Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 2: Back to the top story. In some breaking news that
Speaker 2: we continue to cover, dozens of Democratic lawmakers are considering
Speaker 2: signing a letter demanding President Joe Biden withdraw from the race.
Speaker 2: A senior party official said as panic mounts that he'll
Speaker 2: cost them control of Congress. This exclusive report coming just
Speaker 2: in the last ten minutes from Billy House and Eric Wasason.
Speaker 2: Billy is Bloomberg News congressional reporter. He joins us from
Speaker 2: our Washington DC bureau right now, Billy, the calls for
Speaker 2: Biden to step aside are growing increasingly louder. This time though,
Speaker 2: it's coming from lawmakers who are concerned about Congress.
Speaker 3: What did you learn?
Speaker 4: Yeah, there's a draft letter that's prepared for signing, has
Speaker 4: not been sent out, but it is being circulated from
Speaker 4: safe seat democrats. These are Democrats from traditionally safe seats,
Speaker 4: non competitive areas. This underscores that it's just not people
Speaker 4: worried about losing their elections who are concerned about Biden
Speaker 4: staying on the ticket, but those who likely will be
Speaker 4: re elected and concerned about the state of Congress as
Speaker 4: a way to put a break on perhaps a Trump presidency.
Speaker 3: Billy, this is such an unusual situation. Obviously, I can't
Speaker 3: ever remember in my many years on this planet of
Speaker 3: the House Democrats actually moving against a president like this.
Speaker 3: Do we have any sense of who will be the
Speaker 3: signers of this letter? I mean, could it be a
Speaker 3: Nancy Pelosi type of person to actually sign on to this?
Speaker 4: I think it's far more likely to be a senior
Speaker 4: Democratic lawmakers, again from safe seats, who are concerned about
Speaker 4: status on committees on legislation and on ability to block
Speaker 4: the White House Trump White House from ramming through things.
Speaker 4: These are probably veteran lawmakers, and the question is will
Speaker 4: they pull the trigger and actually send this letter, and
Speaker 4: or will something else happen to prevent that?
Speaker 1: Billy?
Speaker 2: Is the concern here that that Trump will become president
Speaker 2: and that Republicans will control Congress?
Speaker 1: Also?
Speaker 2: Is this a last ditch effort at this point to
Speaker 2: have a Congress that is not in the same party
Speaker 2: as the president?
Speaker 4: Well, the concern is that both the Senate and the
Speaker 4: House would fall because of a Biden candidacy, that that
Speaker 4: would derail down ballot candidacies, and the fact that Democrats
Speaker 4: are fearful of a White House and Congress totally dominated
Speaker 4: by Republicans running this country.
Speaker 3: Yeah, but I wonder you mentioned, well they really pull
Speaker 3: the trigger? I mean, is them leaking this news to
Speaker 3: you sort of enough to get that message across to Biden?
Speaker 3: Do you think that's part of the plan, is just
Speaker 3: to make it clear to Biden that this is something
Speaker 3: they're willing to do.
Speaker 4: Could be the case, but we do know that Biden's
Speaker 4: hearing some of these concerns. In fact, he called a
Speaker 4: House Minority leader, King Jeffries for a second time yesterday
Speaker 4: for a very what was described as a very personal talk,
Speaker 4: very private talk, and the House Democrats, a group of
Speaker 4: them got together for some legislative discussion yesterday, but that
Speaker 4: devolved into a fear fest, panicky gripe session about what
Speaker 4: happened if Biden sticks around?
Speaker 2: Well, so what happens if he doesn't, though, that's I
Speaker 2: think a big question as well. There's no as Mike mentioned,
Speaker 2: that hasn't happened in our lifetimes that this late in
Speaker 2: a candidacy, a president sitting president has decided not to continue,
Speaker 2: or even a presumptive nominee has decided not to continue.
Speaker 2: You go back to nineteen sixty eight and Lyndon Johnson,
Speaker 2: but that was back in March when he decided not
Speaker 2: to pursue the presidency, was before the primaries. Billy, what
Speaker 2: happens if he were to step aside?
