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Speaker 2: Today, we're going to get back to meat and potatoes,
Speaker 2: and that, of course means equity strategy. Julian Emmanuel's definitive
Speaker 2: what you don't know inside Global Wall Street Baseball Working
Speaker 2: for Ed Heyman, he's got the advantage of the whole
Speaker 2: evercore ISI game. But what's important is he puts out
Speaker 2: a note every morning on the earnings season and how
Speaker 2: we're doing. We have them for an extended conversation this morning, Julian.
Speaker 2: That research note you put out, how are we doing
Speaker 2: on revenue and earnings growthiness and surprises.
Speaker 3: Let's call it good, not great sort of, you know, uh,
Speaker 3: double digit close, you're nudging towards double digit. There's a
Speaker 3: hope that by the end of the season that we'll
Speaker 3: be right there. Revenue solid, you know, nudging towards five percent,
Speaker 3: which is pretty darn good, but in general it's probably
Speaker 3: less than expected. We kind of thought that the surprises,
Speaker 3: and the biggest aspect is the strengthen the dollar that
Speaker 3: sort of dampened and you're certainly seeing in a commentary.
Speaker 3: But again with the dollar, the question here is what's
Speaker 3: the sense of permanence.
Speaker 2: You get to stand at the table with Ed Hymen.
Speaker 2: He's got the black Charby and he's marking up you know,
Speaker 2: the famous Ed Hymen reports. Do you and mister Hymen
Speaker 2: extrapolate out this earnings excellence.
Speaker 3: We do for US twenty twenty five looks like it's
Speaker 3: going to be in the neighborhood of ten percent double digit.
Speaker 4: Yeah, that's Wall Street, That's right, exactly, So, Julian, I mean,
Speaker 4: you know, for the longest time, technology has been the
Speaker 4: driver of this market. Can we still expect technology broadly
Speaker 4: defined to lead this market higher?
Speaker 3: Well, we think the answer broadly is yes. But just
Speaker 3: getting back to earnings for a moment. The positivity around
Speaker 3: twenty twenty five is that and we started to see
Speaker 3: this happen at the end of twenty twenty four. Is
Speaker 3: the other four hundred and ninety three stocks in the
Speaker 3: S and P five hundred have started contributing to positive
Speaker 3: earnings growth, and that's something we expect but on balance,
Speaker 3: when you think about how bull market sort of evolves,
Speaker 3: and you think about the stages of a bull market,
Speaker 3: and what we've.
Speaker 5: Yet to see is that stage.
Speaker 3: Of capital markets enthusiasm and element of emotion and fomo,
Speaker 3: which happens towards the latter stages of every bull market
Speaker 3: that tends to be led by technology the leaders, and
Speaker 3: we think we'll get there at some point.
Speaker 4: We had some pretty good performance in January coming out
Speaker 4: of some of the European markets, which typically lagged the US.
Speaker 4: So it's suggest that maybe some of the non tech
Speaker 4: aspects of the market, maybe some investors looking for value
Speaker 4: in January. Is that something that's got some legs?
Speaker 5: Do you think so?
Speaker 3: To us, that is a geopolitical dependence right there. There's
Speaker 3: no question about the fact that given the really the
Speaker 3: runaway moving the dollar into the end of last year,
Speaker 3: we started getting questions from longer term value investors, is
Speaker 3: it time? When's it time to start shifting? And we've
Speaker 3: seen that we think you're going to need the catalyst.
Speaker 3: The dollar has started to stabilize, which is a positive,
Speaker 3: but we think that you're going to need to see
Speaker 3: a little bit more of a geopolitical catat.
Speaker 2: Okay, you go back to the thirteen hundred, so the
Speaker 2: fourteenth century. That's when Ed Heyman was writing for CJ. Lawrence.
Speaker 2: You use the word repetitively of all these worries out
Speaker 2: there of unlikely, it's unlikely the Fed is going to
Speaker 2: screw up, it's unlikely we're going to see this, it's
Speaker 2: unlikely we're seeing. Explain to us that how we should
Speaker 2: handle all these unlikelyes. We're juggling every day. There'll be
Speaker 2: a new one tomorrow. I don't know what it's going
Speaker 2: to be.
Speaker 3: Well, if you look at the headlines, there was a
Speaker 3: new one about twelve hours ago at the press press
Speaker 3: conference between President Trump and.
Speaker 2: Now do with the unlikelies, we're drowning.
Speaker 3: And what we do is what we've done for a
Speaker 3: number of years now, and try and parse out the
Speaker 3: noise as much as possible and concentrate on the fact that,
Speaker 3: as you said moments ago, we're going to have close
Speaker 3: to double digit earnings growth and all those stocks are
Speaker 3: expensive valuation alone.
