1 00:00:13,560 --> 00:00:16,320 Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly 2 00:00:16,360 --> 00:00:19,919 Speaker 1: Markets podcast. I'm Sarah Pontza, a markets reporter on the 3 00:00:19,960 --> 00:00:23,240 Speaker 1: Cross Asset team, and I'm Mike Reagan, a senior editor 4 00:00:23,320 --> 00:00:26,200 Speaker 1: on the Markets team here at Bloomberg. This week on 5 00:00:26,239 --> 00:00:29,440 Speaker 1: the show, President Trump threw a bombshell into markets at 6 00:00:29,440 --> 00:00:32,639 Speaker 1: the end of the week by announcing tariffs on Mexico 7 00:00:32,840 --> 00:00:35,559 Speaker 1: if the country does not prevent the flow of illegal 8 00:00:35,600 --> 00:00:38,440 Speaker 1: immigrants into the United States. And this comes at a 9 00:00:38,520 --> 00:00:41,879 Speaker 1: time when US and China still seem no closer on 10 00:00:41,960 --> 00:00:45,440 Speaker 1: reaching a trade deal between themselves, so trade is still 11 00:00:45,440 --> 00:00:48,080 Speaker 1: dominating the headlines. One of our guests will walk us 12 00:00:48,080 --> 00:00:51,279 Speaker 1: through how to actually trade a trade war. And the 13 00:00:51,280 --> 00:00:53,400 Speaker 1: bonds rally has kind of taken on a mind of 14 00:00:53,440 --> 00:00:55,920 Speaker 1: its own. Has it gone too far or our tenure 15 00:00:55,960 --> 00:00:59,320 Speaker 1: treasury yield now headed towards to And of course we'll 16 00:00:59,360 --> 00:01:02,440 Speaker 1: close out the episode with our tradition the Craziest thing 17 00:01:02,520 --> 00:01:05,479 Speaker 1: I saw in markets this week, But first we'll talk 18 00:01:05,520 --> 00:01:08,360 Speaker 1: about President Trump and his threats to place tariffs on 19 00:01:08,440 --> 00:01:10,920 Speaker 1: Mexico if they do not stop the flow of illegal 20 00:01:10,920 --> 00:01:14,160 Speaker 1: immigrants into the country. Here to talk about it is 21 00:01:14,280 --> 00:01:18,840 Speaker 1: Brian Chappata, a Bloomberg opinion columnist who focuses on fixed 22 00:01:18,840 --> 00:01:21,440 Speaker 1: income markets. Welcome to the show, Brian, Thanks for having 23 00:01:21,440 --> 00:01:24,880 Speaker 1: me so, Brian. The sort of knee jerk reaction to 24 00:01:25,000 --> 00:01:28,720 Speaker 1: this new threat of tariffs on Mexico was very much 25 00:01:28,800 --> 00:01:33,199 Speaker 1: risk off. We saw a rally in bonds, steep sell 26 00:01:33,200 --> 00:01:37,640 Speaker 1: off in stocks, um interest rates obviously going much lower 27 00:01:37,840 --> 00:01:41,440 Speaker 1: that two on the tenure really coming into focus next, 28 00:01:41,840 --> 00:01:45,360 Speaker 1: is the market re overreacting here considering that President Trump 29 00:01:45,400 --> 00:01:47,320 Speaker 1: has been known to sort of bluff or at least 30 00:01:47,360 --> 00:01:49,440 Speaker 1: change his mind in the past. Well, I think the 31 00:01:49,480 --> 00:01:52,240 Speaker 1: market is very confused right now because you had these 32 00:01:52,440 --> 00:01:56,360 Speaker 1: China trade war possibilities, and that was sort of well telegraphed, 33 00:01:56,400 --> 00:01:58,880 Speaker 1: but Mexico sort of came out of nowhere. There was 34 00:01:58,960 --> 00:02:01,800 Speaker 1: an agreement la utually in place the U S. M 35 00:02:01,880 --> 00:02:05,520 Speaker 1: c A. And there's this question of Okay, if there's 