Speaker 4: Well, that's the big question. Of course, Hubert Humphrey didn't
Speaker 4: farewell back in sixty eight when Johnson withdrew late in
Speaker 4: the game. They are all kinds of scenarios and nobody
Speaker 4: really knows for sure whether Kamala Harris, the vice president,
Speaker 4: would simply be the choice, or there would be an
Speaker 4: open convention, or what exactly would happen. And that's or
Speaker 4: whether it would actually be a boost for Democrats to
Speaker 4: drop Biden this late in the game.
Speaker 3: Well, Billy, what a tremendous scoop on this letter potentially
Speaker 3: from House Democrats. How do you see it all playing out?
Speaker 3: I mean, your guess is as good as anyone's is.
Speaker 3: This kind of looked like the last straw for Biden.
Speaker 3: This type of thing happening.
Speaker 4: It's really hard to tell, but I would suspect he has,
Speaker 4: and others have suggested that he really has just a
Speaker 4: matter of days to turn this around with performances at
Speaker 4: public events or an interview on ABC. But this pressure
Speaker 4: on him is moving faster than many many expected, and
Speaker 4: people are now talking just days for him to do
Speaker 4: something dramatically to show that he's fit and ready to
Speaker 4: stay on board with this campaign.
Speaker 2: Billy, what did you see shift in recent days? Because
Speaker 2: as soon as the debate ended and everybody realized it
Speaker 2: was a political catastrophe for the sitting president, you did
Speaker 2: have a lot of folks come out with what seemed
Speaker 2: like the very manicured statements, including Foreign President Obama, who
Speaker 2: worked closely with Biden for eight years, and others as well,
Speaker 2: sort of mounting this defensive that seemed very coordinated. But
Speaker 2: something shifted in recent days.
Speaker 1: Well, whether something.
Speaker 4: Shifted or something didn't happen that they had asked to happen.
Speaker 4: I mean, certainly the White House and the Biden campaign
Speaker 4: and the President himself had been asking Democrats to keep
Speaker 4: their powder dry in terms of calls for him to withdraw,
Speaker 4: to give him time to show that was that shaky
Speaker 4: debate performance was not really the best picture of where
Speaker 4: he and how he can perform. But instead of really
Speaker 4: coming out forcefully in these few days, he asked, he
Speaker 4: has not done that.
Speaker 2: Hey, Billy, We're gonna let you run because I know
Speaker 2: you are super busy. Once again, this breaking news just
Speaker 2: happening just before the noon hour. Just in the last
Speaker 2: twenty minutes, Billy House and Eric Wasason reporting that House
Speaker 2: Democrats are considering demanding that Biden withdraw from the race.
Speaker 2: Billy House is Bloomberg News Congressional reporter joining us from Washington, DC.
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Speaker 5: So funny story. Yesterday, Tim and I do a simul
Speaker 5: cast together. I'm on TV, he's on radio, and we
Speaker 5: do a simulcast. I'm at the closing bell and we're
Speaker 5: talking about Paramount, and Tim.
Speaker 2: Says, I say, well, more news in Paramount yesterday because
Speaker 2: there were a couple reports that there were some bidders circling,
Speaker 2: and I said, when is this story just going to die?
Speaker 2: When is this going to be done?
Speaker 4: Yeah?
Speaker 5: And then literally like two and a half seconds later,
Speaker 5: there is a headline that said sky Dance and Paramount
Speaker 5: have been talking for a deal.
Speaker 3: A deal.
Speaker 2: I thought Skydance was out, so did we.
Speaker 5: And apparently now they have a preliminary agreement. So it's
Speaker 5: so confusing. Luckily, Keitha Rongganathan Bloomberg Intelligence US media analyst
Speaker 5: can help us. Keitha, what is happening?
Speaker 6: Yeah, thank you so much for having me, Alex and Tim. Yeah,
Speaker 6: it's it's not over until it's over. And this this movie.
Speaker 6: We've seen this movie now play out so many times.
