1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,080 Speaker 1: or watch us live on YouTube. 6 00:00:27,120 --> 00:00:29,520 Speaker 2: You know, you could call twenty twenty five the year 7 00:00:29,680 --> 00:00:33,400 Speaker 2: of the paradox for the stock market, right because despite 8 00:00:33,600 --> 00:00:37,240 Speaker 2: all of it, the trade tensions, the inflation, the geopolitical 9 00:00:37,320 --> 00:00:40,760 Speaker 2: surprises and shocks, you know, we're up double digits across 10 00:00:40,800 --> 00:00:43,240 Speaker 2: the board here for the major indexes. What is twenty 11 00:00:43,280 --> 00:00:46,840 Speaker 2: twenty six? Hold Semashaw here glee in our studios actually, 12 00:00:46,840 --> 00:00:49,520 Speaker 2: which is very exciting. Chief global strategist at Principal Asset 13 00:00:49,560 --> 00:00:52,400 Speaker 2: Management seem always good to see you, thanks for stopping 14 00:00:52,440 --> 00:00:54,880 Speaker 2: by the studio, So good to be here. 15 00:00:54,920 --> 00:00:55,200 Speaker 3: Thank you. 16 00:00:55,680 --> 00:00:58,360 Speaker 2: Is twenty twenty six going to be your paradoxes as 17 00:00:58,360 --> 00:00:59,520 Speaker 2: well for this market? Do you think? 18 00:00:59,680 --> 00:00:59,880 Speaker 4: Yeah? 19 00:00:59,880 --> 00:01:01,640 Speaker 5: I think it will be in a slightly different way, 20 00:01:01,840 --> 00:01:06,800 Speaker 5: in that you have a fairly constructive economic backdrop. Consumers 21 00:01:06,840 --> 00:01:09,720 Speaker 5: we think will be okay, not incredibly strong, but we 22 00:01:09,800 --> 00:01:11,639 Speaker 5: think they'll be okay. They get help from the fiscal 23 00:01:11,680 --> 00:01:14,039 Speaker 5: side they get help from the mounetry side, and yet 24 00:01:14,040 --> 00:01:17,000 Speaker 5: despite that constructive backdrop, investors are still going to have 25 00:01:17,000 --> 00:01:19,759 Speaker 5: that niggling fear about AI, which is likely to persist. 26 00:01:20,480 --> 00:01:22,280 Speaker 3: I'm not sure if AI is going to continue to 27 00:01:22,280 --> 00:01:24,600 Speaker 3: be the tailwind that it has been for the last 28 00:01:24,600 --> 00:01:25,080 Speaker 3: several years. 29 00:01:25,120 --> 00:01:25,200 Speaker 6: Now. 30 00:01:25,240 --> 00:01:28,840 Speaker 3: It seems like conversations that we're hearing from folks say, well, 31 00:01:28,840 --> 00:01:30,679 Speaker 3: I'm a little bit concerned that we've gotten too far 32 00:01:30,720 --> 00:01:33,560 Speaker 3: of our skis or to run its course, or the 33 00:01:33,600 --> 00:01:35,679 Speaker 3: best growth daser behind us. How do you guys think 34 00:01:35,680 --> 00:01:36,119 Speaker 3: about that? 35 00:01:36,280 --> 00:01:38,280 Speaker 5: Yeah, I think the narrative has definitely shifted in the 36 00:01:38,319 --> 00:01:40,800 Speaker 5: last two or three months. That really has gained a 37 00:01:40,840 --> 00:01:43,000 Speaker 5: lot of momentum in that people are saying, Okay, what 38 00:01:43,080 --> 00:01:46,399 Speaker 5: else is there? They're not shying away from tech by 39 00:01:46,400 --> 00:01:48,440 Speaker 5: any means, but they're not adding to exposure. They are 40 00:01:48,440 --> 00:01:50,680 Speaker 5: trying to think where else to go, whether that's of 41 00:01:50,800 --> 00:01:54,640 Speaker 5: the sectors, other regions. So there's definitely that dynamic which 42 00:01:54,680 --> 00:01:56,400 Speaker 5: is starting to come through in a lot of conversations 43 00:01:56,400 --> 00:01:56,960 Speaker 5: that we're having. 44 00:01:57,240 --> 00:01:59,720 Speaker 2: So what are you hearing from clients? I mean, where 45 00:01:59,720 --> 00:02:03,520 Speaker 2: are they looking outside of sort of the obvious tech plays. 46 00:02:03,800 --> 00:02:05,920 Speaker 5: Yeah, so I think the key areas that are really 47 00:02:06,000 --> 00:02:08,720 Speaker 5: we're speaking about is financials, which has already had a 48 00:02:08,720 --> 00:02:12,440 Speaker 5: really good year, but with that constructive backdrop that continues 49 00:02:12,480 --> 00:02:15,600 Speaker 5: to flow through into twenty twenty six. And also consumer discretionary. 50 00:02:16,480 --> 00:02:18,440 Speaker 5: We're hearing more people talk about that, of course, but 51 00:02:18,520 --> 00:02:22,760 Speaker 5: with the fiscal stimulus, the tax refunds that we're expecting 52 00:02:22,800 --> 00:02:24,560 Speaker 5: to come through in Q on, that should give a 53 00:02:24,560 --> 00:02:28,000 Speaker 5: bit of a boost, particularly after a period of some difficulty. 54 00:02:28,040 --> 00:02:30,959 Speaker 5: And then beyond regions, sorry, beyond sectors. A lot of 55 00:02:31,000 --> 00:02:33,720 Speaker 5: questions around regions, and that's been a really interesting discussion 56 00:02:33,760 --> 00:02:38,040 Speaker 5: because Europe has been really kind of underperformers, fairly boring. 57 00:02:38,080 --> 00:02:40,200 Speaker 5: This year is a good year, but what we're seeing 58 00:02:40,240 --> 00:02:42,000 Speaker 5: next year is that nobody's expecting it to be an 59 00:02:42,000 --> 00:02:45,760 Speaker 5: incredible ole performer because growth is still fairly fairly weak, 60 00:02:46,120 --> 00:02:48,720 Speaker 5: but because it doesn't have as much as much exposure 61 00:02:48,800 --> 00:02:53,160 Speaker 5: to technology, it's an opportunity for diversification with a fairly 62 00:02:53,200 --> 00:02:54,440 Speaker 5: solid macro backdrop. 63 00:02:54,760 --> 00:02:56,960 Speaker 3: Is emerging market something you guys think. 64 00:02:56,760 --> 00:03:00,360 Speaker 5: About, Yeah, emerging markets. It's actually because I'm a real 65 00:03:00,400 --> 00:03:02,760 Speaker 5: favorite over the last nine months, and that's something which 66 00:03:02,800 --> 00:03:05,800 Speaker 5: is also carrying through. I give been very particular, you know, 67 00:03:05,800 --> 00:03:07,360 Speaker 5: pick out which areas that you want to be in. 68 00:03:08,000 --> 00:03:10,840 Speaker 5: But certainly the interest rate cycle is continuing in a 69 00:03:10,840 --> 00:03:13,080 Speaker 5: lot of these nations. And interestingly, you know, if you 70 00:03:13,120 --> 00:03:15,320 Speaker 5: still really do believe in the tech narrative when you 71 00:03:15,400 --> 00:03:18,079 Speaker 5: want to stay very much exposed to it. The thing 72 00:03:18,080 --> 00:03:21,200 Speaker 5: about Asia is it has tech but a slightly cheap evaluation. 