WEBVTT - Chipmaker Rout Deepens Plunge From Record 0:00:02.480 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.800 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.960 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.320 --> 0:00:25.640 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:26.920 us live on YouTube. 0:00:27.120 --> 0:00:30.960 Russ Mayfield with us right now and vest strategists Bared Ross. 0:00:31.000 --> 0:00:34.560 I love your note where you say, Okay, they're selling this, 0:00:34.800 --> 0:00:37.400 but they're not running from the market. Describe. 0:00:38.680 --> 0:00:41.280 Yeah, So the S and P is within a percent 0:00:41.479 --> 0:00:43.839 of the all time high, and the momentum index is 0:00:43.880 --> 0:00:46.840 down some twenty five percent. So you've had this big 0:00:46.920 --> 0:00:51.000 rotation out of the darlings of the first half, and 0:00:51.240 --> 0:00:53.040 there's a lot there to pick up the slack. You know, 0:00:53.120 --> 0:00:55.240 equal weights in you an all time high, small caps 0:00:55.280 --> 0:00:57.480 in you an all time high. And it's you know, 0:00:57.560 --> 0:01:01.480 some defensives and that's to be expected. Healthcare utilities catching 0:01:01.520 --> 0:01:04.399 a bid, but financials industrial is doing well. You don't 0:01:04.440 --> 0:01:07.360 see that if it's a you know, investors fleeing the 0:01:07.360 --> 0:01:10.479 asset class because they're worried more of a rotation, which 0:01:10.520 --> 0:01:12.479 you know, I think is healthy, So we'll take it. 0:01:12.480 --> 0:01:15.160 It's healthy, and it's not a correction, is it. I mean, 0:01:15.200 --> 0:01:18.640 we're just simply on a blended basis. There's a lot 0:01:18.680 --> 0:01:22.319 of carnage out there, but we're nowhere near like quote 0:01:22.400 --> 0:01:26.119 unquote a correction. No, not even close. 0:01:26.160 --> 0:01:28.200 I mean the one thing you could worry about is, 0:01:28.760 --> 0:01:31.319 you know, where, where's the leverage in the system, and 0:01:31.400 --> 0:01:35.280 if there's enough of a momentum unwind, do leverage players 0:01:35.480 --> 0:01:39.039 you know, have to start selling other things, you know, 0:01:39.080 --> 0:01:41.000 to meet margin calls or whatever it is. So maybe 0:01:41.000 --> 0:01:44.760 there's some technical pressure down the pipe. But again, the 0:01:44.800 --> 0:01:46.640 indexes are within a percent or two of an all 0:01:46.680 --> 0:01:48.520 time high. I mean they'll be down a little bit today. 0:01:48.560 --> 0:01:53.960 But yeah, correction, not even close. Rotation, healthy, consolidation, whatever 0:01:53.960 --> 0:01:56.600 you want to call it, it's it's not a reason 0:01:56.640 --> 0:01:58.120 to get to get scared of things here. 0:01:58.280 --> 0:01:58.760 Well we're els. 0:01:58.800 --> 0:02:00.800 Let's talk about you know, rotation, right, I mean, let's 0:02:00.800 --> 0:02:03.240 talk about those factors that do drive the equity market, 0:02:03.240 --> 0:02:07.120 lowvall value growth. You tell me the second half of 0:02:07.160 --> 0:02:09.600 this year, which of those factors do you think do 0:02:09.639 --> 0:02:10.720 you expect to do the best? 0:02:12.440 --> 0:02:15.839 I think value could catch a bid, right, I think 0:02:15.880 --> 0:02:19.080 financial is industrials, some of those classic value stocks, energy 0:02:19.160 --> 0:02:21.160 is obviously going to move with oil, but that's been 0:02:21.200 --> 0:02:21.760 good lately. 0:02:22.440 --> 0:02:22.680 To me. 0:02:22.800 --> 0:02:26.440 The strength or the robustness of that move depends on 0:02:26.760 --> 0:02:28.919 what happens in Iran. If we get yields down and 0:02:29.000 --> 0:02:32.680 oil down, I think value has legs. If we don't, 0:02:32.800 --> 0:02:34.280 you know, it's more of a mixed bag. 0:02:34.440 --> 0:02:36.920 Okay for us, We've all got experience here. Henry's in 0:02:36.960 --> 0:02:41.320 the studio today, Rocket, he listens every morning. Henry's ten. 0:02:41.960 --> 0:02:45.880 For the kids out there, Ross, how do you begin 0:02:45.919 --> 0:02:49.600 to learn about your game with all these different narratives 0:02:49.639 --> 0:02:53.160 going on? What's your advice to Henry about starting an 0:02:53.200 --> 0:02:54.160 investment account? 