07:02.480 --> 0:07:05.160 How important is the discussion around the Federal Reserve this 0:07:05.279 --> 0:07:08.480 year because there's a lot of questioning whether they even 0:07:08.520 --> 0:07:10.680 cut at all this year, and perhaps there's a rate 0:07:10.760 --> 0:07:13.400 hike some point of the year, So the Fed call 0:07:13.480 --> 0:07:15.160 seems a little less clear these. 0:07:15.080 --> 0:07:17.960 Days, which actually makes it less important. 0:07:18.040 --> 0:07:21.440 Okay, well so, so from our point of view, this 0:07:21.520 --> 0:07:25.080 is a do no harm type environment, and by do 0:07:25.280 --> 0:07:28.760 no harm that means no hikes. And we actually do 0:07:28.880 --> 0:07:33.400 not believe that. If you're Jay Powell and you know 0:07:33.520 --> 0:07:37.000 your term is off in twenty twenty six, the one thing. 0:07:36.960 --> 0:07:39.280 You've got to do is deliver the. 0:07:39.200 --> 0:07:44.960 Soft landing to the country, and sticky inflation will not 0:07:45.120 --> 0:07:48.080 be Jay Powell's problem in twenty twenty five or twenty six. 0:07:48.320 --> 0:07:49.840 It will be the administrations broum. 0:07:49.880 --> 0:07:52.240 You can't see this on radio, but on YouTube you 0:07:52.240 --> 0:07:54.680 can see a little birdie on my right shoulder whispering 0:07:54.720 --> 0:08:01.640 into my sony headphone. Chairman Imen me if if if 0:08:01.720 --> 0:08:04.600 Jerome goes down to be a governor, Paul, there's certain 0:08:04.720 --> 0:08:10.440 music to chairman of Heim running a FED press What 0:08:10.480 --> 0:08:13.640 would what would hymen FED press conference be? 0:08:13.800 --> 0:08:13.880 Like? 0:08:14.240 --> 0:08:15.960 You know, and don't ask a follow up. 0:08:15.920 --> 0:08:20.640 Question exactly, So, Julian, how long can how long can 0:08:20.680 --> 0:08:21.640 bull markets last? 0:08:21.680 --> 0:08:21.840 Here? 0:08:21.880 --> 0:08:23.280 I mean kind of give us a sense of where 0:08:23.320 --> 0:08:24.960 we are kind of in the history here. 0:08:25.400 --> 0:08:30.400 It's relatively young, okay by historical standards. Uh, you know, 0:08:30.480 --> 0:08:34.240 the the average bull market goes out, you know, four 0:08:34.320 --> 0:08:39.160 plus years, and we're really only starting year three right now. 0:08:39.200 --> 0:08:42.480 So from that perspective, and also in terms of the 0:08:42.600 --> 0:08:48.079 absolute gain, we're still really almost you know, basically mid range. 0:08:48.440 --> 0:08:50.679 But you had twenty three, twenty four, both of those 0:08:50.760 --> 0:08:53.400 years at s and P five hundred, uh give you 0:08:53.480 --> 0:08:55.880 more than twenty percent returns. How do you think about 0:08:55.920 --> 0:08:58.720 a year three in that scenario? So I mean three pete, 0:08:58.760 --> 0:09:01.439 I mean the you know, coach Riley has the patent 0:09:01.480 --> 0:09:02.880 on three P, but can we threepeat it? 0:09:03.040 --> 0:09:06.160 Why Coach Riley may not have the patent on threepeat? 0:09:06.200 --> 0:09:08.800 If Andy Reid brings home a win on Sunday, he's 0:09:08.800 --> 0:09:09.720 going to Kansas. 0:09:09.720 --> 0:09:11.040 It's a deal with the NFL. 0:09:12.240 --> 0:09:15.920 There you go, we got we got Fred, Thank you 0:09:15.960 --> 0:09:19.680 so much. He goes to breakfast between Chapel Hill and 0:09:19.760 --> 0:09:22.920 Duke like the how what is the distance? Eleven ten 0:09:23.400 --> 0:09:27.240 ten miles? Or so Fife waffle House is doing a 0:09:27.280 --> 0:09:31.280 surch charge and eggs at the she Whaff in Durham, 0:09:31.320 --> 0:09:34.640 North Carolina two seven seven one three. I mean, what 0:09:34.679 --> 0:09:37.840 does that hyman say about this inflation fere out there? 