Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business
Speaker 1: Week inside from the reporters and editors who bring you
Speaker 1: America's most trusted business magazine, plus global business, finance and
Speaker 1: tech news. The Bloomberg Business Week Podcast with Carol Messer
Speaker 1: and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Earning season, Folks, you know officially underway.
Speaker 3: Three of the big ones already reporting, JP Morgan, Chase,
Speaker 3: City Group, and Wells Fargo. They were out this morning
Speaker 3: before the open. A bit of a mixed bag on
Speaker 3: what some would say maybe is a bit of a
Speaker 3: tough backdrop.
Speaker 2: I'm looking at the stocks.
Speaker 3: City is down two percent, Tim as we speak, JP
Speaker 3: Morgan just a little bit lower, down about one percent
Speaker 3: or just shy, but Wells Fargo really taking the hit
Speaker 3: the biggest on a percentage basis, down about six percent.
Speaker 4: Yeah. Three of my decliners that you just mentioned just now, certainly, Hey,
Speaker 4: I'm all three sold off earlier in this set you
Speaker 4: just heard from Carol the latest and Charlie when it
Speaker 4: came to those numbers with our banker earnings round up
Speaker 4: with us, as Bloomberg News Global Finance correspondent Snali Basix
Speaker 4: she's here in our Bloomberg studio. Also, Cheryl Pate, senior
Speaker 4: portfolio manager at angel Oak Capital, joins us as well.
Speaker 4: Cheryl joins us from Atlanta. Okay, Shanali, the good, the bad,
Speaker 4: the mixed. The results from the three give us the highlights.
Speaker 1: Wow.
Speaker 5: So the good news is that you did see a
Speaker 5: tick upward, for example, in investment banking fees at a
Speaker 5: lot of places JP Morgan that was fifty percent higher.
Speaker 5: The bad news is that, for example, at Wells Fargo,
Speaker 5: you saw weakness compared to what was expected in net
Speaker 5: interest income that was.
Speaker 2: Coming though you know, yes.
Speaker 5: But the thing here is is you did see interestingly yesterday,
Speaker 5: for example, when the CPI print was released and you
Speaker 5: saw that sharp moved lower in yields. You actually saw
Speaker 5: the biggest US bank sell off and the regional banks rally.
Speaker 5: And the reason you saw that was because even though
Speaker 5: you're seeing rates potentially come down, I think there's a
Speaker 5: massive question on what does this mean for that mix
Speaker 5: that banks have. What happens to the deposits, but also
Speaker 5: what happens to the money that's being made from the
Speaker 5: loans that are being put out. Remember, we're looking at
Speaker 5: consumers with tons of credit card debt. Right now, you're
Speaker 5: seeing charge offs starting to rise. Provisions for loan losses
Speaker 5: were higher than expected at JP Morgan Fortress, JP Morgan,
Speaker 5: No one. It's not that people are really worried about
Speaker 5: the health of JP Morgan. What they're more worried about
Speaker 5: is Okay, well, what does this say about the propensity
Speaker 5: of consumers to both take on more debt and pay
Speaker 5: that debt back?
Speaker 2: Right exactly?
Speaker 6: So?
Speaker 2: Is there like so is it mixed? Do you say
Speaker 2: in general? Or is there any trend overall? Takeaway?
Speaker 5: Well, think about it. All the big stocks are lower
Speaker 5: today after earnings, and not by a really small margin.
Speaker 5: They had a really significant runoff into this moment. You've
Speaker 5: seen JP Morgan Wells both at more than twenty percent
Speaker 5: city group thirty percent city groups still trading at around
Speaker 5: sixty six or so percent of book value, maybe a
Speaker 5: little less right now. But you know, the setup was
Speaker 5: pretty good going into this. The future is super uncertain.
Speaker 3: Yeah, that's fair. I think that is so fair. Let's
Speaker 3: get to Cheryl. Cheryl come on in on the conversation.
Speaker 3: Listening to Shanali, who is usually up. I don't know
Speaker 3: at the wee hours and breaking it down and sending
Speaker 3: us all messages about the results. What's your takeaway about
Speaker 3: the three big banks that reported today.
Speaker 7: Yeah, No, I think it's a similar perspective here. I
Speaker 7: really think a lot of the reaction today really hinges
Speaker 7: on the forward guidance, and I think, you know, there
Speaker 7: may have been some expectations that there may have been
Speaker 7: some upside to some of the guidance. The fact that
Speaker 7: JP Morgan reiterated I think was a little disappointing. And
Speaker 7: then you know, Wells on the other side, guiding to
Speaker 7: the high end in terms of in terms of NIM
Speaker 7: compression or NII compression certainly was disappoint team. So we've
Speaker 7: been focused on guidance, on NIM and on credit and
Speaker 7: I think that the question mark really is on the
Speaker 7: forward guidance, and we didn't get a lot there.
Speaker 4: Janellie, Jamie Diamond, we always listen when he speaks. It's
Speaker 4: a letter to investors, an annual report, or an earnings call,
Speaker 4: commentary from Jamie Diamond, anything of note.
Speaker 2: He wasn't there today.
Speaker 5: He was out celebrating the banks one hundredth anniversary in Germany.
Speaker 5: He was in Frankfurt.
Speaker 4: Is that notable.
Speaker 5: You know, it's interesting when Jamie diamond sneezes, everybody catches
Speaker 5: a cold.
Speaker 2: Right, you know, is that what happened to me?
Speaker 3: If he doesn't sound like Tim Stenovick, a deeper Tim Stenevik,
Speaker 3: it is people.
Speaker 5: Want to look for a deeper meaning. You look at
Speaker 5: Morgan Stanley for example, and just kind of how sloggish
Speaker 5: the stock has been relative to the other banks, given
Speaker 5: that there has been a big change in leadership. There
Speaker 5: so much confidence in James Gorman. People are looking for
Speaker 5: direction from Ted Picken who he is as a leader.
Speaker 5: And if Jamie I'm in worre to step down than
Speaker 5: what the same questions arise for JP Morgan perhaps on
Speaker 5: a bigger scale. So people do look for direction. But
Speaker 5: you know, perhaps like many leaders are doing right now,
Speaker 5: giving deputies time to breathe and make their mark is
Speaker 5: prudent coming into the next cycle.
Speaker 4: So Chaneli, is that another sign that you know where
Speaker 4: I'm going with this?
Speaker 5: You can't read into things.
Speaker 2: I can't think.
Speaker 4: We can't read into this, I don't think.
Speaker 5: So he steps down. When he steps down.
Speaker 4: He does, But he's also made some moves in the
Speaker 4: past few months about potential successors.