0:02:55.560 --> 0:02:58.760 Well, I would say get started now, Henry. The best 0:02:58.760 --> 0:03:01.480 time to buy stocks was ten years ago. The next 0:03:01.560 --> 0:03:03.600 best time is today. I think this is a perfect 0:03:03.600 --> 0:03:05.240 time to learn about stocks because we're about to enter 0:03:05.280 --> 0:03:08.519 an earning season where the thing that really drives stocks 0:03:08.560 --> 0:03:10.760 over the long term takes center stage. A lot of times, 0:03:10.800 --> 0:03:13.400 it's easy to forget what the main driver of stock 0:03:13.440 --> 0:03:16.160 prices is. And we're about to see a great quarter 0:03:16.200 --> 0:03:18.360 of earnings. So Henry, pay attention to what these companies 0:03:18.360 --> 0:03:19.960 are saying. That's the house, that's the game. 0:03:20.040 --> 0:03:23.240 Yeah, I'm read now. You know, justin Bear's great, great 0:03:23.280 --> 0:03:27.200 book and Damien, there's always an excuse to say no. 0:03:27.480 --> 0:03:29.200 Right, well, I mean there is always an excuse to 0:03:29.200 --> 0:03:30.720 say now. I think look, I think you're making a 0:03:30.919 --> 0:03:32.919 good point here, Ross about position sizing, or at least 0:03:32.919 --> 0:03:34.600 that's the way I'm reading what you're saying, right, I mean, 0:03:34.639 --> 0:03:36.520 you can take risk in this market, but it's about 0:03:36.680 --> 0:03:39.520 you know, it's about how you position within the broader portfolio. 0:03:39.640 --> 0:03:42.520 And you know, instead of getting defensive outright and buying 0:03:42.520 --> 0:03:45.520 you know, I don't know what are defensive Stucker, staples, utilities, 0:03:45.600 --> 0:03:48.360 energy to a lesser extent, you know, maybe you just 0:03:48.440 --> 0:03:50.920 have to kind of, you know, take a little bit 0:03:50.920 --> 0:03:51.560 off the table here. 0:03:52.280 --> 0:03:54.000 Yeah, And one of the things we've been talking about 0:03:54.000 --> 0:03:55.840 to clients is, you know, there's a lot of passive 0:03:55.840 --> 0:03:58.600 investors out there who might not know how concentrated their 0:03:58.640 --> 0:04:02.160 portfolios have gotten, especially in the AI trade, and so 0:04:02.720 --> 0:04:05.280 it's a good time to be proactive about looking to 0:04:05.320 --> 0:04:09.280 those other sectors. It's not necessarily a repudiation of AI trade, 0:04:09.280 --> 0:04:12.680 but more just as you mentioned, kind of risk management, diversification, 0:04:12.840 --> 0:04:14.960 and I think a lot of people don't know how 0:04:15.000 --> 0:04:17.920 concentrated the SMP is even if it's you know, talking 0:04:17.960 --> 0:04:18.680 about all the time. 0:04:19.080 --> 0:04:21.240 That's the correct I mean even internationally, right, you can 0:04:21.240 --> 0:04:22.960 make an argument like what we're seeing in China with 0:04:23.000 --> 0:04:25.240 their stock market is heavily tied to the AI trade 0:04:25.880 --> 0:04:26.560 one hundred percent. 0:04:26.640 --> 0:04:30.000 I mean, the EM indexes now are so weighted in China, 0:04:30.120 --> 0:04:33.520 Korea and Taiwan that they're basically AI indexes. They're not 0:04:33.720 --> 0:04:38.039 plays on you know, demographic growth or stronger economic growth 0:04:38.120 --> 0:04:40.880 in the emerging market world. So you just have to 0:04:40.880 --> 0:04:43.200 know what you own and then like you said, those 0:04:43.240 --> 0:04:46.479 positions accordingly and kind of just play the game. You know, 0:04:46.560 --> 0:04:48.200 risk management is important here. 0:04:48.040 --> 0:04:50.240 With Bart Russ Mayfield with this is when you thank 0:04:50.279 --> 0:04:54.039 you so much. Stay with us. More from Bloomberg Surveillance 0:04:54.120 --> 0:04:55.440 coming up after this. 0:05:02.680 --> 0:05:06.279 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:05:06.320 --> 0:05:09.479 weekday afternoons from seven to ten am Eastern Listen on 0:05:09.560 --> 0:05:13.240 Applecarplay and Android Auto with the Bloomberg Business app, or 0:05:13.400 --> 0:05:14.839 watch us live on YouTube. 