WEBVTT - Stocks Get Tech Lift as US Yields Fall on Soft CPI 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.880 Business app. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:27.800 or watch us live on YouTube severity. 0:00:27.880 --> 0:00:31.160 Roth walks in and it's really wicked cold in your folks, 0:00:31.160 --> 0:00:32.040 I like it that way. 0:00:32.280 --> 0:00:34.199 And the whole room heats up because she's working the 0:00:34.280 --> 0:00:37.360 terminal short like nothing. What do you see over there 0:00:37.400 --> 0:00:41.320 in the terminal, Stephanie Roth, Oh, this inflation report? 0:00:41.400 --> 0:00:41.920 This shock? 0:00:43.000 --> 0:00:45.760 I certainly, it certainly is a shock. I think the 0:00:45.760 --> 0:00:47.720 main thing that we have to remember is there is 0:00:47.800 --> 0:00:49.800 a lot of error in this report, so I would 0:00:49.800 --> 0:00:52.240 not take much away from this. A key thing that 0:00:51.960 --> 0:00:54.600 there's an issue with in the sense that when they're 0:00:54.640 --> 0:00:59.120 sampling the data specifically around November, that the survey period 0:00:59.200 --> 0:01:01.640 was condensed until later in the month when you typically 0:01:01.680 --> 0:01:05.200 have significant holiday discounting. And when we spoke with BLS, 0:01:05.200 --> 0:01:07.440 they said they're not doing anything to adjust those seasonals, 0:01:07.840 --> 0:01:11.680 so that automatically makes the data artificially weak and we're 0:01:11.720 --> 0:01:13.360 probably going to see a bounce back in December. 0:01:13.840 --> 0:01:16.399 Is there a trend we can take away from here that, boy, 0:01:16.440 --> 0:01:19.760 it's at least inflation is not going up from here. 0:01:19.800 --> 0:01:22.360 Is that a fair takeaway? Maybe it's not cooling as much. 0:01:22.240 --> 0:01:25.000 As these numbers might suggest, but it doesn't appear to 0:01:25.040 --> 0:01:25.479 be rising. 0:01:25.680 --> 0:01:26.800 I think that's entirely fair. 0:01:26.880 --> 0:01:27.160 Okay. 0:01:27.480 --> 0:01:31.000 There was this concern that around the holiday season companies 0:01:31.040 --> 0:01:33.840 wouldn't really do the typical discounting that they usually do 0:01:33.920 --> 0:01:36.440 because of the tariffs. That doesn't appear to be the case, 0:01:36.680 --> 0:01:38.960 and we knew this heading into the data print because 0:01:39.000 --> 0:01:41.520 if you looked at a number of different indicators that 0:01:41.560 --> 0:01:44.280 survey the company is ahead of the holiday season, it 0:01:44.319 --> 0:01:48.280 showed a normal holiday discounting year. So it doesn't appear 0:01:48.320 --> 0:01:52.560 like there was this lapse in discounting just because of tariffs. 0:01:52.560 --> 0:01:56.680 In fact, it was a typical year for discounting. And 0:01:56.720 --> 0:01:58.360 then on top of that, you have some of the 0:01:58.880 --> 0:02:00.920 issues within the data because of the government shutdown. 0:02:01.200 --> 0:02:04.240 So Myron's been out here, Governor Myron, We've got a 0:02:04.280 --> 0:02:06.840 lower rates, a whole bunch of other people. There's been 0:02:06.840 --> 0:02:10.560 a clear tendency within Bloomberg's surveillance of people looking at 0:02:10.560 --> 0:02:14.840 a disinflationary tendency. Is it a January tendency or is 0:02:14.840 --> 0:02:17.480 it a FED meeting waiting out mid summer. 0:02:18.880 --> 0:02:21.880 Yeah, I mean so I think I think what we'll 0:02:21.919 --> 0:02:24.400 see is inflation will bounce back in the next couple 0:02:24.400 --> 0:02:27.400 of prints, the economy will start to pick up again, 0:02:27.440 --> 0:02:29.680 in which case the Fed's probably going to be on 0:02:29.720 --> 0:02:31.519 hold for much of the beginning. 