WEBVTT - Single Best Idea with Tom Keene: Paul Donovan & Meghan Graper

0:00:02.400 --> 0:00:15.360
<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

0:00:13.400 --> 0:00:16.000
<v Speaker 2>Single best Idea, What a show today with all the

0:00:16.040 --> 0:00:19.520
<v Speaker 2>economic data CPI, retail sales in that and our guests

0:00:19.680 --> 0:00:23.280
<v Speaker 2>rally great to have Dana Telsey with us a Telsey Advisor,

0:00:23.600 --> 0:00:26.119
<v Speaker 2>way too short a visit with her, but important and

0:00:26.239 --> 0:00:29.120
<v Speaker 2>retail sales are a little soggy, particularly the Control group.

0:00:29.600 --> 0:00:32.240
<v Speaker 2>She made very clear that there's a partition in America.

0:00:32.360 --> 0:00:35.880
<v Speaker 2>Luxury's really doing quite well. She's optimistic about a redo

0:00:36.000 --> 0:00:39.120
<v Speaker 2>in China of demand, but away from that, there was

0:00:39.159 --> 0:00:42.559
<v Speaker 2>some sogginess to retail sales. What ad joy to have

0:00:42.600 --> 0:00:45.360
<v Speaker 2>Gena Martin Adams with her courage to be in the market,

0:00:45.400 --> 0:00:50.559
<v Speaker 2>Bloomberg Intelligence and just before her Edyard Denny truly iconic

0:00:51.400 --> 0:00:56.000
<v Speaker 2>Edyard Denny reaffirming SPX fifty four hundred and the idea

0:00:56.080 --> 0:00:59.840
<v Speaker 2>that corporations are moving forward. We certainly saw that within

0:01:00.040 --> 0:01:03.240
<v Speaker 2>the equity markets as well. There was a little bit

0:01:03.280 --> 0:01:07.560
<v Speaker 2>of fed analysis. Paul Donovan outstanding. If you're on LinkedIn,

0:01:07.680 --> 0:01:10.800
<v Speaker 2>We send this out Single best Idea out to Twitter

0:01:10.840 --> 0:01:13.559
<v Speaker 2>and LinkedIn every day, and if you're on LinkedIn, look

0:01:13.640 --> 0:01:17.559
<v Speaker 2>up Paul Donovan of UBS. He does a great, great

0:01:17.680 --> 0:01:23.160
<v Speaker 2>job bringing the UBS knowledge to LinkedIn. Mister Donovan was

0:01:23.319 --> 0:01:27.200
<v Speaker 2>fired up today about a FED that is not so

0:01:27.319 --> 0:01:31.600
<v Speaker 2>much wrong wrong, wrong, but much more behind behind behind

0:01:31.959 --> 0:01:33.959
<v Speaker 2>here is Donovan of UBS.

0:01:34.120 --> 0:01:36.840
<v Speaker 3>I would be looking to cut rates already because if

0:01:36.840 --> 0:01:40.200
<v Speaker 3>you look at the market based prices, the prices that

0:01:40.280 --> 0:01:44.920
<v Speaker 3>FED policy actually influences. That's in this inflation territory. You

0:01:44.920 --> 0:01:48.320
<v Speaker 3>look at durable goods prices, that's in outright deflation territory.

0:01:48.680 --> 0:01:51.640
<v Speaker 3>Here it does how therapy think that keeping interest rates

0:01:51.720 --> 0:01:54.320
<v Speaker 3>higher for longer is going to bring down owners equivalent

0:01:54.360 --> 0:01:57.560
<v Speaker 3>rent because newslash it isn't it doesn't have any impact

0:01:57.600 --> 0:01:59.920
<v Speaker 3>on owners equivalent rent. It certainly off for the downside

0:02:00.120 --> 0:02:03.160
<v Speaker 3>might actually raise it. And that's where we're finding this

0:02:03.280 --> 0:02:06.200
<v Speaker 3>stickiness in inflation. It's in the made up prices, the

0:02:06.240 --> 0:02:10.280
<v Speaker 3>fantasy prices. Now we saw obviously a big bond market reaction.