Speaker 5: And to say talk for the first time ten years. Man,
Speaker 5: this guy has been making moves.
Speaker 4: But didn't he say something different a few months ago?
Speaker 5: He said that you know that five years, five years,
Speaker 5: five years thing that he always said that has gone away.
Speaker 5: It's the horizon is certainly smaller. The bigger question for
Speaker 5: me is are his deputies ready? Is Jen Pipsack ready?
Speaker 5: She's the one that people are watching the most.
Speaker 3: Some would say he's being, you know, maybe really responsible
Speaker 3: as a leader to make sure that bench is ready
Speaker 3: to take over.
Speaker 2: I want to bring Cheryl back in.
Speaker 3: You're hearing us talk about Jamie Diamond, and we know
Speaker 3: there's more than JP Morgan, but we do focus on it.
Speaker 3: You know, what is you're thinking about the outlook for
Speaker 3: this company and then kind of who takes over and
Speaker 3: when they take over from Jamie Diamond.
Speaker 7: Yeah, I think that's been a question for a number
Speaker 7: of years. Clearly as some of the commentary already look.
Speaker 7: I think this was a good opportunity to have some
Speaker 7: more people in the in the forefront, and I think
Speaker 7: it was it was done well on the conference call today. Timing,
Speaker 7: I think it is still uncertain and perhaps maybe it's
Speaker 7: It's dependent on where we go from an economic perspective
Speaker 7: here too. You know, the data now is somewhat supportive
Speaker 7: of moving towards rate cuts and hopefully you know, it's
Speaker 7: off landing no landing type scenario, which which may be
Speaker 7: more opportune than than a more hard landing scenario.
Speaker 3: Cheryl, I want to shift gears to City a little bit.
Speaker 3: City's down two percent, So if it's lows of the
Speaker 3: day down three point six percent at its lows today,
Speaker 3: City warning that costs likely to be at the high
Speaker 3: end of the forecast. What was your takeaway on City?
Speaker 3: What do we need to know about Jane Frasier and
Speaker 3: her team and what they're doing? And as Shaneli mentioned,
Speaker 3: I mean this is another one up twenty five percent
Speaker 3: so far this year.
Speaker 7: Yeah. No, I think the execution so far has been
Speaker 7: good on the restructuring plan, and you know we are
Speaker 7: positive on the name for that reason. I think you know,
Speaker 7: this loops into the forward guidance and expenses have been
Speaker 7: you know, troublesome for the whole sector for some time,
Speaker 7: and moving to the higher end of the range again
Speaker 7: here I think puts more uncertainty onto the forward look.
Speaker 7: I think more of what will drive city looking forward.
Speaker 7: That is going to be execution on restructuring and also
Speaker 7: working to deploy some of that excess capital. And I
Speaker 7: thought the buyback commentary was helpful from that perspective.
Speaker 5: Today, Cheryl, what is your favorite choice among the banks
Speaker 5: and why?
Speaker 1: You know?
Speaker 7: I think today we would say JP Morgan would be
Speaker 7: our top pick. We do like the large cap banks
Speaker 7: generally given more diversification. We clearly saw that come through
Speaker 7: in the capital markets revenue, and I think, you know,
Speaker 7: JP Morgan was the standout winner there today. But also
Speaker 7: in case of looking towards any wobbles and credit going forward,
Speaker 7: the prudence the fortress balance sheet concept, I think really
Speaker 7: stands the test of time in a more difficult environment.
Speaker 7: So that's you know, where we would put our top
Speaker 7: pick today.
Speaker 3: Hey, just to wrap up, guys, just got about sixty
Speaker 3: second Cheryl, let me start with you and then we'll
Speaker 3: go to Shanali next week.
Speaker 2: Holman Sachs. Bank of America, what is on your radar, Cheryl?
Speaker 7: I think we're mostly watching for credit, particularly from Bank
Speaker 7: of America, and then starting to get in some of
Speaker 7: the regional banks. We've clearly been concerned about commercial real
Speaker 7: estate exposure, but also some weakening in the consumers side.
Speaker 7: I think we were encouraged today with the comments from
Speaker 7: JP Morgan on credit card and also City that it's
Speaker 7: just regular, sort of normal course normalization, seasoning of vintages.
Speaker 7: But I think that'll be important to see out of
Speaker 7: Bank of America and then you know, the Goldman's and
Speaker 7: Morgans of the world. Clearly it's been a good quarter
Speaker 7: for capital markets, particularly strong investment banking revenues and equity trading.
Speaker 4: Shanali very briefly next week, Bank of America, what are
Speaker 4: you looking for In.
Speaker 5: Addition, in addition to what Cheryl was saying about credit quality,
Speaker 5: I'm also watching for trading because if you saw fixed
Speaker 5: income coming in a little light at JP Morgan and
Speaker 5: even City Group, that's a big, big, big business for
Speaker 5: Goldman Sacks. They have been leaning in on prime brokerage
Speaker 5: and of course Morgan Stanley equities trading as well. It
Speaker 5: was a huge bite spot this quarter so far. Let's
Speaker 5: see how that competition plays out.
Speaker 3: All right, great setup of what's going on today and
Speaker 3: then of course into next week.
Speaker 2: Shanelli Bossk, thank you so much.
Speaker 3: As always, we always appreciate your input and the researchers
Speaker 3: end us.
Speaker 2: I know this kid doesn't sleep.
Speaker 3: Global finance correspond at Bloomberg News and Cheryl Pate are
Speaker 3: thanks to you as well, and the analysis senior portfolio
Speaker 3: manager at angel Oak Capital Advisors there in Atlanta. The
Speaker 3: KBW Bank Index little change and actually most of the
Speaker 3: names are higher in today's session.
Speaker 4: Okay, So now to our other big focus this week,
Speaker 4: and that was two prints on inflation fed cho J.
Speaker 4: Powell updating US lawmakers on the economy and monetary policy,
Speaker 4: and then how it all played out in moves along
Speaker 4: the treasury curve. Carol's safe to say a reset on
Speaker 4: rates again, which makes us wonder have we talked out?
Speaker 3: Yeah, it's a great question, and we've got a great
Speaker 3: person to answer back with us. Is Bloomberg News rates
Speaker 3: reporter Michael mackenzie. He's out there in New Jersey. All right, Michael.
Speaker 3: Another inflation print today. We had one yesterday. We definitely
Speaker 3: did see the treasury curve move. How are you kind
Speaker 3: of adding it all together? Have we topped out when
Speaker 3: it comes to some of the levels that we've seen
Speaker 3: on the treasury curve.