0:02:31.200 --> 0:02:31.760 Of next year. 0:02:33.000 --> 0:02:35.320 So again, so the Fed, I mean if you look 0:02:35.320 --> 0:02:36.800 at so you don't think the Fed's going to look 0:02:36.800 --> 0:02:39.959 at these numbers and say we've got inflation. I sure, 0:02:39.960 --> 0:02:42.760 hope not sure, because you think that data in the 0:02:42.800 --> 0:02:44.520 next couple of months could in fact show a little 0:02:44.520 --> 0:02:46.320 bit more inflation in the economy. 0:02:47.040 --> 0:02:50.400 Yeah, And we know that there was a there was 0:02:50.440 --> 0:02:50.960 an issue. 0:02:51.000 --> 0:02:53.640 I mean, it didn't even collect in the October CPI 0:02:53.720 --> 0:02:54.960 for the most part, we know that there are issues 0:02:54.960 --> 0:02:59.120 with the data. So to form a strong conclusion about 0:02:59.240 --> 0:03:03.000 this print up two as being some massive disinflationary period, 0:03:03.040 --> 0:03:05.280 I think is entirely inaccurate. 0:03:05.480 --> 0:03:06.480 Stephanie Roth through this. 0:03:06.560 --> 0:03:09.000 With a Wolf Research and we continue here Paul Sweeney 0:03:09.040 --> 0:03:12.000 and Tom Keane with Lisa Matteo and John Tuckler. Good 0:03:12.040 --> 0:03:15.639 Morning Across the Nation series XM Channel one twenty one, 0:03:15.639 --> 0:03:18.600 Good Morning Canada. I mentioned David Rosenberg up in Toronto 0:03:18.960 --> 0:03:20.400 with a disinflationary call. 0:03:20.720 --> 0:03:23.959 Nailed that into this report on YouTube. 0:03:24.000 --> 0:03:28.200 Subscribed to Bloomberg Podcasts, We're thrilled to finish twenty twenty 0:03:28.240 --> 0:03:31.600 five strong, humbled by the sign ups there each and 0:03:31.680 --> 0:03:35.800 every day at Bloomberg podcast Paul Sweeney was Stephanie rough. 0:03:35.600 --> 0:03:38.640 All right, so we've got an inflation environment that's at 0:03:38.720 --> 0:03:40.120 least okay at this point. 0:03:40.200 --> 0:03:41.160 How about the labor market. 0:03:41.200 --> 0:03:42.120 What did you take away. 0:03:41.920 --> 0:03:43.720 From some of the labor data earlier. 0:03:44.720 --> 0:03:46.240 Yeah, I mean so, I think what we're seeing is 0:03:46.360 --> 0:03:48.520 a live market that's holding up a lot better and 0:03:48.560 --> 0:03:51.720 in fact starting to inflect a bit higher from here. 0:03:51.960 --> 0:03:53.840 And I think that's the main conclusion that we should 0:03:53.840 --> 0:03:59.920 take away from the headline jobs numbers. Let me replace 0:04:00.040 --> 0:04:02.480 the private payrolls numbers. The headline jobs numbers are impacted 0:04:02.520 --> 0:04:05.960 again by not necessarily the government shut down in particular, 0:04:06.000 --> 0:04:09.680 but the the third resignation program which ended into at 0:04:09.720 --> 0:04:12.440 the end of September. These are people who took severance package. 0:04:12.440 --> 0:04:14.080 This is not people who lost their jobs. So if 0:04:14.080 --> 0:04:16.039 you look at the private payroll numbers, they were actually 0:04:16.080 --> 0:04:18.480 quite decent. Now we're looking at, you know, a trend 0:04:18.520 --> 0:04:20.919 that's close to in the seventy thousand range, which is 0:04:20.960 --> 0:04:24.600 really not bad so and the effect the unemployment rate 0:04:24.680 --> 0:04:28.400 rose is less of a less of a concern, I 0:04:28.440 --> 0:04:31.240 think partially because there was again some issues with the 0:04:31.720 --> 0:04:35.600 government shut down impacting the data, and then in today's 0:04:35.600 --> 0:04:39.479 inflation data, the airlines were a big driver of the 0:04:39.480 --> 0:04:41.400 weakness and that there was also canceled flights. 0:04:41.400 --> 0:04:44.640 There was just a lot going on in your first. 0:04:44.360 --> 0:04:46.120 Look at the noises the airlines. 