Speaker 6: But yes, sky Dance is back. It looks like they
Speaker 6: have amended some of the terms of the deal agreement
Speaker 6: with Paramount. Remember they had been in this very very
Speaker 6: long drawn out negotiating process. We're talking almost six seven months,
Speaker 6: and then right when they were at the finish line
Speaker 6: somewhere in mid June, you know, Sherry Redstone basically just
Speaker 6: walked away, you know, from the entire deal. But I
Speaker 6: think now they're back, and I think the one big
Speaker 6: thing that Sherry Redstone was kind of looking for, which
Speaker 6: she seems to have gotten, is slightly better in terms
Speaker 6: of the amount of cash that she's going to get paid,
Speaker 6: So I think previously it was about one point seven billion,
Speaker 6: now it's one point seven five billion. But I think
Speaker 6: more importantly is that she is getting stronger indemnification languages
Speaker 6: language in the deal agreement, which basically protects her from
Speaker 6: any potential lawsuits. That's something that she has been pretty
Speaker 6: worried about because remember the sky Dance steal basically favors
Speaker 6: her over everybody else, so that is obviously breeding ground
Speaker 6: for a lot of litigation. And the one thing I
Speaker 6: think that is going to work for skuy Dance and
Speaker 6: David Ellison is that there is no longer this requirement
Speaker 6: for the majority of the minority shareholder approval, which was
Speaker 6: kind of a non starter for David Ellison. So I
Speaker 6: think she has said that, Okay, we don't need that anymore.
Speaker 6: So that's where we stand right now. We're really not
Speaker 6: sure about, you know, if there are any deal sweeteners
Speaker 6: for the Class B shareholders or what else is happening
Speaker 6: in terms of the other deal terms.
Speaker 2: Yeah, this is a very complicated deal, and it's also
Speaker 2: given the dual class share structure makes it even more complicated. Kita,
Speaker 2: I'm wondering who gets what lay it out for us?
Speaker 2: Because we know David Allison, who's we should notice, the
Speaker 2: son of Larry Allison. He's a film producer, he's certainly
Speaker 2: interested in the studio business. But who gets what if
Speaker 2: this deal were to go through?
Speaker 6: Yes, I think what is going to happen is, obviously,
Speaker 6: as you said, this is an extremely convoluted, complex process.
Speaker 6: So in stage one of this deal, it's a multi
Speaker 6: step deal. In stage one, what is going to happen
Speaker 6: is Skydance is basically going to acquire National Amusements. Now,
Speaker 6: National Amusements is the parent company of Paramount.
Speaker 2: Okay, I'm just getting out the white board to make
Speaker 2: a diagram here.
Speaker 5: Actually that's a good idea.
Speaker 6: Yeah, yeah, it holds about eighty percent of the voting
Speaker 6: stock for Paramount. So they're going to go ahead and
Speaker 6: do that transaction first, and then once that's in place,
Speaker 6: then they're actually Paramount is going to merge with sky Dance,
Speaker 6: so it becomes one whole combined entity. And then obviously,
Speaker 6: right now you have this really kind of funny structure
Speaker 6: at the paramount, So they've basically fired their previous CEO,
Speaker 6: Bob Backash, and now they have kind of this three
Speaker 6: headed CEO, so they have three different division chiefs who
Speaker 6: are heading the company as kind of the stop gap arrangement.
Speaker 6: So I think the plan is once David Ellison takes control,
Speaker 6: he's going to have Jeff Shell run the whole thing.
Speaker 6: And remember Jeff Shell used to run NBC, so he's
Speaker 6: extremely familiar with the media business. So that is kind
Speaker 6: of the tentative plan. But again we'll have to say.
Speaker 6: And I think the reason why Sherry Redstone prefers the
Speaker 6: sky Dance plan to let's say, the Sony Apollo plan,
Speaker 6: which actually gave better financial terms to the rest of
Speaker 6: the shareholders, was because they were really looking to sell
Speaker 6: a lot of the assets and only keep the studio.