Speaker 5: It does not end the ball mark.
Speaker 2: Buried in your note Hymen doesn't get down to the
Speaker 2: bottom of the Julian Mmanual note it's just too long
Speaker 2: and too dense. You go right at share buybacks, explain
Speaker 2: to us, I mean forget about Apple, there's others share
Speaker 2: buybacks and Coopertino right.
Speaker 3: Absolutely, So when you think about buybacks and you think
Speaker 3: about this world we're living in of uncertainties and likelies
Speaker 3: and unlikelies, the question is, how do you manage an
Speaker 3: environment where, by definition, you're going to have greater volatility? Okay,
Speaker 3: and even if we didn't have this political environment, at
Speaker 3: these valuations, you're likely to have greater volatility. The answer
Speaker 3: is you want to own companies that can buy back
Speaker 3: their shifts, because that defines the concept of volatility managed on.
Speaker 2: A Wednesday in New York. The nights are good. Just
Speaker 2: the sun is setting later. Yes, I'm losing how that
Speaker 2: is like after five pm. We welcome all of you
Speaker 2: across nation on your communites. Good morning on Apple, Carblay,
Speaker 2: Good morning on Android, Auto, Google out with Earninge's Lisa
Speaker 2: nailed that. We'll talk about that here in a moment,
Speaker 2: and we say good morning on YouTube as well. Subscribe
Speaker 2: to Bloomberg Podcast. They mentioned podcasts three times in the
Speaker 2: Google bellt yester. They didn't mention us no, I kept
Speaker 2: I kept. Sorry, I sat there with a beverage of
Speaker 2: my choice. Imoy, come on, mentioned Blueberg's surveillance.
Speaker 4: Yeah, they didn't growing, Julie, how do you feel about
Speaker 4: valuation in this marketplace? I mean, you can make the
Speaker 4: argument that this is really rich market. Now if I
Speaker 4: pull out the mag seven maybe less so should I
Speaker 4: be concerned about that?
Speaker 5: You should be concerned about that?
Speaker 3: And actually, for us, virtually every conversation we have with
Speaker 3: clients basically starts with walk us through the parameters evaluation.
Speaker 3: And my concern with the evolution of the bull market
Speaker 3: is when that stops being question number one or two,
Speaker 3: then we're going to be concerned. But look, there's no
Speaker 3: getting around the concept of history, and we are not
Speaker 3: believers of the idea it's different this time.
Speaker 5: You can make a.
Speaker 3: Lot of cases for why it could be, but we
Speaker 3: are at, you know, the highest levels of valuation in
Speaker 3: the last number of decades.
Speaker 4: How important is the discussion around the Federal Reserve this
Speaker 4: year because there's a lot of questioning whether they even
Speaker 4: cut at all this year, and perhaps there's a rate
Speaker 4: hike some point of the year, So the Fed call
Speaker 4: seems a little less clear these.
Speaker 5: Days, which actually makes it less important.
Speaker 3: Okay, well so, so from our point of view, this
Speaker 3: is a do no harm type environment, and by do
Speaker 3: no harm that means no hikes. And we actually do
Speaker 3: not believe that. If you're Jay Powell and you know
Speaker 3: your term is off in twenty twenty six, the one thing.
Speaker 5: You've got to do is deliver the.
Speaker 3: Soft landing to the country, and sticky inflation will not
Speaker 3: be Jay Powell's problem in twenty twenty five or twenty six.
Speaker 5: It will be the administrations broum.
Speaker 2: You can't see this on radio, but on YouTube you
Speaker 2: can see a little birdie on my right shoulder whispering
Speaker 2: into my sony headphone. Chairman Imen me if if if
Speaker 2: Jerome goes down to be a governor, Paul, there's certain
Speaker 2: music to chairman of Heim running a FED press What
Speaker 2: would what would hymen FED press conference be?
Speaker 6: Like?
Speaker 2: You know, and don't ask a follow up.
Speaker 4: Question exactly, So, Julian, how long can how long can
Speaker 4: bull markets last?
Speaker 2: Here?
Speaker 4: I mean kind of give us a sense of where
Speaker 4: we are kind of in the history here.
Speaker 3: It's relatively young, okay by historical standards. Uh, you know,
Speaker 3: the the average bull market goes out, you know, four
Speaker 3: plus years, and we're really only starting year three right now.
Speaker 3: So from that perspective, and also in terms of the
Speaker 3: absolute gain, we're still really almost you know, basically mid range.
Speaker 4: But you had twenty three, twenty four, both of those
Speaker 4: years at s and P five hundred, uh give you
Speaker 4: more than twenty percent returns. How do you think about
Speaker 4: a year three in that scenario? So I mean three pete,
Speaker 4: I mean the you know, coach Riley has the patent
Speaker 4: on three P, but can we threepeat it?
