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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple car Playing and

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Speaker 1: broun Otto with the Bloomberg Business App. Listen on demand

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Speaker 2: Back to the top story. In some breaking news that

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Speaker 2: we continue to cover, dozens of Democratic lawmakers are considering

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Speaker 2: signing a letter demanding President Joe Biden withdraw from the race.

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Speaker 2: A senior party official said as panic mounts that he'll

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Speaker 2: cost them control of Congress. This exclusive report coming just

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Speaker 2: in the last ten minutes from Billy House and Eric Wasason.

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Speaker 2: Billy is Bloomberg News congressional reporter. He joins us from

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Speaker 2: our Washington DC bureau right now, Billy, the calls for

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Speaker 2: Biden to step aside are growing increasingly louder. This time though,

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Speaker 2: it's coming from lawmakers who are concerned about Congress.

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Speaker 3: What did you learn?

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Speaker 4: Yeah, there's a draft letter that's prepared for signing, has

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Speaker 4: not been sent out, but it is being circulated from

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Speaker 4: safe seat democrats. These are Democrats from traditionally safe seats,

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Speaker 4: non competitive areas. This underscores that it's just not people

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Speaker 4: worried about losing their elections who are concerned about Biden

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Speaker 4: staying on the ticket, but those who likely will be

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Speaker 4: re elected and concerned about the state of Congress as

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Speaker 4: a way to put a break on perhaps a Trump presidency.

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Speaker 3: Billy, this is such an unusual situation. Obviously, I can't

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Speaker 3: ever remember in my many years on this planet of

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Speaker 3: the House Democrats actually moving against a president like this.

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Speaker 3: Do we have any sense of who will be the

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Speaker 3: signers of this letter? I mean, could it be a

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Speaker 3: Nancy Pelosi type of person to actually sign on to this?

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Speaker 4: I think it's far more likely to be a senior

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Speaker 4: Democratic lawmakers, again from safe seats, who are concerned about

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Speaker 4: status on committees on legislation and on ability to block

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Speaker 4: the White House Trump White House from ramming through things.

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Speaker 4: These are probably veteran lawmakers, and the question is will

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Speaker 4: they pull the trigger and actually send this letter, and

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Speaker 4: or will something else happen to prevent that?

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Speaker 1: Billy?

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Speaker 2: Is the concern here that that Trump will become president

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Speaker 2: and that Republicans will control Congress?

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Speaker 1: Also?

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Speaker 2: Is this a last ditch effort at this point to

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Speaker 2: have a Congress that is not in the same party

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Speaker 2: as the president?

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Speaker 4: Well, the concern is that both the Senate and the

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Speaker 4: House would fall because of a Biden candidacy, that that

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Speaker 4: would derail down ballot candidacies, and the fact that Democrats

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Speaker 4: are fearful of a White House and Congress totally dominated

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Speaker 4: by Republicans running this country.

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Speaker 3: Yeah, but I wonder you mentioned, well they really pull

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Speaker 3: the trigger? I mean, is them leaking this news to

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Speaker 3: you sort of enough to get that message across to Biden?

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Speaker 3: Do you think that's part of the plan, is just

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Speaker 3: to make it clear to Biden that this is something

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Speaker 3: they're willing to do.

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Speaker 4: Could be the case, but we do know that Biden's

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Speaker 4: hearing some of these concerns. In fact, he called a

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Speaker 4: House Minority leader, King Jeffries for a second time yesterday

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Speaker 4: for a very what was described as a very personal talk,

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Speaker 4: very private talk, and the House Democrats, a group of

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Speaker 4: them got together for some legislative discussion yesterday, but that

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Speaker 4: devolved into a fear fest, panicky gripe session about what

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Speaker 4: happened if Biden sticks around?

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Speaker 2: Well, so what happens if he doesn't, though, that's I

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Speaker 2: think a big question as well. There's no as Mike mentioned,

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Speaker 2: that hasn't happened in our lifetimes that this late in

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Speaker 2: a candidacy, a president sitting president has decided not to continue,

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Speaker 2: or even a presumptive nominee has decided not to continue.

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Speaker 2: You go back to nineteen sixty eight and Lyndon Johnson,

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Speaker 2: but that was back in March when he decided not

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Speaker 2: to pursue the presidency, was before the primaries. Billy, what

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Speaker 2: happens if he were to step aside?

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Speaker 4: Well, that's the big question. Of course, Hubert Humphrey didn't

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Speaker 4: farewell back in sixty eight when Johnson withdrew late in

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Speaker 4: the game. They are all kinds of scenarios and nobody

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Speaker 4: really knows for sure whether Kamala Harris, the vice president,

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Speaker 4: would simply be the choice, or there would be an

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Speaker 4: open convention, or what exactly would happen. And that's or

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Speaker 4: whether it would actually be a boost for Democrats to

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Speaker 4: drop Biden this late in the game.

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Speaker 3: Well, Billy, what a tremendous scoop on this letter potentially

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Speaker 3: from House Democrats. How do you see it all playing out?