Speaker 6: I think what Skydance has promised Sherry is that they
Speaker 6: will keep the company pretty much intact before they start
Speaker 6: looking to kind of dispose of assets. And I think
Speaker 6: that was very important for Sherry and kind of her
Speaker 6: preserve her her family's legacy.
Speaker 5: So one key point though, was the majority of the
Speaker 5: minority of the voting shares won't have to vote on
Speaker 5: this deal. How are the majority of the minority voting
Speaker 5: shareholders going to feel about that?
Speaker 6: Not good? And that's been the feeling all true, right
Speaker 6: because this was Sherry Redstone basically having her payday at
Speaker 6: the expense of everybody else, and so they have been threatening.
Speaker 6: You know, Mario Gabelli especially has been extremely vocal about this.
Speaker 6: He has been threatening litigation. He said, don't go down
Speaker 6: this path with sky Dance because I'm definitely going to
Speaker 6: sue you. Everybody else is going to sue you as well.
Speaker 6: So you know, obviously they do not like this, which
Speaker 6: is why you know sky Dance was kind of putting
Speaker 6: in all of these different deal sweeteners for the Class
Speaker 6: B shareholders, even for the Class A shareholders. But again,
Speaker 6: I think Shary Redstone, especially when you know about three
Speaker 6: weeks ago when she said no, was again scared of
Speaker 6: all the litigation that was going to come her way.
Speaker 6: And I think the other thing that has happened Alex
Speaker 6: over the past few days is, you know, the regulatory environment.
Speaker 6: I think there's a whole different perspective of what might
Speaker 6: happen in Washington right now. So I think initially we
Speaker 6: were kind of looking at a regulatory process that was
Speaker 6: going to be extremely difficult for these companies across the
Speaker 6: finish line. If you have a Trump administration, that whole
Speaker 6: climate definitely changes. It eases things up. It's pro consolidation.
Speaker 6: So I think maybe that these companies are looking at
Speaker 6: it from that perspective as well.
Speaker 2: That's interesting. I mean, that's a big bet to make
Speaker 2: ahead of an election where a lot can still happen.
Speaker 2: I think many people would argue, Gita, this is I
Speaker 2: don't have to tell you this, and I don't have
Speaker 2: to tell much of our audience this. But media is
Speaker 2: a tough business right now, and I'm wondering what makes
Speaker 2: these assets attractive to this buyer. We're in an environment
Speaker 2: where we're seeing traditional linear TV just completely fall apart.
Speaker 2: The movie business is being taken on by the it's
Speaker 2: not even fair to call them upstarts, but the streamers,
Speaker 2: the legacy companies are trying to adapt to become streamers,
Speaker 2: with very mixed success. I think it's fair to say,
Speaker 2: what are the attractive parts of Paramount's business.
Speaker 6: Yeah, so definitely not the TV networks. I mean one
Speaker 6: could argue that.
Speaker 5: Okay, Survivor is still awesome. Okay, let's just put it
Speaker 5: out there. You know how I feel about this, KEITHA.
Speaker 6: Yeah, Well, CBS I was I was going to say,
Speaker 6: CBS is actually the one crown jewel in the whole
Speaker 6: Paramount TV portfolio. And obviously that has you know, Survivor,
Speaker 6: that has all of the NFL, all of the sports, right,
Speaker 6: it has a pretty pretty robust news lineup, so you know,
Speaker 6: when it comes to sports and news which CBS has,
Speaker 6: they're actually in a good place. It's the rest of
Speaker 6: the Paramount and the Viacom cable networks that are really
Speaker 6: not in such a good place, which is you know, Nickelodeon,
Speaker 6: Comedy Central, you know, MTV, VH one, all of these
Speaker 6: other channels which are general entertainment channels which have basically
Speaker 6: been exposed to the most rapid kind of deterioration in
Speaker 6: terms of audiences. So obviously that part of the business,
Speaker 6: I'm not really sure who would really want. Maybe Warner
Speaker 6: Brothers Discovery, maybe they see that there's you know, they
Speaker 6: could potentially be some kind of synergies there. But again
Speaker 6: sky Dance, I know has not you know, is not
Speaker 6: obviously very excited about that. The one ascid that sky
Speaker 6: Dance is definitely very excited about is the studio. And
Speaker 6: remember they've had a long history with Paramount. I mean
Speaker 6: they've financed so many of the movies, whether you know
Speaker 6: it's Transformers or Mission Impossible.