Speaker 3: Why Coach Riley may not have the patent on threepeat?
Speaker 3: If Andy Reid brings home a win on Sunday, he's
Speaker 3: going to Kansas.
Speaker 4: It's a deal with the NFL.
Speaker 2: There you go, we got we got Fred, Thank you
Speaker 2: so much. He goes to breakfast between Chapel Hill and
Speaker 2: Duke like the how what is the distance? Eleven ten
Speaker 2: ten miles? Or so Fife waffle House is doing a
Speaker 2: surch charge and eggs at the she Whaff in Durham,
Speaker 2: North Carolina two seven seven one three. I mean, what
Speaker 2: does that hyman say about this inflation fere out there?
Speaker 2: Or do we actually have a quiescent disinflationary vector.
Speaker 3: Well, I can say this having lived many years in
Speaker 3: Atlanta and environs. It brings a tear to my eye
Speaker 3: to think about paying an incremental costed waffle se.
Speaker 5: Whaff very very good. Three AM visits.
Speaker 2: Say, you know, I've never been in a waffle house
Speaker 2: before midnight to play music down there, and there's the
Speaker 2: only thing that was opened. Yeh, but cracker bill, the
Speaker 2: burrel to crack shot.
Speaker 5: That shuts out.
Speaker 2: That's a family institution there. But I mean, that's a
Speaker 2: pernicious inflation that people fear.
Speaker 3: No question, and in all seriousness, let's let's step back
Speaker 3: and think about this. Which is why the geopolitical dynamics
Speaker 3: are so interesting and sort of unpredictable at this point,
Speaker 3: is because President Trump was elected in large part because
Speaker 3: of the American consumers disquiet with inflation. And this is inflation.
Speaker 2: One more question. The hallmark of Eddiman's work is a
Speaker 2: respect for engineering and technology. It's carried that for decades
Speaker 2: and decades. Does your shop believe in the effervescence the
Speaker 2: persistence of AI and Meg seven and big tech? You can't.
Speaker 2: You gotta own it, right, we.
Speaker 3: Do, no question about it. And again that goes back
Speaker 3: to Eds roots as an MIT grad. But from our perspective,
Speaker 3: what we've seen in the last couple of weeks with
Speaker 3: the evolution of deep seek is actually, if anything, going
Speaker 3: to accelerate adoption. And that's the key corporate America accelerating
Speaker 3: adoption of AI. We as consumers are already there the
Speaker 3: same way we were the Internet in the early nineties
Speaker 3: before it hit desktops in corporate America.
Speaker 2: Chairman, I can just see it.
Speaker 5: I mean, it just rings true.
Speaker 2: I mean, you know, can we start a roomor here
Speaker 2: right now? Good morning, mister Powell. Thank you for he
Speaker 2: uses as Bloomberg every day. I don't know if Ed
Speaker 2: wouldn't use be at the Eccles building with a sharpie
Speaker 2: in his head mark it up, PhD Papers, Julian Emmanuel,
Speaker 2: thank you so much working it evercore Isi.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am e'stern Listen on
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Speaker 1: watch us live on YouTube.
Speaker 2: Mona Mahajan on MEGS seven. It's got legs. AI as legs.
Speaker 7: It certainly has legs. It's a long term holding, but
Speaker 7: this year could be volatile, so we've already seen a
Speaker 7: bit of that. Keep in mind, this is not only
Speaker 7: a cohort that got a little bit of an extension
Speaker 7: on the valuation front, but now is also facing threats
Speaker 7: like competition from China and other players like tariffs as well.
Speaker 7: And you know, some of the retaliation we saw from China,
Speaker 7: for example on Apple already weighing on some of the
Speaker 7: mag seven as well. So keep in mind this is
Speaker 7: a year that we want to remain diversified across sectors,
Speaker 7: across asset classes, large cap and mid cap, growth and value.
Speaker 4: So what are you seeing just out of earnings because
Speaker 4: you know, one of the themes coming that twenty twenty
Speaker 4: five is we're not going to get a whole lot
Speaker 4: from the Fed this year, probably one maybe two rate
Speaker 4: cuts at best, So it really has to be earnings
Speaker 4: that have to deliver if this market's going to move higher.
Speaker 4: How do you guys think about that?
Speaker 7: Yeah, it's a great call out because S and P
Speaker 7: returns are really a combination of valuation expansion plus earnings growth.