0:04:46.320 --> 0:04:48.760 First look at the noises the airlines. They fell six 0:04:48.800 --> 0:04:50.840 point five percent over two months, so it comes out 0:04:50.839 --> 0:04:54.560 to about three percent each month. If you look at 0:04:54.600 --> 0:04:57.279 the you know, the core number was point one five 0:04:57.440 --> 0:05:01.320 nine across both months. That's you know, quite low. What 0:05:01.400 --> 0:05:05.240 peril was was pretty weak. That is probably tied to 0:05:05.279 --> 0:05:08.840 this whole holiday discounting issue. So there's a lot of 0:05:09.200 --> 0:05:11.960 sort of noise within within the report, and part tied 0:05:12.000 --> 0:05:13.400 to the government shut down in port tied to the 0:05:13.400 --> 0:05:16.880 fact that it's just a sort of less inflationary backdrop. 0:05:17.440 --> 0:05:19.840 North Fries of market higher features of forty now out 0:05:19.880 --> 0:05:22.960 of forty seven nansdeck up one point three half percent. 0:05:23.040 --> 0:05:26.320 The nansdack one hundred, I should say vict sixteen point 0:05:26.400 --> 0:05:29.000 eight three. You know, I look at this stuff, I 0:05:29.040 --> 0:05:32.640 look at the whole ballet of it all, and I 0:05:33.120 --> 0:05:36.720 am more than certain. I learned this from David Rosenberg 0:05:36.760 --> 0:05:41.479 at Merrill years ago, Merrill, Lynch, Pierce, Fenner, and Smith. 0:05:41.760 --> 0:05:43.800 I saw an article that is just Meryl. I said, 0:05:44.000 --> 0:05:45.480 it will never just be maryl. 0:05:46.360 --> 0:05:49.320 You just mentioned that the pros like you look at 0:05:49.360 --> 0:05:53.880 each line item. What did the service sector line items say? 0:05:54.279 --> 0:05:57.440 And the angst of a four to be in purchasing. 0:05:57.040 --> 0:06:04.000 Power, utility bills, bills, the auto insurance. Can you see 0:06:04.000 --> 0:06:05.120 those in the report? 0:06:05.279 --> 0:06:07.800 Yeah, we can see that in the report. Motor vehicle 0:06:07.880 --> 0:06:12.000 insurance looks pretty flat. Transportation services, lodging, all that stuff 0:06:12.040 --> 0:06:15.800 was pretty soft. It's hard to know to what extent 0:06:15.839 --> 0:06:18.880 this is government shutdown related. My senses it probably is, 0:06:18.880 --> 0:06:21.680 and we'll see a bit of a bounce back. And 0:06:21.720 --> 0:06:24.279 then on the good side, that was all pretty soft, 0:06:24.279 --> 0:06:25.839 outside of maybe some used. 0:06:25.760 --> 0:06:27.480 Vehicles fed pick. 0:06:28.160 --> 0:06:30.360 What do you think who should it be or who 0:06:30.400 --> 0:06:31.080 do I think it will be? 0:06:32.000 --> 0:06:33.880 Book? We have time for both answers. 0:06:34.680 --> 0:06:35.680 I would love to see Waller. 0:06:35.720 --> 0:06:36.960 I think he'd be a great pick, and I think 0:06:37.120 --> 0:06:39.760 markets would really prefer to see Waller, who I. 0:06:39.720 --> 0:06:40.360 Think is more likely. 0:06:40.400 --> 0:06:42.160 It's probably more likely to be Hassett, although it does 0:06:42.200 --> 0:06:45.440 seem like incrementally over the past couple of weeks there 0:06:45.440 --> 0:06:48.479 seems to be some more concerns about Hasset, or at 0:06:48.560 --> 0:06:51.560 least more hesitation out of the White House for picking him. 0:06:51.680 --> 0:06:53.880 Stephanie Roth, thank you so much for joining us. 0:06:53.920 --> 0:06:56.800 Your commitment to surveillances appreciated of course, with the FED 0:06:57.000 --> 0:06:59.560 sides and other great moments. 0:06:59.560 --> 0:07:00.320 Stay with us. 0:07:00.560 --> 0:07:03.760 More from Bloomberg Surveillance coming up after this. 0:07:11.040 --> 0:07:14.600 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:07:14.680 --> 0:07:17.840 weekday afternoons from seven to ten am Eastern Listen on 0:07:17.920 --> 0:07:21.600 Applecarplay and Android Otto with the Bloomberg Business app, or 0:07:21.720 --> 0:07:23.160 watch us live on YouTube. 