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Speaker 3: I mean, your guess is as good as anyone's is.

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Speaker 3: This kind of looked like the last straw for Biden.

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Speaker 3: This type of thing happening.

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Speaker 4: It's really hard to tell, but I would suspect he has,

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Speaker 4: and others have suggested that he really has just a

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Speaker 4: matter of days to turn this around with performances at

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Speaker 4: public events or an interview on ABC. But this pressure

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Speaker 4: on him is moving faster than many many expected, and

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Speaker 4: people are now talking just days for him to do

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Speaker 4: something dramatically to show that he's fit and ready to

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Speaker 4: stay on board with this campaign.

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Speaker 2: Billy, what did you see shift in recent days? Because

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Speaker 2: as soon as the debate ended and everybody realized it

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Speaker 2: was a political catastrophe for the sitting president, you did

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Speaker 2: have a lot of folks come out with what seemed

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Speaker 2: like the very manicured statements, including Foreign President Obama, who

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Speaker 2: worked closely with Biden for eight years, and others as well,

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Speaker 2: sort of mounting this defensive that seemed very coordinated. But

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Speaker 2: something shifted in recent days.

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Speaker 1: Well, whether something.

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Speaker 4: Shifted or something didn't happen that they had asked to happen.

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Speaker 4: I mean, certainly the White House and the Biden campaign

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Speaker 4: and the President himself had been asking Democrats to keep

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Speaker 4: their powder dry in terms of calls for him to withdraw,

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Speaker 4: to give him time to show that was that shaky

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Speaker 4: debate performance was not really the best picture of where

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Speaker 4: he and how he can perform. But instead of really

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Speaker 4: coming out forcefully in these few days, he asked, he

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Speaker 4: has not done that.

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Speaker 2: Hey, Billy, We're gonna let you run because I know

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Speaker 2: you are super busy. Once again, this breaking news just

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Speaker 2: happening just before the noon hour. Just in the last

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Speaker 2: twenty minutes, Billy House and Eric Wasason reporting that House

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Speaker 2: Democrats are considering demanding that Biden withdraw from the race.

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Speaker 2: Billy House is Bloomberg News Congressional reporter joining us from Washington, DC.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 5: So funny story. Yesterday, Tim and I do a simul

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Speaker 5: cast together. I'm on TV, he's on radio, and we

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Speaker 5: do a simulcast. I'm at the closing bell and we're

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Speaker 5: talking about Paramount, and Tim.

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Speaker 2: Says, I say, well, more news in Paramount yesterday because

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Speaker 2: there were a couple reports that there were some bidders circling,

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Speaker 2: and I said, when is this story just going to die?

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Speaker 2: When is this going to be done?

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Speaker 4: Yeah?

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Speaker 5: And then literally like two and a half seconds later,

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Speaker 5: there is a headline that said sky Dance and Paramount

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Speaker 5: have been talking for a deal.

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Speaker 3: A deal.

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Speaker 2: I thought Skydance was out, so did we.

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Speaker 5: And apparently now they have a preliminary agreement. So it's

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Speaker 5: so confusing. Luckily, Keitha Rongganathan Bloomberg Intelligence US media analyst

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Speaker 5: can help us. Keitha, what is happening?

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Speaker 6: Yeah, thank you so much for having me, Alex and Tim. Yeah,

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Speaker 6: it's it's not over until it's over. And this this movie.

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Speaker 6: We've seen this movie now play out so many times.

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Speaker 6: But yes, sky Dance is back. It looks like they

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Speaker 6: have amended some of the terms of the deal agreement

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Speaker 6: with Paramount. Remember they had been in this very very

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Speaker 6: long drawn out negotiating process. We're talking almost six seven months,

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Speaker 6: and then right when they were at the finish line

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Speaker 6: somewhere in mid June, you know, Sherry Redstone basically just

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Speaker 6: walked away, you know, from the entire deal. But I

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Speaker 6: think now they're back, and I think the one big

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Speaker 6: thing that Sherry Redstone was kind of looking for, which

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Speaker 6: she seems to have gotten, is slightly better in terms

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Speaker 6: of the amount of cash that she's going to get paid,

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Speaker 6: So I think previously it was about one point seven billion,

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Speaker 6: now it's one point seven five billion. But I think

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Speaker 6: more importantly is that she is getting stronger indemnification languages

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Speaker 6: language in the deal agreement, which basically protects her from

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Speaker 6: any potential lawsuits. That's something that she has been pretty

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Speaker 6: worried about because remember the sky Dance steal basically favors

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Speaker 6: her over everybody else, so that is obviously breeding ground

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Speaker 6: for a lot of litigation. And the one thing I

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Speaker 6: think that is going to work for skuy Dance and

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Speaker 6: David Ellison is that there is no longer this requirement

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Speaker 6: for the majority of the minority shareholder approval, which was

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Speaker 6: kind of a non starter for David Ellison. So I

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Speaker 6: think she has said that, Okay, we don't need that anymore.