Speaker 8: I think that's a pretty reasonable conclusion to control, Carol,
Speaker 8: I think the rally you're now seeing this week has
Speaker 8: actually one investor described to me as a bit of fomo.
Speaker 8: People who missed the top and yields back in April
Speaker 8: when we were around four seventy five, for example, in
Speaker 8: five years are now having to buy because the data
Speaker 8: is slowing and the inflation picked. The inflation printly got
Speaker 8: yesterday on CPI was really important because there was a
Speaker 8: bit of anxiety going into that, but the fact that
Speaker 8: it came below expectations, the fact that it shows that
Speaker 8: FED is probably done enough here in terms of tightening
Speaker 8: interest rate policies is twenty twenty two that they are
Speaker 8: going to win the fight on inflation, and they are
Speaker 8: only get it closer towards that two percent target, And
Speaker 8: I think you're now going to get the market beginning.
Speaker 8: We've seen some big trades go through FED fund's futures
Speaker 8: today where people are beginning to speculate on whether the
Speaker 8: FED will go fifty in September. I think that's not
Speaker 8: on the table at all at the moment, but it
Speaker 8: is interesting to see when you look at rate cut
Speaker 8: expectations for twenty twenty five, they're beginning to build again.
Speaker 8: His expectation of bomb market that the FED is going
Speaker 8: to do a lot more easy than people think, well
Speaker 8: at least what the FED says they're going to do
Speaker 8: by next year. So I think there is a bit
Speaker 8: of pomo going on. Retail sales. Next Tuesday will be
Speaker 8: an important piece of data, and I think really it'll
Speaker 8: be the next couple of payroll numbers that we get,
Speaker 8: because if the labor market softens further, then I think
Speaker 8: you definitely get the cut in September. You might even
Speaker 8: get another one in November.
Speaker 4: Michael Weed, we often ask you about a peak on
Speaker 4: the tenure, but how low could the tenure go this year?
Speaker 8: Well, it's chatter today that you're going to see a
Speaker 8: three handle on the ten year. I think you.
Speaker 2: Said three handle, You said a three hand.
Speaker 8: Get below four percent? I think again, we're in this
Speaker 8: tricky period now where the inflation number was such a
Speaker 8: good number for the bomb market. You just cannot really
Speaker 8: assess just how big this buying is going to come
Speaker 8: in the drive prices down, actually drive prices up and
Speaker 8: yeelds down. Sorry, so, and we have been here before.
Speaker 8: We've had these big pivot trays that have been put
Speaker 8: on the last couple of years. But the CPI was
Speaker 8: also It came after two days of testimony from Chair Power,
Speaker 8: and he kind of brought back to duel mandate for
Speaker 8: the fair here. He said, we're watching employment, and I
Speaker 8: think if you get cracks in in labor over the
Speaker 8: next couple of months, you're definitely going to see the
Speaker 8: bomb market rally harder.
Speaker 3: So I am thinking we all are thinking about Monday
Speaker 3: at twelve thirty pm Wall Street time, when Fetcher J.
Speaker 3: Powell will be interviewed by David Rubinstein at the Economic
Speaker 3: Club of Washington.
Speaker 9: D C.
Speaker 2: Powell asked for this conversation.
Speaker 3: Is this kind of a victory speech a little bit
Speaker 3: or I don't know, how are you.
Speaker 8: I don't think he's going to play it that way.
Speaker 8: I think he's going to continue to be pretty careful.
Speaker 8: The one speech you really got to look forward to,
Speaker 8: I think is the end of August at Jackson Hall,
Speaker 8: because that'll be about what twenty days before the September
Speaker 8: eighteenth BED meeting, and that's going to be the pivotal
Speaker 8: one because then you have seen more data. Don't forget
Speaker 8: they're very data dependent. They keep telling us they're data dependent.
Speaker 8: I think Monday he'll be a bit he'll stick to
Speaker 8: the script, the recent script. Then you know, they looking
Speaker 8: at both the labor market, they're looking at inflation. They
Speaker 8: probably he's probably has more confidence that inflation is coming down.
Speaker 8: Don't forget this week he said they didn't have enough confidence.
Speaker 8: So there may be he could get the market fired
Speaker 8: up again if he says we do have confidence. But
Speaker 8: I think he's going to be pretty cautious still. But
Speaker 8: I think that Jackson Hole speech he makes at the
Speaker 8: end of August, that's going to be that's going to
Speaker 8: be the big thing, the big event for the market.
Speaker 4: Michael, just thirty seconds. What about the July thirty first
Speaker 4: fal Reserve meeting? Is there any chatter of a rate cut?
Speaker 10: There?
Speaker 4: No, why not?
Speaker 8: I think you just haven't seen enough data. I think
Speaker 8: the Fed has made it pretty clear they want to
Speaker 8: see a series of data prints. The inflation is moving
Speaker 8: the right direction. Labor market okay, unemployment rates ticked up
Speaker 8: over four percent. That's not enough to get the Fed
Speaker 8: to read You think about, you know, bringing right cards forward.
Speaker 8: They want to give themselves, you know, play flexibility. Still,
Speaker 8: But everyone I've spoken to this week as even people
Speaker 8: who didn't think September was in play before now say
Speaker 8: it's in play and they expect to cut in September.
Speaker 8: Plased on what we're currently seeing in the days.
Speaker 3: An amazing week again, Michael McKenzie, Have a great week
Speaker 3: and Bloomberg News Rates report. Michael McKenzie out there in
Speaker 3: New Jersey.
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Speaker 3: All right, folks, Tesla always on our radart fields like
Speaker 3: shares of Tesla did sell off earlier today, I think
Speaker 3: I'm just.
Speaker 4: Gonna they turned around there up three point eight percent.
Speaker 9: Now.
Speaker 3: Yeah, we've definitely seen like a rally around Trail market
Speaker 3: right a little bit yesterday we did see the trade,
Speaker 3: though there was some pressure. The stock today was downgraded
Speaker 3: by ubs and concerns at the US Carmaker's shares have
Speaker 3: risen too much too soon, that's their words on optimism
Speaker 3: over its artificial intelligence plans. Meantime, Tim, we've got another
Speaker 3: story on our radar when it comes to Tesla, or
Speaker 3: should I say the anti Tesla crowd.
Speaker 4: Yeah, the other EV startup that's persuading buyers to drop
Speaker 4: seventy thousand dollars on its EV's, but still has a
Speaker 4: big hurdle to get over and that is making money.
Speaker 4: The story is in the upcoming issue of Bloomberg business Week.