0:07:23.320 --> 0:07:24.800 We're gonna go to Emily Rowland right now. 0:07:24.840 --> 0:07:27.400 She is a Johnny anecock and I just can't say 0:07:27.520 --> 0:07:31.120 enough Howard manual life. She has just said you have 0:07:31.200 --> 0:07:35.280 to participate. First of all, congratulations. 0:07:34.200 --> 0:07:37.920 On the last three, four, five years. You've just absolutely 0:07:38.120 --> 0:07:43.960 killed the common sense nature of just own quality stocks. 0:07:44.280 --> 0:07:45.720 Any variants for next. 0:07:45.600 --> 0:07:49.280 Year, No, Tom, I mean we have long recognized the 0:07:49.320 --> 0:07:52.480 fact that over time, stock prices follow profits. 0:07:52.520 --> 0:07:53.520 It's pretty simple. 0:07:54.240 --> 0:07:56.960 The challenge, of course this year is quality has honestly 0:07:57.000 --> 0:07:58.040 been left in the dust. 0:07:58.200 --> 0:08:00.000 This year has been all about momentum. 0:08:00.160 --> 0:08:02.640 It's been about technicals, it's been about finding a chart 0:08:02.720 --> 0:08:04.360 that's going on, checking out. 0:08:04.440 --> 0:08:07.480 What does it signal to you that they've been left behind. 0:08:07.840 --> 0:08:10.400 Well, it just signals that there just has been a 0:08:10.600 --> 0:08:15.480 sentiment driven market, whether it's political sentiment, whether it's sell 0:08:15.600 --> 0:08:18.840 US dollars and buy everything else, whether it's embrace Europe. 0:08:18.880 --> 0:08:21.720 I mean, look at things like Spain and the cosby 0:08:21.920 --> 0:08:25.680 this year. They're both up eighty percent. They are trading 0:08:25.720 --> 0:08:28.600 not like companies but almost like ticker symbols. So we've 0:08:28.640 --> 0:08:32.120 seen investors really be driven by sentiment. We've been getting 0:08:32.120 --> 0:08:36.160 out our old technical investing textbooks from years ago to 0:08:36.240 --> 0:08:38.160 try to figure out what's going on. But I think 0:08:38.160 --> 0:08:40.280 there could be a bid for quality as we head 0:08:40.280 --> 0:08:42.319 into a trickier year in twenty twenty six. 0:08:42.679 --> 0:08:46.360 Some concerns out there about a bubble around this whole 0:08:46.400 --> 0:08:49.679 AI story broadly defined and maybe just not in those 0:08:49.679 --> 0:08:51.559 seven names, but maybe more broadly in the market. 0:08:51.640 --> 0:08:52.400 How do you think about that? 0:08:52.600 --> 0:08:54.040 Yeah, I mean, there's no doubt about it. 0:08:54.120 --> 0:08:56.880 The valuations are elevated around twenty two and a half 0:08:56.920 --> 0:08:58.000 times forward earnings. 0:08:58.000 --> 0:08:59.079 Of course, the peak. 0:08:58.920 --> 0:09:02.200 Historically was twenty five or But what we're really focused 0:09:02.240 --> 0:09:06.880 on is the denominator of the pe ratio, it's earnings. 0:09:06.920 --> 0:09:09.720 And the earnings engine in the United States is on. 0:09:10.600 --> 0:09:12.280 We have a lot of tailwinds in the next year. 0:09:12.320 --> 0:09:14.560 We've got the provisions from the one big beautiful Bill. 0:09:14.600 --> 0:09:19.079 We've got energy prices close to support here that helps consumers. 0:09:19.120 --> 0:09:21.120 So there's a lot going right for corporate America. 0:09:21.200 --> 0:09:24.560 Okay, inflation comes at lower Yeah, and you're on Trush 0:09:24.640 --> 0:09:24.920 came in. 0:09:24.960 --> 0:09:26.640 I don't know if you saw the report, but you know, 0:09:27.080 --> 0:09:29.440 way under three percent. Yeah, let's say we get a 0:09:29.440 --> 0:09:32.240 FED cut this time whenever, maybe when the red sox 0:09:32.480 --> 0:09:36.920 finally enter the free agent market whatever, I'm sorry. Money 0:09:36.920 --> 0:09:40.000 market funds, Paul, at what three point six percent? Yeah, 0:09:40.040 --> 0:09:42.400 they're going to be three point five percent? What does 0:09:42.440 --> 0:09:46.920 the John Hancock Manual Life Research of the emotion of 0:09:47.000 --> 0:09:48.720 money market funds coming down? 0:09:48.800 --> 0:09:50.920 There is a love affair with money markets. 