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Speaker 6: So that's where we stand right now. We're really not

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Speaker 6: sure about, you know, if there are any deal sweeteners

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Speaker 6: for the Class B shareholders or what else is happening

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Speaker 6: in terms of the other deal terms.

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Speaker 2: Yeah, this is a very complicated deal, and it's also

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Speaker 2: given the dual class share structure makes it even more complicated. Kita,

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Speaker 2: I'm wondering who gets what lay it out for us?

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Speaker 2: Because we know David Allison, who's we should notice, the

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Speaker 2: son of Larry Allison. He's a film producer, he's certainly

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Speaker 2: interested in the studio business. But who gets what if

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Speaker 2: this deal were to go through?

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Speaker 6: Yes, I think what is going to happen is, obviously,

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Speaker 6: as you said, this is an extremely convoluted, complex process.

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Speaker 6: So in stage one of this deal, it's a multi

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Speaker 6: step deal. In stage one, what is going to happen

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Speaker 6: is Skydance is basically going to acquire National Amusements. Now,

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Speaker 6: National Amusements is the parent company of Paramount.

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Speaker 2: Okay, I'm just getting out the white board to make

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Speaker 2: a diagram here.

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Speaker 5: Actually that's a good idea.

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Speaker 6: Yeah, yeah, it holds about eighty percent of the voting

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Speaker 6: stock for Paramount. So they're going to go ahead and

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Speaker 6: do that transaction first, and then once that's in place,

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Speaker 6: then they're actually Paramount is going to merge with sky Dance,

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Speaker 6: so it becomes one whole combined entity. And then obviously,

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Speaker 6: right now you have this really kind of funny structure

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Speaker 6: at the paramount, So they've basically fired their previous CEO,

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Speaker 6: Bob Backash, and now they have kind of this three

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Speaker 6: headed CEO, so they have three different division chiefs who

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Speaker 6: are heading the company as kind of the stop gap arrangement.

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Speaker 6: So I think the plan is once David Ellison takes control,

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Speaker 6: he's going to have Jeff Shell run the whole thing.

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Speaker 6: And remember Jeff Shell used to run NBC, so he's

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Speaker 6: extremely familiar with the media business. So that is kind

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Speaker 6: of the tentative plan. But again we'll have to say.

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Speaker 6: And I think the reason why Sherry Redstone prefers the

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Speaker 6: sky Dance plan to let's say, the Sony Apollo plan,

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Speaker 6: which actually gave better financial terms to the rest of

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Speaker 6: the shareholders, was because they were really looking to sell

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Speaker 6: a lot of the assets and only keep the studio.

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Speaker 6: I think what Skydance has promised Sherry is that they

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Speaker 6: will keep the company pretty much intact before they start

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Speaker 6: looking to kind of dispose of assets. And I think

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Speaker 6: that was very important for Sherry and kind of her

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Speaker 6: preserve her her family's legacy.

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Speaker 5: So one key point though, was the majority of the

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Speaker 5: minority of the voting shares won't have to vote on

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Speaker 5: this deal. How are the majority of the minority voting

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Speaker 5: shareholders going to feel about that?

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Speaker 6: Not good? And that's been the feeling all true, right

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Speaker 6: because this was Sherry Redstone basically having her payday at

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Speaker 6: the expense of everybody else, and so they have been threatening.

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Speaker 6: You know, Mario Gabelli especially has been extremely vocal about this.

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Speaker 6: He has been threatening litigation. He said, don't go down

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Speaker 6: this path with sky Dance because I'm definitely going to

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Speaker 6: sue you. Everybody else is going to sue you as well.

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Speaker 6: So you know, obviously they do not like this, which

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Speaker 6: is why you know sky Dance was kind of putting

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Speaker 6: in all of these different deal sweeteners for the Class

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Speaker 6: B shareholders, even for the Class A shareholders. But again,

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Speaker 6: I think Shary Redstone, especially when you know about three

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Speaker 6: weeks ago when she said no, was again scared of

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Speaker 6: all the litigation that was going to come her way.

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Speaker 6: And I think the other thing that has happened Alex

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Speaker 6: over the past few days is, you know, the regulatory environment.

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Speaker 6: I think there's a whole different perspective of what might

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Speaker 6: happen in Washington right now. So I think initially we

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Speaker 6: were kind of looking at a regulatory process that was

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Speaker 6: going to be extremely difficult for these companies across the

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Speaker 6: finish line. If you have a Trump administration, that whole

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Speaker 6: climate definitely changes. It eases things up. It's pro consolidation.

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Speaker 6: So I think maybe that these companies are looking at

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Speaker 6: it from that perspective as well.

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Speaker 2: That's interesting. I mean, that's a big bet to make

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Speaker 2: ahead of an election where a lot can still happen.