0:09:38.120 --> 0:09:41.959 Or do we actually have a quiescent disinflationary vector. 0:09:41.800 --> 0:09:44.360 Well, I can say this having lived many years in 0:09:44.800 --> 0:09:48.880 Atlanta and environs. It brings a tear to my eye 0:09:48.920 --> 0:09:52.480 to think about paying an incremental costed waffle se. 0:09:52.320 --> 0:09:56.000 Whaff very very good. Three AM visits. 0:09:55.600 --> 0:09:57.920 Say, you know, I've never been in a waffle house 0:09:58.040 --> 0:10:04.040 before midnight to play music down there, and there's the 0:10:04.080 --> 0:10:06.480 only thing that was opened. Yeh, but cracker bill, the 0:10:06.480 --> 0:10:07.600 burrel to crack shot. 0:10:07.720 --> 0:10:08.240 That shuts out. 0:10:08.240 --> 0:10:10.720 That's a family institution there. But I mean, that's a 0:10:10.760 --> 0:10:12.760 pernicious inflation that people fear. 0:10:12.920 --> 0:10:16.240 No question, and in all seriousness, let's let's step back 0:10:16.280 --> 0:10:20.240 and think about this. Which is why the geopolitical dynamics 0:10:20.360 --> 0:10:24.040 are so interesting and sort of unpredictable at this point, 0:10:24.320 --> 0:10:28.040 is because President Trump was elected in large part because 0:10:28.080 --> 0:10:33.520 of the American consumers disquiet with inflation. And this is inflation. 0:10:33.960 --> 0:10:38.440 One more question. The hallmark of Eddiman's work is a 0:10:38.679 --> 0:10:43.240 respect for engineering and technology. It's carried that for decades 0:10:43.280 --> 0:10:48.120 and decades. Does your shop believe in the effervescence the 0:10:48.160 --> 0:10:52.720 persistence of AI and Meg seven and big tech? You can't. 0:10:52.840 --> 0:10:55.080 You gotta own it, right, we. 0:10:54.960 --> 0:10:57.120 Do, no question about it. And again that goes back 0:10:57.120 --> 0:11:01.480 to Eds roots as an MIT grad. But from our perspective, 0:11:01.800 --> 0:11:03.760 what we've seen in the last couple of weeks with 0:11:03.960 --> 0:11:08.439 the evolution of deep seek is actually, if anything, going 0:11:08.480 --> 0:11:13.719 to accelerate adoption. And that's the key corporate America accelerating 0:11:13.760 --> 0:11:17.920 adoption of AI. We as consumers are already there the 0:11:18.000 --> 0:11:21.640 same way we were the Internet in the early nineties 0:11:21.679 --> 0:11:24.520 before it hit desktops in corporate America. 0:11:24.800 --> 0:11:27.320 Chairman, I can just see it. 0:11:27.360 --> 0:11:28.559 I mean, it just rings true. 0:11:28.960 --> 0:11:31.280 I mean, you know, can we start a roomor here 0:11:31.360 --> 0:11:35.280 right now? Good morning, mister Powell. Thank you for he 0:11:35.400 --> 0:11:37.400 uses as Bloomberg every day. I don't know if Ed 0:11:37.400 --> 0:11:41.359 wouldn't use be at the Eccles building with a sharpie 0:11:41.360 --> 0:11:45.559 in his head mark it up, PhD Papers, Julian Emmanuel, 0:11:45.679 --> 0:11:48.280 thank you so much working it evercore Isi. 0:11:54.800 --> 0:11:58.400 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:11:58.440 --> 0:12:01.640 weekday afternoons from seven to ten am e'stern Listen on 0:12:01.720 --> 0:12:05.360 Applecarplay and Android Auto with the Bloomberg Business app, or 0:12:05.520 --> 0:12:07.000 watch us live on YouTube. 