0:05:15.279 --> 0:05:18.080 Last time, Tiffany Wilding was on for like a minute 0:05:18.080 --> 0:05:21.480 and twelve seconds. Going along here today for the Pacific 0:05:21.520 --> 0:05:25.279 Investment Management Company. They're economists for all of North America, 0:05:25.320 --> 0:05:28.640 Tiffany Wilding. Tiffany, what are you thinking about for the 0:05:28.720 --> 0:05:33.159 PIMCO manager brief on Monday morning. What's the thing that 0:05:33.360 --> 0:05:34.440 matters right now? 0:05:37.839 --> 0:05:38.760 You know, Well, I. 0:05:38.800 --> 0:05:42.720 Think we're clearly focused on on how Federal Reserve official 0:05:42.839 --> 0:05:46.880 communication is evolving. You know. Obviously, we're also very close 0:05:47.120 --> 0:05:50.880 focused on on the data. And I think there's an interesting, 0:05:51.320 --> 0:05:53.320 you know, sort of bifurcation that's happened because, on the 0:05:53.360 --> 0:05:56.760 one hand, you know, Federal Reserve officials you know, appear 0:05:56.920 --> 0:06:01.000 to be setting the markets up for potential rate hikes 0:06:01.400 --> 0:06:03.400 if inflation doesn't start. 0:06:03.160 --> 0:06:04.480 To moderate here, you know. 0:06:04.680 --> 0:06:06.400 On the other hand, we got good news on the 0:06:06.400 --> 0:06:09.080 inflation data this week, both the CPI and the pp 0:06:09.200 --> 0:06:13.279 I coming in under expectations, you know, in our own 0:06:13.320 --> 0:06:16.400 forecast is is that you will see some moderation in 0:06:16.600 --> 0:06:19.680 core inflation, which is the important one for the Fed, 0:06:20.040 --> 0:06:21.800 you know. But I've been saying this, you know, even 0:06:21.800 --> 0:06:23.960 on this program with you, Tom, that you have to 0:06:24.040 --> 0:06:26.640 keep in mind that headline inflation, you know, and thus 0:06:26.680 --> 0:06:29.800 we're going back to pre war levels on commodity prices. 0:06:30.000 --> 0:06:32.440 Headline inflation is actually likely going to dip below two 0:06:32.480 --> 0:06:34.840 percent next year. You know, so all of that sort 0:06:34.880 --> 0:06:36.599 of suggests to us that we have a fed on hold. 0:06:36.600 --> 0:06:39.919 But nevertheless, officials, you know, are certainly preparing the markets 0:06:39.920 --> 0:06:41.479 for a couple of potential. 0:06:41.400 --> 0:06:44.160 Okay, so the first derivative, inflation's coming down. There's a 0:06:44.200 --> 0:06:46.679 lot of people agree with what Tiffany just said. There 0:06:47.320 --> 0:06:50.600 are we going to see lower prices or dare I 0:06:50.720 --> 0:06:54.640 say even are we going to see level prices as 0:06:54.680 --> 0:06:55.960 we go along in time? 0:06:57.960 --> 0:07:01.680 Well, we've already seen the national app average retail gasoline 0:07:01.680 --> 0:07:04.800 price come down off of its recent peak. Now over 0:07:04.839 --> 0:07:08.320 the last few days it's it's up again as the 0:07:08.320 --> 0:07:11.320 Middle East conflict as has kind of flared up, but 0:07:11.400 --> 0:07:14.840 we are down off of the wartime peak levels. You know, 0:07:14.840 --> 0:07:17.880 we're also seeing some various food prices that are actually falling. 