0:09:50.960 --> 0:09:54.679 There are seven plus trillion dollars sitting in cash right now, 0:09:54.679 --> 0:09:57.560 and we think that those yields could disappear before your 0:09:57.559 --> 0:10:00.640 eyes into next year. The bond mark mart is just 0:10:00.840 --> 0:10:04.840 not sniffing out the disinflation that we see coming from 0:10:04.840 --> 0:10:07.920 the housing market. Just this morning, looking at the CPI report, 0:10:07.960 --> 0:10:10.080 it was still like groundhog Day. It was like the 0:10:10.080 --> 0:10:13.520 shelter component was still driving the bulk of the gains 0:10:13.559 --> 0:10:15.800 in CPI, even though we're at the lowest level since 0:10:15.840 --> 0:10:18.920 twenty twenty one. The labor market's gotten more cracks in 0:10:18.960 --> 0:10:21.560 it than I would suggest. The official data is telling 0:10:21.640 --> 0:10:24.839 us that means bond yields lower. There's an opportunity right 0:10:24.880 --> 0:10:27.880 now to lean into the income that's available in high 0:10:27.960 --> 0:10:31.360 quality bonds. Investors won't do it. Our work suggests that 0:10:31.520 --> 0:10:35.280 people buy money market funds on mass until rates are zero. 0:10:35.480 --> 0:10:36.559 We don't want that to happen. 0:10:36.600 --> 0:10:39.440 Well A Sure, Paul Capital Economics publishes I love the 0:10:39.440 --> 0:10:41.600 PA I've never seen this, folks in humpteen years. 0:10:41.960 --> 0:10:46.199 BLS reports hard to believe slum in delation exactly A 0:10:46.240 --> 0:10:48.160 sure needs more data exactly right. 0:10:48.960 --> 0:10:51.960 Earnings earnings have been really solid in the last several quarters. 0:10:51.960 --> 0:10:54.040 Here are they strong. 0:10:53.840 --> 0:10:55.360 Enough to support this marketing going forward, I. 0:10:55.360 --> 0:10:58.160 Think, yeah, you know, analysts are penciling in fourteen percent 0:10:58.200 --> 0:11:01.240 earnings growth for the US next year. That is pretty lofty, 0:11:01.240 --> 0:11:03.120 but as I mentioned before, there are a number of 0:11:03.160 --> 0:11:06.400 tailwinds in place for corporate America. I would say, just 0:11:06.440 --> 0:11:09.679 building on the America theme, we have the best earnings 0:11:09.720 --> 0:11:12.760 growth of any companies globally in the United States. 0:11:12.840 --> 0:11:15.160 You've seen that not be rewarded. This year. 0:11:15.240 --> 0:11:17.600 The S and P five hundred up around fifteen percent. 0:11:18.000 --> 0:11:21.920 European equities are up twice that amount. Guess what their 0:11:21.920 --> 0:11:25.440 earnings growth is. It's low single digits. So what we've 0:11:25.440 --> 0:11:28.280 seen again is this sentiment driven trade. 0:11:28.320 --> 0:11:29.080 Bringing it over. 0:11:29.360 --> 0:11:34.040 European financial stocks are up almost sixty percent this year. 0:11:34.120 --> 0:11:35.120 Their earnings growth is. 0:11:35.080 --> 0:11:35.959 Left for a decade. 0:11:36.240 --> 0:11:40.360 I mean, in your shot, sure, with your track record, 0:11:41.000 --> 0:11:43.760 what's the minimum timeline. 0:11:43.120 --> 0:11:46.959 Our listeners and viewers should use. To me, it's three years. 0:11:47.360 --> 0:11:50.160 The media doesn't do that right, and Sweeney's out at 0:11:50.240 --> 0:11:53.679 seven years. But the answer is we're so the short 0:11:53.760 --> 0:11:55.360 termism is unreal. 