Speaker 7: Valuation expansion, as we just highlighted, probably not going to
Speaker 7: contribute all that much maybe even a little bit of
Speaker 7: negative contribution in some sectors. So earnings growth will be
Speaker 7: the driver of returns. We continue to see ten to
Speaker 7: fifteen percent earnings growth this year. Of course, that is
Speaker 7: predicated on a consumer that continues to hold in there.
Speaker 7: Labor market will see on Friday that continues to remain
Speaker 7: resilient as well in the US economy. That you know,
Speaker 7: I looked at Atlanta GDP now three point nine percent.
Speaker 2: Well maybe with at the margin, do you sell MAG seven?
Speaker 2: I don't hear you saying that.
Speaker 7: Yeah, you know, we think you could do a little
Speaker 7: bit of rebalancing. If you know, if you're MAG seven
Speaker 7: and your tech has gotten an outsized way in your portfolio,
Speaker 7: you may want to rebalance that with the other sectors.
Speaker 7: But generally we're in the camp of complementing. We want
Speaker 7: to make sure it's me.
Speaker 2: You got to go to Wharton. What a god's thing
Speaker 2: is complimenting?
Speaker 7: Well, you know, if you owned all largely tech and
Speaker 7: AI in your portfolios, you actually did pretty well the
Speaker 7: last couple of years. We think the way you do
Speaker 7: well in twenty twenty five in the next couple of
Speaker 7: years is you have to own growth and value. So
Speaker 7: you want to make sure not only tech sectors, you
Speaker 7: have industrials in their financials, healthcare, you know, mid cap
Speaker 7: stocks as well, bonds.
Speaker 4: What do you do with tariffs? Is that even come
Speaker 4: into your calculation or anach safe? Boy, that's noise. I'm
Speaker 4: just not going to worry about it.
Speaker 5: Yeah.
Speaker 7: You know, Look, the tariff uncertainty has weiight on this market,
Speaker 7: no doubt. And we know the old adage markets don't
Speaker 7: like uncertainty, and this is a source of you know,
Speaker 7: will it happen, will it not happen. What I will
Speaker 7: say is there was a probably a growing fear over
Speaker 7: the weekend when we were thinking about twenty five percent
Speaker 7: tariffs on our biggest trading partners. Now that was walked
Speaker 7: back on Monday, and we did seem to view tariffs
Speaker 7: more as a negotiating tool after that. So we got
Speaker 7: some concessions from the border from our na bring you know,
Speaker 7: economies on the north and south, which I think provided
Speaker 7: a bit of relief for the markets and the broader
Speaker 7: economy as well.
Speaker 2: What do you here feel the emotion of Edward Jones
Speaker 2: clients across this nation.
Speaker 7: Yeah, and great call out by the way, Edward Jones
Speaker 7: now nine million households across the US. We are in
Speaker 7: every county except.
Speaker 5: One in Texas.
Speaker 7: We're trying to get that county. Yeah, we have yep,
Speaker 7: we are really have our eyes and ears on the
Speaker 7: average and the mood. You know, I will say there's
Speaker 7: parts of the country that are feeling a little more optimistic.
Speaker 7: This is an economy, as we've talked about, the labor
Speaker 7: market is held up. The economy is doing okay. Inflation
Speaker 7: is a concern, and that is still a concern. And
Speaker 7: you know it's tough because we went from a nine
Speaker 7: percent inflation rate. We are back to you know, two
Speaker 7: point nine percent on headline CPI, but that's still year
Speaker 7: over your growth. Your prices are still going up, albeit
Speaker 7: at a slower pace of growth. And so this is
Speaker 7: probably the dichotomy between lower income and that mid and
Speaker 7: upper income household. Mid and upper income they have participated
Speaker 7: in growing stock market, even their houses are starting to
Speaker 7: show some signs of life as well house prices and
Speaker 7: so there yeah, un for the mortgage hopefully, and you
Speaker 7: know this is they're feeling okay with their wealth creation
Speaker 7: that's happened over the last couple of years. So we
Speaker 7: want to be mindful of both ends of the spectrum,
Speaker 7: but economy is really driven by that mid and upper
Speaker 7: income consumer fixed income.
Speaker 5: What do we do here?
Speaker 4: I mean, again, to your treasury four point two percent,
Speaker 4: that's not a bad way to make a living. Do
Speaker 4: I take some credit risks or.
Speaker 5: How do you think of that?
Speaker 3: Yeah?
Speaker 7: You know, so within your investment grade portfolio, we continue
Speaker 7: to feel like you could add a little bit of
Speaker 7: duration here, even at four and a half percent slightly
Speaker 7: under on a tenure that is still at the probably
Speaker 7: towards the high end of a ten year treasury yield range.