0:12:07.280 --> 0:12:12.240 Mona Mahajan on MEGS seven. It's got legs. AI as legs. 0:12:13.080 --> 0:12:16.200 It certainly has legs. It's a long term holding, but 0:12:16.360 --> 0:12:19.280 this year could be volatile, so we've already seen a 0:12:19.320 --> 0:12:20.960 bit of that. Keep in mind, this is not only 0:12:20.960 --> 0:12:24.119 a cohort that got a little bit of an extension 0:12:24.120 --> 0:12:26.920 on the valuation front, but now is also facing threats 0:12:27.280 --> 0:12:31.400 like competition from China and other players like tariffs as well. 0:12:31.480 --> 0:12:34.080 And you know, some of the retaliation we saw from China, 0:12:34.120 --> 0:12:37.120 for example on Apple already weighing on some of the 0:12:37.120 --> 0:12:39.679 mag seven as well. So keep in mind this is 0:12:39.720 --> 0:12:42.840 a year that we want to remain diversified across sectors, 0:12:42.840 --> 0:12:47.280 across asset classes, large cap and mid cap, growth and value. 0:12:47.480 --> 0:12:50.079 So what are you seeing just out of earnings because 0:12:50.160 --> 0:12:51.880 you know, one of the themes coming that twenty twenty 0:12:51.880 --> 0:12:53.520 five is we're not going to get a whole lot 0:12:53.520 --> 0:12:55.760 from the Fed this year, probably one maybe two rate 0:12:55.840 --> 0:12:59.040 cuts at best, So it really has to be earnings 0:12:59.080 --> 0:13:01.360 that have to deliver if this market's going to move higher. 0:13:01.440 --> 0:13:02.400 How do you guys think about that? 0:13:02.480 --> 0:13:04.839 Yeah, it's a great call out because S and P 0:13:04.960 --> 0:13:09.000 returns are really a combination of valuation expansion plus earnings growth. 0:13:09.280 --> 0:13:12.480 Valuation expansion, as we just highlighted, probably not going to 0:13:12.559 --> 0:13:14.720 contribute all that much maybe even a little bit of 0:13:14.720 --> 0:13:18.560 negative contribution in some sectors. So earnings growth will be 0:13:18.720 --> 0:13:22.160 the driver of returns. We continue to see ten to 0:13:22.240 --> 0:13:25.680 fifteen percent earnings growth this year. Of course, that is 0:13:25.760 --> 0:13:28.240 predicated on a consumer that continues to hold in there. 0:13:28.360 --> 0:13:31.080 Labor market will see on Friday that continues to remain 0:13:31.120 --> 0:13:33.600 resilient as well in the US economy. That you know, 0:13:33.760 --> 0:13:36.280 I looked at Atlanta GDP now three point nine percent. 0:13:36.480 --> 0:13:40.480 Well maybe with at the margin, do you sell MAG seven? 0:13:40.920 --> 0:13:42.120 I don't hear you saying that. 0:13:42.440 --> 0:13:46.360 Yeah, you know, we think you could do a little 0:13:46.400 --> 0:13:48.920 bit of rebalancing. If you know, if you're MAG seven 0:13:48.960 --> 0:13:52.400 and your tech has gotten an outsized way in your portfolio, 0:13:52.520 --> 0:13:54.560 you may want to rebalance that with the other sectors. 0:13:55.160 --> 0:13:58.480 But generally we're in the camp of complementing. We want 0:13:58.480 --> 0:13:59.679 to make sure it's me. 0:14:00.720 --> 0:14:03.320 You got to go to Wharton. What a god's thing 0:14:03.800 --> 0:14:04.760 is complimenting? 0:14:04.920 --> 0:14:08.439 Well, you know, if you owned all largely tech and 0:14:08.520 --> 0:14:10.480 AI in your portfolios, you actually did pretty well the 0:14:10.559 --> 0:14:12.520 last couple of years. We think the way you do 0:14:12.600 --> 0:14:15.040 well in twenty twenty five in the next couple of 0:14:15.120 --> 0:14:17.680 years is you have to own growth and value. So 0:14:17.720 --> 0:14:19.760 you want to make sure not only tech sectors, you 0:14:19.800 --> 0:14:24.440 have industrials in their financials, healthcare, you know, mid cap 0:14:24.480 --> 0:14:26.120 stocks as well, bonds. 