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Speaker 2: I think many people would argue, Gita, this is I

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Speaker 2: don't have to tell you this, and I don't have

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Speaker 2: to tell much of our audience this. But media is

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Speaker 2: a tough business right now, and I'm wondering what makes

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Speaker 2: these assets attractive to this buyer. We're in an environment

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Speaker 2: where we're seeing traditional linear TV just completely fall apart.

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Speaker 2: The movie business is being taken on by the it's

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Speaker 2: not even fair to call them upstarts, but the streamers,

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Speaker 2: the legacy companies are trying to adapt to become streamers,

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Speaker 2: with very mixed success. I think it's fair to say,

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Speaker 2: what are the attractive parts of Paramount's business.

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Speaker 6: Yeah, so definitely not the TV networks. I mean one

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Speaker 6: could argue that.

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Speaker 5: Okay, Survivor is still awesome. Okay, let's just put it

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Speaker 5: out there. You know how I feel about this, KEITHA.

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Speaker 6: Yeah, Well, CBS I was I was going to say,

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Speaker 6: CBS is actually the one crown jewel in the whole

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Speaker 6: Paramount TV portfolio. And obviously that has you know, Survivor,

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Speaker 6: that has all of the NFL, all of the sports, right,

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Speaker 6: it has a pretty pretty robust news lineup, so you know,

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Speaker 6: when it comes to sports and news which CBS has,

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Speaker 6: they're actually in a good place. It's the rest of

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Speaker 6: the Paramount and the Viacom cable networks that are really

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Speaker 6: not in such a good place, which is you know, Nickelodeon,

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Speaker 6: Comedy Central, you know, MTV, VH one, all of these

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Speaker 6: other channels which are general entertainment channels which have basically

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Speaker 6: been exposed to the most rapid kind of deterioration in

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Speaker 6: terms of audiences. So obviously that part of the business,

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Speaker 6: I'm not really sure who would really want. Maybe Warner

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Speaker 6: Brothers Discovery, maybe they see that there's you know, they

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Speaker 6: could potentially be some kind of synergies there. But again

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Speaker 6: sky Dance, I know has not you know, is not

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Speaker 6: obviously very excited about that. The one ascid that sky

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Speaker 6: Dance is definitely very excited about is the studio. And

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Speaker 6: remember they've had a long history with Paramount. I mean

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Speaker 6: they've financed so many of the movies, whether you know

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Speaker 6: it's Transformers or Mission Impossible.

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Speaker 2: So they did the New Top Gun too.

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Speaker 6: H Yeah, Okay, New Top Gun as well. So they've

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Speaker 6: had a long history with Cherry Redstone with the Paramount

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Speaker 6: studio business. And remember, at the end of the day,

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Speaker 6: content is king and they know that. And you know,

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Speaker 6: whether the Paramount plus streaming service works or not, I mean,

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Speaker 6: this content is still valuable and they could sell it

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Speaker 6: to Amazon, they could sell a lot of this content

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Speaker 6: to Netflix. They're already doing some deals. But again, the

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Speaker 6: content is definitely valuable, and there is definitely this arms

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Speaker 6: race for content. So you know, I think they definitely

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Speaker 6: want the content production piece of it. Again, You're absolutely

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Speaker 6: right that the TV networks is going to be a

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Speaker 6: little bit hard, But I think that's what Cherry Redstone

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Speaker 6: also realizes, and she realizes that the longer this process

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Speaker 6: kind of drags out, the less and less valuable those

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Speaker 6: assets are going to be.

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Speaker 5: Do we think that Paramount stands a chance? Like what, Okay,

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Speaker 5: let's just say this actually happens, what's your time frame, Like,

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Speaker 5: let's give them a year, six months?

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Speaker 6: You mean as a standalone company.

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Speaker 5: Yeah, like until you say, okay, this deal is a

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Speaker 5: success or the deal was not a success.

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Speaker 6: Yeah, oh okay, okay. So once the deal actually goes through, Yeah,

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Speaker 6: I think you know, it would take at least about

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Speaker 6: twelve to eighteen months to kind of get the whole

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Speaker 6: integration done and to kind of figure out what the

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Speaker 6: path forward would be. So yeah, I think it would,

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Speaker 6: you know. And we're also kind of looking at this

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Speaker 6: broader media landscape also, Alex, in terms of what could

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Speaker 6: happen in terms of other deals, right what is going

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Speaker 6: to happen with Warner Brothers, Discovery, what's going to happen

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Speaker 6: with Peacock and NBC? And there probably is a whole

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Speaker 6: wave of consolidation coming. It's just that the regulatory climate

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Speaker 6: right now looks extremely difficult.

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Speaker 5: All right, Githa, We really appreciate it. We appreciate you

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Speaker 5: and all these circumstances. Either on Nathan Bloomberg, intelligence US

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Speaker 5: media analyst. Yeah, I don't have Tim knows this about me.

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Speaker 5: I'm a big survivor. I didn't know that about it

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Speaker 5: and yeah, well we got into it when I had

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Speaker 5: a concussion in November, and then my family and I

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Speaker 5: we have like joint surveyor survivor family night. We talk

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Speaker 5: about it and we learn things.