0:07:18.680 --> 0:07:21.600 But in general, you know, when we say inflation is 0:07:21.640 --> 0:07:25.160 coming down, you know that is the price change. And 0:07:25.240 --> 0:07:27.720 so you know, we're not expecting overall inflation in the 0:07:27.800 --> 0:07:30.360 United States to you know, to dip in a negative 0:07:30.440 --> 0:07:34.200 territory go into deflation. But we do think moderating inflation 0:07:34.360 --> 0:07:36.280 is a completely reasonable outlook to have. 0:07:36.480 --> 0:07:38.600 I mean, Tiffany gets everything, you know, she's at a 0:07:38.640 --> 0:07:41.280 restaurant seven days a week. What's the grocery shop? And 0:07:41.400 --> 0:07:42.920 look like at the satsau. 0:07:42.560 --> 0:07:44.760 Rouse, Tiffany, I have to ask you this. 0:07:44.800 --> 0:07:47.400 You know, obviously you were watching I was watching Kevin 0:07:47.400 --> 0:07:50.320 Warsh's testimony to Congress this week, and you know, some 0:07:50.360 --> 0:07:52.760 of the questionings, specifically the questioning I saw from Senator 0:07:52.840 --> 0:07:56.800 Warren regarding one hundred million dollar payments, there's some craziness. 0:07:56.840 --> 0:07:58.920 I mean, is there any validitity to that? I mean, 0:07:59.520 --> 0:08:02.240 she just kind of muck raking. I mean, what's going on, 0:08:02.400 --> 0:08:04.640 you know, underneath the surface here in terms of you know, 0:08:05.200 --> 0:08:10.840 the Senate's real acceptance of the new newfait Chairman, Well, 0:08:10.880 --> 0:08:11.120 you know. 0:08:11.040 --> 0:08:16.560 I mean certainly, you know, I mean Senator Warren, you know, 0:08:16.640 --> 0:08:19.600 will will have will have her peace to say. You know, 0:08:19.640 --> 0:08:21.560 I think what we're and certainly there could be some 0:08:21.600 --> 0:08:22.920 more that comes out on that, but I think what 0:08:22.960 --> 0:08:25.880 we're focused on at least is you know, what what 0:08:25.960 --> 0:08:30.120 sort of signals is chairwah sending in terms of how 0:08:30.160 --> 0:08:32.440 he's going to conduct monetary policy? You know, And I 0:08:32.440 --> 0:08:35.800 think the biggest emphasis that's come out since he's become chair, 0:08:36.480 --> 0:08:40.040 you know, is that he's very focused on price stability, 0:08:40.559 --> 0:08:42.440 you know, and I think that's very consistent with the 0:08:42.480 --> 0:08:45.280 other communication that we've seen from other officials to say 0:08:45.360 --> 0:08:48.080 that if you're not getting inflation that's moderating, you know 0:08:48.080 --> 0:08:51.120 that the Federal Reserve is is prepared to act, you know, 0:08:51.120 --> 0:08:52.720 and I think that, you know, this is a good 0:08:52.720 --> 0:08:55.640 focus to have, you know, in terms of the markets, 0:08:55.920 --> 0:08:59.720 you know, anchoring longer term inflation expectations are ensuring that 0:08:59.760 --> 0:09:03.240 they're anchored, you know, with this commitment to act. If 0:09:03.280 --> 0:09:07.600 inflation you know, doesn't moderate as we all expect, should 0:09:07.600 --> 0:09:10.120 actually keep longer dated interest rates anchored, right because you 0:09:10.160 --> 0:09:13.600 don't have inflation risk premiums that are getting priced into 0:09:13.640 --> 0:09:15.160 the long end of the interest rate curve. 0:09:15.679 --> 0:09:17.520 So so everything that we've heard. 0:09:17.280 --> 0:09:20.640 From Warsh in terms of his commitment to price stability, 0:09:21.080 --> 0:09:23.240 we actually think is a good thing for the bond market. 0:09:23.880 --> 0:09:25.480 You know. Now, of course, you know, there will be 0:09:25.600 --> 0:09:28.000 other questions that senators have. We'll continue to watch that 0:09:28.040 --> 0:09:28.400 as well. 0:09:28.480 --> 0:09:30.560 And Tiffany, what about the size of the Fed's balance sheet? 0:09:30.600 --> 0:09:32.560 I mean, I know we didn't really get into the 0:09:32.600 --> 0:09:34.880 thick of it during the testimony, but you know, did 0:09:34.920 --> 0:09:36.880 you get any takeaways on that on where that's headed. 