0:11:55.679 --> 0:11:58.160 Well, that's fair, but if you look at the economic 0:11:58.200 --> 0:12:01.840 growth picture, the macro is like on a different planet 0:12:02.200 --> 0:12:04.880 from what's going on in these markets. The US from 0:12:04.880 --> 0:12:07.319 an economic perspective is kind of like the clean of 0:12:07.400 --> 0:12:09.640 shirt and the dirty laundry. Right now, if you look 0:12:09.679 --> 0:12:12.480 at Europe, the data are coming in. I mean pmis, 0:12:12.520 --> 0:12:15.600 for example for the Eurozone at forty nine point two. 0:12:16.000 --> 0:12:18.400 It's okay, but it's not. 0:12:18.559 --> 0:12:21.280 I don't think it justifies a thirty plus percent return 0:12:21.320 --> 0:12:24.240 in Europe and eighty percent return in Spain. I think 0:12:24.280 --> 0:12:26.400 these markets have run a lot and need trim into 0:12:26.400 --> 0:12:26.960 strengthen too. 0:12:27.000 --> 0:12:27.400 Next year. 0:12:27.480 --> 0:12:28.280 Well, good one, Martin. 0:12:28.400 --> 0:12:31.160 What do you do with dividends? Does that you play 0:12:31.200 --> 0:12:32.240 with you guys at all? 0:12:32.400 --> 0:12:35.720 Or I like anything that has like the word income 0:12:36.160 --> 0:12:39.280 in it for next year? I think income over capital appreciation. 0:12:39.440 --> 0:12:41.400 The problem is that the dividend yield on the S 0:12:41.440 --> 0:12:44.800 and P five hundreds one point two percent right now, 0:12:44.800 --> 0:12:46.400 and the fact that you can get four to five 0:12:46.400 --> 0:12:48.880 percent in high quality bonds, I like that a bit better. 0:12:48.960 --> 0:12:50.760 Okay, but you know, with a view of Trinity chops 0:12:50.760 --> 0:12:53.360 from old and new, John Hancock, Emily Rowland and Tom 0:12:53.440 --> 0:12:57.920 Keane worshiped at the altar of Margie Patel to Paul's 0:12:58.000 --> 0:13:02.160 great question is dividend growth and alternative to yield? 0:13:02.679 --> 0:13:03.160 I think so. 0:13:03.559 --> 0:13:07.360 I mean again, we like this kind of relative value play, 0:13:07.440 --> 0:13:09.600 and I think you're going to find those dividend growers 0:13:09.600 --> 0:13:12.640 in that bucket. It's value and quality at a reasonable price. 0:13:12.720 --> 0:13:14.600 What a God's name of the Red Sox do? When 0:13:14.640 --> 0:13:16.559 I saw Bredman, we're the Patriots. 0:13:16.600 --> 0:13:19.880 We're eleven and two, like unbelievable? 0:13:19.920 --> 0:13:22.520 Are you in the Manual Life? Johnny Hancock's seats are 0:13:22.760 --> 0:13:23.520 fifty yard line? 0:13:23.640 --> 0:13:27.520 Yeah right, those are for the clients. I wish, I wish. 0:13:27.800 --> 0:13:30.599 Emily Roland, thank you so much. You should see the 0:13:30.800 --> 0:13:34.640 Red Sox tickets. It's just sick. She's with the Johnny 0:13:34.640 --> 0:13:35.319 Hancock company. 0:13:35.360 --> 0:13:38.640 I should say Manual Life John Hancock to do it correctly, 0:13:38.720 --> 0:13:42.680 Emily Rowland, and she has been dead on about participating 0:13:43.480 --> 0:13:45.000 in the markets. 0:13:45.200 --> 0:13:49.240 Stay with us. More from Bloomberg Surveillance coming up after this. 0:13:56.440 --> 0:14:00.400 This is the Bloomberg Surveillance Podcast. Listen live each weekdays 0:14:00.400 --> 0:14:03.640 starting at seven am Eastern on Applecarplay and Android Auto 0:14:03.800 --> 0:14:06.760 with the Bloomberg Business app. You can also listen live 0:14:06.840 --> 0:14:10.400 on Amazon Alexa from our flagship New York station. Just 0:14:10.480 --> 0:14:12.959 say Alexa play Bloomberg eleven thirty. 0:14:13.120 --> 0:14:14.880 We have a special tree for your folks. I want 0:14:14.880 --> 0:14:16.640 to frame this out as well as I can. You've 0:14:16.679 --> 0:14:21.440 got a really odd headline this morning of breaking news. 0:14:21.480 --> 0:14:24.360 I'm going to go right to the Bloomberg where we've 0:14:24.400 --> 0:14:28.560 got Trump Media to combine with a company you don't know. 0:14:28.800 --> 0:14:32.600 Tae to build nuclear fusion business. 