Speaker 7: And we do think, you know, FED is probably on
Speaker 7: hold for now, but could we get one, possibly two
Speaker 7: rate cuts during the reindeer of the cycle. Yes, and
Speaker 7: so we do think an investment grade bond, you know,
Speaker 7: for ten years, you can lock in four and a
Speaker 7: half percent. If you're close to retirement and you're looking
Speaker 7: at maybe for six to eight percent return, that's this
Speaker 7: is not a bad part of your portfolio. So we
Speaker 7: think it's a good thing for balanced investors to have yield.
Speaker 5: Once again, how about alternatives real quickly?
Speaker 4: Yeah, for Edward Jones client, did they think.
Speaker 8: About alternative investments, private credit, private.
Speaker 7: Ag Yeah, you know, for our average client, we can
Speaker 7: get a lot done with this equities and bonds. You know,
Speaker 7: we know the old adage. Yes, you know, I totally
Speaker 7: agree with invest early invest often some of the high
Speaker 7: net worth clients though, starting to look at parts of diversification.
Speaker 2: I've never said this, I've never thought this. Edward Jones
Speaker 2: a bit doog own bitcoin.
Speaker 7: Very we think very speculative. Still, you know, we like
Speaker 7: assets where we can model out cash flow, so selectors.
Speaker 7: We want to be able to Yeah, cash flow's discount
Speaker 7: and we can't do that yet, So not there yet.
Speaker 2: Oh, come on, there's no wonderling.
Speaker 7: And you know there's been other ways to make a
Speaker 7: good living and return of less.
Speaker 2: You know, we should do a joint interview, a one
Speaker 2: hour interview Mona and the wonderful talent from Robinhood, have
Speaker 2: Robinhood and Edward Jones together. Yeah, sure, that would be
Speaker 2: like lights out.
Speaker 5: Yeah, Mona, this has been hugely valuable.
Speaker 2: Don't be a stranger, Mona.
Speaker 5: You guys we're the.
Speaker 2: Senior investment strategist, Edward Jones, iconic across America.
Speaker 1: Can't say look, this is the Bloomberg Surveillance podcast. Listen
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Speaker 2: Joining us now pulling the lucky card moving to London
Speaker 2: this week, Amanda Rabella joins US. She spent a huge
Speaker 2: value add for US on ETFs. We thrilled with US
Speaker 2: extra ecor sales in all, Let's start with the why
Speaker 2: why are you moving to London? I mean, is it
Speaker 2: just like it's time to move with all the cacophony
Speaker 2: going on in America.
Speaker 9: I think the US is still a fantastic country. There's
Speaker 9: so much going for it. Obviously we've had a new
Speaker 9: president coming in, but I think ultimately the long term
Speaker 9: benefits of being in the US are still there. Just
Speaker 9: you know, my gig was to come here and build
Speaker 9: out our US business. We're the second largest ETF provider
Speaker 9: on the usage side. We thought that there may be
Speaker 9: a few things that some of our global investors can
Speaker 9: benefit from with US bringing expertise to the US. Obviously
Speaker 9: a very crowded market, but we've been able to get
Speaker 9: some traction with some expertise in thematic.
Speaker 1: Sure, this is moving back, it's moving back, moving back.
Speaker 5: I got it, I got it.
Speaker 3: Okay, thematics, yes, exactly.
Speaker 4: So what give us the latest? What are you seeing
Speaker 4: in the ETF business?
Speaker 2: Where are the funds?
Speaker 4: Flog is again, Tom, I've talked about this all the time.
Speaker 4: We grew up in a world of mutual funds and
Speaker 4: that's wh all the money was going. Now it's ETFs
Speaker 4: has been an extraordinary world story.
Speaker 5: So you're in a great business. It's better than equities
Speaker 5: in Dallas.
Speaker 4: But talk to us about ETF.
Speaker 9: Yeah, so it's fantastic. So at the end of last year,
Speaker 9: we crossed the ten trillion dollar mark globally in terms
Speaker 9: of ETF au M, and then just in terms of
Speaker 9: flows across the one trillion dollar mark. So just think
Speaker 9: about that, right, that's basically as big as the you know,
Speaker 9: volumes of FX on a daily basis globally. Right when
Speaker 9: I think about when I was at an unknowned competitor,
Speaker 9: but you can probably guess who. I remember. We had
Speaker 9: a celebration for our am crossing the one trillion dollar mark,
Speaker 9: and now you know, we've got many participants like that
Speaker 9: fee cuts. Now we've got the second wave of new pricing.
Speaker 2: So does the stable four or one K money migrate
Speaker 2: over to ETFs? I think that's something three years out.