0:09:38.400 --> 0:09:39.920 Well, I mean, I think there's I think this is 0:09:39.960 --> 0:09:42.840 now an open question. So the FED stopped at so 0:09:42.960 --> 0:09:46.920 called QT program quantitative tightening, where it gradually reduces its 0:09:46.960 --> 0:09:50.040 balance sheet at the end of last year, you know, 0:09:50.080 --> 0:09:54.760 and as because we saw front end interest rates, overnight 0:09:54.840 --> 0:09:58.120 rates and things like that, you know, start to start 0:09:58.120 --> 0:10:00.840 to increase to suggest that you know, reserves were coming 0:10:01.240 --> 0:10:05.439 more scarce. But ultimately we think they probably the Federals 0:10:05.440 --> 0:10:07.720 are probably can further reduce its balance sheet. 0:10:07.960 --> 0:10:10.120 And the reason is just because you have. 0:10:10.080 --> 0:10:14.640 Michelle Bowman and other bank regulators within her team that 0:10:14.679 --> 0:10:18.320 are laying the groundwork to try to relax some of 0:10:18.360 --> 0:10:21.960 the liquidity regulations and liquidity stress tests for banks and 0:10:21.960 --> 0:10:25.319 how they're implemented, and that should result in them, you know, 0:10:25.360 --> 0:10:28.120 effectively hoarding reserves less and that can mean that the 0:10:28.679 --> 0:10:31.120 Federal reserve can drain, you know. So we actually think 0:10:31.120 --> 0:10:33.360 that the Fed will probably start to reduce its balance 0:10:33.400 --> 0:10:37.040 sheet again next year as some of these policies. 0:10:36.880 --> 0:10:38.679 You know, sort of reduce bank demand for real. 0:10:38.679 --> 0:10:41.160 Okay, before you go frame up the calendar for me, 0:10:41.360 --> 0:10:44.480 I got July twenty nine with just tomorrow, and then 0:10:44.520 --> 0:10:47.560 I go to September sixteenth, which is a million years away, 0:10:48.000 --> 0:10:52.720 October twenty eighth, December nine, which meeting is Tiffany Wilding 0:10:53.120 --> 0:10:53.760 focused on done. 0:10:56.000 --> 0:10:58.680 I mean, obviously we're we're focused on all of the meetings, 0:10:59.200 --> 0:11:01.560 you know, and I think I think September, you know, 0:11:01.640 --> 0:11:04.120 is certainly one to focus on. You know. I think 0:11:04.160 --> 0:11:08.480 the interesting thing from FED speak more recently, Governor Waller 0:11:08.520 --> 0:11:12.240 in particular, you know, sort of suggested that regardless of 0:11:12.280 --> 0:11:15.360 the drivers of inflation, you know, whether they're their supply 0:11:15.559 --> 0:11:18.760 or demand related, that if they see one more strong 0:11:19.679 --> 0:11:22.160 firm inflation print, then they're sort of ready to act. 0:11:22.200 --> 0:11:24.360 So that suggests to us that even if our view 0:11:24.400 --> 0:11:27.440 is ultimately right that inflation moderates, you know, if you 0:11:27.440 --> 0:11:30.080 get one more strong print here, you know, you could 0:11:30.080 --> 0:11:33.320 certainly see them hiking as early as September, you know, 0:11:33.360 --> 0:11:36.920 But again we take a step back. We're not in 0:11:35.679 --> 0:11:39.680 a twenty two a twenty twenty two type of environment, 0:11:40.240 --> 0:11:43.320 and ultimately, you know, we think the funeral reserve, you know, 0:11:43.400 --> 0:11:46.680 isn't on course to you know, to hike dramatically here. 0:11:46.679 --> 0:11:49.320 Maybe a few if they do it. But inflation, I 0:11:49.320 --> 0:11:51.280 think is is certainly in a good place and hopefully 0:11:51.280 --> 0:11:54.280 we'll get more data, you know, to that regard moving forward. 