Speaker 4: It's coming out next week. It's the August issue we've
Speaker 4: got with us Bloomberg Technology co host ed Ludlow. He
Speaker 4: joins us on his Business Week story in our San
Speaker 4: Francisco bureau. And you know a lot about Tesla, you
Speaker 4: know a lot about Rivian. This is the focus of
Speaker 4: the story that you wrote with Max Chafkin. How is
Speaker 4: the company doing?
Speaker 11: It's hard to say, and we wrote four thousand words,
Speaker 11: so you think we'd come to a conclude. It's a
Speaker 11: great story, you know, So thank you guys.
Speaker 8: Good.
Speaker 11: Where have you two been all over the place? West coast,
Speaker 11: East coast again? Look, you guys kind of.
Speaker 2: Teaching a lot of EV's, we have been.
Speaker 11: I will exactly different, I know types, and I'm really
Speaker 11: grateful for you guys getting hands on with that world.
Speaker 11: Like the point or the open of the four thousand
Speaker 11: word BusinessWeek article is that Rivian or the first iteration
Speaker 11: of it was like the anti Elon anti Tesla. Tesla
Speaker 11: had small form factor cars, Model three, Model Y. They
Speaker 11: have Elon, and we you know, Elon is divisive. I
Speaker 11: think that's a fair and objective thing to say, frankly.
Speaker 11: And so in the first instance, Rivian was able to
Speaker 11: sell it's kind of very large suv and very large
Speaker 11: pickup to that kind of market somebody that didn't want
Speaker 11: a Tesla but wanted MeV or just didn't like to
Speaker 11: be assated with Elon's products. But it had a super
Speaker 11: limited shelf life. Now they've hit reset, they are on
Speaker 11: Rivian two point zero, and we went super detailed on
Speaker 11: the strategy to actually stop burning through billions of dollars
Speaker 11: and start making some money down the road.
Speaker 4: Okay, And I have a sort of how the sausage
Speaker 4: has made question for you because I imagine while you
Speaker 4: were reporting the story, news of that five billion dollar
Speaker 4: investment from VW came in.
Speaker 11: Oh so, without betraying confidence, it's brilliant timing. It gives
Speaker 11: the story new life and energy. Like the way that
Speaker 11: I would put it is that Volkswagen almost comes in
Speaker 11: at the eleventh hour, and because an injection of five
Speaker 11: billion dollars certainly helps, even if the story is that
Speaker 11: you're burning through billions anyway, having some more billions is good.
Speaker 11: But Max and I certainly got the sense a few
Speaker 11: weeks ago that something was happening. And I've got a
Speaker 11: pretty good track record, right I've broken quite a lot
Speaker 11: of news on Rivian, frankly, and I just had no idea.
Speaker 11: I didn't see it coming. You know, we did learn
Speaker 11: the backstory, which is that Oliver Bloom and Volkswagen were
Speaker 11: admirers of Rivian.
Speaker 6: RJ.
Speaker 11: Scaringe, the seer of Rivian, met with Oliver Bloom about
Speaker 11: less than a year ago. But like last summer in Atlanta, Georgia,
Speaker 11: where Porsche has its kind of excellent center. It's somewhere
Speaker 11: you can visit, and he rocks up and in the
Speaker 11: parking lot they've got some Rivians and he's like, that's
Speaker 11: kind of neat. But the idea is, like all car
Speaker 11: companies benchmark against each other by testing other people's vehicles,
Speaker 11: and they kind of went from there. And the main
Speaker 11: thing you need to know is that Rivian needed money
Speaker 11: and it has some access to that now. But it's
Speaker 11: also kind of a big vote of credibility for Rivian
Speaker 11: that Volkswagen would turn to them to fix some of
Speaker 11: Volkswagen's own problems in this kind of shift we're seeing
Speaker 11: to electric drive train.
Speaker 3: And yet Rivian, if you go back to late twenty
Speaker 3: twenty one, was a one hundred and seventy two dollars
Speaker 3: a share stock. It is down more than twenty percent
Speaker 3: this year. I said it used to be one hundred
Speaker 3: seventy two a shear it's eighteen dollars and fifty two
Speaker 3: cents a share today. So if it seems like it
Speaker 3: has so much potential, how come investors aren't really necessarily,
Speaker 3: you know, buying up shares.
Speaker 11: Yeah, the concern has been does it ever move beyond
Speaker 11: being a niche player? You know, it built fifty two
Speaker 11: thousand evs across its two consumer cars and a van
Speaker 11: for Amazon last year. It will probably do fifty seven
Speaker 11: thousand this year. How does it get to like the
Speaker 11: four hundred thousand that Tesla does each quarter? And at
Speaker 11: one point it's market cap was lower than the cash
Speaker 11: it had on its balance sheet. And one way of
Speaker 11: interpreting that is that the market values the car business
Speaker 11: that basically zero and so Q the R two. The
Speaker 11: R two is a smaller form factor suv. They have
Speaker 11: a new plan on how they're going to build it.
Speaker 11: It's going to go from their existing plant in Illinois
Speaker 11: instead of Georgia, where they still plan to build a
Speaker 11: factory in the future. That's going to be they hope
Speaker 11: the Model three moment, like Tesla went through, finally a
Speaker 11: mass market car. And the question that we pose or
Speaker 11: at least, like you know, Bradstone says, now that we
Speaker 11: want to answer questions in BusinessWeek. I think we explain
Speaker 11: how the R two is going to get Rivian there
Speaker 11: based on interviews with r. J. Scaring's the CEO, and
Speaker 11: it's not going to be easy, but they have really
Speaker 11: thought about it.
Speaker 4: Can we think about it the R two being like
Speaker 4: the Model three for Tesla?
Speaker 11: Yeah, yeah, so like in scale, I think, like go
Speaker 11: back to what we started the conversation on the initial
Speaker 11: buyers were like the early adopters, the people that didn't
Speaker 11: want a Model three, so they wanted an suv and
Speaker 11: Rivian had the only three row suv on the market.
Speaker 11: But most people just want like the RAV four, Toyota
Speaker 11: Rav four or Honda CRV equivalent, and it doesn't really
Speaker 11: exist yet. The problem Rivian's got is that they've said, here,
Speaker 11: we have it. It's forty five thousand dollars. They r
Speaker 11: two them and everyone else everyone's going to have like
Speaker 11: this little suv in the thirty five to forty five
Speaker 11: thousand dollars range coming in the next two years. So
Speaker 11: it's about kudos Serivian for also being quite good at technology.