36 00:02:05,520 --> 00:02:08,840 Speaker 1: a deal in place and you could still arbitrarily throw 37 00:02:08,919 --> 00:02:12,800 Speaker 1: some tariffs onto a country, what does this mean for 38 00:02:13,000 --> 00:02:15,480 Speaker 1: the China front? So now you're fighting a two front 39 00:02:15,840 --> 00:02:19,200 Speaker 1: trade war, and the question becomes, at what point will 40 00:02:19,280 --> 00:02:23,440 Speaker 1: this just completely mess up global supply chains, the overall 41 00:02:23,560 --> 00:02:26,839 Speaker 1: markets and ultimately the U S economy, and that's when 42 00:02:26,880 --> 00:02:28,679 Speaker 1: you start to get a risk off. You start to 43 00:02:28,840 --> 00:02:31,160 Speaker 1: see a lot of people buy up treasuries. It's certainly 44 00:02:31,160 --> 00:02:34,680 Speaker 1: messing up a lot of weekends for financial journalists and traders. 45 00:02:34,680 --> 00:02:37,280 Speaker 1: I mentioned at least, but Brian so so much of 46 00:02:37,320 --> 00:02:41,520 Speaker 1: the pricing in the bond market revolves around inflation and 47 00:02:41,639 --> 00:02:45,799 Speaker 1: what people are expecting for inflation going forward. Now, obviously 48 00:02:46,520 --> 00:02:49,839 Speaker 1: a new round of tariffs on Mexico while we're still 49 00:02:49,880 --> 00:02:53,560 Speaker 1: waiting for the goods from China to arrive on the boats. 50 00:02:53,760 --> 00:02:57,720 Speaker 1: With those that new set of tariffs, UM, the implication 51 00:02:57,800 --> 00:03:02,320 Speaker 1: obviously is that at least some of these UH expenses 52 00:03:02,360 --> 00:03:05,760 Speaker 1: from the tariffs will be passed on to consumers, which 53 00:03:05,880 --> 00:03:10,280 Speaker 1: should have uh an inflationary effect. But yet the bond 54 00:03:10,320 --> 00:03:14,320 Speaker 1: market is reacting as if it's expecting less inflation going forward. 55 00:03:14,480 --> 00:03:17,080 Speaker 1: Could you sort of walk us through what the bond 56 00:03:17,120 --> 00:03:20,840 Speaker 1: market is thinking and why traders seem to think the 57 00:03:20,880 --> 00:03:23,600 Speaker 1: Fed's next move will be even more aggressive cuts rather 58 00:03:23,639 --> 00:03:26,519 Speaker 1: than a rate hike to respond to higher prices. Yeah, well, 59 00:03:26,560 --> 00:03:29,519 Speaker 1: I think this definitely is not the kind of price 60 00:03:29,600 --> 00:03:32,880 Speaker 1: increases and inflation that the FED wants to see. It 61 00:03:32,919 --> 00:03:36,400 Speaker 1: should be more of an organic, natural thing fueled by 62 00:03:36,760 --> 00:03:39,880 Speaker 1: you know, wage gains and general economic growth. And this 63 00:03:39,960 --> 00:03:42,800 Speaker 1: is more of a one time hit as a result 64 00:03:43,080 --> 00:03:47,080 Speaker 1: of this policy from the Trump administration. So I think 65 00:03:47,160 --> 00:03:51,080 Speaker 1: it's sort of a trade off between inflation and growth, 66 00:03:51,280 --> 00:03:53,960 Speaker 1: and I think the bond market is saying this is 67 00:03:54,000 --> 00:03:56,800 Speaker 1: going to be a bigger hit on economic growth, and 68 00:03:56,840 --> 00:03:59,960 Speaker 1: the FED will look through this idea that prices are 69 00:04:00,040 --> 00:04:03,480 Speaker 1: going up because of these tariffs on China and on Mexico, 70 00:04:03,920 --> 00:04:06,480 Speaker 1: and