0:11:54.440 --> 0:11:56.880 Really wonderful tivity. Well, thank you so much to pimcod 0:11:56.920 --> 0:12:00.400 this morning. Stay with us more from Bloomberg. So thats 0:12:00.440 --> 0:12:01.800 coming up after this. 0:12:09.040 --> 0:12:12.600 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:12:12.679 --> 0:12:15.800 weekday afternoons from seven to ten am Eastern Listen on 0:12:15.920 --> 0:12:19.319 Apple Karplay and Android Otto with the Bloomberg Business app, 0:12:19.480 --> 0:12:20.840 or watch us live on. 0:12:20.760 --> 0:12:24.600 YouTube in our studios in New York. Simona Macuda joins 0:12:24.679 --> 0:12:29.520 US with State Street Investment Management, their chief economist. You 0:12:29.880 --> 0:12:32.920 were in school in Romania, right, I was here, so 0:12:33.320 --> 0:12:35.120 I got to do an audible here it's Friday. I 0:12:35.200 --> 0:12:39.320 get used to it, okay, when it's when we talk 0:12:39.400 --> 0:12:43.120 about the Black Sea. What is the number one misconception 0:12:43.200 --> 0:12:47.640 Americans get wrong? Strevetas Admiral Stravitas tells me, Mania is 0:12:47.960 --> 0:12:51.559 arguably the most important territory in Eastern Europe for America. 0:12:51.880 --> 0:12:56.040 It is pretty strategic, and I think the interest in 0:12:56.120 --> 0:13:01.040 making that, you know, strategic and strong is coming from 0:13:01.040 --> 0:13:01.640 both sides. 0:13:01.679 --> 0:13:04.000 Because the water up on the seat, the naval basins 0:13:04.200 --> 0:13:04.600 and all that. 0:13:04.800 --> 0:13:06.199 Daniebe absolutely yeah. 0:13:06.320 --> 0:13:08.200 The Daniu, the Danube tour. 0:13:08.520 --> 0:13:10.760 I'm not done the Danube tour out of Romania. But 0:13:10.760 --> 0:13:12.680 here here's the thing about Romania. I mean, yields are 0:13:12.679 --> 0:13:14.400 pretty high now. I mean they've had a hike pretty 0:13:14.440 --> 0:13:16.480 pretty aggressively to offset some of the things that we've 0:13:16.520 --> 0:13:18.559 seen on the ground there domestically and real yields and 0:13:18.760 --> 0:13:20.680 Romania have collapsed. I think they're one of the few 0:13:20.679 --> 0:13:23.840 now in EM then have actually a negative real yield 0:13:23.840 --> 0:13:25.679 on to your basis. But we're not going to talk 0:13:25.679 --> 0:13:30.480 about Romania pemonia. Let's let's talk about Japan. Let's talk 0:13:30.520 --> 0:13:33.080 about funding those carry trades. And EM talked to us 0:13:33.080 --> 0:13:35.120 about the end, talk to us about you know, do 0:13:35.200 --> 0:13:38.959 you see any potential buying of jgb's by locals, repatriation 0:13:39.200 --> 0:13:40.360 of all those assets on shore? 0:13:40.679 --> 0:13:43.120 You know, that's been the story for so long. We've 0:13:43.160 --> 0:13:46.880 been talking about this, We've been afraid about this happening, 0:13:46.960 --> 0:13:50.280 and so far it's been a very slow moving kind 0:13:50.320 --> 0:13:53.000 of anyone here, right, and I think it will continue 0:13:53.040 --> 0:13:57.080 to be that incrementally, yes, because obviously you look at 0:13:57.200 --> 0:13:59.480 Japanese yields being at the levels not seen in a 0:13:59.559 --> 0:14:02.880 very very long time. There is an attraction there. But 0:14:04.000 --> 0:14:06.160 you know, these things don't happen overnight. 0:14:07.000 --> 0:14:09.280 No, they don't. But I mean, look, I'm just I'm Tom. 0:14:09.320 --> 0:14:10.719 I don't know if you caught this. The latest tik 0:14:10.760 --> 0:14:12.600 date out of the US, I mean the foreign bid 0:14:12.679 --> 0:14:16.160 specifically the bit out of Japan has collapsed, not collapsed, 0:14:16.160 --> 0:14:19.520 but it's gone down pretty pretty significantly. And so you know, 0:14:19.760 --> 0:14:21.400 these are the things that I get concerned about, right, 0:14:21.400 --> 0:14:23.440 who's going to be buying all this debt, all this issues, 0:14:23.480 --> 0:14:25.680 all this coupon, you know, issues that were expected to 0:14:25.680 --> 0:14:28.080 see from the US Treasury. And so when I ask about, 0:14:28.280 --> 0:14:30.560 you know, the Fed's balance sheet, that's the place that 0:14:30.600 --> 0:14:33.120 I think most investors, myself and are looking for if 0:14:33.160 --> 0:14:34.280 there's going to be a black swan event. 0:14:34.280 --> 0:14:35.080 Would you agree with that? 0:14:35.680 --> 0:14:38.280 I don't expect that. I mean, the concerns are valid. 0:14:38.320 --> 0:14:38.440 Right. 