Speaker 11: You know, the products are really good. They've just not
Speaker 11: been very good at building them. They're a startup, right
Speaker 11: that's grown super fast and time to grow up, get
Speaker 11: rid of the teething problems.
Speaker 3: But that like you just hit on it, right, That's
Speaker 3: the holy grail though, whether you're Tesla, whether you're Rivian,
Speaker 3: it's not about spending seventy or eighty thousand dollars.
Speaker 2: For an EV you want. I mean, if you're really
Speaker 2: going to.
Speaker 3: Build out your business, you've got to get to that
Speaker 3: middle market, right or less expensive market.
Speaker 2: That's where you scale up.
Speaker 11: Yeah, and I think that the reason I really enjoyed
Speaker 11: the process is I covered Rivian starting when it was
Speaker 11: like forty people or whatever, and now it's thirteen thousand
Speaker 11: and we kind of really get into the head of
Speaker 11: CEO RJ Scarrange, And you know, he was generous with
Speaker 11: his time in terms of interviews, and of course I
Speaker 11: spoke to a lot of sources, but I think the
Speaker 11: penny dropped for him that he needed this R two
Speaker 11: to materialize more quickly, and that's why they're going to
Speaker 11: build it at their existing factory in Illinois, not Georgia,
Speaker 11: because they can do it six months faster than they
Speaker 11: had originally planned, knowing that all that competition is going
Speaker 11: to do something at the same time, and.
Speaker 4: Very briefly because there's a lot we want to get
Speaker 4: to in the last three minutes with you. Yeah, last
Speaker 4: question on this. One of my big takeaways was RJ.
Speaker 4: Scarrange really finds himself in the right place at the
Speaker 4: right time, whether it's MIT or whether it's with Lauren Sanchez.
Speaker 10: Oh sure about that.
Speaker 11: So in short, RJ is an incredibly impressive person. He
Speaker 11: is kind, he is held in wide high regard by
Speaker 11: everyone that I've spoken to, takes incredible care of himself physically.
Speaker 11: He's a micro manager from an engineering standpoint. The question is, like,
Speaker 11: you know, it's hard being a startup CEO, founder, CEO.
Speaker 11: He's been also brilliant at deal making, and so I
Speaker 11: also kind of explained in the magazine he's been an
Speaker 11: unreliable boyfriend, you know, the deals with Ford and Mercedes
Speaker 11: to do joint ventures and joint evs. What happened to those?
Speaker 11: And so now with VW. He gave me a pretty
Speaker 11: strong response when I put that to him about why
Speaker 11: VW is going to work, and the answer basically was like,
Speaker 11: you know, we've proved that we're good at this. We'll see.
Speaker 3: Yeah, all right, So listen, great story, killer story in
Speaker 3: the upcoming new issue of Bloomberg Business Week. So we
Speaker 3: highly recommend everybody check it out. That new issue should
Speaker 3: be it out next week. Having said that, we also
Speaker 3: want to get to an exclusive from you and Dana
Speaker 3: Hall yesterday that Tesla postponing its ROBOTAXI unveiling to October.
Speaker 4: Okay, Ed, When Ed joined us to talk about this
Speaker 4: a few months ago, we said, Ed, is this really
Speaker 4: going to happen in August? Because because next year autonomous
Speaker 4: has been the big joke for about you know, eight
Speaker 4: or nine years when it comes to well a decade
Speaker 4: at this point to Tesla, so not surprise, surprise the market.
Speaker 4: We saw shoes close down by more than eight percent.
Speaker 4: Was it a surprise to you.
Speaker 11: Well, it wasn't a surprise to me because, like our job,
Speaker 11: right in the course of our reporting, we spoke to
Speaker 11: sources and they said, yeah, it's delayed to October. The reason,
Speaker 11: according to the sources, is that I think Tesla and
Speaker 11: Elon wanted more to show. They wanted more prototypes to
Speaker 11: actually unveil when the event happens. One source told me
Speaker 11: that even as recently as this week, Elon requested that
Speaker 11: the design team make changes to the design of the
Speaker 11: robotats team. So, as we always say, Elon's often late
Speaker 11: on the timelines or deadlines he publicly states, but he
Speaker 11: also often gets there at the end. And I think
Speaker 11: the anxiety in the share price was it had been
Speaker 11: on an eleven day winning run RSI for the technos
Speaker 11: or technicals out there was like in the high eighties.
Speaker 11: And so much as Empsis has been put on the pivot,
Speaker 11: you know that Tesla in the long term, making evs
Speaker 11: and setting them to consumers will be a small part
Speaker 11: of the business relative to software sales are running on
Speaker 11: autonomous ROBOTAXI business.
Speaker 3: Yeah, fascinating. I'm looking at RSI two relative Strength Index,
Speaker 3: and it's still pretty much overbought at this point, so
Speaker 3: you're right. It had quite a run as of late. Ed,
Speaker 3: so great to go around the world when it comes
Speaker 3: to EV's with you, so so appreciate it.
Speaker 2: Have a great weekend, Our, Ed Ludlow.
Speaker 3: He is co host of Bloomberg Technology on Bloomberg Television.
Speaker 3: Catch them every day at eleven am Wall Street Time
Speaker 3: on Bloomberg TV.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 1: each weekdays starting at two pm Eastern Dot Apple car Play,
Speaker 1: and Androyd Auto with the Bloomberg Business You can also
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Speaker 1: station Just Say Alexa playing Bloomberg eleven thirty.
Speaker 9: Well.
Speaker 4: Last night's press conference, President Joe Biden said European our
Speaker 4: are prepared to cut investment to China if it keeps
Speaker 4: up its support for Russia, offering a warning after NATO
Speaker 4: accused Beijing of enabling the invasion of Ukraine.
Speaker 2: That's right, Tim.
Speaker 3: He also reiterated that the United States is very committed
Speaker 3: to NATO basically bottom line. Earlier on Bloomberg Surveillance, NATO
Speaker 3: Secretary General Stoltenberg stress too the ties between the US
Speaker 3: and its European allies.
Speaker 9: The United States so will remain a strong NATO ally
Speaker 9: because this also makes the United States safer and the stronger.
Speaker 9: The United States is big twenty five percent of the
Speaker 9: world GDP, but to get with NATO allies, we are
Speaker 9: fifty percent of the world's GDP.
Speaker 3: Okay, that, of course is NATO Secretary General Stoltenberg earlier
Speaker 3: on Bloomberg Surveillance. I do want to point out too,
Speaker 3: there's a new story in the Bloomberg that says, whether
Speaker 3: it's Joe Biden nor Donald Trump, Europe knows it must
Speaker 3: stand alone.
Speaker 2: So we want to get more on.