that's why you're seeing the possibility of a rape cut. 71 00:04:06,640 --> 00:04:10,760 Speaker 1: Although to be fair, uh, various FED officials, including Neil Kashkari, 72 00:04:11,000 --> 00:04:14,120 Speaker 1: one of the more dovish among the FED officials throughout 73 00:04:14,120 --> 00:04:17,120 Speaker 1: the country, uh, sort of says we're okay where we 74 00:04:17,120 --> 00:04:19,400 Speaker 1: are right now. We don't need to do anything. We're 75 00:04:19,440 --> 00:04:22,080 Speaker 1: likely to hear that word transitory again, just a different 76 00:04:22,080 --> 00:04:24,280 Speaker 1: meaningless time. Yeah. I mean there's so many I mean 77 00:04:24,320 --> 00:04:27,880 Speaker 1: everyone's sort of playing game theory with with the tariffs, 78 00:04:27,920 --> 00:04:32,159 Speaker 1: and obviously President Trump has been very actively going against 79 00:04:32,160 --> 00:04:33,919 Speaker 1: the Feds, saying if we all I only got some 80 00:04:34,000 --> 00:04:36,040 Speaker 1: FED help, we'd be doing even better than we are 81 00:04:36,160 --> 00:04:38,560 Speaker 1: right now. And China is gonna get all the stimulus 82 00:04:38,560 --> 00:04:41,400 Speaker 1: and I'm not gonna get anything. So there's a bit 83 00:04:41,400 --> 00:04:43,920 Speaker 1: of game theory potentially going on. I'm not sure if 84 00:04:43,960 --> 00:04:47,560 Speaker 1: that's exactly the motivation here. I mean tying uh, these 85 00:04:47,680 --> 00:04:50,679 Speaker 1: Mexico tariffs to immigration is sort of out of left 86 00:04:50,720 --> 00:04:54,040 Speaker 1: field and kind of bizarre. Frankly, Uh, it feels a 87 00:04:54,040 --> 00:04:57,920 Speaker 1: little arbitrary. And it's unclear exactly whether you know when 88 00:04:57,920 --> 00:05:00,240 Speaker 1: the five percent goes to ten percent. I mean, there 89 00:05:00,240 --> 00:05:03,560 Speaker 1: are dates, but when you know Mexico does enough for 90 00:05:03,640 --> 00:05:05,680 Speaker 1: Trump to say, Okay, we don't need to tear a 91 00:05:05,760 --> 00:05:08,920 Speaker 1: few anymore is very unclear. And now let's turn our 92 00:05:08,960 --> 00:05:12,279 Speaker 1: attention to the other trade war that's been dominating headlines, 93 00:05:12,440 --> 00:05:16,320 Speaker 1: the tensions between the US and China, and joining us 94 00:05:16,360 --> 00:05:20,000 Speaker 1: to break it all down is Lorie Calvacina, the head 95 00:05:20,200 --> 00:05:24,200 Speaker 1: US equity strategist at RBC UM also spent some time 96 00:05:24,200 --> 00:05:26,960 Speaker 1: at Credit Swiss if I'm not mistaken, and uh, Sarah 97 00:05:27,000 --> 00:05:31,200 Speaker 1: a graduate of the University of Virginia. So congratulations to 98 00:05:31,240 --> 00:05:34,800 Speaker 1: that basketball team. We're all begrudgingly saying congratulations, but we're 99 00:05:34,800 --> 00:05:36,840 Speaker 1: really happy for you. I'm happy I went to the 100 00:05:36,920 --> 00:05:39,680 Speaker 1: University of Delaware, which is actually a knockoff of uv A, 101 00:05:39,800 --> 00:05:43,320 Speaker 1: Like they literally copied the campus at Delaware. So this 102 00:05:43,400 --> 00:05:45,720 Speaker 1: is like as close to a national championship as I'm 103 00:05:45,720 --> 00:05:50,520 Speaker 1: gonna get, I think. So I'm happy, We're We're excited, Lori. 104 00:05:50,800 --> 00:05:53,000 Speaker 1: You