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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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Speaker 2: with Lisa Bromwitz and Amrie Hordern join us each day

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Speaker 2: for insight from the best in markets, economics, and geopolitics

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Speaker 2: from our global headquarters in New York City. We are

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Speaker 2: live on Bloomberg Television weekday mornings from six to nine

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Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or

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Speaker 2: anywhere else you listen, and as always on the Bloomberg

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Speaker 2: Terminal and the Bloomberg Business app. We begin the sour

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Speaker 2: stocks lower, much lower, global equality slammed as investor worries

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Speaker 2: over China AI startup deep seek lead to questions about

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Speaker 2: US tech leadership and valuations. Victoria Fernandez of Crossmark Global

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Speaker 2: Investments with this to say, we expect high levels of

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Speaker 2: volatility as markets try to find a broader footing than

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Speaker 2: the highly concentrated environment of just a handful.

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Speaker 3: Of tech names.

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Speaker 2: There appears to be little room for error as we

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Speaker 2: enter the new year with elevated sentiment levels and extremes invaluations.

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Speaker 2: Victoria joins us now for more. Victoria, welcome to the program. You,

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Speaker 2: of course wrote that before this big shakeout in the

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Speaker 2: equity market, can you share with us your thoughts this

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Speaker 2: morning as to whether you really believe this is a

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Speaker 2: threat to US dominance.

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Speaker 4: Yeah, I don't know if I would say threat to

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Speaker 4: US dominance, Jonathan bet I do think it's a threat

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Speaker 4: to the expectations that we had coming into this year

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Speaker 4: that we were going to have this extremely strong growth

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Speaker 4: for this year and that that was going to lead

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Speaker 4: the stock market higher and lead bony olds higher. So

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Speaker 4: there is a threat to that component, and what does

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Speaker 4: that mean in regards to the FED. Obviously, the tech

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Speaker 4: game can turn on a dime. We've seen it over

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Speaker 4: the last twenty four hours. I do think that the

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Speaker 4: US is probably still a little bit of head in

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Speaker 4: this race, in this tech race, because of all of

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Speaker 4: the investment that we have put in there. But it

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Speaker 4: looks like the story is China is not as far

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Speaker 4: back as what p people thought, They are much closer.

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Speaker 4: So it leads to some questions, and obviously we see

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Speaker 4: that response in the markets today, and it also leads

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Speaker 4: to the concern that the US China trade wars and

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Speaker 4: the restrictions on chips and things like that could get

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Speaker 4: even more heated, which will bring more volatility to this market.

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Speaker 2: So Victoria, let's go through the individual components of the

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Speaker 2: market breakdown in equities, and you can share with us

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Speaker 2: where you'd be constructive and where maybe you'd be hands off.

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Speaker 2: So you've got the likes of Nvidia, the obvious place

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Speaker 2: to start. That gets hammered, how many chips do we

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Speaker 2: actually need to make this kind of progress? And then

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Speaker 2: you've got the big spenders on those chips, the likes

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Speaker 2: of Microsoft and Meta. They're getting some real competition, They've

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Speaker 2: spent a lot of money.

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Speaker 3: They're declining this morning. And then you've got the energy.

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Speaker 2: Names as well, So the whole ecosystems being questioned. The

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Speaker 2: utilities that ran up aggressively over the last twelve months

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Speaker 2: are getting hit this morning too. What would you be

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Speaker 2: looking to pick up the pieces with, Victoria, would you

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Speaker 2: be willing to say, you know what, I'm going to

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Speaker 2: stay away for the time big.

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Speaker 3: Yeah.

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Speaker 4: So, as you know at Crossmark actually been underweight a

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Speaker 4: lot of these names versus the market over the past

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Speaker 4: nine months to twelve months because we were taking a

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Speaker 4: little bit off the table as things went along. So

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Speaker 4: I think that's what you you know hopefully have done,

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Speaker 4: so your position is a little bit less. I would

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Speaker 4: not go in and pick names up right now at

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Speaker 4: this point in time. I would let this shake out

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Speaker 4: a little bit, unless you want to make a very

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Speaker 4: tactical move and go in and be trading, you know,

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Speaker 4: every few hours or every day in these names. If

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Speaker 4: you're a long term investor, let this shake out a

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Speaker 4: little bit.