Speaker 3: NATO, the role of the US, how the questions around
Speaker 3: President Bien's presidential run are tim impacting it all.
Speaker 4: We welcome back Angela's senior fellow at Brookings Institution, also
Speaker 4: the author of Putin's World, Russia Against the West and
Speaker 4: with the Rest, Doctor stant also Senior Advisor to the
Speaker 4: Center for Eurasian, Russian and East European Studies and Professor
Speaker 4: Emerita of Government and Foreign Service at Georgetown. Early in
Speaker 4: her career, Carol she was a national intelligence officer for
Speaker 4: Russia and Eurasia at the National Intelligence Council and also
Speaker 4: served in the Office of Policy Planning at the US
Speaker 4: Department of State. We're done with the interview again, out
Speaker 4: of time.
Speaker 3: Hey, Angelia, it be so impressive, thank you for coming back.
Speaker 3: What's top of mind NATO, US, Europe, Russia and President
Speaker 3: Biden's political future. Where should we start?
Speaker 6: So a lot we can with the NATO summit, which,
Speaker 6: from the point of view of the Ukraine Russia war
Speaker 6: was as expected, was successful, presented unity, continued support for Ukraine,
Speaker 6: said that there would be a bridge to NATO membership,
Speaker 6: although it's not clear what that bridge is. We're setting
Speaker 6: up a new NATO command in Germany and vs Baden
Speaker 6: to support Ukraine, seven hundred people there. NATO sending a
Speaker 6: civilian officer to permanently be stationed in Kiev to advise
Speaker 6: the Ukrainian government on different things. So there was a
Speaker 6: lot that was signed, that was promised that was to Ukraine.
Speaker 6: A Ukrainian president was there. But as you intimated, hanging
Speaker 6: over this NATO summit for the Allies was the question
Speaker 6: of after January of twenty twenty five, will the United
Speaker 6: States still be committed to NATO, and we know that
Speaker 6: some of these NATO leaders that were in town for
Speaker 6: the summit. We're also meeting with some of President Trump's
Speaker 6: foreign policy adviser to advise us to try and get
Speaker 6: a sense of the lay of the land. But there's
Speaker 6: a lot of uncertainty, and now some of these Europeans
Speaker 6: are saying we have to conceive of a world where
Speaker 6: Europe is without the United States as it contemplates its
Speaker 6: own security.
Speaker 4: Well, angel to that point, just this isn't an anecdote.
Speaker 4: But on the subway this morning, I opened the New
Speaker 4: York Times app, as a always do, and I saw
Speaker 4: in the app that there were leave seven or eight
Speaker 4: stories about the press conference last night and about what
Speaker 4: Democrats are thinking when it comes to Biden's reelection chances.
Speaker 4: Not one of those stories was actually about the substance
Speaker 4: of what happened at the NATO confab. And I think,
Speaker 4: and my question for you is how damn And this
Speaker 4: is not a knock on the New York Times, no question.
Speaker 4: This is what people are interested in and what this
Speaker 4: is dominating the conversation in Washington and abroad as well.
Speaker 4: My question for you, Angela is what does it mean
Speaker 4: for international the international community. If this is the focus
Speaker 4: right now and we're not focused on the NATO confab.
Speaker 6: Yeah, I mean, there was precious little in the news
Speaker 6: about the NATO conference, which was seventy fifth anniversary, lots
Speaker 6: of preparations, supposed to show the strongest alliance and the
Speaker 6: history of the world, but it was so overshadowed by
Speaker 6: President Biden his state of health and the future of
Speaker 6: democracy in the United States, which is a shame because
Speaker 6: this was an important summit. As you said, it's the
Speaker 6: first time that NATO explicitly criticized China for its support
Speaker 6: of Russia in this war. The Chinese were not happy
Speaker 6: about that. There was a meeting with Asian allies Japan,
Speaker 6: South Korea, Australia, New Zealand, and NATO and the Asian
Speaker 6: Allies are now cooperating more because obviously the Ukraine War
Speaker 6: and also the challenge from China, they're very much interconnected.
Speaker 10: All of those things were really.
Speaker 6: Overshadowed by this question of what's happening domestically in the US.
Speaker 6: And you know, I did watch the President's press conference
Speaker 6: yes today and on the substance of what he said
Speaker 6: about foreign policy, particularly Russia, Ukraine, but also China, the
Speaker 6: Middle East. That was all very coherent and good. But
Speaker 6: as you say, people are focusing on the style and
Speaker 6: his attitude towards everything instead of focusing on the subject.
Speaker 3: So our story on the Bloomberg at two twenty seven
Speaker 3: pm Wall Street Time here is whether it's Joe Biden
Speaker 3: or Donald Trump, Europe knows it must stand alone.
Speaker 2: Is that how you see it?
Speaker 3: No matter who is in the White House come November,
Speaker 3: that is increasingly a Europe on its own versus really
Speaker 3: working with the United States.
Speaker 10: I think that's a little over dramatized.
Speaker 6: I mean, I think if a Democrat wins the presidential election,
Speaker 6: there will be continuity. I think there will be more
Speaker 6: pressure on the Europeans to spend more on defense. But
Speaker 6: in a way, the Biden administration has been successful in
Speaker 6: persuading many of them to do that, and so many
Speaker 6: of these companies are not spending more on their own
Speaker 6: defense than they were before. But obviously, if you think
Speaker 6: about NATO, the US is the biggest contributor to it.
Speaker 6: If President Trump wins the election, then I think there
Speaker 6: are very serious questions about what will happen to Europe
Speaker 6: and the US.
Speaker 10: European relationship. We know that he seriously.
Speaker 6: Contemplated pulling the United States out of NATO when he
Speaker 6: was president, and even though the Congress has passed legislation
Speaker 6: trying to make that impossible, if that's what he wanted
Speaker 6: to do, he would probably do it now. Some of
Speaker 6: his foreign policy adviser, I mean, there are different people.
Speaker 6: We don't know who would get what positions, but some
Speaker 6: of them I think, and Sena advanced for instance. I
Speaker 6: don't know whether he'll be the vice presidential candidate or
Speaker 6: notter what position he might get. He's been explicit that
Speaker 6: we should stop giving money to Ukraine, he should make
Speaker 6: the Europeans do much more for their own defense. So
Speaker 6: I think to say that Europe's going to be on
Speaker 6: its own definitely after January twenty twenty five is overly dramatic.
Speaker 6: But I think there's certainly near grounds for concerns in
Speaker 6: Europe that are quite well founded.