Speaker 2: So they did the New Top Gun too.
Speaker 6: H Yeah, Okay, New Top Gun as well. So they've
Speaker 6: had a long history with Cherry Redstone with the Paramount
Speaker 6: studio business. And remember, at the end of the day,
Speaker 6: content is king and they know that. And you know,
Speaker 6: whether the Paramount plus streaming service works or not, I mean,
Speaker 6: this content is still valuable and they could sell it
Speaker 6: to Amazon, they could sell a lot of this content
Speaker 6: to Netflix. They're already doing some deals. But again, the
Speaker 6: content is definitely valuable, and there is definitely this arms
Speaker 6: race for content. So you know, I think they definitely
Speaker 6: want the content production piece of it. Again, You're absolutely
Speaker 6: right that the TV networks is going to be a
Speaker 6: little bit hard, But I think that's what Cherry Redstone
Speaker 6: also realizes, and she realizes that the longer this process
Speaker 6: kind of drags out, the less and less valuable those
Speaker 6: assets are going to be.
Speaker 5: Do we think that Paramount stands a chance? Like what, Okay,
Speaker 5: let's just say this actually happens, what's your time frame, Like,
Speaker 5: let's give them a year, six months?
Speaker 6: You mean as a standalone company.
Speaker 5: Yeah, like until you say, okay, this deal is a
Speaker 5: success or the deal was not a success.
Speaker 6: Yeah, oh okay, okay. So once the deal actually goes through, Yeah,
Speaker 6: I think you know, it would take at least about
Speaker 6: twelve to eighteen months to kind of get the whole
Speaker 6: integration done and to kind of figure out what the
Speaker 6: path forward would be. So yeah, I think it would,
Speaker 6: you know. And we're also kind of looking at this
Speaker 6: broader media landscape also, Alex, in terms of what could
Speaker 6: happen in terms of other deals, right what is going
Speaker 6: to happen with Warner Brothers, Discovery, what's going to happen
Speaker 6: with Peacock and NBC? And there probably is a whole
Speaker 6: wave of consolidation coming. It's just that the regulatory climate
Speaker 6: right now looks extremely difficult.
Speaker 5: All right, Githa, We really appreciate it. We appreciate you
Speaker 5: and all these circumstances. Either on Nathan Bloomberg, intelligence US
Speaker 5: media analyst. Yeah, I don't have Tim knows this about me.
Speaker 5: I'm a big survivor. I didn't know that about it
Speaker 5: and yeah, well we got into it when I had
Speaker 5: a concussion in November, and then my family and I
Speaker 5: we have like joint surveyor survivor family night. We talk
Speaker 5: about it and we learn things.
Speaker 2: It's like a whole It's like Season in the thirties.
Speaker 5: We Big Bong No. Forty six maybe for we Big
Speaker 5: Bong all over. We're currently watching I think season thirty six.
Speaker 5: We kind of just go where we feel. And then yeah,
Speaker 5: it's a guilty secret that I have that I apparently
Speaker 5: share with all of radio.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 2: If you go to our EA d go on the
Speaker 2: Bloomberg terminal, you can see the most red stories over
Speaker 2: the last eight hours, over the last one hour. You
Speaker 2: can play around with it. And one thing that you're
Speaker 2: seeing right now is the most red story in the
Speaker 2: last eight hours is JP Morgan's Kalanovic to exit amid
Speaker 2: string of poor stock calls. We're very lucky to have
Speaker 2: it with us.
Speaker 1: This morning.
Speaker 2: Alexandra Semenova. She is Bloomberg Equities reporter and she's here
Speaker 2: in our Bloomberg Interactive Broker's studio. This was huge news.