73 00:03:21,600 --> 00:03:23,760 Speaker 5: So I think there's lots of opportunities outside of the US. 74 00:03:23,760 --> 00:03:26,360 Speaker 5: And because this year you did actually see the global 75 00:03:26,400 --> 00:03:30,079 Speaker 5: diversification paid off, that theme is now following through into 76 00:03:30,080 --> 00:03:30,839 Speaker 5: twenty twenty six. 77 00:03:31,000 --> 00:03:33,240 Speaker 2: So when you talk are em doing well next year 78 00:03:33,280 --> 00:03:35,800 Speaker 2: possibly and the financials continuing to do nicely, I think 79 00:03:35,800 --> 00:03:38,880 Speaker 2: all that's predicated on a scenario where we're going to 80 00:03:38,880 --> 00:03:44,600 Speaker 2: have lower rates for longer. What happens if we don't well. 81 00:03:44,640 --> 00:03:46,800 Speaker 5: I mean, it's been interesting because the last week or so, 82 00:03:46,920 --> 00:03:49,560 Speaker 5: just the fact that the market lifted because of expectations 83 00:03:49,640 --> 00:03:53,440 Speaker 5: turning for the around the FED cut in December tells 84 00:03:53,520 --> 00:03:56,400 Speaker 5: us how important it still is. So when we're thinking 85 00:03:56,440 --> 00:03:58,760 Speaker 5: about twenty twenty six, we have this constructive backdrop. We 86 00:03:58,800 --> 00:04:01,480 Speaker 5: think that markets will do okay, And to your point, 87 00:04:01,600 --> 00:04:04,080 Speaker 5: it is predicated on the idea that policymakers are able 88 00:04:04,120 --> 00:04:07,400 Speaker 5: to still step in and provide that help wherever it's necessary. Now, 89 00:04:07,400 --> 00:04:10,920 Speaker 5: we don't think that the US requires a lot of 90 00:04:10,960 --> 00:04:13,440 Speaker 5: rate cuts, but we do need to feel that the 91 00:04:13,440 --> 00:04:15,000 Speaker 5: feders were still willing to step in. 92 00:04:15,760 --> 00:04:19,159 Speaker 3: We had some very good earnings in third quarter, I 93 00:04:19,160 --> 00:04:23,000 Speaker 3: think better than most people forecasted. Is the earnings out 94 00:04:23,960 --> 00:04:26,240 Speaker 3: constructive for this market? Are there earnings growth? Is it 95 00:04:26,360 --> 00:04:28,279 Speaker 3: enough to push this market higher? 96 00:04:28,680 --> 00:04:32,960 Speaker 5: Yeah? Absolutely, we do think that without you know, for example, 97 00:04:33,120 --> 00:04:36,360 Speaker 5: our economic growth forecast is for about two percent two 98 00:04:36,400 --> 00:04:39,000 Speaker 5: point one percent growth next year. When you have that 99 00:04:39,120 --> 00:04:41,760 Speaker 5: kind of backdrop, then really earnies can do well. Now, 100 00:04:41,920 --> 00:04:45,479 Speaker 5: again it's not bangbusters, but it is something that you 101 00:04:45,520 --> 00:04:48,040 Speaker 5: can see a bit of a broadening out and it 102 00:04:48,120 --> 00:04:51,280 Speaker 5: can continue to drive the market higher. Again, we're not 103 00:04:51,320 --> 00:04:54,839 Speaker 5: looking at twenty five percent gains, but we are thinking 104 00:04:54,839 --> 00:04:57,800 Speaker 5: that this is still a fairly decent year for next 105 00:04:58,040 --> 00:04:58,719 Speaker 5: twenty twenty six. 106 00:04:58,800 --> 00:05:03,120 Speaker 2: Do tariffs trip up finally trip up Corporate America next year? 107 00:05:03,160 --> 00:05:05,240 Speaker 2: Because I mean, if you look at earnings this past quarter, 108 00:05:05,360 --> 00:05:06,080 Speaker 2: they really didn't. 109 00:05:07,120 --> 00:05:08,760 Speaker 5: I don't think that tariffs are going to be that 110 00:05:08,839 --> 00:05:11,120 Speaker 5: much of an issue, you know, we're expecting that the 111 00:05:11,600 --> 00:05:13,560 Speaker 5: amount of uncertain that we have this year is going 112 00:05:13,600 --> 00:05:15,960 Speaker 5: to continue to fade into next year, though of course 113 00:05:16,000 --> 00:05:19,039 Speaker 5: there'll be pockets volatility and concerns, but ultimately we have 114 00:05:19,120 --> 00:05:22,720 Speaker 5: also realized that businesses are able to adapt. We don't 115 00:05:22,720 --> 00:05:24,800 Speaker 5: think that they are willing to pass on too many 116 00:05:24,839 --> 00:05:27,680 Speaker 5: price increases, so you could see some margin compression, but 117 00:05:27,720 --> 00:05:30,000 Speaker 5: we're not expecting it to be very very significant. 118 00:05:30,720 --> 00:05:34,039 Speaker 3: But geopolitics, I mean, it just seems like, you know, 119 00:05:34,080 --> 00:05:35,680 Speaker 3: we still have I don't know what's going on in 120 00:05:35,720 --> 00:05:37,520 Speaker 3: the mid mid East, but does nothing seem to be 121 00:05:37,600 --> 00:05:42,679 Speaker 3: resolved there. We've got ongoing negotiations between the ukin and Russia. 122 00:05:42,720 --> 00:05:45,120 Speaker 3: We've got China. Who knows what's going to happen in 123 00:05:45,120 --> 00:05:47,279 Speaker 3: that part of the world. The market seems to have 124 00:05:47,640 --> 00:05:51,400 Speaker 3: discounted most of that throughout this year. Is that something 125 00:05:51,400 --> 00:05:53,919 Speaker 3: we can expect to continue to think or is that 126 00:05:54,000 --> 00:05:55,120 Speaker 3: a black swan out. 127 00:05:54,960 --> 00:05:58,400 Speaker 5: There that is now I believe that the market should 128 00:05:58,400 --> 00:06:01,480 Speaker 5: continue to discount it was right and ounting it this year. Historically, 129 00:06:01,520 --> 00:06:05,680 Speaker 5: whenever there've been geopolitical events, unless it fundamentally changes the 130 00:06:05,720 --> 00:06:08,440 Speaker 5: inflation story, it is not something which has a sustained 131 00:06:08,440 --> 00:06:10,640 Speaker 5: market impact. So of course we keep an eye on it, 132 00:06:10,680 --> 00:06:13,000 Speaker 5: but it's not something that we're willing to try and 133 00:06:13,400 --> 00:06:14,760 Speaker 5: position portfolios around. 134 00:06:15,400 --> 00:06:18,600 Speaker 2: And what about outside equities, I'm thinking, well, crypto, which 135 00:06:18,600 --> 00:06:21,279 Speaker 2: we know volatility is sort of always the word of 136 00:06:21,320 --> 00:06:23,480 Speaker 2: the day. But even things like private credit, where there 137 00:06:23,480 --> 00:06:26,120 Speaker 2: have been some concerns and we've seen pockets of weakness, 138 00:06:26,279 --> 00:06:27,760 Speaker 2: how do you look at that in twenty twenty six. 139 00:06:27,839 --> 00:06:29,880 Speaker 5: Yeah, we still have a constructive view of private credit. 140 00:06:29,920 --> 00:06:31,640 Speaker 5: Of course, I've been as you said, there's been pockets 141 00:06:31,680 --> 00:06:33,760 Speaker 5: of weakness and it has created a lot of concerns. 142 00:06:33,800 --> 00:06:36,440 Speaker 5: Are they something more sinister underlying it? But a lot 143 00:06:36,480 --> 00:06:39,400 Speaker 5: of that has to us it's been idiosyncratic shocks. If 144 00:06:39,400 --> 00:06:41,479 Speaker 5: we're looking at the consumer base, for example, and how 145 00:06:41,560 --> 00:06:43,800 Speaker 5: this feeds through to private credit, we don't have that 146 00:06:43,839 --> 00:06:48,160 Speaker 5: many concerns. We still think they strength in that underlying story. 147 00:06:48,240 --> 00:06:50,120 Speaker 5: It is losing a little bit of shine, I would say, 148 00:06:50,120 --> 00:06:51,880 Speaker 5: but that means that investors need to be really careful 149 00:06:51,880 --> 00:06:54,279 Speaker 5: abou where they're looking at. So for us, the middle 150 00:06:54,279 --> 00:06:56,279 Speaker 5: market direct lending is an area which you have a 151 00:06:56,279 --> 00:06:59,120 Speaker 5: little bit more defensive nacio slightly more high quality within 152 00:06:59,160 --> 00:07:02,520 Speaker 5: that space. So I think it's important that investor's position 153 00:07:02,760 --> 00:07:06,520 Speaker 5: appropriately within private credit. But importantly, going forward, these returns 154 00:07:06,560 --> 00:07:07,920 Speaker 5: are going to be more and more difficult to come 155 00:07:07,960 --> 00:07:09,400 Speaker 5: about in the same way that we've had over the 156 00:07:09,440 --> 00:07:11,960 Speaker 5: last few years. So dipping into private markets is going 157 00:07:12,000 --> 00:07:13,480 Speaker 5: to be credit increasingly important. 158 00:07:13,880 --> 00:07:15,680 Speaker 3: Not for nothing but the high temperature today in des 159 00:07:15,760 --> 00:07:17,400 Speaker 3: Moines I was supposed to be thirteen degrees. 