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Speaker 3: You're right.

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Speaker 4: The whole ecosystem, from utilities to chips, to the support

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Speaker 4: to the software, have all been rattled here. So I

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Speaker 4: would actually look at some of the other areas of

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Speaker 4: the market. I would look at some industrials. I would

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Speaker 4: look at some financials and see if you could find

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Speaker 4: some areas there to put your money to work while

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Speaker 4: you let these elements kind of fade a little bit.

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Speaker 5: How does an influence though, and there is still a

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Speaker 5: lot to be learned in terms of how broadly applicable

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Speaker 5: and how truly revolutionary this is. But Victoria, how much

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Speaker 5: does it change thesis on the energy space in particular,

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Speaker 5: at a time we're already Donald Trump wants to increase

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Speaker 5: the US infrastructure and keep energy prices low.

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Speaker 4: Yeah, so obviously the energy names that are being hit

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Speaker 4: today there was such this huge expectation that demand would

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Speaker 4: increase because of AI, that we were going to be

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Speaker 4: building lots of data centers, we were going to need

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Speaker 4: all of this power coming from these companies, and that

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Speaker 4: tone has shifted when you look at the oil companies

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Speaker 4: and you look at some.

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Speaker 6: Of the other energy companies.

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Speaker 4: Though we've been expecting that the price of oil is

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Speaker 4: going to come down, we know that that's what this

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Speaker 4: current administration wants to do and that was going to

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Speaker 4: be difficult for some of these companies. So we were

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Speaker 4: already shifting and looking at more of the midstream, the

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Speaker 4: transportation components of the oil and gas and the energy

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Speaker 4: companies versus maybe some of the upstream or utilities themselves.

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Speaker 4: So I think you can make that shift and then

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Speaker 4: if things change and the expectation starts to move higher again,

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Speaker 4: you can add a little bit more or back to

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Speaker 4: that part of your portfolio.

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Speaker 5: There's another aspect of the trade this morning, and something

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Speaker 5: Jim Bianco pointed to is simply algorithmic buying in the

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Speaker 5: bond space. Does a change of you with the FEDSTNE

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Speaker 5: this week, Given the fact that there was so much

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Speaker 5: expectation around growth and even potentially a resurgence and inflation.

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Speaker 3: Does this put a damper on that.

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Speaker 5: Given that where the stock market goes so to the sentiment,

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Speaker 5: I think it.

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Speaker 4: Does a little bit, Lisa. I mean we've talked over

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Speaker 4: the last few weeks about that rise in the longer

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Speaker 4: end part of the curve. Then it really wasn't due

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Speaker 4: to inflation expectations brape evens have held pretty steady. It

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Speaker 4: was due to tertle gremium to the growth that we

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Speaker 4: were looking for, meaning what I'm f saying three point

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Speaker 4: three percent growth globally over the next couple of years.

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Speaker 4: I have a feeling that'll probably come down if the

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Speaker 4: AI story continues the way it is today. So if

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Speaker 4: growth expectations are lower, that's why you're seeing that longer

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Speaker 4: end part of the curve come down, and that steepness

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Speaker 4: of the curve that has been a benefit for financials

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Speaker 4: and for banks will start to go away a little bit.

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Speaker 4: So it does shift the story, and I think it

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Speaker 4: actually gives the Fed a little bit more room to

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Speaker 4: take this pause because volatility.

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Speaker 6: Is continuing to go up.

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Speaker 4: Look at the VIX today, it's up what thirty percent

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Speaker 4: just this morning, and it was a net speculative short

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Speaker 4: position on VIX over the weekend, so I think we'll

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Speaker 4: see a lot more volatility that's going to give the

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Speaker 4: FED more.

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Speaker 6: Time to pause.

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Speaker 3: Victoria, you have to forgive me.

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Speaker 5: My head's kind of spinning here because there are these

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Speaker 5: competing narratives that are hard to get my head around.

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Speaker 5: You've got the AI revolution that may or may not

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Speaker 5: transpire in short order as a result of greater efficiency.

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Speaker 5: You have a FED at the scrappling with growth expectations

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Speaker 5: and just where we are currently in the economy. And

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Speaker 5: then you have politics overlaying on that, which is part

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Speaker 5: of the reason why people were saying that bonds were

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Speaker 5: selling off, that the deficit is just increasing dramatically, and

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Speaker 5: that at some point the bond vigilantes are back. Which

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Speaker 5: story are you paying most attention to? What's your sort

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Speaker 5: of load star at a time of so many cross currents.