Speaker 2: Congratulations on the scoop. It's got a green bee or
Speaker 2: black b in a green circle on the terminal, which
Speaker 2: means it's a Bloomberg exclusive. You were the first to
Speaker 2: report about this huge news happening. What's going on?
Speaker 7: Yeah, thank you guys for having me on. So obviously
Speaker 7: pretty significant that one of the most prominent forecasters on
Speaker 7: Wall Street is leaving JP Morgan. He's been at the
Speaker 7: firm for nineteen years. He most recently has become known
Speaker 7: for being one of the few remaining contrarions on Wall Street,
Speaker 7: sticking with his s and P five hundred target of
Speaker 7: forty two one hundred. That's a drop of more than
Speaker 7: twenty percent from where we are now before the year ends,
Speaker 7: and it's been a bit of a challenging run for
Speaker 7: him over the last three years. In twenty twenty two,
Speaker 7: he was bullish through much of the route that we experienced.
Speaker 7: Last year, he stayed bearish even as the SMP five
Speaker 7: hundred rows twenty four percent, and then of course this
Speaker 7: year he's kind of stuck with that call in the
Speaker 7: face of the rally, so, you know, I mean, it's
Speaker 7: always a tough job to try to predict the market,
Speaker 7: but especially when you're in a very prominent position like
Speaker 7: that and making calls as a face of JP Morgan's
Speaker 7: research team.
Speaker 3: You know, Alexandra, what I find interesting about Marko Klanovich
Speaker 3: is he was one of the first strategists who sort
Speaker 3: of looked at how some of the big quant funds
Speaker 3: were trading and their influence on the market. You know,
Speaker 3: most strategists look at, you know, what they expect earnings
Speaker 3: per share to do what they expect for you know,
Speaker 3: interest rates, that sort of thing. He really got in
Speaker 3: the weeds on, you know, your volatility targeting hedge funds
Speaker 3: and momentum tracing CTA funds. What exactly in his thinking
Speaker 3: was led him to believe that we're due for this
Speaker 3: bearish turn this year.
Speaker 7: Yeah, I mean, as you point out, Mike, the guy's brilliant.
Speaker 7: He has a PhD in physics. You know, he has
Speaker 7: obviously been very focused on the quantitative aspect of you know,
Speaker 7: all of this. He's been talking a lot over the
Speaker 7: last few years about you know, very low volatility and
Speaker 7: how that's been an issue for market. So that has
Speaker 7: definitely been part of his call recently. You know, he
Speaker 7: is saying that a lot of people are you know,
Speaker 7: too optimistic given the macroeconomic backdrop. He says that we're
Speaker 7: at the end of this business cycle that with sustained
Speaker 7: higher rates, it's going to be very difficult to achieve
Speaker 7: the growth that appears to be priced into equity markets.
Speaker 7: And he was just you know, insisting that eventually we
Speaker 7: will get that drop that he's calling for.
Speaker 2: So if I go to your biopage, just see all
Speaker 2: the stories that you've written in recent days, and you
Speaker 2: have to scroll a lot because you've written so many stories.
Speaker 2: You have an interview with David Kelly JP Morgan Asset
Speaker 2: Management of JP Morgan Asset Management, and his call that
Speaker 2: he shared with you was polar opposite of Marco Kolonovic's call.
Speaker 2: These two guys work at the same firm, they're making
Speaker 2: different calls, they're out there in public. How does that
Speaker 2: relationship work? How does it work that they're they're not
Speaker 2: sort of espousing the same thing. Is it is that
Speaker 2: hard for employees there, like, help me understand how that works?
Speaker 7: Yeah, so that's been really really interesting. So technically it
Speaker 7: is really you know, a good thing to have different
Speaker 7: views under one roof of diversity of opinion. But it
Speaker 7: feels like, you know, it's been more pronounced over the
Speaker 7: past two years as a lot of people are struggling
Speaker 7: to predict what will happen, and it's certainly been pronounced.
Speaker 7: To JP Morgan, they're trading desk actually led by Andrew Tyler.