0:14:38.480 --> 0:14:40.440 You look around the world and tell me, where do 0:14:40.480 --> 0:14:43.080 you see a fiscal picture that actually looks good? 0:14:44.440 --> 0:14:46.040 The worst maybe Germany? 0:14:46.080 --> 0:14:48.160 And there your target. It's almost the opposite where it's 0:14:48.160 --> 0:14:51.680 almost too good for their own benefit. Right, It's a 0:14:51.720 --> 0:14:55.760 problem across the board. It's something that I think incrementally 0:14:56.400 --> 0:14:59.920 the prices get squeezed and the pen gets intensified by 0:15:00.040 --> 0:15:01.600 it's It's gonna take a while. 0:15:02.200 --> 0:15:03.160 And you know. 0:15:03.200 --> 0:15:05.120 One of the biggest lessons I learned when I came 0:15:05.160 --> 0:15:07.480 to stage draman economist. Right, I don't manage money, but 0:15:07.520 --> 0:15:09.520 I'm surrounded by all these people who do. We have 0:15:09.560 --> 0:15:12.320 six trillion under management, lots of people who manage money. 0:15:12.320 --> 0:15:12.600 There. 0:15:13.240 --> 0:15:16.160 One of the best lessons I learned from a colleague 0:15:16.280 --> 0:15:20.640 was when I was told Simona, I cannot hate everything, right, 0:15:20.840 --> 0:15:24.800 you have to own something, and in the restive. 0:15:24.200 --> 0:15:28.840 Things state Japan, because they're going to get their act together. 0:15:29.480 --> 0:15:33.640 I wouldn't say so. I would say the view is 0:15:33.680 --> 0:15:36.320 that the US dollar as a whole is in a 0:15:36.440 --> 0:15:41.680 multier depreciation cycle, and that comes from a number of places, 0:15:41.720 --> 0:15:43.680 including fixed incomon locations. 0:15:43.760 --> 0:15:44.800 I don't see that. 0:15:45.160 --> 0:15:48.560 Well, no, that's the irony of it, right, Sometimes you're 0:15:48.600 --> 0:15:51.200 the trigger of the geopolitical risk event, and yet you 0:15:51.200 --> 0:15:54.560 are the safe asset. So that's a reminder though that 0:15:54.760 --> 0:15:58.680 these things, there is value in what the US dollar offers, 0:15:58.720 --> 0:16:02.280 so incrementally it can shift in a direction, but it's 0:16:02.320 --> 0:16:03.400 going to be a slow process. 0:16:03.400 --> 0:16:04.960 I got to ask this, Can I do an audible 0:16:05.000 --> 0:16:08.760 on a Friday. Okay, you went to graduate school in 0:16:08.840 --> 0:16:13.080 a place with two of the most spiritual libraries in America. 0:16:13.160 --> 0:16:17.560 It's Suffolk in Boston, the Moakly Law Library, and there's 0:16:17.640 --> 0:16:21.320 also the ninth floor Study Lounge just down Tremont Street. 0:16:21.360 --> 0:16:25.480 Did you study in those libraries? Yes, I literally studied 0:16:25.520 --> 0:16:29.640 for half the CFA between BU and there. But they're 0:16:29.280 --> 0:16:33.680 the folks in Boston at Suffolk University. In Tremont they 0:16:33.680 --> 0:16:38.560 have built modern architecture in the old Street, these spectacularly 0:16:38.640 --> 0:16:41.200 gorgeous libraries. Nobody knows about them. Yeah. 0:16:41.360 --> 0:16:44.680 No, they are beautiful. And it's like the location, it's amazing, right, 0:16:44.720 --> 0:16:47.040 Like I always say, like, oh my god, I'm walking 0:16:47.080 --> 0:16:47.720 on history. 0:16:47.880 --> 0:16:52.760 Yeah, you're with all this history is you're with all 0:16:52.800 --> 0:16:55.440 this history in the atheneum there, and you're trying to 0:16:55.480 --> 0:16:58.880 study Friedrich Hayek out an LC over to Chicago because 0:16:58.920 --> 0:17:01.320 that's what Simona and I did. And then there's a 0:17:01.440 --> 0:17:05.240 damn sunset in your way, you know, across the Pardinal. 0:17:05.480 --> 0:17:08.480 So this is great. Can you come back again once 0:17:08.520 --> 0:17:09.000 a decade? 0:17:09.520 --> 0:17:10.440 It's not that far. 0:17:12.119 --> 0:17:15.440 On Romania her Romanian also all of her effort at 0:17:15.440 --> 0:17:20.080 State Street Investment management as well Samonama Coda, their chief economist. 