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Speaker 4: Yeah, you're right, I mean there's it's different stories you

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Speaker 4: can look at, and really, depending on what you want

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Speaker 4: your story to be, you can find the right evidence

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Speaker 4: to back that up. For me, it's obviously the bond market,

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Speaker 4: not that we say the bond market's always right, and

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Speaker 4: the equity market isn't. But the bond market is giving

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Speaker 4: us a lot of clues as to what's going on

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Speaker 4: in regards to inflation expectations, in regards to growth expectations,

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Speaker 4: in regards to debt issuance coming in. Obviously that's tied

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Speaker 4: to the political element and what we're going to see there.

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Speaker 4: What is issue it's going to look like. Is it

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Speaker 4: going to be more bills? Is it going to be

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Speaker 4: longer term coupons, which I think it probably will be,

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Speaker 4: and what does that mean for interest expense.

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Speaker 6: It's all tied together. But I'd be watching the bond market.

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Speaker 4: To see where yields go and how those bond Vigilani's

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Speaker 4: actually come in and how long they want to play

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Speaker 4: this game. To me, that's what's going to drive the

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Speaker 4: equity market obviously, along with earnings.

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Speaker 2: No sign of the vigil lanecies this morning so far,

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Speaker 2: at least, Victoria, I appreciate your time, Victoria Fernandez there

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Speaker 2: of Crossmark Global Investments. Yeah, US tech leader's under pressure

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Speaker 2: ahead of earnings as the Chinese AI startup Deep Seak's

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Speaker 2: latest model boost cost effectiveness one running on less advanced chips.

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Speaker 2: Angelo Zeno f Cfira joined US now for more, Angela,

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Speaker 2: Welcome to the program. What a time to catch up

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Speaker 2: with you, sir. So Meta comes out and says it's

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Speaker 2: going to spend north as sixty billion dollars on campex

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Speaker 2: this year, and then Deep Seak comes out and says,

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Speaker 2: slow down, maybe you don't have to spend that much, Angela,

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Speaker 2: Is this good news or bad news for the likes

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Speaker 2: of Meta?

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Speaker 6: Yeah, I mean.

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Speaker 7: It's amazing what a couple of days will do, right,

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Speaker 7: But yeah, I mean as far as kind of what

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Speaker 7: this means specifically for Meta, you know, I don't think

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Speaker 7: it necessarily changes the story for Meta very much. To

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Speaker 7: be honest with you, I think, you know, the company

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Speaker 7: kind of just you know, they announced their CAPEX plan

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Speaker 7: on Friday, the sixty to sixty five billion. I think

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Speaker 7: they're going to reiterate that when they report later this week,

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Speaker 7: and you know, when we kind of think about some

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Speaker 7: of the hyperscalers out there, continue to think that they're

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Speaker 7: very well positioned, you know, given the free cash flow

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Speaker 7: generation kind of their business models and their ability to

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Speaker 7: continue to aggressively, you know, spend on some of these

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Speaker 7: next generation tools out there. But you know, whether or not,

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Speaker 7: you know, this allows them to potentially kind of lower

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Speaker 7: their costs of modeling or what have you. Remains to

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Speaker 7: be seen, but you know, I think at the end

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Speaker 7: of the day, I don't think it changes the much.

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Speaker 7: Doesn't change the story much specifically for Meta I think

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Speaker 7: kind of some of these chip makers that might be

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Speaker 7: a little bit of a different story.

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Speaker 2: Though Angey might not change things for management. I wonder

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Speaker 2: if it changes things for investors. Do you think they'll

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Speaker 2: carry on supporting the amount of spending that this company

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Speaker 2: is doing.

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Speaker 7: I mean, listen, I think they're going to have to

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Speaker 7: tell a really good story in terms of the monetization

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Speaker 7: of AI when they do a report on Wednesday. I

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Speaker 7: think the investors are going to kind of want, you know,

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Speaker 7: more clarity on how they plan to monetize AI. I think,

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Speaker 7: you know, the ROI potential is there for this company,

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Speaker 7: maybe not as clear as for some of the cloud

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Speaker 7: companies out there, and kind of the need to increase

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Speaker 7: capacity and.