160 00:07:17,960 --> 00:07:18,920 Speaker 2: We're looking forward to that. 161 00:07:20,520 --> 00:07:25,000 Speaker 3: And dude, the low temperature in Wednesdays can be minus five. 162 00:07:26,080 --> 00:07:28,200 Speaker 5: So the thing is is that in de Moines you 163 00:07:28,240 --> 00:07:31,000 Speaker 5: don't need to step outside. You can go through the skywalks. 164 00:07:31,040 --> 00:07:34,680 Speaker 3: Okay, because for those of who all know Principal Asset Management, 165 00:07:35,000 --> 00:07:38,040 Speaker 3: great great asset management business. They've been into business forever. 166 00:07:38,080 --> 00:07:40,080 Speaker 3: I've gone out there to Des Moines many times to 167 00:07:40,120 --> 00:07:45,080 Speaker 3: see those folks. It's December and it's chili in Des Moines. Yeah, 168 00:07:45,120 --> 00:07:48,480 Speaker 3: and so Seema being the leader of you know, one 169 00:07:48,520 --> 00:07:50,200 Speaker 3: of the senior folks of Principal as the managers, he's 170 00:07:50,240 --> 00:07:52,440 Speaker 3: got to go to des Moines and see the folks there. 171 00:07:53,120 --> 00:07:55,040 Speaker 5: Black Friday thermal thermal sales. 172 00:07:55,200 --> 00:07:57,760 Speaker 2: Yes, you're stocking up. 173 00:07:58,520 --> 00:08:01,040 Speaker 3: This is not London because this is not the city 174 00:08:01,040 --> 00:08:03,520 Speaker 3: of London. This is De Moines, Iowa in December. 175 00:08:03,640 --> 00:08:05,440 Speaker 2: Makes it look like a heat wave here in New 176 00:08:05,520 --> 00:08:06,480 Speaker 2: York City exactly. 177 00:08:06,560 --> 00:08:08,160 Speaker 3: Semasha, thank you so much for joining us. 178 00:08:08,160 --> 00:08:08,840 Speaker 4: We appreciate it. 179 00:08:08,840 --> 00:08:11,320 Speaker 3: On our way from London to Des Moines, Iowa, make 180 00:08:11,360 --> 00:08:14,040 Speaker 3: a little stopover in New York City here, Smashaw, chief 181 00:08:14,040 --> 00:08:17,320 Speaker 3: global Strategist, principal Asset Management to stay with us. More 182 00:08:17,320 --> 00:08:19,680 Speaker 3: from Bloomberg Surveillance coming up after this. 183 00:08:29,040 --> 00:08:32,640 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 184 00:08:32,720 --> 00:08:35,720 Speaker 1: weekday afternoons from seven to ten am. He's durn Listen 185 00:08:35,800 --> 00:08:39,360 Speaker 1: on Apple Karplay and Android Otto with the Bloomberg Business app, 186 00:08:39,520 --> 00:08:41,319 Speaker 1: or watch us live on YouTube. 187 00:08:41,360 --> 00:08:43,640 Speaker 2: You know, Paul, we are going to have a new 188 00:08:43,640 --> 00:08:48,280 Speaker 2: FED chair in in May. President Trump says he's decided 189 00:08:48,360 --> 00:08:50,720 Speaker 2: on his pick. He hasn't announced too, but we know 190 00:08:50,760 --> 00:08:53,720 Speaker 2: that Kevin Hassett, his chief Economic advisor, seems to be 191 00:08:53,720 --> 00:08:56,560 Speaker 2: at the top of that list. Want to dig into 192 00:08:56,600 --> 00:09:00,520 Speaker 2: how that may impact market decisions and take a look 193 00:09:00,559 --> 00:09:05,439 Speaker 2: at sort of the more global political landscape, if you will. 194 00:09:05,440 --> 00:09:09,000 Speaker 2: With Henrietta Trey's co founder of Veda Partners. Henrietta, thanks 195 00:09:09,040 --> 00:09:10,880 Speaker 2: so much for being with us. Let's just start with 196 00:09:11,160 --> 00:09:13,960 Speaker 2: the Federal Reserve, the changes that are to come in 197 00:09:14,000 --> 00:09:15,880 Speaker 2: the months ahead. How are you looking at that when 198 00:09:15,920 --> 00:09:19,080 Speaker 2: you think about markets overall in twenty twenty six. 199 00:09:20,200 --> 00:09:21,840 Speaker 6: I think it's obviously the core question. 200 00:09:22,080 --> 00:09:24,760 Speaker 7: And with so much uncertainty at the FED, what I 201 00:09:25,000 --> 00:09:29,319 Speaker 7: like about having a new FED member, specifically if it's 202 00:09:29,400 --> 00:09:32,160 Speaker 7: Kevin Hassett, is you know how that member is going 203 00:09:32,200 --> 00:09:32,520 Speaker 7: to vote. 204 00:09:32,520 --> 00:09:34,319 Speaker 6: There's not any confusion, and with such. 205 00:09:34,120 --> 00:09:37,120 Speaker 7: A disparate FED, that's been something that's tricky for investors 206 00:09:37,120 --> 00:09:39,120 Speaker 7: to really nail down. So you now will have two 207 00:09:39,200 --> 00:09:42,760 Speaker 7: guaranteed locks on the voting basis of whether or not 208 00:09:42,760 --> 00:09:43,640 Speaker 7: there should be cuts. 209 00:09:43,960 --> 00:09:45,480 Speaker 6: The tricky part is the timing. 210 00:09:45,800 --> 00:09:48,280 Speaker 7: As we get into May, the President is going to 211 00:09:48,320 --> 00:09:51,880 Speaker 7: be staring down the twenty twenty six midterm elections coming 212 00:09:51,960 --> 00:09:54,000 Speaker 7: up in November, and all four hundred and thirty five 213 00:09:54,040 --> 00:09:57,320 Speaker 7: members except for the twenty two I think Republicans who 214 00:09:57,360 --> 00:09:59,760 Speaker 7: are not running again, are going to be up for reelection. 215 00:10:00,000 --> 00:10:01,560 Speaker 6: They're going to have to sell the United. 216 00:10:01,360 --> 00:10:04,360 Speaker 7: States consumer on the idea that the economy is great 217 00:10:04,400 --> 00:10:06,400 Speaker 7: and so we should be cutting interest rates if we 218 00:10:06,520 --> 00:10:09,360 Speaker 7: need to, or the job market is where we should 219 00:10:09,360 --> 00:10:12,360 Speaker 7: be prioritizing our time, but simultaneously that we need a 220 00:10:12,360 --> 00:10:15,400 Speaker 7: two thousand dollars tax rebate to offset the cost of 221 00:10:15,440 --> 00:10:18,320 Speaker 7: the tariff. So it's a really tricky dynamic to have 222 00:10:18,360 --> 00:10:19,840 Speaker 7: that conversation at the same time. 223 00:10:20,000 --> 00:10:21,960 Speaker 6: That's what I'd be worried about in terms of timing, 224 00:10:22,040 --> 00:10:24,720 Speaker 6: but Kevin has it. I think we'd get through the set. 225 00:10:24,640 --> 00:10:26,680 Speaker 7: Without too much of a problem on the confirmation front, 226 00:10:26,800 --> 00:10:29,000 Speaker 7: unless there's some unknown quantity we haven't learned about the 227 00:10:29,080 --> 00:10:31,400 Speaker 7: last decade of his time in the public space. 228 00:10:31,600 --> 00:10:33,720 Speaker 3: Henrietta, I know you're going to tell us that Congress 229 00:10:33,800 --> 00:10:36,160 Speaker 3: is either on break now or they're about to go 230 00:10:36,240 --> 00:10:39,400 Speaker 3: on break, But what's the to do list for our 231 00:10:39,440 --> 00:10:40,040 Speaker 3: Congress here? 232 00:10:40,080 --> 00:10:40,600 Speaker 4: Looking forward? 233 00:10:41,600 --> 00:10:43,600 Speaker 7: Yeah, the to do list is really going to be 234 00:10:43,640 --> 00:10:47,200 Speaker 7: dominated by those ACA subsidies, which is where they actually 235 00:10:47,240 --> 00:10:50,120 Speaker 7: have promised the Democratic Conference that they will hold a 236 00:10:50,200 --> 00:10:51,160 Speaker 7: vote this year. 237 00:10:51,600 --> 00:10:54,280 Speaker 6: So in the three week work session. 