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Speaker 2: It's like a whole It's like Season in the thirties.

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Speaker 5: We Big Bong No. Forty six maybe for we Big

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Speaker 5: Bong all over. We're currently watching I think season thirty six.

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Speaker 5: We kind of just go where we feel. And then yeah,

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Speaker 5: it's a guilty secret that I have that I apparently

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Speaker 5: share with all of radio.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Effo, Cardplay and enroun

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Speaker 1: Otto with the Bloomberg Business app. Listen on demand wherever

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Speaker 2: If you go to our EA d go on the

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Speaker 2: Bloomberg terminal, you can see the most red stories over

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Speaker 2: the last eight hours, over the last one hour. You

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Speaker 2: can play around with it. And one thing that you're

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Speaker 2: seeing right now is the most red story in the

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Speaker 2: last eight hours is JP Morgan's Kalanovic to exit amid

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Speaker 2: string of poor stock calls. We're very lucky to have

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Speaker 2: it with us.

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Speaker 1: This morning.

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Speaker 2: Alexandra Semenova. She is Bloomberg Equities reporter and she's here

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Speaker 2: in our Bloomberg Interactive Broker's studio. This was huge news.

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Speaker 2: Congratulations on the scoop. It's got a green bee or

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Speaker 2: black b in a green circle on the terminal, which

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Speaker 2: means it's a Bloomberg exclusive. You were the first to

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Speaker 2: report about this huge news happening. What's going on?

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Speaker 7: Yeah, thank you guys for having me on. So obviously

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Speaker 7: pretty significant that one of the most prominent forecasters on

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Speaker 7: Wall Street is leaving JP Morgan. He's been at the

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Speaker 7: firm for nineteen years. He most recently has become known

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Speaker 7: for being one of the few remaining contrarions on Wall Street,

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Speaker 7: sticking with his s and P five hundred target of

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Speaker 7: forty two one hundred. That's a drop of more than

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Speaker 7: twenty percent from where we are now before the year ends,

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Speaker 7: and it's been a bit of a challenging run for

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Speaker 7: him over the last three years. In twenty twenty two,

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Speaker 7: he was bullish through much of the route that we experienced.

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Speaker 7: Last year, he stayed bearish even as the SMP five

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Speaker 7: hundred rows twenty four percent, and then of course this

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Speaker 7: year he's kind of stuck with that call in the

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Speaker 7: face of the rally, so, you know, I mean, it's

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Speaker 7: always a tough job to try to predict the market,

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Speaker 7: but especially when you're in a very prominent position like

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Speaker 7: that and making calls as a face of JP Morgan's

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Speaker 7: research team.

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Speaker 3: You know, Alexandra, what I find interesting about Marko Klanovich

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Speaker 3: is he was one of the first strategists who sort

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Speaker 3: of looked at how some of the big quant funds

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Speaker 3: were trading and their influence on the market. You know,

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Speaker 3: most strategists look at, you know, what they expect earnings

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Speaker 3: per share to do what they expect for you know,

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Speaker 3: interest rates, that sort of thing. He really got in

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Speaker 3: the weeds on, you know, your volatility targeting hedge funds

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Speaker 3: and momentum tracing CTA funds. What exactly in his thinking

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Speaker 3: was led him to believe that we're due for this

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Speaker 3: bearish turn this year.

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Speaker 7: Yeah, I mean, as you point out, Mike, the guy's brilliant.

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Speaker 7: He has a PhD in physics. You know, he has

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Speaker 7: obviously been very focused on the quantitative aspect of you know,

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Speaker 7: all of this. He's been talking a lot over the

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Speaker 7: last few years about you know, very low volatility and

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Speaker 7: how that's been an issue for market. So that has

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Speaker 7: definitely been part of his call recently. You know, he

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Speaker 7: is saying that a lot of people are you know,

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Speaker 7: too optimistic given the macroeconomic backdrop. He says that we're

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Speaker 7: at the end of this business cycle that with sustained

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Speaker 7: higher rates, it's going to be very difficult to achieve

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Speaker 7: the growth that appears to be priced into equity markets.

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Speaker 7: And he was just you know, insisting that eventually we

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Speaker 7: will get that drop that he's calling for.

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Speaker 2: So if I go to your biopage, just see all

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Speaker 2: the stories that you've written in recent days, and you

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Speaker 2: have to scroll a lot because you've written so many stories.

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Speaker 2: You have an interview with David Kelly JP Morgan Asset

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Speaker 2: Management of JP Morgan Asset Management, and his call that

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Speaker 2: he shared with you was polar opposite of Marco Kolonovic's call.

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Speaker 2: These two guys work at the same firm, they're making

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Speaker 2: different calls, they're out there in public. How does that

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Speaker 2: relationship work? How does it work that they're they're not

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Speaker 2: sort of espousing the same thing. Is it is that

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Speaker 2: hard for employees there, like, help me understand how that works?