0:14:26.200 --> 0:14:28.000 What do you do with tariffs? Is that even come 0:14:28.000 --> 0:14:30.360 into your calculation or anach safe? Boy, that's noise. I'm 0:14:30.400 --> 0:14:31.320 just not going to worry about it. 0:14:31.640 --> 0:14:31.880 Yeah. 0:14:31.920 --> 0:14:34.640 You know, Look, the tariff uncertainty has weiight on this market, 0:14:34.720 --> 0:14:37.200 no doubt. And we know the old adage markets don't 0:14:37.280 --> 0:14:40.120 like uncertainty, and this is a source of you know, 0:14:40.200 --> 0:14:42.000 will it happen, will it not happen. What I will 0:14:42.000 --> 0:14:45.520 say is there was a probably a growing fear over 0:14:45.560 --> 0:14:47.760 the weekend when we were thinking about twenty five percent 0:14:47.840 --> 0:14:51.480 tariffs on our biggest trading partners. Now that was walked 0:14:51.520 --> 0:14:54.880 back on Monday, and we did seem to view tariffs 0:14:54.960 --> 0:14:57.600 more as a negotiating tool after that. So we got 0:14:57.600 --> 0:15:00.720 some concessions from the border from our na bring you know, 0:15:00.920 --> 0:15:04.440 economies on the north and south, which I think provided 0:15:04.480 --> 0:15:06.440 a bit of relief for the markets and the broader 0:15:06.480 --> 0:15:07.200 economy as well. 0:15:07.480 --> 0:15:12.200 What do you here feel the emotion of Edward Jones 0:15:12.520 --> 0:15:14.280 clients across this nation. 0:15:14.640 --> 0:15:17.000 Yeah, and great call out by the way, Edward Jones 0:15:17.040 --> 0:15:20.560 now nine million households across the US. We are in 0:15:20.720 --> 0:15:22.680 every county except. 0:15:22.400 --> 0:15:23.840 One in Texas. 0:15:23.880 --> 0:15:29.160 We're trying to get that county. Yeah, we have yep, 0:15:29.280 --> 0:15:31.760 we are really have our eyes and ears on the 0:15:32.240 --> 0:15:36.840 average and the mood. You know, I will say there's 0:15:36.880 --> 0:15:39.680 parts of the country that are feeling a little more optimistic. 0:15:40.360 --> 0:15:42.120 This is an economy, as we've talked about, the labor 0:15:42.160 --> 0:15:46.040 market is held up. The economy is doing okay. Inflation 0:15:46.520 --> 0:15:49.320 is a concern, and that is still a concern. And 0:15:49.560 --> 0:15:51.640 you know it's tough because we went from a nine 0:15:51.680 --> 0:15:54.000 percent inflation rate. We are back to you know, two 0:15:54.040 --> 0:15:57.400 point nine percent on headline CPI, but that's still year 0:15:57.440 --> 0:16:00.760 over your growth. Your prices are still going up, albeit 0:16:00.800 --> 0:16:03.520 at a slower pace of growth. And so this is 0:16:03.680 --> 0:16:07.840 probably the dichotomy between lower income and that mid and 0:16:07.920 --> 0:16:11.360 upper income household. Mid and upper income they have participated 0:16:11.360 --> 0:16:14.880 in growing stock market, even their houses are starting to 0:16:14.880 --> 0:16:17.280 show some signs of life as well house prices and 0:16:17.360 --> 0:16:23.000 so there yeah, un for the mortgage hopefully, and you 0:16:23.040 --> 0:16:26.400 know this is they're feeling okay with their wealth creation 0:16:26.480 --> 0:16:28.600 that's happened over the last couple of years. So we 0:16:28.640 --> 0:16:30.600 want to be mindful of both ends of the spectrum, 0:16:30.600 --> 0:16:33.320 but economy is really driven by that mid and upper 0:16:33.360 --> 0:16:35.360 income consumer fixed income. 