guys actually put out a report this week called 105 00:05:53,240 --> 00:05:55,599 Speaker 1: how to Trade a Trade War, twenty one pages long, 106 00:05:56,080 --> 00:05:59,800 Speaker 1: very in depth. You guys went through every single or 107 00:05:59,839 --> 00:06:02,560 Speaker 1: an is called transcript from the last season. You also 108 00:06:02,760 --> 00:06:06,600 Speaker 1: surveyed your guys company analysts. How can you actually go 109 00:06:06,640 --> 00:06:10,400 Speaker 1: about it? It's clearly not that simple. It's very very tough. 110 00:06:10,440 --> 00:06:13,359 Speaker 1: And I think what's complicated matters is right after that 111 00:06:13,400 --> 00:06:15,520 Speaker 1: initial Trump tweet a few weeks ago, we felt like 112 00:06:15,600 --> 00:06:17,560 Speaker 1: people were in denial. They just didn't want to think 113 00:06:17,600 --> 00:06:20,000 Speaker 1: about it. They said, Okay, these this escalation isn't actually 114 00:06:20,000 --> 00:06:21,839 Speaker 1: going to go through on Friday, And then it did, 115 00:06:22,440 --> 00:06:25,880 Speaker 1: and then people were sort of in a state of shock, saying, Okay, 116 00:06:25,920 --> 00:06:28,960 Speaker 1: well there's this window, it's probably not actually gonna happen. 117 00:06:29,440 --> 00:06:31,600 Speaker 1: And guess what you know last week it felt like 118 00:06:31,640 --> 00:06:34,600 Speaker 1: the middle of last week clients were saying, we actually 119 00:06:34,640 --> 00:06:36,520 Speaker 1: have to figure out how to position for this in 120 00:06:36,520 --> 00:06:39,560 Speaker 1: our portfolios and so we went to our analysts. We 121 00:06:39,600 --> 00:06:41,680 Speaker 1: gave them about twenty four hours and we said, you've 122 00:06:41,680 --> 00:06:44,599 Speaker 1: had some time to think about this. Within your industry, 123 00:06:44,640 --> 00:06:46,720 Speaker 1: what would you buy and what would you sell? What's 124 00:06:46,760 --> 00:06:49,680 Speaker 1: most at most at risk, what's least at risk. We 125 00:06:49,760 --> 00:06:52,839 Speaker 1: really wanted to understand, as the news ebbs and flows, 126 00:06:53,440 --> 00:06:55,479 Speaker 1: what are the both sides of the trade. Just let's 127 00:06:55,520 --> 00:06:58,320 Speaker 1: have these lists ready to go. We also asked the 128 00:06:58,360 --> 00:07:01,159 Speaker 1: analysts to just standardize our thoughts and really we tried 129 00:07:01,200 --> 00:07:03,359 Speaker 1: to assess their gut feel. I think investors right now 130 00:07:03,440 --> 00:07:05,920 Speaker 1: they want hard data, they want hard numbers. I don't 131 00:07:05,960 --> 00:07:08,840 Speaker 1: think it's possible to get them yet. And we just said, 132 00:07:09,000 --> 00:07:10,720 Speaker 1: what's going to be the impact to demand, what's going 133 00:07:10,760 --> 00:07:13,120 Speaker 1: to be the impact margins? And when we did that, 134 00:07:13,160 --> 00:07:15,880 Speaker 1: we found that we actually had some very clear sector 135 00:07:16,000 --> 00:07:19,120 Speaker 1: and industry takeaways. There were some very clear leans and 136 00:07:19,200 --> 00:07:22,040 Speaker 1: tilts that we saw develop. We cross referenced that with 137 00:07:22,080 --> 00:07:25,000 Speaker 1: some work we did analyzing transcripts, and we we literally 138 00:07:25,040 --> 00:07:28,360 Speaker 1: went through all five