0:02:11.120 --> 0:02:13.919
<v Speaker 3>So the last CPI print, the March number, which came

0:02:13.960 --> 0:02:17.040
<v Speaker 3>in stronger than expected. Why did it come in stronger

0:02:17.080 --> 0:02:22.440
<v Speaker 3>than expected because of rents in Detroit. We can't base

0:02:22.520 --> 0:02:26.560
<v Speaker 3>an entire country's monetary policy on whether or not the

0:02:26.600 --> 0:02:28.920
<v Speaker 3>cost of a condominium Michigan is going up or not.

0:02:29.520 --> 0:02:32.200
<v Speaker 2>Paul Dnovan just brilliant there and really you know, always

0:02:32.320 --> 0:02:35.680
<v Speaker 2>always intense, but fired up there on what we need

0:02:35.680 --> 0:02:39.640
<v Speaker 2>to see. June twelfth, at the next FED meeting, we

0:02:39.639 --> 0:02:41.600
<v Speaker 2>looked at equities today and of course we did look

0:02:41.600 --> 0:02:44.959
<v Speaker 2>at Barnes, Matt Michigan of Johnny Hancock. Thank you for attendance.

0:02:45.000 --> 0:02:47.560
<v Speaker 2>Right around the eight thirty report. Ira Jersey of Bloomberg

0:02:47.560 --> 0:02:51.600
<v Speaker 2>Intelligence is just brilliant about the focus on short paper

0:02:51.639 --> 0:02:55.119
<v Speaker 2>he will publish for Bloomberg Intelligence. I think you'll see

0:02:55.160 --> 0:02:58.359
<v Speaker 2>that as we tape this within an hour, that'll be very,

0:02:58.480 --> 0:03:02.000
<v Speaker 2>very important to look at this readjustment equities higher, the

0:03:02.080 --> 0:03:04.840
<v Speaker 2>real yield coming in that's been bracketed. I'm going to

0:03:04.880 --> 0:03:08.160
<v Speaker 2>say two ten to two twenty two, ten to two eighteen,

0:03:08.560 --> 0:03:11.280
<v Speaker 2>and the ten year really breaking down beneath two point

0:03:11.360 --> 0:03:16.040
<v Speaker 2>one zero percent off the set of economic data today.

0:03:16.320 --> 0:03:20.800
<v Speaker 2>Before that, we talked to Megan Graper, she's outstanding at Berkeley's.

0:03:20.840 --> 0:03:23.040
<v Speaker 2>We talked to her about corporate issuance. We talked to

0:03:23.080 --> 0:03:25.040
<v Speaker 2>her about debt markets.

0:03:25.400 --> 0:03:27.639
<v Speaker 1>I think you've got to think about taking chips off

0:03:27.639 --> 0:03:29.480
<v Speaker 1>the table because we don't know what we don't know.

0:03:29.639 --> 0:03:32.440
<v Speaker 1>So the second half of the year, I think presents

0:03:32.480 --> 0:03:35.720
<v Speaker 1>the potential for any number of land mines to start

0:03:35.720 --> 0:03:38.160
<v Speaker 1>rearing their head. And so while you have these optimal

0:03:38.480 --> 0:03:41.640
<v Speaker 1>demand technicals in place, you know, even thinking about your

0:03:41.680 --> 0:03:45.520
<v Speaker 1>twenty twenty five funding needs and pulling those forward. I mean,

0:03:45.600 --> 0:03:49.520
<v Speaker 1>acceleration is now the defining force behind the new issue

0:03:49.520 --> 0:03:52.720
<v Speaker 1>markets and investment grade. And so we're we're seeing volumes

0:03:52.720 --> 0:03:56.120
<v Speaker 1>at forty percent, but it's not precluding borrowers from achieving

0:03:56.240 --> 0:04:00.400
<v Speaker 1>negative new issue concessions versus their existing secondaries. And you're

0:04:00.400 --> 0:04:03.800
<v Speaker 1>seeing over subscriptions that are pretty eye popping, particularly in

0:04:03.880 --> 0:04:06.040
<v Speaker 1>the long end of the curve. So the combination of

0:04:06.080 --> 0:04:10.600
<v Speaker 1>those factors means, you know, double down, continue to pull

0:04:10.760 --> 0:04:14.280
<v Speaker 1>funding forward, and I think you know, avoid the noise

0:04:14.360 --> 0:04:16.720
<v Speaker 1>that might start to creep in and the rate volatility

0:04:16.760 --> 0:04:19.200
<v Speaker 1>we're likely to experience as we move into the second

0:04:19.240 --> 0:04:19.880
<v Speaker 1>half of the year.