0:16:35.400 --> 0:16:36.080 What do we do here? 0:16:36.120 --> 0:16:38.560 I mean, again, to your treasury four point two percent, 0:16:38.600 --> 0:16:41.200 that's not a bad way to make a living. Do 0:16:41.280 --> 0:16:42.840 I take some credit risks or. 0:16:43.040 --> 0:16:43.680 How do you think of that? 0:16:44.040 --> 0:16:44.400 Yeah? 0:16:44.480 --> 0:16:47.680 You know, so within your investment grade portfolio, we continue 0:16:47.720 --> 0:16:49.440 to feel like you could add a little bit of 0:16:49.520 --> 0:16:52.080 duration here, even at four and a half percent slightly 0:16:52.160 --> 0:16:55.400 under on a tenure that is still at the probably 0:16:55.440 --> 0:16:59.240 towards the high end of a ten year treasury yield range. 0:16:59.400 --> 0:17:02.040 And we do think, you know, FED is probably on 0:17:02.080 --> 0:17:05.160 hold for now, but could we get one, possibly two 0:17:05.240 --> 0:17:08.399 rate cuts during the reindeer of the cycle. Yes, and 0:17:08.480 --> 0:17:11.240 so we do think an investment grade bond, you know, 0:17:11.280 --> 0:17:12.840 for ten years, you can lock in four and a 0:17:12.840 --> 0:17:16.119 half percent. If you're close to retirement and you're looking 0:17:16.119 --> 0:17:18.680 at maybe for six to eight percent return, that's this 0:17:18.720 --> 0:17:20.760 is not a bad part of your portfolio. So we 0:17:20.760 --> 0:17:23.320 think it's a good thing for balanced investors to have yield. 0:17:23.359 --> 0:17:25.960 Once again, how about alternatives real quickly? 0:17:26.200 --> 0:17:28.720 Yeah, for Edward Jones client, did they think. 0:17:28.560 --> 0:17:30.840 About alternative investments, private credit, private. 0:17:30.600 --> 0:17:33.720 Ag Yeah, you know, for our average client, we can 0:17:33.720 --> 0:17:35.919 get a lot done with this equities and bonds. You know, 0:17:36.080 --> 0:17:39.359 we know the old adage. Yes, you know, I totally 0:17:39.400 --> 0:17:42.720 agree with invest early invest often some of the high 0:17:42.720 --> 0:17:45.760 net worth clients though, starting to look at parts of diversification. 0:17:45.960 --> 0:17:49.400 I've never said this, I've never thought this. Edward Jones 0:17:49.560 --> 0:17:52.119 a bit doog own bitcoin. 0:17:53.160 --> 0:17:55.399 Very we think very speculative. Still, you know, we like 0:17:55.520 --> 0:17:59.800 assets where we can model out cash flow, so selectors. 0:18:01.280 --> 0:18:03.560 We want to be able to Yeah, cash flow's discount 0:18:03.560 --> 0:18:05.440 and we can't do that yet, So not there yet. 0:18:05.480 --> 0:18:06.960 Oh, come on, there's no wonderling. 0:18:07.480 --> 0:18:09.879 And you know there's been other ways to make a 0:18:09.920 --> 0:18:11.880 good living and return of less. 0:18:12.240 --> 0:18:14.200 You know, we should do a joint interview, a one 0:18:14.240 --> 0:18:18.919 hour interview Mona and the wonderful talent from Robinhood, have 0:18:19.160 --> 0:18:23.480 Robinhood and Edward Jones together. Yeah, sure, that would be 0:18:23.520 --> 0:18:24.280 like lights out. 0:18:24.359 --> 0:18:26.520 Yeah, Mona, this has been hugely valuable. 0:18:26.560 --> 0:18:27.840 Don't be a stranger, Mona. 0:18:27.840 --> 0:18:28.639 You guys we're the. 0:18:28.680 --> 0:18:33.320 Senior investment strategist, Edward Jones, iconic across America. 