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Speaker 6: What have you.

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Speaker 7: But I think it's extremely important for metas on Wednesday

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Speaker 7: to really kind of tell a clear cut story on

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Speaker 7: how they monitor how they plan to monetize AI. You're

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Speaker 7: going to have LAMA four point a zero ramp here

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Speaker 7: in the first half of this year. You know, clearly

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Speaker 7: Meta AI has seen kind of a significant increase, and

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Speaker 7: it's kind of installed based, So there are definitely ways

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Speaker 7: that you know, we think that they can kind of

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Speaker 7: monetize AI here over the next couple of years. They've

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Speaker 7: just got to make sure that they tell the story

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Speaker 7: properly there for.

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Speaker 1: Investors, Angelo, how worried are you about a late nineteen

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Speaker 1: ninety nine moment or suddenly we have valuations on a

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Speaker 1: story that actually is true that there is a revolution

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Speaker 1: going on, but that we don't fully understand.

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Speaker 5: What it is yet and who the winners actually will be.

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Speaker 5: Do you think that there will be some more disruption

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Speaker 5: that will be profound to the rally that we've seen

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Speaker 5: so far, Big Tech.

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Speaker 7: Listen, I think you'll continue to see a lot of

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Speaker 7: noise out there. I think the game's going to continue

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Speaker 7: to change as far as kind of the AI ecosystem

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Speaker 7: is concerned, as far as where valuations are concerned. You know,

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Speaker 7: what we do like about tech actually is, you know,

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Speaker 7: the valuations are not extreme at all. We do think

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Speaker 7: for the most part, Big Tech, you've got growth at

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Speaker 7: a reasonable price among you know, kind of let's call

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Speaker 7: it the mag five names that I cover within you know,

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Speaker 7: tech and comm services, you know, not taking into account

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Speaker 7: Amazon or Tessa within kind of that ecosystem, and you

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Speaker 7: kind of, again you look at those valuations out there,

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Speaker 7: You look at kind of that the secular driver specifically

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Speaker 7: tied to the cloud and digital light spend, and that

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Speaker 7: continues to remain intact. And I don't actually think kind

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Speaker 7: of a lot of this monetization AI potential is embedded

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Speaker 7: in a lot of these kind of stories for these names,

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Speaker 7: So I'm not necessarily worried about the valuations here. Again,

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Speaker 7: I think as far as the chip industry is concerned,

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Speaker 7: what you're going to see start happening is you're going

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Speaker 7: to potentially start seeing multiple compression on any sort of

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Speaker 7: rallies here, because I think there are going to be

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Speaker 7: some concerns about kind of the magnitude of spend as

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Speaker 7: we go into twenty twenty six and twenty twenty seven,

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Speaker 7: not necessarily twenty twenty five.

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Speaker 5: All of that being said, Angelo there was a theory

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Speaker 5: out there that essentially, if this efficiency story was correct

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Speaker 5: with artificial intelligence, it would be the non tech names

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Speaker 5: that would benefit that much more. Simply because they wouldn't

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Speaker 5: have to be as heavily cost driven as they have

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Speaker 5: been in the past. Does that concern you, Do you

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Speaker 5: think that we're closer to that shift that threshold in

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Speaker 5: who benefits from future advancements?

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Speaker 7: Yeah, I mean, listen, get I think that the story

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Speaker 7: is going to continue to change in the market here

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Speaker 7: in terms of who potential winners are, you know, where

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Speaker 7: you should kind of be investing and what have you.

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Speaker 7: We continue to be, you know, very big believers kind

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Speaker 7: of the way you invest kind of in AI long

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Speaker 7: term is you know, the cloud companies we think are

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Speaker 7: going to be the biggest beneficiaries out there, especially when

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Speaker 7: you kind of look at some of those companies from

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Speaker 7: a valuation perspective and the amount of capacity that you're

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Speaker 7: going to need here, you know, over the long term.