238 00:10:53,920 --> 00:10:56,600 Speaker 7: Which equals out to about twelve days of legislative action 239 00:10:57,320 --> 00:10:59,079 Speaker 7: for the whole month of December through the end of 240 00:10:59,120 --> 00:11:00,240 Speaker 7: this year, they're going to have to. 241 00:11:00,240 --> 00:11:02,320 Speaker 6: Hold some sort of vote on ACA subsidies. 242 00:11:02,720 --> 00:11:04,800 Speaker 7: They also wanted to hold something that they were calling 243 00:11:04,920 --> 00:11:09,040 Speaker 7: Russia week but as the President is negotiating deals with 244 00:11:09,160 --> 00:11:12,679 Speaker 7: Brussia and Ukraine separately, they'll probably not hold those votes. 245 00:11:12,720 --> 00:11:16,800 Speaker 7: So mostly ACA subsidies continued work on the appropriations bills 246 00:11:16,800 --> 00:11:17,720 Speaker 7: to avoid a shutdown. 247 00:11:17,920 --> 00:11:21,160 Speaker 6: As we come back in early twenty twenty six, and. 248 00:11:21,160 --> 00:11:24,520 Speaker 2: You throw into the mixed Venezuela now Henrietta right, President 249 00:11:24,559 --> 00:11:27,960 Speaker 2: Trump said that Airline should consider the airspace above and 250 00:11:28,040 --> 00:11:32,160 Speaker 2: around Venezuela to be closed. As his administration continues to 251 00:11:32,200 --> 00:11:37,000 Speaker 2: threaten more aggressive steps against President Maduro's government. We see 252 00:11:37,000 --> 00:11:40,080 Speaker 2: Oil reacting to this news. Oil is hired today. No 253 00:11:40,240 --> 00:11:42,800 Speaker 2: big surprise there, But how do you see that possibly 254 00:11:43,040 --> 00:11:43,640 Speaker 2: playing out? 255 00:11:44,679 --> 00:11:47,800 Speaker 7: Yeah, The thing about going into foreign policy issues is 256 00:11:47,840 --> 00:11:51,160 Speaker 7: that members, especially on the Senate side on Armed Services 257 00:11:51,160 --> 00:11:53,040 Speaker 7: and Foreign Affairs Committee, they take their. 258 00:11:53,000 --> 00:11:56,120 Speaker 6: Jobs incredibly seriously. They're going to want to hold hearings. 259 00:11:56,160 --> 00:11:59,280 Speaker 7: They're going to want to talk about the potential commands 260 00:11:59,320 --> 00:12:02,479 Speaker 7: that HEXIT delivered to kill two remaining survivors. 261 00:12:02,720 --> 00:12:04,880 Speaker 6: They take that incredibly seriously. 262 00:12:04,920 --> 00:12:07,200 Speaker 7: You've seen it in the backlash that came out this 263 00:12:07,280 --> 00:12:10,839 Speaker 7: weekend in public comments from Republican members as well. So 264 00:12:10,880 --> 00:12:13,480 Speaker 7: that's going to eat up a lot of airtime for 265 00:12:13,520 --> 00:12:16,360 Speaker 7: probably weeks, if not months, well into twenty. 266 00:12:16,160 --> 00:12:17,760 Speaker 6: Twenty six, I would expect as well. 267 00:12:17,840 --> 00:12:20,640 Speaker 7: And again, it just takes away those twelve legislative days 268 00:12:20,640 --> 00:12:22,360 Speaker 7: of action that they actually have in the month of 269 00:12:22,400 --> 00:12:25,000 Speaker 7: December to tackle government funding. 270 00:12:24,679 --> 00:12:26,760 Speaker 6: And ACA subsidies. That's going to be. 271 00:12:26,679 --> 00:12:29,320 Speaker 7: Where all their concentration and oxygen is and they love 272 00:12:29,400 --> 00:12:30,079 Speaker 7: those moments. 273 00:12:30,080 --> 00:12:34,360 Speaker 6: They really want to have hearings about it. Oversight. That's 274 00:12:34,480 --> 00:12:35,679 Speaker 6: very serious for those members. 275 00:12:36,280 --> 00:12:38,920 Speaker 3: I'm heading Tooruba next month and that's like right off 276 00:12:38,920 --> 00:12:42,200 Speaker 3: the coast of Venezuela, so I'm paying attention to I mean, 277 00:12:42,200 --> 00:12:44,599 Speaker 3: I'll be sitting on the beach watching navy ship. I 278 00:12:44,640 --> 00:12:47,400 Speaker 3: don't know what's going on. Hey, Henrietta, can you tell 279 00:12:47,440 --> 00:12:50,480 Speaker 3: me what an auto pen is? And do I need 280 00:12:50,520 --> 00:12:51,240 Speaker 3: to care about this? 281 00:12:52,480 --> 00:12:54,360 Speaker 6: I would. They're used all the time. 282 00:12:54,840 --> 00:12:57,960 Speaker 7: The President signs a million different things today and the 283 00:12:57,960 --> 00:13:02,559 Speaker 7: auto pen is a time test used in every single 284 00:13:02,559 --> 00:13:06,280 Speaker 7: administration way to get signatures out the door from the president. Obviously, 285 00:13:06,360 --> 00:13:09,600 Speaker 7: President Trump has a bone to pick with the auto pen, 286 00:13:09,840 --> 00:13:12,840 Speaker 7: but I would be shocked if he hasn't also been 287 00:13:12,880 --> 00:13:15,040 Speaker 7: a profligate user of it, particularly in his first term. 288 00:13:15,400 --> 00:13:18,600 Speaker 2: But he actually made Biden's portrait in the White House 289 00:13:18,640 --> 00:13:23,000 Speaker 2: a picture of the autopen his auto signature. Yes, so 290 00:13:23,040 --> 00:13:26,080 Speaker 2: it's not Biden's face, it is his auto pen signature 291 00:13:26,120 --> 00:13:27,000 Speaker 2: hanging in the White House. 292 00:13:27,120 --> 00:13:27,320 Speaker 4: Estra. 293 00:13:27,920 --> 00:13:29,800 Speaker 6: So the maturity is astounding. 294 00:13:30,400 --> 00:13:36,240 Speaker 3: Henriette is. We had the governorships in Virginia and New 295 00:13:36,320 --> 00:13:39,280 Speaker 3: Jersey several weeks ago, which were a positive for the Democrats, 296 00:13:39,280 --> 00:13:42,240 Speaker 3: and that kind of caused the Trump administration too, I 297 00:13:42,240 --> 00:13:46,440 Speaker 3: guess focus a little bit more on affordability. Is that 298 00:13:46,520 --> 00:13:49,320 Speaker 3: still a theme for this White House or as it 299 00:13:49,360 --> 00:13:49,720 Speaker 3: moved on? 300 00:13:50,720 --> 00:13:51,720 Speaker 6: You know, it has to be. 301 00:13:52,080 --> 00:13:54,600 Speaker 7: It has to be because the president is very closely 302 00:13:54,640 --> 00:13:58,200 Speaker 7: watching the midterms. If the Democrats control the House, which 303 00:13:58,240 --> 00:14:00,920 Speaker 7: is very likely to be the outcome of the next election, 304 00:14:01,040 --> 00:14:05,000 Speaker 7: then he has a serious problem in terms of real oversight, subpoenas, etc. 305 00:14:05,360 --> 00:14:07,880 Speaker 7: That will occupy the next the final two years of 306 00:14:07,920 --> 00:14:10,760 Speaker 7: his term in office. So winning the twenty twenty six 307 00:14:10,840 --> 00:14:13,960 Speaker 7: midterms has been a huge focus for the president, which 308 00:14:13,960 --> 00:14:16,680 Speaker 7: is why there's been the redistricting efforts across Indiana and 309 00:14:16,720 --> 00:14:19,480 Speaker 7: Texas and everywhere else. And the problem for the Trump 310 00:14:19,480 --> 00:14:22,920 Speaker 7: administration is the top issues for the American voters are 311 00:14:22,920 --> 00:14:27,400 Speaker 7: not the Russia, Ukraine, War, Israel, Gaza, Venezuela. None of 312 00:14:27,400 --> 00:14:30,280 Speaker 7: the foreign policy stuff is of interest to US voters. 313 00:14:30,320 --> 00:14:34,200 Speaker 7: They're famously not following international politics. What they do care 314 00:14:34,280 --> 00:14:37,720 Speaker 7: about is inflation and prices. Those the top two issues 315 00:14:37,960 --> 00:14:41,480 Speaker 7: facing consumers in all polls that are taken, along with 316 00:14:41,560 --> 00:14:44,600 Speaker 7: the economy and the job market. So whether the President 317 00:14:44,640 --> 00:14:47,040 Speaker 7: wants to focus on those issues or not, it's mandatory 318 00:14:47,080 --> 00:14:48,880 Speaker 7: because that's what the voters are going to turn out 319 00:14:49,000 --> 00:14:52,520 Speaker 7: to either support their Republican ideas or reject them in November. 