0:17:20.400 --> 0:17:24.560 Stay with us more from Bloomberg Surveillance coming up after this. 0:17:31.840 --> 0:17:35.400 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:17:35.480 --> 0:17:38.639 weekday afternoons from seven to ten am Eastern Listen on 0:17:38.720 --> 0:17:42.359 Applecarplay and Android Auto with the Bloomberg Business app, or 0:17:42.520 --> 0:17:44.040 watch US Live on YouTube. 0:17:44.080 --> 0:17:46.280 And it's a good time to talk to David Katz, 0:17:46.680 --> 0:17:50.320 president's CIO Matrix Asset Advisors, because he says there's no 0:17:50.480 --> 0:17:53.600 fog to Comcast, it's the one to buy. David. Top 0:17:53.600 --> 0:17:56.880 of your list is CMCSA discuss. 0:17:58.440 --> 0:18:01.720 Basically, the company has been under some very negative trends 0:18:01.760 --> 0:18:04.880 for the last few years in terms of subscribers. Management 0:18:04.960 --> 0:18:08.119 is doing everything that they can to try to maximize 0:18:08.200 --> 0:18:10.280 or enhance shareold of value. They're going to be splitting 0:18:10.280 --> 0:18:12.760 the company up in the next twelve to eighteen months. 0:18:12.800 --> 0:18:15.520 We think the two pieces are worth well above what 0:18:15.640 --> 0:18:18.600 the combined entity is worth. We think the stock is 0:18:18.640 --> 0:18:21.320 easily worth in the mid thirties. You're getting into twenty four. 0:18:21.400 --> 0:18:23.600 You get a very good dividend while you wait, and 0:18:23.600 --> 0:18:26.840 you have a very motivated and very competent management team. 0:18:27.040 --> 0:18:29.199 To enhance shareold of value, and the stock's at about 0:18:29.440 --> 0:18:31.760 seven and a half to eight times earning, so it's 0:18:31.880 --> 0:18:33.920 just dirt cheap right Link. 0:18:33.800 --> 0:18:36.520 That over then to Netflix. I mean, mister Roberts has 0:18:36.520 --> 0:18:40.679 taken a different path as any Netflix has been a 0:18:40.960 --> 0:18:42.080 great company. 0:18:42.119 --> 0:18:45.879 They've really done well, you know, in terms of subscriber 0:18:46.000 --> 0:18:49.040 growth and in terms of revenue growth, and in light 0:18:49.080 --> 0:18:50.960 of the problems that they're having. The stock is now 0:18:51.040 --> 0:18:53.359 down to about sixteen and a half to seventeen times 0:18:53.400 --> 0:18:54.160 next year's earning. 0:18:54.200 --> 0:18:55.680 So it's on our radar. 0:18:55.800 --> 0:18:58.520 We think it's still a little bit early, but at 0:18:58.520 --> 0:19:01.159 this price you're getting a lot of the negatives in it. 0:19:01.240 --> 0:19:03.040 We think if you have a eighteen month time or 0:19:03.119 --> 0:19:04.919 is it probably is going to be okay. We're not 0:19:05.040 --> 0:19:06.000 ready to step in here. 0:19:06.119 --> 0:19:09.160 Giza rogenosin with us in a few moments here on Netflix. 0:19:09.240 --> 0:19:13.959 David Katz of Matrix Asset Advisors with Damian Sasaur. 0:19:13.760 --> 0:19:15.000 Dude, I know you think it's going to be a 0:19:15.000 --> 0:19:18.600 pretty healthier earning seasons, but you're also expecting significant volatility. 0:19:18.640 --> 0:19:19.640 Talk to us about that. 0:19:19.800 --> 0:19:21.359 I mean, is that a little bit of a taste 0:19:21.400 --> 0:19:23.280 I guess this week in terms of what we shoul 0:19:23.280 --> 0:19:26.120 can expect for the balance of July and August. 0:19:26.880 --> 0:19:28.879 We think it is We think that the numbers are 0:19:28.920 --> 0:19:30.840 going to buy and large come through good. But you're 0:19:30.840 --> 0:19:34.320 seeing stock price moves of three to seven percent if 0:19:34.359 --> 0:19:36.520 the market thinks still a little bit better than expected 0:19:36.600 --> 0:19:39.760 or a little bit worse than expected. HCA pre announced, 0:19:39.800 --> 0:19:42.560 IBM pre announced, those stocks got taken out and shot. 0:19:43.000 --> 0:19:45.960