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Speaker 7: We also think they're going to be select semi names

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Speaker 7: out there, despite some of the concern out in the

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Speaker 7: market right now, that will continue to benefit in the

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Speaker 7: long term. And I'm not necessarily talking you know, just

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Speaker 7: you know, cloud oriented in nature, so you know, but

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Speaker 7: but that said, I mean, they're going to continue to

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Speaker 7: be narratives that change here over time. And I think

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Speaker 7: investors I think if you're you know, whether you're an

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Speaker 7: investor or a trader, I think is also going to

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Speaker 7: dictate how you kind of navigate through this market as well.

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Speaker 8: Do you think today is just the trader reaction not

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Speaker 8: the investor reaction?

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Speaker 7: Listen, I think there's a lot of kind of trading

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Speaker 7: involved in this market right now. But you know, at

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Speaker 7: the same time, there's you know, one thing the markets

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Speaker 7: hate is uncertainty, right and when you kind of think

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Speaker 7: about the uncertainty that's been created here from this deep

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Speaker 7: seak scenario out there, I think you've got to sell

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Speaker 7: off on some names or you know, compress some of

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Speaker 7: those molts out where there the uncertainty is greatest. And

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Speaker 7: I think specifically when you look at it in Vidia

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Speaker 7: and then it's a name that we've liked here for

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Speaker 7: a long time, Tom, I think you have to, you know,

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Speaker 7: potentially put into a question, do you need to kind

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Speaker 7: of continue to upgrade at the pace that we've been

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Speaker 7: upgrading at for a name like in Vidia. I mean,

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Speaker 7: these annual cadences now that Invidia is on, you know,

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Speaker 7: is the is the is the pace and the amount

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Speaker 7: of spend that we're you know, we've got on in

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Speaker 7: video right now kind of warranted in nature, and I

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Speaker 7: think time will tell on that. But that said, I mean,

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Speaker 7: one of our biggest competitive advantages out there, our biggest

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Speaker 7: competitive advantage is the fact that we have access to

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Speaker 7: these leading edge GPUs and capabilities. So from that perspective,

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Speaker 7: I do expect these hyperscalers to continue to aggressively invest.

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Speaker 8: That's what Dan Ives is also talking about this morning

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Speaker 8: in his constant Twitter post following all of this. Given

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Speaker 8: your work on Meta, I'd love to get your thoughts

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Speaker 8: on the fact that the Information has this story out

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Speaker 8: saying that there's been a scramble and almost a panic

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Speaker 8: at Meta Meta, with leaders saying that they're not sure

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Speaker 8: if the next Meta flagship AI version could perform as

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Speaker 8: well as Deep Seek. So can they even catch up

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Speaker 8: to what Deep Seek is doing? How much is this

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Speaker 8: earnings call analysts and investors going to demand answers on

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Speaker 8: whether or not they were paying attention to the competition

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Speaker 8: was doing.

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Speaker 7: Yeah, I mean, listen again, I think the competitive landscape

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Speaker 7: is definitely kind of an intensive out here in the

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Speaker 7: last couple of days, and we do have to take

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Speaker 7: into you know, we do have to take China seriously

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Speaker 7: at this point in time, I think it creates a lot.

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Speaker 7: There are definitely and there are definitely a number of

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Speaker 7: storylines here that are created also, you know, from a

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Speaker 7: privacy perspective, and other type of storylines out here as

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Speaker 7: well that I think the US government is going to

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Speaker 7: have to address. But as far as far as kind

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Speaker 7: of the ability for kind of metas models now to

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Speaker 7: be compared to the likes of you know, Deep Seek

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Speaker 7: and others out there, that's just you're going to continue

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Speaker 7: to you know, continue.

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Speaker 6: To see that.

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Speaker 7: So listen, I think you know that competitive landscape I

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Speaker 7: think long term is good for the industry, but near

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Speaker 7: term in nature I think gets a lot of investors

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Speaker 7: out there.

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Speaker 2: Word Angela, I appreciate your time this morning, sir, Thank you,

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Speaker 2: Angelo Zena.

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Speaker 3: There of CFIRA investors.

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Speaker 2: Ratt orders China's AI startup Deep Seeg threatens US tech dominance,

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Speaker 2: leading to questions over Max seven valuations. Seema shaff Prince

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Speaker 2: bal Asset Management has been saying the following, Well, the

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Speaker 2: secular trend upward of the Max seven should persist.

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Speaker 3: Over the long run.