hundred transcripts through the last three 139 00:07:28,400 --> 00:07:32,760 Speaker 1: reporting season. So much time, so much time. This is 140 00:07:32,760 --> 00:07:34,520 Speaker 1: not something we all did last week. This is something 141 00:07:34,600 --> 00:07:37,080 Speaker 1: we do every reporting season, but We've been characterizing what 142 00:07:37,160 --> 00:07:39,560 Speaker 1: companies say on trade, and we had like six or 143 00:07:39,600 --> 00:07:41,680 Speaker 1: seven different categories, and we said, let's just put those 144 00:07:41,720 --> 00:07:45,360 Speaker 1: into two basic categories, good and bad. And when we 145 00:07:45,400 --> 00:07:47,840 Speaker 1: did that, we found that the sector takeaways pretty much 146 00:07:47,920 --> 00:07:50,320 Speaker 1: lined up with what our analysts thought. I feel like 147 00:07:50,400 --> 00:07:55,720 Speaker 1: everybody is sort of looking at the UH sales and 148 00:07:55,760 --> 00:07:58,679 Speaker 1: revenue exposure to China, and you don't hear much about 149 00:07:58,720 --> 00:08:01,680 Speaker 1: the cost exposure. UH. You know what what companies are 150 00:08:01,680 --> 00:08:03,800 Speaker 1: importing from China? Is that data sort of harder to 151 00:08:03,840 --> 00:08:06,040 Speaker 1: come by, harder to quin There's a reason everybody is 152 00:08:06,120 --> 00:08:09,080 Speaker 1: running those revenue numbers because it's it's in footnotes and 153 00:08:09,120 --> 00:08:12,640 Speaker 1: financial statements. The cost estimates are not and so that's 154 00:08:12,680 --> 00:08:14,760 Speaker 1: why you don't see it. We actually made a purposeful 155 00:08:14,760 --> 00:08:16,720 Speaker 1: decision not to look at that revenue data. We know 156 00:08:16,760 --> 00:08:19,560 Speaker 1: everybody's looking at that. We know largely you're talking about 157 00:08:19,560 --> 00:08:22,280 Speaker 1: semis and technology when you're talking about companies that list 158 00:08:22,360 --> 00:08:25,480 Speaker 1: direct China exposure. We think everybody knows about that. I mean, 159 00:08:25,520 --> 00:08:27,800 Speaker 1: what was interesting to me is that as we went 160 00:08:27,800 --> 00:08:32,120 Speaker 1: through the different sectors, it was very clear consumer discretionary, industrials, 161 00:08:32,120 --> 00:08:34,880 Speaker 1: tech and materials are really the most at risk areas, 162 00:08:35,280 --> 00:08:37,880 Speaker 1: wasn't too much of a difference in terms of impact 163 00:08:37,960 --> 00:08:41,400 Speaker 1: on margins and impact on demand. Analysts answered those questions 164 00:08:41,480 --> 00:08:45,280 Speaker 1: largely the same um areas that were more immune communication services, 165 00:08:45,440 --> 00:08:49,400 Speaker 1: utilities rates just no real direct exposure. Everything else was 166 00:08:49,480 --> 00:08:53,120 Speaker 1: somewhere in the middle. We've heard about the macro tradebook before, 167 00:08:53,200 --> 00:08:55,040 Speaker 1: the playbook, you could call it, and a lot of 168 00:08:55,040 --> 00:08:57,880 Speaker 1: people have said, Okay, go into small caps, get out 169 00:08:57,880 --> 00:09:01,240 Speaker 1: of emerging markets, get out of China, get out of semiconductors. 