Speaker 9: We're all waiting for this, and I think one component
Speaker 9: of that is going to be very much about all
Speaker 9: of us. A lot of the major asset managers have
Speaker 9: now filed for ETF share classes with the SEC, So
Speaker 9: there's around forty five asset managers who are now hoping
Speaker 9: that the SEC will allow for share class issuance of
Speaker 9: mutual funds. If you then have this opportunity, you can
Speaker 9: have the same exposures in your brokerage account as in
Speaker 9: your four oh one K. I think that the four
Speaker 9: to one K mechanism is still going to be based
Speaker 9: on daily pricing. But when you think about all of
Speaker 9: the different ETFs you have versus all of the mutual funds.
Speaker 2: You have yet, are you going to see lower fees?
Speaker 2: Yeah to Lisa Mateo in her two oh one K
Speaker 2: with a pool of ets versus a pool of mutual funds.
Speaker 9: We did see some feed cuts at the beginning of
Speaker 9: this week which were on mutual funds. Vanguard exactly seven points.
Speaker 2: Well, Vanguard is not next to mansion house.
Speaker 4: And seven basis points.
Speaker 9: Wow, incredible, And that was the average, so there were
Speaker 9: some even lower than that indeed, But I think all
Speaker 9: of us are thinking about this. There's economies of scale
Speaker 9: that have come with the fact that ETFs have just
Speaker 9: like run away and we have like fixed costs which
Speaker 9: can then be absorbed by a bigger au M. It
Speaker 9: makes sense to be passing this on to end investors.
Speaker 4: So revolution is and it makes a ton of sense
Speaker 4: from a lot of the definitely want me air car
Speaker 4: Tunis who does that stuff?
Speaker 5: From whom Yeah he's won.
Speaker 4: Us over, no, no, no question.
Speaker 8: Where are the funds going?
Speaker 4: Are they just going into the s and P five
Speaker 4: hundred ETF or they go in more fun places?
Speaker 3: Yeah.
Speaker 9: So I think the volatility that we've had for the
Speaker 9: past couple of weeks has been very interesting for all
Speaker 9: of us. Definitely kept us on our toes. We had
Speaker 9: seen a lot of money last year going into Nasdaq
Speaker 9: in particular, but those flows have lightened off. Not everyone
Speaker 9: has seen buying opportunities on the dip. We've seen a
Speaker 9: great rotation into a little bit more flow on the
Speaker 9: European equity side, and that's great for DWSX trackers, because
Speaker 9: that's one of our core pillars and how we're helping investors.
Speaker 9: If you look at European equities and international equitiesier to date,
Speaker 9: they're actually outperforming US equities. People often think they're a dog, right,
Speaker 9: but there's there's a great comeback, and especially when you
Speaker 9: look at it on a dollar hedge perspective, it's really
Speaker 9: making sense now.
Speaker 2: I mean, you're so close to Saint Paul's where you're moving.
Speaker 2: You can do, you can do. We're doing playing Mary
Speaker 2: Poppins today. You can do the feed the bird's top and.
Speaker 9: I've addressed then say in a work.
Speaker 2: Or go down to Covent Garden. But Amanda, what's so
Speaker 2: important here is everyone listening knows nobody can get a
Speaker 2: place in Paris, nobody can get a place in London.
Speaker 2: What's when your experience of trying to find a place
Speaker 2: to put your head down at night.
Speaker 9: I think that the market that I left is definitely
Speaker 9: different from the market that I'm now coming back to.
Speaker 9: We have still a lot of people living in the UK,
Speaker 9: we still have net immigration. You know, the new government
Speaker 9: is very keen to be thinking about further house building
Speaker 9: and so forth. But there's already every time I go
Speaker 9: back to London, there's skyscrapers everywhere, not just office space,
Speaker 9: but also a lot of residential as well. And it's
Speaker 9: all over the country, not just London.
Speaker 2: Yeah, it's there's like this. You read the British presence
Speaker 2: Labor and Tories in Nigel Farage and all is not
Speaker 2: doom and gloom but angst.
Speaker 5: Yeah.
Speaker 2: Am I right? It's booming? Is that a safe statement?
Speaker 9: And I think maybe I don't want to get too
Speaker 9: political about it, but I think that's the you know,
Speaker 9: view we have in the UK is that immigration is
Speaker 9: still in that positive for us. There's still workforces that
Speaker 9: we need for certain parts of services. You know, we
Speaker 9: even with Brexit, we still have a net migration from
Speaker 9: the EU as well.
Speaker 2: So okay, well we got we got Bloomberg Daybreak Europe.
Speaker 2: You gotta you gotta become a nodging acquaintance. You can
Speaker 2: stagger from DWS over to over to Queen Victoria Street.