Speaker 3: Angela, we have about two minutes left. I have two
Speaker 3: quick questions I want to get to with you. First Up,
Speaker 3: the relationships that we are increasingly seeing between Russia and India,
Speaker 3: Russia and China. There's a lot of jockeying that seems
Speaker 3: to be going on. Are you still worried about Russia
Speaker 3: and Vladimir Putin and his kind of longer term intentions.
Speaker 10: Oh, I certainly am.
Speaker 6: I mean I think we in the West thought they
Speaker 6: would try and isolate him after this war broke out,
Speaker 6: and of course he's less isolated now than he was
Speaker 6: when the war broke out, and even arguably before it.
Speaker 6: So you can see a company like India Fields, it's
Speaker 6: very important to maintain that relationship with Russia, irrespective of
Speaker 6: the war and irrespective of the fact that US Indian
Speaker 6: relations have been improving.
Speaker 10: And to go to Russia just before.
Speaker 6: The NATO summit began and on the day when Russia
Speaker 6: bombed this children's cancer hospital in ki if not the
Speaker 6: Prime Minister Modi would have known that before he went. Still,
Speaker 6: it says something about how Russia has managed to utilize
Speaker 6: this war to its own benefit.
Speaker 3: Angela forty seconds left, hair, Now, I should US voters
Speaker 3: care about NATO and US involvement.
Speaker 6: Because if Russia succeeds in Ukraine, and if Russia then
Speaker 6: sets its sights on some other country, we should remember
Speaker 6: that twice in the twentieth century the US was forced
Speaker 6: to support Europe in the war, because in the end
Speaker 6: it does threaten US security. If Russia makes huge strides
Speaker 6: on the European continent, it does affect us. We can
Speaker 6: separate ourselves from that continent.
Speaker 3: So appreciate it you finding time for us on this Friday,
Speaker 3: and as you always seem to do.
Speaker 2: Angela, thank you so much. Have a great excuse me,
Speaker 2: great great weekend.
Speaker 4: Doctor Angela Stan, senior Fellow at Brookings Institution, also the
Speaker 4: author of Putin's World, Russia Against the West and With
Speaker 4: the Rest. Doctor Sten also a senior Advisor to the
Speaker 4: Center for Eurasia at Russian and East European Studies. She
Speaker 4: was a National Intelligence Officer for Russia and Eurasia at
Speaker 4: the National Intelligence Council and also served in the Office
Speaker 4: of Policy Planning at the US Department of State.
Speaker 1: Comm a journal.
Speaker 3: How about you let me drive?
Speaker 1: Oh no, no, no, no, who's going to drive?
Speaker 10: Alright?
Speaker 1: Please, I'll do the gravels.
Speaker 10: Let's wat I want to try it. It's good question.
Speaker 1: This is the drive to the globe.
Speaker 10: Don com a thing.
Speaker 1: We'll buy around shold down on Bloomberg radio.
Speaker 3: Oh, in our next lifetime, we're going to do Bloomberg
Speaker 3: business week after dark, after dark, and that conversation we
Speaker 3: just about drinking water before you go to bed.
Speaker 10: Don't do it.
Speaker 4: Let's just stop it.
Speaker 2: Leave it there.
Speaker 3: Having said that, more importantly, what our Bloomberg audience really
Speaker 3: cares about, not that terms like please master, please master,
Speaker 3: stop while you're ahead. Uh, we've got a rally in worry,
Speaker 3: but we're rolling over in terms of our best level.
Speaker 3: So we're not seeing one percent gains anymore on the
Speaker 3: S and P of the Nasdaq, but still up about
Speaker 3: eight ten percent.
Speaker 4: Eighteen percent on the S and P five hundred exactly
Speaker 4: so far this year. Yeah, that's a rally.
Speaker 3: Yeah, and that's why you you know, some would say,
Speaker 3: you know, you pull up something like RSI and you
Speaker 3: see some over bought indices or indication. Certainly you see
Speaker 3: that on the S and P five hundred. So yeah,
Speaker 3: Relative Strength Index.
Speaker 4: Okay, So let's see what Dana Dioria has to say
Speaker 4: about that. Dana's cocio over at Investment. She joins us
Speaker 4: from Pennsylvania. By the way, invest Net in the news
Speaker 4: cycle itself just yesterday Being Capital and Reverence Capital Partners
Speaker 4: said they've agreed to take investment at private accentuating the
Speaker 4: extent of investor interests in software firms exposed to wealth
Speaker 4: management that offer values investment at three point five billion
Speaker 4: dollars on an equity basis and at four point five
Speaker 4: billion dollars including debt.
Speaker 3: All right, we know you weren't probably at the signing
Speaker 3: of the deal, but we have to ask you, does
Speaker 3: it change your world at all? Or what does this mean?
Speaker 3: Because we see some deals kind of happening, whether it's
Speaker 3: you know, acquisition deals being taking private. We talked about
Speaker 3: it with the big banks today that you know, the
Speaker 3: bankers are doing stuff.
Speaker 2: How does it change your world, Dana? If at all?
Speaker 12: It doesn't?
Speaker 1: Right?
Speaker 12: So, I mean certainly we're go for work with business
Speaker 12: sids usual, caring for the vision.
Speaker 13: That we've had, and you know, I think that's why
Speaker 13: there's the interest in us to begin with.
Speaker 1: You know, the.
Speaker 13: Platform, the Pressment platform has done a lot to put
Speaker 13: together a financial ecosystem for retail advisors and their clients,
Speaker 13: and that's going to be increasingly important as we move forward.
Speaker 13: And I think there's just interest in that, you know,
Speaker 13: that value proposition that we've had out there and continue
Speaker 13: to have out there. We've done a lot of the work,
Speaker 13: you know, to kind of put together these pieces of
Speaker 13: the system that we've you know, built as well as acquired,
Speaker 13: and you know, I think they saw the value prop there.
Speaker 3: Frankly, Yeah, all right, So good to kind of get
Speaker 3: your view on it. Having said that, really interest in
Speaker 3: your view on kind of.
Speaker 2: Where we are in the markets.
Speaker 3: Our most read story on the Bloomberg we talked about
Speaker 3: some of the strategists that are out there that have
Speaker 3: varish views and that are potentially kind of being pushed
Speaker 3: out maybe or I shouldn't say that, but just it's
Speaker 3: very hard to be a bear in this environment, to
Speaker 3: be fair, and it harkens back to nineteen ninety nine,
Speaker 3: another environment where we saw a rational exuberance perhaps in
Speaker 3: the market, and then you saw it come undone is it?
Speaker 2: You know, how do you think about it? Because markets
Speaker 2: don't just only go up. We know that.