0:14:33.440 --> 0:14:37.080 My family goes back in this derby over forty years 0:14:37.680 --> 0:14:42.280 to the Lawrence Livermore Lab and Paul the Endless Quest 0:14:42.880 --> 0:14:46.960 to squeeze two atoms and two nucleus together. 0:14:47.480 --> 0:14:48.880 Dan Ives is quite good on this. 0:14:49.000 --> 0:14:51.360 We're going to talk to him with web Bush about 0:14:51.520 --> 0:14:55.000 this combination before we talk to him about the state 0:14:55.080 --> 0:14:58.000 of mag seven and technology. Well, Dan, thank you so 0:14:58.160 --> 0:15:01.880 much for joining us on short notice. I go back 0:15:02.040 --> 0:15:05.960 decades on this. Fusion has been a hope and a 0:15:06.080 --> 0:15:10.480 dream forever. How is Donald Trump gonna finally get us 0:15:11.000 --> 0:15:14.080 over this fragile line of successful physics. 0:15:15.120 --> 0:15:17.920 Yeah, I mean, look, I focus more like with THAE. 0:15:18.520 --> 0:15:21.120 I remember they're backers because I know them from a 0:15:21.200 --> 0:15:22.160 fusion perspective. 0:15:22.280 --> 0:15:26.280 Google, Chevron. Google and Chevron have been there, two major 0:15:26.480 --> 0:15:27.320 recent players. 0:15:27.760 --> 0:15:30.640 Yeah, I mean, you know Goldman some others. Look, I 0:15:30.720 --> 0:15:34.520 think when it comes to nuclear fusion, what that's twenty 0:15:34.640 --> 0:15:39.480 five plus years of the Maxwell winners, the Nobel winners 0:15:39.520 --> 0:15:40.320 that they've had here. 0:15:40.880 --> 0:15:42.840 So I've always viewed this is gonna be. 0:15:43.960 --> 0:15:48.480 If there's a winner in the US and global nuclear fusion, 0:15:48.800 --> 0:15:49.320 it's Tha. 0:15:49.680 --> 0:15:52.160 So I think that's at the centerpiece of this whole deal. 0:15:52.560 --> 0:15:56.800 It's much more about Thae and my view than in 0:15:56.960 --> 0:15:59.920 terms on the Trump angle that's always the political backing. 0:16:00.360 --> 0:16:03.400 Is this an arms race, if you will, a fusion 0:16:03.560 --> 0:16:07.720 race with China. We saw what they did with electric vehicles, 0:16:08.240 --> 0:16:12.040 your conversant in China and AI, the Nvidia chip debate 0:16:12.520 --> 0:16:15.720 in that Is this like getting out in front of 0:16:15.960 --> 0:16:18.480 China catching up a nuclear fusion. 0:16:19.440 --> 0:16:20.520 That's what it's all about. 0:16:20.880 --> 0:16:22.520 I mean, I think you know me and you've talked 0:16:22.520 --> 0:16:25.760 about this and you know on the show this is 0:16:25.800 --> 0:16:28.640 an arms race first China. I mean, everything they're focused 0:16:28.680 --> 0:16:31.440 on is going in two thoy thirty, how they fuel AI, 0:16:31.640 --> 0:16:35.480 arms ors technology. US is way ahead of China because 0:16:35.480 --> 0:16:38.320 of the Vidio, because of Microsoft, because of Palentinger and others. 0:16:38.880 --> 0:16:40.000 Energies are scarce. 0:16:40.080 --> 0:16:42.000 The guy I've always said, like energy is going to 0:16:42.080 --> 0:16:44.600 be the big scarcy in nuclear has to be the play. 0:16:45.080 --> 0:16:47.360 You know, obviously there's AKA and others, but this will 0:16:47.440 --> 0:16:50.120 clearly be the first fusion public play. 0:16:50.760 --> 0:16:53.960 So Dan, I think most people understand the Trump Media 0:16:54.040 --> 0:16:57.480 Company as a media play, a digital media play, if 0:16:57.520 --> 0:17:00.720 you will, Can you tell us about TA because most 0:17:00.760 --> 0:17:02.280 of us don't know a whole lot about Tha. 0:17:03.080 --> 0:17:06.359 Yeah, and again, Thae I think is the centerpiece of 0:17:06.400 --> 0:17:06.960 the whole deal. 0:17:07.040 --> 0:17:09.520 I mean, even though it's a merger, it's it's really 0:17:09.560 --> 0:17:12.400 about TAM I view. I think, look, when you look, 0:17:12.520 --> 0:17:15.720 this is what twenty five, twenty eight years, you know, 0:17:15.840 --> 0:17:18.960 most of out of California they've built I think it's 0:17:19.320 --> 0:17:23.040 about five you know, sort of you know, but I'll 0:17:23.080 --> 0:17:27.440 say few successful fusion buildouts this is one. 0:17:27.520 --> 0:17:30.800 I think it's five Nobels, so many. 0:17:30.760 --> 0:17:34.080 Maxwell's, you know, in terms of from scientists that have 0:17:34.200 --> 0:17:36.800 been through their schwab backing, you know, it's kind of 0:17:36.840 --> 0:17:38.600 who's who in terms of what they've had back. But 0:17:39.119 --> 0:17:41.040 this has really been one coming out of the cow 0:17:41.359 --> 0:17:46.479 system science community, and that's always what it was known as. 0:17:46.560 --> 0:17:49.840 It was always sort of a gem in the science community. Yeah, 0:17:49.880 --> 0:17:51.879 I noticed Jeff Immil was a former board member. 0:17:51.960 --> 0:17:54.680 But with TAE, folks to see Eugene mondays there it 0:17:54.800 --> 0:17:59.000 was just absolutely definitive across all political lines of America. 0:17:59.119 --> 0:18:03.600 Doctor Moneys, of course associated with MIT they let's say 0:18:03.720 --> 0:18:07.480 Dan as a statement, Tae has a heavyweight board, but 0:18:07.640 --> 0:18:10.719 you got to get something done. Going back to Lawrence 0:18:10.800 --> 0:18:14.920 Livermore lab ages ago, it's a lot of theory, it's 0:18:14.960 --> 0:18:19.399 a lot of politics, including the Advance Act accelerating deployment 0:18:19.480 --> 0:18:22.879 of versatile advanced nuclear for clean energy. It sounds like 0:18:22.920 --> 0:18:26.160 an episode Dan Iisa gets Smart, except you're too young 0:18:26.240 --> 0:18:27.840 to remember Get Smart. 0:18:28.200 --> 0:18:33.600 But the answer is, is there any indication fusion will work? Oh? 0:18:33.680 --> 0:18:36.520 I think that's that's you don't do this deal. But 0:18:36.560 --> 0:18:38.000 you don't think this is going to work. 0:18:38.240 --> 0:18:41.080 I mean, if you look with Tae is done, it's 0:18:41.119 --> 0:18:43.240 not just I think like the best bet from a 0:18:43.400 --> 0:18:47.920 US perspective and even global relative to energy. And clearly 0:18:48.040 --> 0:18:50.120 there have been obviously so many starts and stops when 0:18:50.119 --> 0:18:52.760 it comes to fusion. But I do believe this is 0:18:52.920 --> 0:18:56.040 one where when you look at breakthroughs combined with what 0:18:56.200 --> 0:18:58.440 you'd get from a capital perspective. 0:18:58.480 --> 0:19:01.320 Because we've alreays said like that's part arms raised. That's 0:19:01.400 --> 0:19:04.480 why this would be such unique combo. You know, Paul 0:19:04.520 --> 0:19:05.000 this is great. 0:19:05.000 --> 0:19:07.640 I want to thank the Kliman Center for Energy Policy 0:19:08.040 --> 0:19:10.760 at the University Pennsylvania for getting me up to speed 0:19:11.119 --> 0:19:14.280 on this. They got a chart in here from Sorbone 0:19:14.400 --> 0:19:17.320 nineteen fifteen, a proposed power plant. 0:19:17.600 --> 0:19:20.359 It looks like the set of Silo, right, I mean 0:19:20.440 --> 0:19:25.200 that's what yeah, I did, Lanman in hydrocarbons. The fusion 0:19:25.720 --> 0:19:28.240 thing looks like the set of Silo's. 0:19:27.800 --> 0:19:31.199 Exactly what Dan from Ta East perspective. Why are they 0:19:31.280 --> 0:19:34.720 merging with Trump's media president Trump's media company? 0:19:35.640 --> 0:19:39.200 I think probably two reasons, right, I mean one capital, 0:19:39.800 --> 0:19:41.719 I'm I think Trump you will get what two two 0:19:41.760 --> 0:19:45.239 and a half billion cash and you know, bigcoins your 0:19:45.320 --> 0:19:48.119