Speaker 2: It's an easy art. But you know, don't forget Bloomberg
Speaker 2: Daybreak London. But we'd still like to speak to you
Speaker 2: a lot of nice Oh it's killing. They do a podcast, folks,
Speaker 2: fifteen minutes after the show starts and the numbers are
Speaker 2: on it. It's not your Rogan, but it's Joe Rogan
Speaker 2: Ish Amanda Rabell. Thank you so much, greatly appreciate it.
Speaker 1: Today this is the Bloomberg Surveillance Podcast. Listen live each
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Speaker 2: We now turned to Tel Aviv, where the qualities of
Speaker 2: Ethan Braun are driving all of our coverage within the
Speaker 2: levant Ethan. I'm not going to mince words here. When
Speaker 2: you were at Wesleyan, you were sheltered from the violence
Speaker 2: of bombing. We didn't have social media, we didn't have
Speaker 2: the immediacy of the imagery we've seen in Gaza. I
Speaker 2: was the same way of a vintage older Now we
Speaker 2: have the immediacy where I can't even look at coverage
Speaker 2: of Gaza it's so violent. How did you respond given
Speaker 2: the last two years of Gaza? Leveling to the President's
Speaker 2: comments yesterday at the White House.
Speaker 8: A great question, Tom, but I'm not going to make
Speaker 8: it personal.
Speaker 6: I think that what I can reflect is how the
Speaker 6: world responded, and certainly nothing less than shock. I would
Speaker 6: say that in Israel there was a kind of bewildered
Speaker 6: and amazed and bemused embrace. Because anything that might push
Speaker 6: Hamas and Palestinians who oppose Israel away from its border
Speaker 6: to be replaced by Americans and American soldiers and businesses. Wow,
Speaker 6: that is something the Israelis are happy about. Pretty much
Speaker 6: everybody else is horrified.
Speaker 2: There was a nineteen forty eight Palestine war. Among you,
Speaker 2: any other sets of violences from Beirut on down. Stay
Speaker 2: at Cairo, mister Trump, meeting with the leadership of Egypt
Speaker 2: here in the coming weeks and with Jordan. I should
Speaker 2: mention as well, Ethan, this is so important. Where did
Speaker 2: two point one four to two million Palestinians go?
Speaker 6: So, I mean, the President says they're going to go
Speaker 6: to Jordan and to Egypt and perhaps another half dozen
Speaker 6: other places. If we look at Jordan, a country which
Speaker 6: is more than half Palestinian to begin with them, that
Speaker 6: is also a playing host to a million refue Jews
Speaker 6: from Iraq and Syria, and which has its own internal
Speaker 6: political challenges from the Muslim brotherhood this Hashemite monarchy is
Speaker 6: very very afraid, and the last thing it was is
Speaker 6: hundreds of thousands of Palestinians with links to Hamas coming
Speaker 6: into its borders Egypt the same I mean tens and
Speaker 6: tens of millions of people in Egypt. There the Sisi
Speaker 6: government is fighting against the Muslim brotherhood of which Hamas
Speaker 6: is an offshoot, and they're fighting Isis in the Sinai.
Speaker 6: The last thing they want is hundreds of thousands of poor,
Speaker 6: homeless Palestinians coming into there.
Speaker 8: So I don't know Ethan.
Speaker 4: Has there been a response from Iran yet?
Speaker 8: I believe so, Paul.
Speaker 6: I believe that Iran has said this is nuts, and
Speaker 6: you know, it's a sign of what's wrong with America.
Speaker 6: I believe I did see something from the Iranian foreign minister.
Speaker 2: Yes.
Speaker 4: So is there any sense within Israel as to a
Speaker 4: possible next step here? I'm not even sure where we
Speaker 4: go from this pronouncement from the President yesterday.
Speaker 8: It's very very difficult for me to answer that.
Speaker 6: First of all, the decision making apparatus is in Washington
Speaker 6: right now and they're just waking up, So I don't
Speaker 6: know the answer to it.
Speaker 8: But I mean generally in this country. It's like whoa, whoa.
Speaker 6: You know, no Israeli would have ever even dared propose
Speaker 6: this to President Trump, that the United States come in,
Speaker 6: bring its troops and it's people into Gaza to protect Israel.
Speaker 6: And he has made the suggestion, so they don't know
Speaker 6: what to do. I can tell you that the officials
Speaker 6: that I'm talking to are in touch with those in
Speaker 6: Washington are saying, we've never had a more amazing meeting
Speaker 6: in the White House in the history of Israel.
Speaker 2: Right, this hasn't come up yet. And Ethan, you're so
Speaker 2: good at this, I can take the luxury of bringing
Speaker 2: it up with you. I look at, say Robert Kaplan
Speaker 2: in my book of the Year two years ago, is
Speaker 2: wonderful stretch from Morocco over to the East, getting to Persia, etc.