320 00:14:52,640 --> 00:14:56,560 Speaker 7: So those Governatario races where Democrats picked up twelve thirteen 321 00:14:56,640 --> 00:14:59,800 Speaker 7: points in New Jersey and Virginia, where Republicans are really 322 00:15:00,000 --> 00:15:02,200 Speaker 7: hoping to make gains and keep it to like five 323 00:15:02,240 --> 00:15:04,280 Speaker 7: point wins, showed that that's not going to be an 324 00:15:04,280 --> 00:15:07,280 Speaker 7: option as long as affordability remains the number one problem. 325 00:15:07,320 --> 00:15:09,000 Speaker 7: So whether they want to or not, it has to 326 00:15:09,040 --> 00:15:11,600 Speaker 7: be the core focus of the Republican conference and the 327 00:15:11,600 --> 00:15:15,960 Speaker 7: administration AC subsidies player role, and that prices, inflation, all 328 00:15:16,000 --> 00:15:19,360 Speaker 7: those pieces, tariffs are hugely important to the US consumer 329 00:15:19,400 --> 00:15:19,960 Speaker 7: and voter. 330 00:15:20,400 --> 00:15:22,280 Speaker 2: And of course the job market, which you mentioned just 331 00:15:22,320 --> 00:15:26,120 Speaker 2: a second ago. So we know that this administration vows 332 00:15:26,160 --> 00:15:31,320 Speaker 2: strict immigration curves, especially after that National Guard member or 333 00:15:31,320 --> 00:15:33,520 Speaker 2: two of them dying after being ambushed near it near 334 00:15:33,520 --> 00:15:36,760 Speaker 2: the White House last week. So how if they continue 335 00:15:36,800 --> 00:15:39,640 Speaker 2: with that strategy, which it seems like they're going to 336 00:15:40,440 --> 00:15:44,520 Speaker 2: throughout the Trump administration, how do you see that impacting 337 00:15:44,960 --> 00:15:46,600 Speaker 2: the job market specifically? 338 00:15:47,560 --> 00:15:48,480 Speaker 6: Yeah, the job. 339 00:15:48,280 --> 00:15:52,200 Speaker 7: Market is hugely problematic, mostly because people don't feel comfortable. 340 00:15:52,200 --> 00:15:53,520 Speaker 6: If you look at the University. 341 00:15:53,200 --> 00:15:56,080 Speaker 7: Of Michigan consumer confidence data and whether they think they 342 00:15:56,120 --> 00:15:58,360 Speaker 7: have an opportunity to go get a new job, if 343 00:15:58,360 --> 00:16:00,800 Speaker 7: they're going to get a pay increase, everybody's sort of 344 00:16:00,800 --> 00:16:04,000 Speaker 7: staying put. But on top of that, you're seeing major 345 00:16:04,080 --> 00:16:08,080 Speaker 7: corporations fire folks. I think it's eighty six thousand jobs 346 00:16:08,080 --> 00:16:11,960 Speaker 7: in the manufacturing job sector have been lost since Liberation Day. 347 00:16:12,200 --> 00:16:14,800 Speaker 7: So there's this sense amongst the US consumer that there's 348 00:16:14,880 --> 00:16:16,800 Speaker 7: not another job out there and they. 349 00:16:16,640 --> 00:16:17,640 Speaker 6: Need to stay put. 350 00:16:18,320 --> 00:16:21,280 Speaker 7: That creates the uncertainty and the lack of wage growth, 351 00:16:21,280 --> 00:16:24,360 Speaker 7: and again that compounding issue of focused on prices and 352 00:16:24,440 --> 00:16:27,760 Speaker 7: affordability that keeps all that front and center on the 353 00:16:27,800 --> 00:16:28,880 Speaker 7: immigration front. 354 00:16:29,400 --> 00:16:32,760 Speaker 6: From my seat, the response function. 355 00:16:32,520 --> 00:16:34,400 Speaker 7: That you see in the voter polls is that they 356 00:16:34,480 --> 00:16:37,600 Speaker 7: think the President has quote gone too far on immigration, 357 00:16:37,760 --> 00:16:39,440 Speaker 7: and a lot of that is to do with the 358 00:16:39,520 --> 00:16:42,280 Speaker 7: National Guards being sent to cities around America. 359 00:16:42,320 --> 00:16:44,120 Speaker 6: They're coming to New Orleans this week. 360 00:16:44,440 --> 00:16:47,840 Speaker 7: So that's an issue that the American voter sees and 361 00:16:47,920 --> 00:16:50,120 Speaker 7: has decided that they don't like, even though they just. 362 00:16:50,200 --> 00:16:51,880 Speaker 6: Voted for it in twenty twenty four. 363 00:16:51,960 --> 00:16:54,160 Speaker 7: So that's going to be an area of overreach and 364 00:16:54,200 --> 00:16:56,920 Speaker 7: that sort of pendulum swing that we're very used to 365 00:16:57,040 --> 00:16:59,960 Speaker 7: in politics. So you elect one party to do sweeping 366 00:17:00,120 --> 00:17:01,920 Speaker 7: change in one year, and then as soon as they 367 00:17:01,920 --> 00:17:04,320 Speaker 7: start doing a sweeping change, you decide you don't like it. 368 00:17:04,920 --> 00:17:06,120 Speaker 6: That's the phase that we're in right now. 369 00:17:06,359 --> 00:17:09,560 Speaker 2: From the book base, Well, Henrietta, you provide investors with 370 00:17:09,640 --> 00:17:12,840 Speaker 2: economic policy analysis. You've been doing it for years. You're 371 00:17:12,840 --> 00:17:16,000 Speaker 2: gonna have a very busy twenty twenty six. How Manyetta Treys, 372 00:17:16,040 --> 00:17:17,800 Speaker 2: co founder of Veda Partners. 373 00:17:17,560 --> 00:17:20,679 Speaker 3: Stay with us. More from Bloomberg Surveillance coming up after this. 374 00:17:30,119 --> 00:17:33,680 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 375 00:17:33,760 --> 00:17:36,919 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 376 00:17:37,000 --> 00:17:40,679 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app or 377 00:17:40,800 --> 00:17:42,320 Speaker 1: watch US live on YouTube. 378 00:17:42,440 --> 00:17:45,520 Speaker 3: Brian Levitt, chief global market strategist for Investco, joins US 379 00:17:45,520 --> 00:17:48,359 Speaker 3: here in our New York City studios. Brian, what is 380 00:17:48,400 --> 00:17:50,760 Speaker 3: the twenty twenty sixth call for you guys? 381 00:17:50,840 --> 00:17:51,280 Speaker 4: This year? 382 00:17:51,520 --> 00:17:53,399 Speaker 8: The twenty twenty six call for us is that we 383 00:17:53,440 --> 00:17:56,639 Speaker 8: will continue to see resilience in the global economy, actually 384 00:17:56,720 --> 00:17:59,840 Speaker 8: even a pick up in global economic activity given some 385 00:18:00,119 --> 00:18:04,199 Speaker 8: school support policy easing in the United States, and that 386 00:18:04,240 --> 00:18:08,520 Speaker 8: should continue to drive markets higher. We're looking for some 387 00:18:08,680 --> 00:18:13,400 Speaker 8: type of rebalancing, you know, sector rotation even within growth, 388 00:18:13,480 --> 00:18:16,359 Speaker 8: but also to broadening out to other parts of the markets, 389 00:18:16,840 --> 00:18:19,760 Speaker 8: specifically non US markets. 390 00:18:19,359 --> 00:18:21,320 Speaker 4: As the Federal Reserve lowers interest rates. 