Speaker 13: Yeah, well, I think what you're seeing right now is
Speaker 13: some breath in the market. So when you think about
Speaker 13: the idea that markets have gone up and the you know,
Speaker 13: the e troups erc rally, but I mean, of course
Speaker 13: that's market cap weighted, right, And really, if you dive
Speaker 13: onto the surface, if you're sitting in something market.
Speaker 12: Cap weighted or low tracking error to market cap weighted.
Speaker 12: It's been a great ride this year and last year.
Speaker 13: But if you're in a more of an equal weighted
Speaker 13: type of a framework, or something tilted more towards lower
Speaker 13: price value stocks or small caps, it hasn't been as
Speaker 13: much fun. And you know, you haven't experienced a lot
Speaker 13: of that uptick. So I think you know now this
Speaker 13: last you know, obviously the news around inflation was very
Speaker 13: good for markets in general, but small cap stocks in
Speaker 13: particular finally catching a break because being more interest rate
Speaker 13: expensitive and also not being richly valued, and the way
Speaker 13: the large cap peers are. You're actually starting to see
Speaker 13: some breath. So i'd say, you know, is there a
Speaker 13: room in the rally now for some other participation? That
Speaker 13: being said, of course, we're going into an election season,
Speaker 13: expect heightened volatility. Yeah, it doesn't surprise me at all
Speaker 13: that you're starting to hear chatter now for well, hey,
Speaker 13: maybe maybe.
Speaker 12: Some of this is going to catch up with us.
Speaker 12: It can't all go up. We're very richly valued on
Speaker 12: a market cap weighted basis, So.
Speaker 4: What do you mean catch up with us? Like, what
Speaker 4: part of the valuation catches up with us. Is it
Speaker 4: that earnings don't earnings don't match what investors expect? What
Speaker 4: is it?
Speaker 1: Yeah?
Speaker 13: So, I mean I think, you know, we were looking
Speaker 13: at the stand sixty forty model and something like the
Speaker 13: ninety seventh percentile of valuation, right where a lot of
Speaker 13: investors sit. I think when you're priced to perfection and
Speaker 13: you're also very top I mean concentrated on those largest
Speaker 13: growth growthist companies in the market. We all know there's
Speaker 13: a reason technology and communications are leading the way this year, right,
Speaker 13: it's these magnificent seven socks. It's this story around AI
Speaker 13: and growth and yes, uh that that thesis could certainly
Speaker 13: prove out and we continue to have earnings that support
Speaker 13: that level of valuation, But there is there is at
Speaker 13: some point a question of you know, does do we
Speaker 13: have a dip in that story? Do we start to
Speaker 13: realize that AI is going to take a little.
Speaker 12: Bit more time than we hoped to be transformative? Is that?
Speaker 1: You know?
Speaker 13: Is there a pullback expectation of something like that when
Speaker 13: you have so much concentrated in one thesis and one
Speaker 13: small part of the market I'll say small from the
Speaker 13: standpoint of number of companies.
Speaker 12: Certainly there's room for you know, concern there. And then
Speaker 12: you know, going.
Speaker 13: Back to why is there why is there a little
Speaker 13: bit more exuberance in the market around other parts.
Speaker 12: Of the economy.
Speaker 13: Of course, you know, the idea that we're finally going
Speaker 13: to get those rate cuts, you know, and we've we've
Speaker 13: had a fairly hawkish stance from our Fed, right, you know,
Speaker 13: the notion that perhaps we could even get a cut
Speaker 13: in September, at the very least a signal of a
Speaker 13: cut by September.
Speaker 12: I think it's starting to bring other parts of the
Speaker 12: market into the game.
Speaker 4: Did yesterday did yesterday's inflation report? Did that change your
Speaker 4: view of timing of a cut?
Speaker 13: Well, I mean, I think for a lot of people,
Speaker 13: it obviously brought the thought that it's going to come
Speaker 13: in September. You know, maybe there was maybe the expectation
Speaker 13: was that the Fed would wait until after the election.
Speaker 13: Now I think a lot of people are expecting that
Speaker 13: it would happen in September. I would say from my standpoint,
Speaker 13: it made me think September is certainly much more possible.
Speaker 13: I do think also the FED may just signal in September,
Speaker 13: you know, or I don't think July is in play yet.
Speaker 4: And it may just signal it plans today earlier too.
Speaker 3: Yeah, yeah, Hey, Dana, what I you know, really want
Speaker 3: to find out from you is I'm looking at the
Speaker 3: rustle It's up about one point three percent. It was
Speaker 3: up three point six percent yesterday. It was an use
Speaker 3: to see a fair amount of momentum, to say the
Speaker 3: least this week. So as you say this broadening out,
Speaker 3: got new money to put to work, where do I
Speaker 3: put it?
Speaker 10: Yeah?
Speaker 13: I am a proponent of you know, looking at those
Speaker 13: areas of the market have been ignored. I know, valuation
Speaker 13: has not seemed to matter. And you started with it's
Speaker 13: hard to be a bear in this market. I'll say
Speaker 13: it's also hard to be a value investor. But nevertheless,
Speaker 13: I think, look, if you have money to put into
Speaker 13: the market, I'm taking the assumption you've already got a
Speaker 13: big chunk of money in the market that's your standard investment.
Speaker 13: It probably looks market cap esque and that means you've
Speaker 13: got a lot of large cap growth tech already. So
Speaker 13: you may love the AI thesis. You're already very heavily
Speaker 13: bedded on that thesis, whether.
Speaker 12: Whether you know it or not.
Speaker 13: I would put it more towards area of the markets
Speaker 13: that I have been ignored, that are you know, small
Speaker 13: caps in particular, right, small value tends out perform over time.
Speaker 13: These areas of the market are ower than average.
Speaker 12: And their valuation.
Speaker 3: All right, we're gonna leave it on that note, Dana,
Speaker 3: Thank you so much. Dana Dioria Cocio over at Investment
Speaker 3: joining us from Pennsylvania. The Russell is up more than
Speaker 3: six percent. Russell two thousand, up six percent this week.
Speaker 3: If I look at the S and P five hundred,
Speaker 3: just shy of one percent, it's.
Speaker 4: A broadening out of the rally. Yeah, yeah, that reclebration
Speaker 4: hen you live?
Speaker 3: Does it continue?
Speaker 4: I don't know, find me the.
Speaker 2: Answer to that makes earning so important?
Speaker 4: It does, especially for those small companies.
Speaker 2: Yeah exactly.
Speaker 3: But from the large cap do they live up to
Speaker 3: those expectations.
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