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Speaker 7: Yeah, so that's been really really interesting. So technically it

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Speaker 7: is really you know, a good thing to have different

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Speaker 7: views under one roof of diversity of opinion. But it

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Speaker 7: feels like, you know, it's been more pronounced over the

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Speaker 7: past two years as a lot of people are struggling

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Speaker 7: to predict what will happen, and it's certainly been pronounced.

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Speaker 7: To JP Morgan, they're trading desk actually led by Andrew Tyler.

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Speaker 7: They're very bullish. Andrew Tyler has said that his outlook

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Speaker 7: doesn't depend on it interest straight cuts, that the economy

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Speaker 7: is good, that earnings are strong, and you know, the

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Speaker 7: equity run can continue. And then of course at JP

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Speaker 7: Morgan Asset Management, David Kelly also very constructive on equities.

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Speaker 7: He does say that he doesn't really like the mag seven.

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Speaker 7: He says, stay away from the top ten stocks if

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Speaker 7: you're a long term in investors. He wants to you know,

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Speaker 7: he recommends avoiding some of what he thinks is froth

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Speaker 7: forming at the top, but he overall does think that

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Speaker 7: you know, maybe things will broaden out and that so

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Speaker 7: far equities can chug along. So very different views from Klanovic.

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Speaker 3: You know, it's a true it's not unusual for there

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Speaker 3: to be sort of turnover in these chief market strategist

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Speaker 3: roles at the big banks.

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Speaker 2: You know, it's a hard job right now, a very

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Speaker 2: hard job.

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Speaker 7: I don't envy anyone who's doing it.

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Speaker 3: I always compared to like, you know, forecasting the weather

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Speaker 3: on the year's eve of twenty twenty seven or something

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Speaker 3: like that. It's an incredibly difficult job. But you know,

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Speaker 3: Klanovitch was such a brand name. How did you sort

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Speaker 3: of catch on that he was leaving the firm? I mean,

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Speaker 3: is there any drama there? Do we really know what's

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Speaker 3: going on as far as why he's leaving.

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Speaker 7: Yeah, So, you know, very interesting. Interestingly, some sources have

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Speaker 7: told me that he wasn't at their recent conference in Paris,

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Speaker 7: and then JPM Morgan did have a webinar for their

436
00:22:42,720 --> 00:22:45,040
Speaker 7: mediar outlook and he did not participate in that. So

437
00:22:45,280 --> 00:22:48,160
Speaker 7: definitely can sense some of the pressure going on perhaps

438
00:22:48,280 --> 00:22:51,240
Speaker 7: internally ahead of this news and ahead of this announcement

439
00:22:51,920 --> 00:22:56,120
Speaker 7: and to you know, to that point, now dubrothco lekos Bujas,

440
00:22:56,200 --> 00:22:58,560
Speaker 7: who was the chief equity strategy he is moving on

441
00:22:58,680 --> 00:23:02,520
Speaker 7: to take on Kolonovix's roles chief market strategist and Hussain Malik,

442
00:23:02,600 --> 00:23:05,520
Speaker 7: who was co head of Global research with Kolonivik, will

443
00:23:05,560 --> 00:23:07,240
Speaker 7: now be the sole head of Global Research. So a

444
00:23:07,280 --> 00:23:10,679
Speaker 7: lot of moves going on on the research team there overall.

445
00:23:11,119 --> 00:23:13,640
Speaker 2: Hey, I want to remind everyone of some breaking news

446
00:23:13,680 --> 00:23:15,840
Speaker 2: that we've been covering over the last hour or so.

447
00:23:16,160 --> 00:23:18,680
Speaker 2: The drumbeat of pressure on President Joe Biden to drop

448
00:23:18,760 --> 00:23:22,119
Speaker 2: out of the presidential race intensified on Wednesday with a

449
00:23:22,160 --> 00:23:25,160
Speaker 2: bombshell report in The New York Times that he had

450
00:23:25,240 --> 00:23:28,080
Speaker 2: conceded to an ally that he might have to abandon

451
00:23:28,160 --> 00:23:31,240
Speaker 2: his re election bid if he was unable to turn

452
00:23:31,320 --> 00:23:34,560
Speaker 2: around public opinion in the coming days. The White House

453
00:23:34,600 --> 00:23:37,440
Speaker 2: and Biden's campaign quickly denied the report, but time is

454
00:23:37,560 --> 00:23:41,880
Speaker 2: running out for the beleaguered president to convince anxious Democratic officials, donors,

455
00:23:42,359 --> 00:23:45,080
Speaker 2: and voters that he remains viable in his efforts to

456
00:23:45,359 --> 00:23:49,520
Speaker 2: keep former President Donald Trump from returning to office. We're

457
00:23:49,520 --> 00:23:52,760
Speaker 2: going to continue to have coverage of this developing story

458
00:23:53,119 --> 00:23:56,320
Speaker 2: as more information does break. Alex, I just want to

459
00:23:56,920 --> 00:23:58,880
Speaker 2: end with you and sort of get the last word

460
00:23:58,960 --> 00:24:02,760
Speaker 2: here as to what we know about next moves for Marco.