391 00:18:21,400 --> 00:18:24,359 Speaker 2: Okay, so what non US markets do you particularly like 392 00:18:24,400 --> 00:18:25,320 Speaker 2: in twenty twenty six? 393 00:18:25,400 --> 00:18:28,560 Speaker 8: Typically the developing markets of the world perform best in 394 00:18:28,600 --> 00:18:30,760 Speaker 8: an environment when the FED is easing and when the 395 00:18:30,880 --> 00:18:35,280 Speaker 8: dollar is either flat to weakening. And so you know, 396 00:18:35,320 --> 00:18:37,440 Speaker 8: that's why so much of this is on the FED 397 00:18:37,560 --> 00:18:39,760 Speaker 8: right now, and why the focus is so significant on 398 00:18:39,760 --> 00:18:42,440 Speaker 8: the Fed, because a lot of these calls are predicated 399 00:18:42,480 --> 00:18:45,760 Speaker 8: on the fact that we will get easier monetary policy, 400 00:18:45,800 --> 00:18:48,760 Speaker 8: a steepening of the yield curve and no additional upward 401 00:18:48,800 --> 00:18:52,520 Speaker 8: pressure on the US dollar, and so in that backdrop 402 00:18:53,080 --> 00:18:55,880 Speaker 8: a number of developing economies, the central banks of developing 403 00:18:55,880 --> 00:19:00,280 Speaker 8: economies can lower interest rates and produce better economic outcome. 404 00:19:01,000 --> 00:19:01,560 Speaker 2: In the US. 405 00:19:01,640 --> 00:19:03,960 Speaker 3: Here it's been twenty twenty five has been I guess 406 00:19:03,960 --> 00:19:06,840 Speaker 3: the theme has been AI and what it means for everybody. 407 00:19:08,480 --> 00:19:10,399 Speaker 3: Do we still play that in twenty twenty six. Do 408 00:19:10,480 --> 00:19:13,480 Speaker 3: we have a different playbook for AI in twenty twenty six. 409 00:19:13,520 --> 00:19:15,120 Speaker 8: Well, the nice thing about it, I think you continue 410 00:19:15,160 --> 00:19:17,360 Speaker 8: to play it. But the nice thing is you can 411 00:19:17,400 --> 00:19:21,239 Speaker 8: diversify some of your portfolio into other parts of the 412 00:19:21,280 --> 00:19:24,479 Speaker 8: market if you get the policy easing and a pickup 413 00:19:24,480 --> 00:19:26,760 Speaker 8: in activity. And so the challenge for the last couple 414 00:19:26,840 --> 00:19:29,840 Speaker 8: of years has been it's really been an environment where 415 00:19:29,880 --> 00:19:34,399 Speaker 8: economic activity has been basically flat. There's been no real 416 00:19:34,440 --> 00:19:38,800 Speaker 8: catalyst to unlock value in the US markets, and so 417 00:19:39,040 --> 00:19:41,600 Speaker 8: in a slow growth environment, you buy growth. I don't 418 00:19:41,640 --> 00:19:45,520 Speaker 8: think we give up on that trade. But if you 419 00:19:45,640 --> 00:19:49,160 Speaker 8: get to pick up an economic activity that we are expecting, 420 00:19:49,600 --> 00:19:53,280 Speaker 8: you should be able to participate with a better valuation portfolio. 421 00:19:53,400 --> 00:19:57,080 Speaker 8: That would mean moving into MidCap strategies, moving into more 422 00:19:57,160 --> 00:19:59,320 Speaker 8: value oriented parts of the market. 423 00:19:59,119 --> 00:20:01,719 Speaker 2: And what about private credit, which we know has been exploding. 424 00:20:01,760 --> 00:20:05,080 Speaker 2: You see opportunity there in the new year. 425 00:20:05,280 --> 00:20:05,840 Speaker 4: Yeah, we do. 426 00:20:05,920 --> 00:20:08,840 Speaker 8: And I don't think that you know this the concerns 427 00:20:08,880 --> 00:20:12,440 Speaker 8: that people have with a couple of high profile names, 428 00:20:14,080 --> 00:20:16,960 Speaker 8: questions about whether that was systemic, and you know, I 429 00:20:17,040 --> 00:20:18,920 Speaker 8: went on record saying idiosyncratics. 430 00:20:18,920 --> 00:20:20,399 Speaker 4: So so far, so good. 431 00:20:21,440 --> 00:20:24,399 Speaker 8: I don't think that the private markets are paired as 432 00:20:24,440 --> 00:20:27,840 Speaker 8: impaired as many people believe. And you're still looking at 433 00:20:28,359 --> 00:20:33,120 Speaker 8: yields of you know, seven eight percent, which is you know, 434 00:20:33,200 --> 00:20:36,679 Speaker 8: probably a reasonable equity like return, maybe even better than 435 00:20:36,720 --> 00:20:39,560 Speaker 8: equity like return over the next decade, and the fundamentals 436 00:20:39,600 --> 00:20:40,960 Speaker 8: still appear to be sound. 437 00:20:41,600 --> 00:20:43,800 Speaker 3: Twenty twenty eighty five. I mean, if you look across 438 00:20:43,840 --> 00:20:46,560 Speaker 3: fix income, I do that with the I go function 439 00:20:46,680 --> 00:20:49,000 Speaker 3: on the Bloomberg terminal, Like you could read about how 440 00:20:49,040 --> 00:20:52,120 Speaker 3: fixing come is performing globally the US fix income market. 441 00:20:52,240 --> 00:20:54,639 Speaker 3: I mean mid to high single digit returns this year. 442 00:20:54,680 --> 00:20:56,879 Speaker 3: It's been a good year, and some of the best 443 00:20:56,920 --> 00:21:00,000 Speaker 3: returns have been. If you've been taking credit risk, high 444 00:21:00,119 --> 00:21:03,080 Speaker 3: yield leverage loans, how do you think about the credit 445 00:21:03,200 --> 00:21:04,000 Speaker 3: profile out there? 446 00:21:04,080 --> 00:21:05,639 Speaker 8: Well, the first thing I would say about just the 447 00:21:05,720 --> 00:21:08,280 Speaker 8: returns in general and the aggregate. How many people were 448 00:21:08,320 --> 00:21:10,920 Speaker 8: trying to warn us at some point this year about 449 00:21:10,960 --> 00:21:14,800 Speaker 8: the sustainability of the US fiscal situation, and we heard 450 00:21:14,800 --> 00:21:17,040 Speaker 8: things like rates are going to keep going well above 451 00:21:17,119 --> 00:21:18,200 Speaker 8: five six percent. 452 00:21:18,280 --> 00:21:19,560 Speaker 4: I never bought into that. 453 00:21:19,680 --> 00:21:22,119 Speaker 8: In essence, what investors were trying to tell us was 454 00:21:22,119 --> 00:21:23,919 Speaker 8: that the US Treasury was going to trade like a 455 00:21:24,000 --> 00:21:27,080 Speaker 8: credit No, the US Treasury is going to trade based 456 00:21:27,119 --> 00:21:30,359 Speaker 8: on the nominal growth potential of the country. That's precisely 457 00:21:30,400 --> 00:21:32,639 Speaker 8: what it did, moving down from four to eighty and 458 00:21:32,720 --> 00:21:37,680 Speaker 8: mid January to basically four percent today. Now the credit markets, 459 00:21:37,880 --> 00:21:42,200 Speaker 8: what ends up happening mid cycle is that investors become 460 00:21:42,320 --> 00:21:45,720 Speaker 8: very concerned about spreads. But spreads can remain very tight 461 00:21:46,040 --> 00:21:48,640 Speaker 8: so long as the economy doesn't roll over or inflation 462 00:21:48,760 --> 00:21:52,760 Speaker 8: expectations break out, and neither of those things happen. So yeah, 463 00:21:52,840 --> 00:21:57,840 Speaker 8: you should expect coupon like returns in investment grade, in 464 00:21:58,119 --> 00:22:02,440 Speaker 8: high yield, unless you leave we're heading towards a recession. 465 00:22:02,440 --> 00:22:05,040 Speaker 8: And if we were heading towards a recession, I think 466 00:22:05,080 --> 00:22:07,600 Speaker 8: it would look like a much different backdrop, not the 467 00:22:07,680 --> 00:22:09,919 Speaker 8: least of which the FED would probably be looking at 468 00:22:09,960 --> 00:22:14,400 Speaker 8: titan policy and the bankers would probably be tightening lending standards, 469 00:22:14,440 --> 00:22:15,960 Speaker 8: neither of which is happening right now. 470 00:22:16,600 --> 00:22:19,320 Speaker 2: Are you reading any tea leaves and what's happening in crypto? 471 00:22:19,480 --> 00:22:22,080 Speaker 2: I mean, we've got bitcoin now below eighty six thousand. 