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Speaker 2: They're expensive valuations coupled with elevated bond yields, imply that

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Speaker 2: investors should pay increased attention to stocks trading at more

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Speaker 2: attractive valuations. Sema, John, just now for more Sema, welcome

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Speaker 2: to the program. Of course you wrote that before the

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Speaker 2: news over the last week. How much does the news

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Speaker 2: over the last week change your thesis for twenty twenty five?

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Speaker 6: Hi, John, Well, look, as you said before, there are

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Speaker 6: a lot of question marks investors. I think everyone needs

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Speaker 6: some time to digest exactly how real this is, sort

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Speaker 6: of the impacts, how it can be sustained. But you know,

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Speaker 6: as we said, valuations are really extend. It's coming into

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Speaker 6: this year, they were already going to be vulnerabilities. Now

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Speaker 6: I don't think anyone quite saw this coming, but it

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Speaker 6: really does accentuate that need for diversification looking at things

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Speaker 6: with lesser evaluations. But you know, we came into twenty

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Speaker 6: twenty five and I think across the board outlooks the

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Speaker 6: theme was us exceptionalism. We're at the end of January,

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Speaker 6: or not even at the end of January, and a

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Speaker 6: lot of this has the potential of already being rewritten

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Speaker 6: for twenty twenty five. So I think a lot of

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Speaker 6: uncertainty adding to all the tariff uncertainty, inflation, uncertainty that

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Speaker 6: investors were already dealing with. It only looks like a

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Speaker 6: very tough year for investors.

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Speaker 2: It seems, just to follow up this is a question

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Speaker 2: the Lisa Race on a program a little bit earlier.

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Speaker 2: Given what we know, and we know a fair bit

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Speaker 2: over the last week, not enough, but a fair bit.

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Speaker 2: Do you think it is sufficient to undermine US exceptionalism,

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Speaker 2: US tech dominance.

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Speaker 6: Well, I think what it does is it does really

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Speaker 6: put bigger question marks around those valuations because it reminds

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Speaker 6: investors that these companies are not completely immune. It's not

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Speaker 6: like they're never going to have competitors. There will be competition.

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Speaker 6: So there has to be question marks around how much

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Speaker 6: is being spent on chips companies like in video, what

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Speaker 6: is going on with their future? You know, can this

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Speaker 6: really be sustained and this demand going to be kept?

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Speaker 6: So I think there has to be question marks. I

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Speaker 6: think there's a longer term story where US exceptionalism can persist,

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Speaker 6: probably not to such a significant degree, just because of

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Speaker 6: innovation the system. You know, we have you have an

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Speaker 6: administration coming in now who is very much focused on

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Speaker 6: that growth, ensuring that the US keeps it stage. So

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Speaker 6: I think you can't answer that today. But I think

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Speaker 6: investors have to wake up today and say, well, look,

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Speaker 6: maybe we just don't look at the US and global

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Speaker 6: diversification has to be even more prominent in portfolios than

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Speaker 6: they were just a week ago.

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Speaker 5: I love how when the market is flying high, we

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Speaker 5: have a million investors who come on and they say,

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Speaker 5: any DEVI will be applying opportunity. And then there is

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Speaker 5: a true bona fide dip and people say, well this

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Speaker 5: makes us rethink everything. Is this one of those moments

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Speaker 5: for its impliable dip or does it make you rethink everything?

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Speaker 6: But it's a good question because I think you know,

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Speaker 6: we've been like everyone else. We've been looking at money

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Speaker 6: market funds and wondering why are people not deploying? And

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Speaker 6: the answer that keeps coming back is that they've been

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Speaker 6: looking at evaluations and they're just not sure they want

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Speaker 6: to get into the big tech but they just don't

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Speaker 6: like this price now today or even in a few

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Speaker 6: days time when tech maybe comes down even further, investor

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Speaker 6: is going to get back in at that point? I

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Speaker 6: think there's going to be question marks. I think they're

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Speaker 6: not going to jump back into the market until they

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Speaker 6: have real answers, and if anything, this week, what investors

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Speaker 6: should be doing is looking at what are the other sectors?

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Speaker 6: What are the things that can benefit from the overall

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Speaker 6: gain and productivity that deep sea probably offers outside of

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Speaker 6: those max seven So I think a lot of question marks.

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Speaker 6: I wouldn't say that this is a buying all these

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Speaker 6: big tech companies today.