Speaker 7: They're very bullish. Andrew Tyler has said that his outlook
Speaker 7: doesn't depend on it interest straight cuts, that the economy
Speaker 7: is good, that earnings are strong, and you know, the
Speaker 7: equity run can continue. And then of course at JP
Speaker 7: Morgan Asset Management, David Kelly also very constructive on equities.
Speaker 7: He does say that he doesn't really like the mag seven.
Speaker 7: He says, stay away from the top ten stocks if
Speaker 7: you're a long term in investors. He wants to you know,
Speaker 7: he recommends avoiding some of what he thinks is froth
Speaker 7: forming at the top, but he overall does think that
Speaker 7: you know, maybe things will broaden out and that so
Speaker 7: far equities can chug along. So very different views from Klanovic.
Speaker 3: You know, it's a true it's not unusual for there
Speaker 3: to be sort of turnover in these chief market strategist
Speaker 3: roles at the big banks.
Speaker 2: You know, it's a hard job right now, a very
Speaker 2: hard job.
Speaker 7: I don't envy anyone who's doing it.
Speaker 3: I always compared to like, you know, forecasting the weather
Speaker 3: on the year's eve of twenty twenty seven or something
Speaker 3: like that. It's an incredibly difficult job. But you know,
Speaker 3: Klanovitch was such a brand name. How did you sort
Speaker 3: of catch on that he was leaving the firm? I mean,
Speaker 3: is there any drama there? Do we really know what's
Speaker 3: going on as far as why he's leaving.
Speaker 7: Yeah, So, you know, very interesting. Interestingly, some sources have
Speaker 7: told me that he wasn't at their recent conference in Paris,
Speaker 7: and then JPM Morgan did have a webinar for their
Speaker 7: mediar outlook and he did not participate in that. So
Speaker 7: definitely can sense some of the pressure going on perhaps
Speaker 7: internally ahead of this news and ahead of this announcement
Speaker 7: and to you know, to that point, now dubrothco lekos Bujas,
Speaker 7: who was the chief equity strategy he is moving on
Speaker 7: to take on Kolonovix's roles chief market strategist and Hussain Malik,
Speaker 7: who was co head of Global research with Kolonivik, will
Speaker 7: now be the sole head of Global Research. So a
Speaker 7: lot of moves going on on the research team there overall.
Speaker 2: Hey, I want to remind everyone of some breaking news
Speaker 2: that we've been covering over the last hour or so.
Speaker 2: The drumbeat of pressure on President Joe Biden to drop
Speaker 2: out of the presidential race intensified on Wednesday with a
Speaker 2: bombshell report in The New York Times that he had
Speaker 2: conceded to an ally that he might have to abandon
Speaker 2: his re election bid if he was unable to turn
Speaker 2: around public opinion in the coming days. The White House
Speaker 2: and Biden's campaign quickly denied the report, but time is
Speaker 2: running out for the beleaguered president to convince anxious Democratic officials, donors,
Speaker 2: and voters that he remains viable in his efforts to
Speaker 2: keep former President Donald Trump from returning to office. We're
Speaker 2: going to continue to have coverage of this developing story
Speaker 2: as more information does break. Alex, I just want to
Speaker 2: end with you and sort of get the last word
Speaker 2: here as to what we know about next moves for Marco.
Speaker 6: We know what is he what is he going to
Speaker 6: be working on.
Speaker 7: Unclear what the next move will be, very keen to
Speaker 7: find out, but it is very common for strategists at
Speaker 7: these banks to sometimes move on to open up their
Speaker 7: own research shops. The most recent example that comes to
Speaker 7: mind is Adam Parker, who was chief US equity strategist
Speaker 7: for Morgan Stanley. He is now running his own firm,
Speaker 7: Trivariate Research, so a lot of that could happen. Will
Speaker 7: definitely stay on top of whatever his next move might be.
Speaker 3: Tom Lee. Tom Lee was the head of equity the
Speaker 3: chap Morgan too.