472 00:22:22,280 --> 00:22:24,119 Speaker 2: It was at one hundred and twenty six thousand just 473 00:22:24,160 --> 00:22:27,199 Speaker 2: a couple months ago. Not even what do you do 474 00:22:27,320 --> 00:22:29,920 Speaker 2: with bitcoin in particular in the new year. 475 00:22:30,960 --> 00:22:34,240 Speaker 8: It seems to me that it's been very much predicated 476 00:22:34,359 --> 00:22:37,879 Speaker 8: on expectations of the Fed, which makes today seem like 477 00:22:37,960 --> 00:22:41,320 Speaker 8: a little bit of a surprise compared to where we 478 00:22:41,359 --> 00:22:44,720 Speaker 8: have been. If you look at when Jerome Powell first 479 00:22:44,840 --> 00:22:48,160 Speaker 8: indicated that there might be some differing of views at 480 00:22:48,160 --> 00:22:51,560 Speaker 8: the FOMC, that's when you started to see things like 481 00:22:51,640 --> 00:22:55,640 Speaker 8: crypto sell off. You started to see nonprofitable tech sell off, 482 00:22:55,720 --> 00:22:56,720 Speaker 8: So that was all. 483 00:22:56,600 --> 00:22:57,960 Speaker 4: Part of the same trade. 484 00:22:58,040 --> 00:22:59,960 Speaker 8: I've got to be honest, I'm not the world's form 485 00:23:00,160 --> 00:23:03,960 Speaker 8: most crypto expert, but I assumed as there was greater 486 00:23:04,200 --> 00:23:07,240 Speaker 8: clarity from where we were going with the Federal Reserve 487 00:23:07,359 --> 00:23:09,720 Speaker 8: as December got priced back in for a raykit, I 488 00:23:09,720 --> 00:23:11,800 Speaker 8: didn't expect this morning's action. 489 00:23:12,240 --> 00:23:15,520 Speaker 4: In crypto, so clearly there's still. 490 00:23:15,359 --> 00:23:18,960 Speaker 2: Some is there just contagion selling? I mean there's some. 491 00:23:19,000 --> 00:23:21,400 Speaker 8: Leverage in those markets, contagion selling. I mean it has 492 00:23:21,480 --> 00:23:24,320 Speaker 8: moved pretty far below it's it's fifty day moving average 493 00:23:24,359 --> 00:23:26,240 Speaker 8: right now, where the S and P five hundred does not. 494 00:23:26,600 --> 00:23:29,680 Speaker 8: I don't view it necessarily as a harbinger of where 495 00:23:29,680 --> 00:23:34,840 Speaker 8: the stock market is going, but certainly interesting to watch today, intriguing, 496 00:23:34,960 --> 00:23:37,080 Speaker 8: not something I would have expected. I did not expect 497 00:23:37,119 --> 00:23:39,760 Speaker 8: to wake up this morning and see crypto down five percent. 498 00:23:40,160 --> 00:23:43,560 Speaker 3: Right, you're a Michigan man in good standing after four years, 499 00:23:44,160 --> 00:23:49,879 Speaker 3: winning year in sale? Are you top universe? I expect 500 00:23:49,880 --> 00:23:53,199 Speaker 3: this from Tom. What was your takeaway from this Saturday? 501 00:23:53,600 --> 00:23:55,359 Speaker 3: The Ohio State University and you're Michigan. 502 00:23:55,640 --> 00:23:58,080 Speaker 8: Michigan could not stop the run, and you know you 503 00:23:58,160 --> 00:24:01,600 Speaker 8: had a twelve minute dry Ohio State just rolling them. 504 00:24:01,600 --> 00:24:04,520 Speaker 8: I think sixteen of eighteen plays were running. Michigan couldn't 505 00:24:04,520 --> 00:24:06,760 Speaker 8: stop the run, they couldn't get anything going on offense. 506 00:24:06,880 --> 00:24:08,120 Speaker 4: They'll be back right. 507 00:24:08,119 --> 00:24:10,359 Speaker 8: These things are These things have tended to be a 508 00:24:10,400 --> 00:24:11,240 Speaker 8: little bit cyclical. 509 00:24:11,280 --> 00:24:12,320 Speaker 4: Ohio State's got. 510 00:24:12,160 --> 00:24:14,240 Speaker 8: A very good team this year. They've got a number 511 00:24:14,240 --> 00:24:16,320 Speaker 8: of first round picks heading towards the NFL. 512 00:24:17,119 --> 00:24:18,560 Speaker 4: We'll be back go blue. 513 00:24:18,560 --> 00:24:22,040 Speaker 3: And it's crazy. If the Ohio State coach did not 514 00:24:22,119 --> 00:24:25,320 Speaker 3: win this game and he won the national championship, he 515 00:24:25,440 --> 00:24:28,680 Speaker 3: still would be at risk. Remarkable, right and believed because 516 00:24:28,680 --> 00:24:30,840 Speaker 3: you can't Michigan, you can't get. 517 00:24:30,840 --> 00:24:33,440 Speaker 4: As you should have been. Exactly exactly, That's how it works. 518 00:24:33,560 --> 00:24:36,560 Speaker 3: Brian Levi at Chief Global Market Strategists for Investment. Stay 519 00:24:36,640 --> 00:24:39,479 Speaker 3: with us. More from Bloomberg Surveillance coming up after this. 520 00:24:48,880 --> 00:24:52,480 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 521 00:24:52,520 --> 00:24:55,679 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 522 00:24:55,760 --> 00:24:59,160 Speaker 1: applecar Play and Android Otto with the Bloomberg Business app, 523 00:24:59,359 --> 00:25:01,080 Speaker 1: or watch us live on YouTube. 524 00:25:01,160 --> 00:25:04,320 Speaker 3: It is time for newspapers and Lisa Manteoli, So what 525 00:25:04,359 --> 00:25:04,680 Speaker 3: have fors? 526 00:25:04,720 --> 00:25:04,800 Speaker 7: All? 527 00:25:04,840 --> 00:25:04,959 Speaker 4: Right? 528 00:25:05,000 --> 00:25:06,919 Speaker 9: So I want to talk about DNA test kits. Right, 529 00:25:06,960 --> 00:25:08,439 Speaker 9: I'm not sure if you guys have done that. My 530 00:25:08,480 --> 00:25:09,359 Speaker 9: sisters have tried it. 531 00:25:09,400 --> 00:25:11,439 Speaker 2: You know the twenty three did it? You did the 532 00:25:11,480 --> 00:25:13,840 Speaker 2: twenty three and meters you did see that's when they 533 00:25:13,880 --> 00:25:16,360 Speaker 2: did too. It's really popular. But here's the thing. 534 00:25:16,480 --> 00:25:18,920 Speaker 9: It's now causing issues for families that are handling the 535 00:25:19,080 --> 00:25:22,480 Speaker 9: states because they have surprised heirs who are now looking 536 00:25:22,520 --> 00:25:23,400 Speaker 9: for their cut of. 537 00:25:23,320 --> 00:25:25,560 Speaker 2: The inheritors only under services way. 538 00:25:25,680 --> 00:25:28,440 Speaker 9: Yes, yes, yes, yes, so the Wall Street Journal actually 539 00:25:28,480 --> 00:25:31,040 Speaker 9: had this is an interesting take on it. States are 540 00:25:31,080 --> 00:25:33,919 Speaker 9: now reconsidering laws because a will or a trust it 541 00:25:33,960 --> 00:25:36,200 Speaker 9: doesn't necessarily prevent surprise. 542 00:25:35,840 --> 00:25:37,359 Speaker 2: Relatives from making a claim. 543 00:25:37,600 --> 00:25:40,880 Speaker 9: And there's phrases and will sometimes like to my descendants, 544 00:25:40,920 --> 00:25:43,000 Speaker 9: So that can leave out room. 545 00:25:42,880 --> 00:25:45,760 Speaker 2: For like the open Yes it does, it does. 546 00:25:45,840 --> 00:25:48,159 Speaker 9: So that I mean the rules differ from state to states, 547 00:25:48,160 --> 00:25:50,440 Speaker 9: so it depends on what state you are. But lawyers 548 00:25:50,440 --> 00:25:52,520 Speaker 9: are saying what you need to do is you need 549 00:25:52,560 --> 00:25:55,280 Speaker 9: to create a state plans that account for potential surprise 550 00:25:55,480 --> 00:25:56,560 Speaker 9: heirs because it's. 551 00:25:56,400 --> 00:25:58,720 Speaker 2: Happening more and more. I can't believe it. Can you 552 00:25:58,800 --> 00:26:01,000 Speaker 2: believe they're now in yan need to add a line 553 00:26:01,080 --> 00:26:03,000 Speaker 2: to your wills and trusts? 554 00:26:03,000 --> 00:26:04,800 Speaker 3: Now, did you have me surprises in your twenty three 555 00:26:04,840 --> 00:26:05,600 Speaker 3: and me experience? 