0:04:20.160 --> 0:04:22.640
<v Speaker 2>Some people say, what do we follow here? Paul's very

0:04:22.680 --> 0:04:26.159
<v Speaker 2>good about following the CD race. Somebody tweeted in live

0:04:26.240 --> 0:04:29.040
<v Speaker 2>chat on YouTube. They tweeted and they had a five

0:04:29.080 --> 0:04:32.520
<v Speaker 2>point three five percent six months CD, which sounds like

0:04:32.560 --> 0:04:35.640
<v Speaker 2>from another era. Another age is a police to scene

0:04:35.680 --> 0:04:38.400
<v Speaker 2>of the mesa scene I can't remember which era. But

0:04:38.440 --> 0:04:40.520
<v Speaker 2>the answer is in one of the great themes today

0:04:40.520 --> 0:04:44.520
<v Speaker 2>on the show across equities, bonds, currencies, commodities is we're

0:04:44.600 --> 0:04:48.719
<v Speaker 2>back to normal in the bond market, at least in pricing.

0:04:48.760 --> 0:04:50.800
<v Speaker 2>I don't know if our brains are back to normal,

0:04:51.360 --> 0:04:54.120
<v Speaker 2>and that'll certainly be one of our themes into the

0:04:54.160 --> 0:04:56.760
<v Speaker 2>caution that Megan Raper talks about. Into the end of

0:04:56.800 --> 0:05:00.840
<v Speaker 2>two thousand and twenty four, just an except day for

0:05:00.920 --> 0:05:04.240
<v Speaker 2>us on linking in this economics into the markets. As

0:05:04.240 --> 0:05:07.279
<v Speaker 2>we take this record high in the standard and pores

0:05:07.360 --> 0:05:10.760
<v Speaker 2>five hundred, we do a major shout out to the bulls,

0:05:10.760 --> 0:05:13.240
<v Speaker 2>the people that said be in this market. There are

0:05:13.279 --> 0:05:15.520
<v Speaker 2>too many to name. There's been a good set of

0:05:15.560 --> 0:05:18.760
<v Speaker 2>people that have said just participate. I think Brian Belski

0:05:18.800 --> 0:05:22.839
<v Speaker 2>at BMO Capital Markets is one. Ben Ladler way out

0:05:22.839 --> 0:05:27.360
<v Speaker 2>front with e Toro and before that with HSBC. We're

0:05:27.360 --> 0:05:31.400
<v Speaker 2>on Apple car play, We're on Android play. Here'gely popular

0:05:31.480 --> 0:05:35.320
<v Speaker 2>in free the Bloomberg business. Apple will get you over

0:05:35.320 --> 0:05:37.920
<v Speaker 2>to Apple a car play that builds out. They continue

0:05:37.960 --> 0:05:41.160
<v Speaker 2>to enhance Apple car Play when they're not trying to

0:05:41.160 --> 0:05:44.279
<v Speaker 2>figure out what to do with the goggles. YouTube is

0:05:44.400 --> 0:05:47.840
<v Speaker 2>just building. We are thrilled with the reach, the global

0:05:47.880 --> 0:05:51.400
<v Speaker 2>reach every day of YouTube. We really just can't believe

0:05:51.440 --> 0:05:54.320
<v Speaker 2>the ease of use there in the building that we're

0:05:54.320 --> 0:05:58.080
<v Speaker 2>seeing YouTube. What do you do? You search Bloomberg Podcasts

0:05:58.120 --> 0:06:02.160
<v Speaker 2>and critically subscribe to Bloomberg podcast That's the easy path.

0:06:02.240 --> 0:06:06.560
<v Speaker 2>Subscribe to Bloomberg Podcasts and you'll find us. You'll find

0:06:06.560 --> 0:06:11.279
<v Speaker 2>the replay two hours, fifty six minutes, and also this podcast.

0:06:11.680 --> 0:06:14.719
<v Speaker 2>Look for us on Apple we say good morning. This

0:06:14.839 --> 0:06:23.960
<v Speaker 2>is single best idea