Speaker 2: And he's been in the news a ton lately. Yeah,
Speaker 2: this is what the market needs, is for the I
Speaker 2: think I saw on oddline.
Speaker 7: Yeah, fifteen thousand by the end of twenty three.
Speaker 1: Wow.
Speaker 2: Okay, so quite a bit.
Speaker 1: Hey.
Speaker 2: Alex Simonova, Bloomberg News Equities reporter here in our Bloomberg
Speaker 2: Interactive Broker's studio. Check out her story. It is the
Speaker 2: most read in the last eight hours on the Bloomberg terminal.
Speaker 2: This is Bloomberg.
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Speaker 5: Okay, let's get to the ISM services. As Charlie was
Speaker 5: just saying, you had a yields dropping after IM Services
Speaker 5: coming at a four year low. Steve Miller, IM Services
Speaker 5: chair joins us in Fort Worth, Texas. Hey Steve, what
Speaker 5: is happening?
Speaker 3: Hi?
Speaker 8: Hi, good morning Alex.
Speaker 6: Yeah, it was.
Speaker 8: It was a surprise for sure. We saw, you know,
Speaker 8: three of the sub indexes dropping from from last month
Speaker 8: and and we think that's what well, that's definitely what
Speaker 8: drove the overall the overall rating down. The only the
Speaker 8: business activity new orders and employment. We're in contracting territory,
Speaker 8: the supplier delivery state and expansion territory. But with a
Speaker 8: small drop, how.
Speaker 2: Do you explain it? I mean, we we get the numbers,
Speaker 2: we have the data in front of us. As you mentioned, surprise,
Speaker 2: lowest in four years. How do you explain it?
Speaker 8: Well, what we saw from you know, so two months
Speaker 8: ago we saw a contraction reading and then last month
Speaker 8: we saw I'd bump up, hoping that that was a
Speaker 8: return to growth. But what we saw was real estate
Speaker 8: rental and leasing returned to negative, transportation and warehousing returned
Speaker 8: to negative, and h and we saw mining consistent negative,
Speaker 8: and information and wholesale trade also swapped from from growth
Speaker 8: to contraction. So we saw a pretty significant shift from
Speaker 8: from many companies in the growth mode to atraction.
Speaker 5: So is this is this like bad news like processionary
Speaker 5: harbinger thing or is this just a softening like what
Speaker 5: what's the read ahead?
Speaker 8: Yeah, so one of the things that we saw in
Speaker 8: the numbers was was a continuing commentary on costs being high,
Speaker 8: but we saw some backing off of the rate of increase.
Speaker 8: So I'm so, you know, we're hoping that this is
Speaker 8: this is a blip. And and from the overall commentary,
Speaker 8: there was a bit of a mix in terms of
Speaker 8: positive of sustained business kind of meeting plan. So it
Speaker 8: didn't seem like a shock from the overall commentary, but
Speaker 8: it certainly wasn't good news.
Speaker 2: Yeah, that's what I'm trying to Is it good news
Speaker 2: for the FED?
Speaker 1: Though?
Speaker 8: You know it kind of the down up down that
Speaker 8: we saw this month, in the last two months, I
Speaker 8: certainly give some credence to the FED and saying you know,
Speaker 8: let's look at things for a little while, make sure
Speaker 8: that we're seeing that stabilization before rate cuts.
Speaker 5: Just one more question, then the consumer. Does this show
Speaker 5: that the consumer is slowing and buying less stuff?
Speaker 1: Well, we saw.
Speaker 8: Retail trade for the second month in a row in
Speaker 8: contraction mode, and then wholesale trade went from went from
Speaker 8: expansion to contraction mode from last month to this month.
Speaker 8: So I would say, yes, all.
Speaker 2: Right, Steve, we're gonna have to leave it there. Thanks
Speaker 2: so much for joining us. Steve Miller is ISM Services Chair.
Speaker 2: He joins us from Fort Worth, Texas. Once again June,
Speaker 2: us ISM Services falling to forty eight point eight below
Speaker 2: all estimates.
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