556 00:26:05,920 --> 00:26:08,399 Speaker 2: No surprises? It sort of just confirmed what I thought. Oh, 557 00:26:08,440 --> 00:26:09,040 Speaker 2: it's kind of neat. 558 00:26:09,080 --> 00:26:09,640 Speaker 4: Yeah, it's fun. 559 00:26:09,960 --> 00:26:13,680 Speaker 2: Yes, okay, good good, No surprise anything out there. You're 560 00:26:13,720 --> 00:26:16,320 Speaker 2: just putting that out there, nothing surprising. You're not going 561 00:26:16,400 --> 00:26:17,719 Speaker 2: to claim anybody's art. 562 00:26:17,800 --> 00:26:20,920 Speaker 9: Its Okay, did you guys go to the movies over 563 00:26:20,960 --> 00:26:21,400 Speaker 9: the weekend? 564 00:26:21,400 --> 00:26:24,680 Speaker 2: No, yes, I did. Okay, did you see the Utopia too? 565 00:26:24,880 --> 00:26:25,160 Speaker 4: I did? 566 00:26:25,200 --> 00:26:28,479 Speaker 2: I know, and I saw this story that I saw Wicked. 567 00:26:28,680 --> 00:26:31,480 Speaker 2: Oh you did, okay, which I really enjoyed. Okay, good, good, 568 00:26:31,520 --> 00:26:33,760 Speaker 2: And I'm surprised it was not number one because I 569 00:26:33,800 --> 00:26:34,960 Speaker 2: know what you're going to tell us. 570 00:26:34,920 --> 00:26:37,040 Speaker 9: Yes, Yancey's which I was surprised too, because I was like, 571 00:26:37,080 --> 00:26:39,800 Speaker 9: Wicked is huge and it's been huge. But yeah, it's 572 00:26:39,840 --> 00:26:43,240 Speaker 9: now Walt Disney. They are front and center Utopia too. 573 00:26:43,680 --> 00:26:45,520 Speaker 9: It's a sequel to the film that was back in 574 00:26:45,560 --> 00:26:48,080 Speaker 9: twenty sixteen, so it's been like a while since. This 575 00:26:48,160 --> 00:26:50,120 Speaker 9: came out one hundred and fifty six million in North 576 00:26:50,119 --> 00:26:54,640 Speaker 9: American box office over Thanksgiving, five hundred and fifty six 577 00:26:54,720 --> 00:26:58,919 Speaker 9: million worldwide. Disney said it's the biggest animated opening for 578 00:26:58,960 --> 00:27:01,520 Speaker 9: all of all time in China. That excludes like the 579 00:27:01,520 --> 00:27:03,600 Speaker 9: local because that's huge, the biggest. 580 00:27:03,800 --> 00:27:04,640 Speaker 2: Yeah, that's rarely. 581 00:27:04,560 --> 00:27:07,360 Speaker 3: Global Hollywood, because China has been kind of closed off. 582 00:27:07,520 --> 00:27:09,600 Speaker 3: After becoming the second biggest movie theater in the world 583 00:27:09,640 --> 00:27:12,639 Speaker 3: after North America, it kind of slowed down over the 584 00:27:12,720 --> 00:27:15,000 Speaker 3: last six seven, eight years. But you know, I think 585 00:27:15,000 --> 00:27:15,760 Speaker 3: it's opening. 586 00:27:15,560 --> 00:27:16,280 Speaker 4: Up a little bit more. 587 00:27:16,440 --> 00:27:18,080 Speaker 3: So that's a good sign for Hollywood. 588 00:27:18,119 --> 00:27:21,639 Speaker 9: Okay, good, good, good, And it's good news for theaters, 589 00:27:21,720 --> 00:27:24,280 Speaker 9: right because it's been kind of slow before before Wicked 590 00:27:24,320 --> 00:27:27,200 Speaker 9: came out. And it kind of sets the stage two 591 00:27:27,359 --> 00:27:30,920 Speaker 9: for the next Disney movie, which is Avatar. It's coming 592 00:27:31,240 --> 00:27:33,679 Speaker 9: December nineteenth, so they're kind of set in the stage 593 00:27:33,720 --> 00:27:34,400 Speaker 9: for a little bit. 594 00:27:34,680 --> 00:27:36,399 Speaker 2: But yeah, I hope to go see it. I like 595 00:27:36,480 --> 00:27:37,240 Speaker 2: the first one. 596 00:27:37,560 --> 00:27:40,560 Speaker 3: It was very cute movie, I mean cuteness, surprise. I 597 00:27:40,560 --> 00:27:43,720 Speaker 3: think for Disney they thought it could be big bag. 598 00:27:43,840 --> 00:27:47,160 Speaker 2: Yeah, but I see Wicked after just one weekend. That's 599 00:27:47,320 --> 00:27:50,320 Speaker 2: that's what's surprising to me. But okay, those Utopia. 600 00:27:50,040 --> 00:27:52,959 Speaker 9: Yes, yes, yes, okay, So this one, there was a 601 00:27:52,960 --> 00:27:55,760 Speaker 9: big ultra marathon in DC over the weekend. But it 602 00:27:55,880 --> 00:27:57,800 Speaker 9: might not be the one that you've heard of. It's 603 00:27:57,840 --> 00:28:01,600 Speaker 9: the Taco Bell DC fifty k. Okay, So here's what you. 604 00:28:01,520 --> 00:28:01,919 Speaker 4: Have to do. 605 00:28:02,440 --> 00:28:04,639 Speaker 9: Thirty one miles of running, but you have to stop 606 00:28:04,720 --> 00:28:09,040 Speaker 9: and eat at nine different taco bill the way. Okay, 607 00:28:09,320 --> 00:28:11,760 Speaker 9: each location you have to purchase and eat an item. 608 00:28:11,880 --> 00:28:16,080 Speaker 9: Drinks don't count as a purchase, and the race rules 609 00:28:16,160 --> 00:28:19,120 Speaker 9: say that yes, vomiting is discouragement. 610 00:28:18,560 --> 00:28:20,880 Speaker 2: Allowed, oh gosh, but. 611 00:28:20,920 --> 00:28:23,960 Speaker 9: Also no pepto, bismal, no alcocy. You're not allowed to 612 00:28:24,000 --> 00:28:26,280 Speaker 9: take any pepsid. You can't do anything like that before 613 00:28:26,320 --> 00:28:28,399 Speaker 9: the race. And it gets tougher as you go on 614 00:28:28,480 --> 00:28:30,840 Speaker 9: because they start add it on, like at this you know, 615 00:28:30,960 --> 00:28:33,119 Speaker 9: by this time you hit this chain, you have to 616 00:28:33,119 --> 00:28:35,000 Speaker 9: eat this many chilupus or something like that. 617 00:28:35,840 --> 00:28:37,919 Speaker 2: So they really push it. You have to hand in 618 00:28:37,960 --> 00:28:38,760 Speaker 2: a receipt when. 619 00:28:38,600 --> 00:28:40,520 Speaker 9: You cross the finish line to show that you had 620 00:28:40,560 --> 00:28:44,680 Speaker 9: you know, all the greasy event. Yes, you have to 621 00:28:44,720 --> 00:28:48,720 Speaker 9: complete it in eleven hours at least that's the cutoff. Okay, okay, 622 00:28:48,920 --> 00:28:52,520 Speaker 9: but people, it's something new. It's like ultra marathons is 623 00:28:52,600 --> 00:28:54,600 Speaker 9: like this whole big you know, crazy They can. 624 00:28:54,520 --> 00:28:56,680 Speaker 2: Eat any crazy stomach for something like that. 625 00:28:56,800 --> 00:28:57,200 Speaker 4: I get. 626 00:28:57,360 --> 00:28:58,960 Speaker 3: I would not want. 627 00:28:59,200 --> 00:29:03,240 Speaker 2: Yeah, I would not even attempt, especially our clean eater 628 00:29:03,560 --> 00:29:05,400 Speaker 2: Lisa Macheo. I cannot see you doing. 629 00:29:05,520 --> 00:29:07,600 Speaker 9: I mean, granted you run off the calories, but still 630 00:29:08,000 --> 00:29:08,880 Speaker 9: it can't be good. 631 00:29:09,480 --> 00:29:12,440 Speaker 2: Now I'm going to pass on that running experience, all right. 632 00:29:12,360 --> 00:29:15,360 Speaker 3: The newspapers, Lisa Matteo, there you go. The highlight of 633 00:29:15,400 --> 00:29:15,720 Speaker 3: the day. 634 00:29:16,120 --> 00:29:20,959 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 635 00:29:21,080 --> 00:29:25,360 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 636 00:29:25,480 --> 00:29:29,000 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 637 00:29:29,040 --> 00:29:33,040 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 638 00:29:33,080 --> 00:29:36,440 Speaker 1: can also watch us live every weekday on YouTube and 639 00:29:36,640 --> 00:29:38,400 Speaker 1: always on the Bloomberg terminal.