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Speaker 5: That is exactly where I wanted to go. How much

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Speaker 5: does this actually point people toward the direction of where

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Speaker 5: AI can actually be deployed. Are there particular areas that

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Speaker 5: you're looking at that are the quickest and cleanest beneficiaries

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Speaker 5: of this type of efficiency?

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Speaker 6: Yeah, you know, I think like everyone else, we've been

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Speaker 6: doing all the homework into the very sectors. The two

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Speaker 6: that really have stood out to us are healthcare and agriculture,

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Speaker 6: the clear benefits that they can gain. So I think

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Speaker 6: that that story is still very much emotion. For anything,

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Speaker 6: it's probably been amplified by today's news or the last

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Speaker 6: week's news. So I don't think this question marks around those.

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Speaker 6: It's really about those specific companies that have really benefited

441
00:20:29,000 --> 00:20:31,680
Speaker 6: from this drive up, thinking about all the infrastructure that

442
00:20:31,680 --> 00:20:34,480
Speaker 6: they'll be necessary to drive the kind of AI that

443
00:20:34,520 --> 00:20:36,880
Speaker 6: we've been seeing. So I think that's where the question

444
00:20:36,880 --> 00:20:39,480
Speaker 6: marks are. But I think it does mean some pretty

445
00:20:39,480 --> 00:20:41,240
Speaker 6: good news for other sectors around the world.

446
00:20:41,720 --> 00:20:43,560
Speaker 8: Is this a moment that you would actually want to

447
00:20:43,560 --> 00:20:45,679
Speaker 8: have more exposure to the Chinese equity market.

448
00:20:47,480 --> 00:20:49,440
Speaker 6: It's such a good question. I think everyone's going to

449
00:20:49,480 --> 00:20:51,600
Speaker 6: be wondering that today. You know, did we make a

450
00:20:51,640 --> 00:20:54,640
Speaker 6: mistake by not increasing exposure? And then there's too many

451
00:20:54,680 --> 00:20:57,920
Speaker 6: question marks. Still, there's still a lot of concerns around

452
00:20:57,960 --> 00:21:02,080
Speaker 6: the fundamental story company or investors willing to go all

453
00:21:02,119 --> 00:21:03,800
Speaker 6: in into one trade, just like they did with the

454
00:21:03,880 --> 00:21:06,679
Speaker 6: US with the Max seven, into a new company or

455
00:21:06,680 --> 00:21:09,399
Speaker 6: one of two companies in China so that one sided

456
00:21:09,440 --> 00:21:11,439
Speaker 6: better shifting, or are you going to look at the

457
00:21:11,480 --> 00:21:14,320
Speaker 6: whole ecosystem within China say look, there are still some

458
00:21:14,359 --> 00:21:17,760
Speaker 6: deep rooted fundamental problems that investors have to consider. So

459
00:21:17,800 --> 00:21:21,440
Speaker 6: it's global diversification. I don't think it specifically means China.

460
00:21:21,560 --> 00:21:23,199
Speaker 6: It's looking at one of the other companies. What are

461
00:21:23,240 --> 00:21:25,560
Speaker 6: the other countries that may be a little bit less

462
00:21:25,600 --> 00:21:29,119
Speaker 6: vulnerable potentially to what's emerging today?

463
00:21:29,280 --> 00:21:31,199
Speaker 9: Siman you mentioned earlier, the US is going to make

464
00:21:31,720 --> 00:21:35,080
Speaker 9: sure they maintain their tech dominance. We have seen just

465
00:21:35,119 --> 00:21:36,960
Speaker 9: in the first week, so I don't know if it's

466
00:21:37,000 --> 00:21:39,200
Speaker 9: a real barometer, but just in the first week, President

467
00:21:39,280 --> 00:21:43,120
Speaker 9: Donald Trump has really taken aim on Canada, on Mexico,

468
00:21:43,320 --> 00:21:46,119
Speaker 9: on Colombia, and he's held off on China.

469
00:21:46,200 --> 00:21:47,920
Speaker 3: Do you think something like this will push.

470
00:21:47,760 --> 00:21:51,000
Speaker 9: The administration to ratchet up the pressure on Beijing.