461
00:24:03,760 --> 00:24:05,920
Speaker 6: We know what is he what is he going to

462
00:24:05,960 --> 00:24:06,439
Speaker 6: be working on.

463
00:24:07,040 --> 00:24:09,840
Speaker 7: Unclear what the next move will be, very keen to

464
00:24:09,960 --> 00:24:13,119
Speaker 7: find out, but it is very common for strategists at

465
00:24:13,160 --> 00:24:15,439
Speaker 7: these banks to sometimes move on to open up their

466
00:24:15,480 --> 00:24:19,760
Speaker 7: own research shops. The most recent example that comes to

467
00:24:19,800 --> 00:24:22,560
Speaker 7: mind is Adam Parker, who was chief US equity strategist

468
00:24:22,600 --> 00:24:25,280
Speaker 7: for Morgan Stanley. He is now running his own firm,

469
00:24:25,359 --> 00:24:28,479
Speaker 7: Trivariate Research, so a lot of that could happen. Will

470
00:24:28,520 --> 00:24:31,760
Speaker 7: definitely stay on top of whatever his next move might be.

471
00:24:32,040 --> 00:24:34,440
Speaker 3: Tom Lee. Tom Lee was the head of equity the

472
00:24:34,840 --> 00:24:35,760
Speaker 3: chap Morgan too.

473
00:24:35,880 --> 00:24:38,000
Speaker 2: And he's been in the news a ton lately. Yeah,

474
00:24:38,600 --> 00:24:42,840
Speaker 2: this is what the market needs, is for the I

475
00:24:42,840 --> 00:24:43,840
Speaker 2: think I saw on oddline.

476
00:24:43,880 --> 00:24:46,360
Speaker 7: Yeah, fifteen thousand by the end of twenty three.

477
00:24:46,600 --> 00:24:46,840
Speaker 1: Wow.

478
00:24:47,480 --> 00:24:49,000
Speaker 2: Okay, so quite a bit.

479
00:24:49,400 --> 00:24:49,520
Speaker 1: Hey.

480
00:24:49,640 --> 00:24:53,720
Speaker 2: Alex Simonova, Bloomberg News Equities reporter here in our Bloomberg

481
00:24:53,760 --> 00:24:56,720
Speaker 2: Interactive Broker's studio. Check out her story. It is the

482
00:24:56,960 --> 00:25:00,399
Speaker 2: most read in the last eight hours on the Bloomberg terminal.

483
00:25:00,480 --> 00:25:01,600
Speaker 2: This is Bloomberg.

484
00:25:07,520 --> 00:25:11,360
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

485
00:25:11,520 --> 00:25:15,000
Speaker 1: weekdays at ten am Eastern on applecard Play and Android

486
00:25:15,040 --> 00:25:17,800
Speaker 1: Auto with the Bloomberg Business app. You can also listen

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00:25:17,960 --> 00:25:21,000
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488
00:25:21,400 --> 00:25:24,160
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

489
00:25:25,320 --> 00:25:28,480
Speaker 5: Okay, let's get to the ISM services. As Charlie was

490
00:25:28,560 --> 00:25:31,200
Speaker 5: just saying, you had a yields dropping after IM Services

491
00:25:31,240 --> 00:25:33,800
Speaker 5: coming at a four year low. Steve Miller, IM Services

492
00:25:33,920 --> 00:25:36,680
Speaker 5: chair joins us in Fort Worth, Texas. Hey Steve, what

493
00:25:36,920 --> 00:25:37,480
Speaker 5: is happening?

494
00:25:38,040 --> 00:25:38,159
Speaker 3: Hi?

495
00:25:38,280 --> 00:25:39,320
Speaker 8: Hi, good morning Alex.

496
00:25:40,240 --> 00:25:40,720
Speaker 6: Yeah, it was.

497
00:25:41,200 --> 00:25:44,720
Speaker 8: It was a surprise for sure. We saw, you know,

498
00:25:44,840 --> 00:25:49,640
Speaker 8: three of the sub indexes dropping from from last month

499
00:25:50,080 --> 00:25:52,320
Speaker 8: and and we think that's what well, that's definitely what

500
00:25:52,440 --> 00:25:56,960
Speaker 8: drove the overall the overall rating down. The only the

501
00:25:57,800 --> 00:26:02,960
Speaker 8: business activity new orders and employment. We're in contracting territory,

502
00:26:03,200 --> 00:26:06,359
Speaker 8: the supplier delivery state and expansion territory. But with a

503
00:26:06,800 --> 00:26:08,400
Speaker 8: small drop, how.