Speaker 2: And the loom of time and Ethan Bryner tendency there
Speaker 2: is is Turkey air Towan looking down from the north
Speaker 2: trying to husband control over this region. How does mister
Speaker 2: Airdwan respond to ad hoc trump isms.
Speaker 8: Well, I don't know how he's going to but you're
Speaker 8: absolutely right that it isn't a great opportunity for.
Speaker 6: Him to show a sort of Muslim solidarity and to
Speaker 6: show that this Zionist American imperialist approach is absolutely the
Speaker 6: last thing we in the region want to need, and
Speaker 6: it's going to help him take over Siria if that's
Speaker 6: on his agenda, which it appears to be. So it's a
Speaker 6: very legitimate question.
Speaker 2: Paul's got some more. Let me sneak one in here quickly.
Speaker 2: Here is Netanyah who electable in Israel? Like if there
Speaker 2: was an election right now, would net yah who win?
Speaker 2: Going away?
Speaker 6: So you know, Natanya who is the Trump of Israel?
Speaker 6: Meaning who could have possibly imagined such political power?
Speaker 8: And the answer in my view is yes.
Speaker 6: And the meeting yesterday and what President Trump offered him
Speaker 6: is only going to consolidate his political standing in this country.
Speaker 8: Yes, I believe he is Ethan.
Speaker 4: Can you give us a sense of what the situation
Speaker 4: is on the ground in Gaza today? Where are they
Speaker 4: in that Ceaspire process.
Speaker 8: Well, we're two weeks into it.
Speaker 6: They're supposedly starting a discussion about the next phase. But
Speaker 6: of course what the President just said kind of throws
Speaker 6: everything into the air. Meanwhile, on the ground, hundreds of
Speaker 6: thousands of people are returning to nothing to their homes
Speaker 6: that are you know, hanging rebar and no water, no sewage,
Speaker 6: and they don't know what to do. And many of
Speaker 6: them are going back to the humanitarian ARAA and many
Speaker 6: of them are.
Speaker 8: Saying, get me out of here. So you know, that
Speaker 8: is one.
Speaker 6: Thing that needs to be said here that ideologically Palestinians
Speaker 6: the audit we moved, but personally and practically plenty of
Speaker 6: them would go if there were a place to go
Speaker 6: because their homes are unfortunately a construction zone.
Speaker 2: It's in one final quest question we brought up, and
Speaker 2: this is in March of last year. It's like literally
Speaker 2: twelve months ago, the successful civil engineering project known as
Speaker 2: the Gaza Floating Peer. How do we actually, like, where
Speaker 2: do we put the concrete of a destroyed gaza? Forgetting
Speaker 2: about the humanitarian issue. I mean, we couldn't even build
Speaker 2: a dock off gaza, let alone get rid of a
Speaker 2: two million people body of concrete.
Speaker 6: Tom, I'm going to take that as a rhetorical question
Speaker 6: because I'm not an engineer.
Speaker 8: I hear you, the floating pier was a disaster.
Speaker 6: I mean, look that said, if there were a decision
Speaker 6: to move everybody out and to rebuild the place. I'm
Speaker 6: assuming American companies would find a way to move all
Speaker 6: the rubble out. But I mean that's kind of question
Speaker 6: number seventeen, right, The first sixteen are unanswerable.
Speaker 4: So what are next steps? Just maybe a little bit
Speaker 4: of from what we heard from President Trump, you say,
Speaker 4: what are next steps in Gaza between Israel and Hamas.
Speaker 6: Look, in theory, there are working groups that are going
Speaker 6: to Doha tomorrow to sort of work through the next phase,
Speaker 6: which is more hostage releases, more prisoner releases, and so on.
Speaker 6: Those things are pretty shaky. Israelis are quite shaken up
Speaker 6: by the release of many, many people who've killed a
Speaker 6: lot of Israelis, and they are on the other hand,
Speaker 6: of course, embracing the hostages coming home. But it's in
Speaker 6: theory that's the next phase. And I think that one
Speaker 6: of the things that Trump may have been doing is
Speaker 6: this kind of here's an extreme notion in order to
Speaker 6: get all the hostages out and to get the Israeli
Speaker 6: government to agree to a true end of war.
Speaker 2: That may also be what's going on in exhausting time.
Speaker 2: Ethan Browner, thank you so much for your leadership here.
Speaker 2: Our coverage across the levon from Beirut, down to Tel
Speaker 2: Aviv and on down to Cairo as well. Again the
Speaker 2: President meeting with the leaderships of Jordan and Egypt here
Speaker 2: in the coming weeks as well. After this stunning session
Speaker 2: with Israel, in the news of the last twenty four hours.
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