471
00:21:53,000 --> 00:21:55,439
Speaker 6: I have to imagine that the administration is going to

472
00:21:55,480 --> 00:21:58,720
Speaker 6: try and do their homework, try and figure out how

473
00:21:59,440 --> 00:22:01,440
Speaker 6: much of a threat this really is before they jump

474
00:22:01,480 --> 00:22:06,280
Speaker 6: headfirst into making some additional threats. But the news over

475
00:22:06,280 --> 00:22:08,520
Speaker 6: the past week, just because they hadn't moved forward with

476
00:22:08,600 --> 00:22:11,080
Speaker 6: China or Europe for that matter, doesn't mean that tarifs

477
00:22:11,119 --> 00:22:12,879
Speaker 6: were never going to come. I think we were just

478
00:22:12,880 --> 00:22:14,920
Speaker 6: thinking about what is the timing and how dressic could

479
00:22:14,920 --> 00:22:17,040
Speaker 6: they be. If this really does prove to be something

480
00:22:17,119 --> 00:22:19,399
Speaker 6: very meaningful, then yes, I'd expect that maybe tariff's on

481
00:22:19,440 --> 00:22:22,879
Speaker 6: China could be greater. The US has even more of

482
00:22:22,880 --> 00:22:26,560
Speaker 6: a reason to try and rain in their strengths. I

483
00:22:26,600 --> 00:22:28,200
Speaker 6: suddenly don't think that it's something that they're going to

484
00:22:28,280 --> 00:22:30,880
Speaker 6: jump into so that tomorrow you start to see headlines.

485
00:22:30,680 --> 00:22:32,920
Speaker 5: Just to wrap this all together, Sima, do you think

486
00:22:32,920 --> 00:22:34,480
Speaker 5: that the FED has ever been less relevant on a

487
00:22:34,520 --> 00:22:36,960
Speaker 5: week where we're going to be hearing from Meta, Microsoft

488
00:22:37,000 --> 00:22:39,440
Speaker 5: and Tesla on the same day as a FED rate decision.

489
00:22:41,240 --> 00:22:42,879
Speaker 6: I think they're coming to this week the FED is

490
00:22:42,920 --> 00:22:45,160
Speaker 6: already somewhat irrelevant because I think everyone knows that they're

491
00:22:45,200 --> 00:22:49,200
Speaker 6: not going to cut rates this week. Having said that, yeah,

492
00:22:49,320 --> 00:22:51,159
Speaker 6: I mean, look, this isn't going to be the headline news. No,

493
00:22:51,240 --> 00:22:53,440
Speaker 6: I mean even on the blueby terminal, I struggled to

494
00:22:53,440 --> 00:22:56,840
Speaker 6: see anything on the FED for this morning. But look,

495
00:22:57,240 --> 00:22:58,800
Speaker 6: is this could be key because I think just want

496
00:22:58,840 --> 00:23:01,000
Speaker 6: to say one thing on this. We have been very

497
00:23:01,080 --> 00:23:05,920
Speaker 6: much I think reassured that you as consumers, household balances

498
00:23:05,920 --> 00:23:09,280
Speaker 6: are very very resilient because network has increased so significantly.

499
00:23:09,520 --> 00:23:11,800
Speaker 6: But we can't ignore the fact that network in the

500
00:23:11,880 --> 00:23:16,440
Speaker 6: US has been driven higher significantly because of equity market exposure.

501
00:23:17,000 --> 00:23:20,200
Speaker 6: So any kind of concerns of equity markets does unfortunately

502
00:23:20,240 --> 00:23:22,000
Speaker 6: feed through to the US economy. So I think that

503
00:23:22,080 --> 00:23:24,000
Speaker 6: is something that we're not going to hear about from

504
00:23:24,000 --> 00:23:26,080
Speaker 6: the FED this week. But it's not that they have

505
00:23:26,160 --> 00:23:28,960
Speaker 6: to be watching tracking very very carefully over the coming.

506
00:23:28,680 --> 00:23:31,440
Speaker 2: Months, Seema, appreciate your input. As always, sim As Sharer

507
00:23:31,480 --> 00:23:33,679
Speaker 2: there of Principal Asset Management off the back of the

508
00:23:33,680 --> 00:23:38,040
Speaker 2: Salas this morning. This is the Bloomberg Surveillance Podcast, bringing

509
00:23:38,119 --> 00:23:41,960
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510
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511
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