504
00:26:08,320 --> 00:26:11,399
Speaker 2: Do you explain it? I mean, we we get the numbers,

505
00:26:12,000 --> 00:26:15,120
Speaker 2: we have the data in front of us. As you mentioned, surprise,

506
00:26:15,840 --> 00:26:18,159
Speaker 2: lowest in four years. How do you explain it?

507
00:26:19,600 --> 00:26:23,320
Speaker 8: Well, what we saw from you know, so two months

508
00:26:23,359 --> 00:26:27,640
Speaker 8: ago we saw a contraction reading and then last month

509
00:26:27,720 --> 00:26:30,680
Speaker 8: we saw I'd bump up, hoping that that was a

510
00:26:30,760 --> 00:26:35,600
Speaker 8: return to growth. But what we saw was real estate

511
00:26:35,640 --> 00:26:41,280
Speaker 8: rental and leasing returned to negative, transportation and warehousing returned

512
00:26:41,320 --> 00:26:47,640
Speaker 8: to negative, and h and we saw mining consistent negative,

513
00:26:47,640 --> 00:26:51,960
Speaker 8: and information and wholesale trade also swapped from from growth

514
00:26:52,040 --> 00:26:56,000
Speaker 8: to contraction. So we saw a pretty significant shift from

515
00:26:56,320 --> 00:27:00,400
Speaker 8: from many companies in the growth mode to atraction.

516
00:27:01,040 --> 00:27:04,280
Speaker 5: So is this is this like bad news like processionary

517
00:27:04,359 --> 00:27:06,800
Speaker 5: harbinger thing or is this just a softening like what

518
00:27:07,240 --> 00:27:08,560
Speaker 5: what's the read ahead?

519
00:27:09,640 --> 00:27:12,800
Speaker 8: Yeah, so one of the things that we saw in

520
00:27:13,000 --> 00:27:19,160
Speaker 8: the numbers was was a continuing commentary on costs being high,

521
00:27:19,320 --> 00:27:23,440
Speaker 8: but we saw some backing off of the rate of increase.

522
00:27:24,600 --> 00:27:26,760
Speaker 8: So I'm so, you know, we're hoping that this is

523
00:27:27,000 --> 00:27:31,399
Speaker 8: this is a blip. And and from the overall commentary,

524
00:27:31,560 --> 00:27:33,480
Speaker 8: there was a bit of a mix in terms of

525
00:27:33,560 --> 00:27:39,960
Speaker 8: positive of sustained business kind of meeting plan. So it

526
00:27:40,040 --> 00:27:43,560
Speaker 8: didn't seem like a shock from the overall commentary, but

527
00:27:44,320 --> 00:27:45,520
Speaker 8: it certainly wasn't good news.

528
00:27:46,080 --> 00:27:47,960
Speaker 2: Yeah, that's what I'm trying to Is it good news

529
00:27:48,000 --> 00:27:48,400
Speaker 2: for the FED?

530
00:27:48,440 --> 00:27:48,600
Speaker 1: Though?

531
00:27:50,800 --> 00:27:54,200
Speaker 8: You know it kind of the down up down that

532
00:27:54,320 --> 00:27:57,000
Speaker 8: we saw this month, in the last two months, I

533
00:27:57,119 --> 00:27:59,560
Speaker 8: certainly give some credence to the FED and saying you know,

534
00:27:59,680 --> 00:28:02,640
Speaker 8: let's look at things for a little while, make sure

535
00:28:02,720 --> 00:28:06,000
Speaker 8: that we're seeing that stabilization before rate cuts.

536
00:28:07,760 --> 00:28:12,000
Speaker 5: Just one more question, then the consumer. Does this show

537
00:28:12,040 --> 00:28:15,000
Speaker 5: that the consumer is slowing and buying less stuff?

538
00:28:16,960 --> 00:28:17,880
Speaker 1: Well, we saw.

539
00:28:17,840 --> 00:28:20,879
Speaker 8: Retail trade for the second month in a row in

540
00:28:21,040 --> 00:28:25,880
Speaker 8: contraction mode, and then wholesale trade went from went from

541
00:28:27,000 --> 00:28:31,040
Speaker 8: expansion to contraction mode from last month to this month.

542
00:28:31,400 --> 00:28:34,080
Speaker 8: So I would say, yes, all.

543
00:28:34,000 --> 00:28:35,440
Speaker 2: Right, Steve, we're gonna have to leave it there. Thanks

544
00:28:35,440 --> 00:28:38,480
Speaker 2: so much for joining us. Steve Miller is ISM Services Chair.

545
00:28:38,560 --> 00:28:42,120
Speaker 2: He joins us from Fort Worth, Texas. Once again June,

546
00:28:42,360 --> 00:28:45,560
Speaker 2: us ISM Services falling to forty eight point eight below

547
00:28:46,120 --> 00:28:47,120
Speaker 2: all estimates.

548
00:28:47,560 --> 00:28:52,080
Speaker 1: This is the Bloomberg Intelligence podcast, available on apples, Spotify,

549
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550
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00:28:59,000 --> 00:29:02,560
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