0:18:33.440 --> 0:18:37.560 Can't say look, this is the Bloomberg Surveillance podcast. Listen 0:18:37.720 --> 0:18:40.639 live each weekday starting at seven am Eastern on Apple 0:18:40.680 --> 0:18:43.760 Corplay and Android Auto with the Bloomberg Business app. You 0:18:43.760 --> 0:18:47.280 can also listen live on Amazon Alexa from our flagship 0:18:47.320 --> 0:18:51.560 New York station Just Say Alexa Play Bloomberg eleven thirty. 0:18:51.400 --> 0:18:55.280 Joining us now pulling the lucky card moving to London 0:18:55.359 --> 0:18:58.200 this week, Amanda Rabella joins US. She spent a huge 0:18:58.280 --> 0:19:04.159 value add for US on ETFs. We thrilled with US 0:19:04.280 --> 0:19:07.240 extra ecor sales in all, Let's start with the why 0:19:07.320 --> 0:19:09.199 why are you moving to London? I mean, is it 0:19:09.280 --> 0:19:11.879 just like it's time to move with all the cacophony 0:19:12.080 --> 0:19:13.160 going on in America. 0:19:13.960 --> 0:19:17.480 I think the US is still a fantastic country. There's 0:19:17.520 --> 0:19:19.880 so much going for it. Obviously we've had a new 0:19:19.920 --> 0:19:22.840 president coming in, but I think ultimately the long term 0:19:23.000 --> 0:19:25.520 benefits of being in the US are still there. Just 0:19:25.720 --> 0:19:28.119 you know, my gig was to come here and build 0:19:28.119 --> 0:19:30.960 out our US business. We're the second largest ETF provider 0:19:31.000 --> 0:19:33.240 on the usage side. We thought that there may be 0:19:33.240 --> 0:19:36.560 a few things that some of our global investors can 0:19:36.600 --> 0:19:40.080 benefit from with US bringing expertise to the US. Obviously 0:19:40.119 --> 0:19:42.800 a very crowded market, but we've been able to get 0:19:42.800 --> 0:19:45.600 some traction with some expertise in thematic. 0:19:45.720 --> 0:19:48.600 Sure, this is moving back, it's moving back, moving back. 0:19:48.800 --> 0:19:49.720 I got it, I got it. 0:19:49.760 --> 0:19:51.760 Okay, thematics, yes, exactly. 0:19:52.040 --> 0:19:54.080 So what give us the latest? What are you seeing 0:19:54.080 --> 0:19:55.040 in the ETF business? 0:19:55.040 --> 0:19:55.920 Where are the funds? 0:19:55.920 --> 0:19:58.120 Flog is again, Tom, I've talked about this all the time. 0:19:58.160 --> 0:19:59.679 We grew up in a world of mutual funds and 0:19:59.680 --> 0:20:02.680 that's wh all the money was going. Now it's ETFs 0:20:02.680 --> 0:20:04.720 has been an extraordinary world story. 0:20:04.880 --> 0:20:07.880 So you're in a great business. It's better than equities 0:20:07.880 --> 0:20:08.359 in Dallas. 0:20:08.400 --> 0:20:09.840 But talk to us about ETF. 0:20:10.000 --> 0:20:12.440 Yeah, so it's fantastic. So at the end of last year, 0:20:12.440 --> 0:20:14.720 we crossed the ten trillion dollar mark globally in terms 0:20:14.720 --> 0:20:18.080 of ETF au M, and then just in terms of 0:20:18.119 --> 0:20:20.400 flows across the one trillion dollar mark. So just think 0:20:20.400 --> 0:20:22.840 about that, right, that's basically as big as the you know, 0:20:22.960 --> 0:20:26.160 volumes of FX on a daily basis globally. Right when 0:20:26.160 --> 0:20:28.480 I think about when I was at an unknowned competitor, 0:20:28.560 --> 0:20:30.520 but you can probably guess who. I remember. We had 0:20:30.520 --> 0:20:33.640 a celebration for our am crossing the one trillion dollar mark, 0:20:33.720 --> 0:20:36.120