170 00:09:01,640 --> 00:09:04,640 Speaker 1: This week we actually kind of saw the opposite. I 171 00:09:04,679 --> 00:09:08,000 Speaker 1: thought it was pretty amazing that we saw emerging markets, 172 00:09:08,040 --> 00:09:12,240 Speaker 1: we saw China, we saw semiconductors actually outperforming in small 173 00:09:12,280 --> 00:09:15,320 Speaker 1: caps underperforming. Is it the idea that maybe you need 174 00:09:15,360 --> 00:09:17,520 Speaker 1: to get a little more granular, a little bit more micro, 175 00:09:17,960 --> 00:09:20,360 Speaker 1: or is it the idea that right now investors are 176 00:09:20,400 --> 00:09:22,520 Speaker 1: just still unsure of what to do well. I think 177 00:09:22,520 --> 00:09:25,680 Speaker 1: it's a question of applying the risk and factoring in 178 00:09:25,720 --> 00:09:28,040 Speaker 1: the risk two different parts of the market at different 179 00:09:28,040 --> 00:09:30,360 Speaker 1: points in time, and I think the semiconductor one has 180 00:09:30,400 --> 00:09:32,760 Speaker 1: been a really obvious one for a very long time. 181 00:09:32,800 --> 00:09:34,199 Speaker 1: If you want to go in and run a screen 182 00:09:34,320 --> 00:09:37,000 Speaker 1: just looking at Chinese revenue exposure. You're gonna get a 183 00:09:37,000 --> 00:09:38,920 Speaker 1: big list of semi companies and everybody knows that, and 184 00:09:38,960 --> 00:09:41,760 Speaker 1: everyone was doing that analysis back in the fall. Now 185 00:09:41,800 --> 00:09:43,960 Speaker 1: I think people are starting to look at the retailers 186 00:09:44,000 --> 00:09:47,280 Speaker 1: which are really more affected by List four UM, and 187 00:09:47,800 --> 00:09:50,360 Speaker 1: nobody really had that on their their time horizon. Nobody 188 00:09:50,400 --> 00:09:53,559 Speaker 1: really thought that was even up within the realm of possibility. 189 00:09:53,840 --> 00:09:56,240 Speaker 1: So that's where all the focus is right now. One 190 00:09:56,280 --> 00:09:59,680 Speaker 1: thing I find interesting in your recent reports your neutral 191 00:10:00,240 --> 00:10:03,679 Speaker 1: as far as small caps versus large caps. And I'm 192 00:10:03,679 --> 00:10:05,440 Speaker 1: interested in this because I've been on TV a few 193 00:10:05,440 --> 00:10:08,640 Speaker 1: times when the market's really bad and the anchor will say, well, 194 00:10:08,679 --> 00:10:11,440 Speaker 1: small caps are doing worse than large caps. You know, 195 00:10:11,480 --> 00:10:14,120 Speaker 1: aren't they immune to the trade war? And my answer 196 00:10:14,200 --> 00:10:17,040 Speaker 1: is always like, well, they are immune to a strong dollar. 197 00:10:17,520 --> 00:10:19,760 Speaker 1: But if you look at the makeup of small caps, 198 00:10:19,760 --> 00:10:21,840 Speaker 1: I mean a lot of banks, a lot of consumer 199 00:10:21,880 --> 00:10:27,120 Speaker 1: discretionary at risk to import costs, UM obviously higher beta, 200 00:10:27,160 --> 00:10:29,319 Speaker 1: and small caps so when the market goes down, they're 201 00:10:29,320 --> 00:10:31,120 Speaker 1: going to go down a little bit more. I mean, 202 00:10:31,160 --> 00:10:33,040 Speaker 1: can you give me a smarter answer than that? Well, 203 00:10:33,080 --> 00:10:35,400 Speaker 1: the so I I spent about seven years as a 204 00:10:35,440 --> 00:10:38,319 Speaker 1: small cap strategy in the past, and and I can 205 00:10:38,360 --> 00:10:40,720 Speaker 1: tell you that they're They're kind of two issues that 206 00:10:40,800 --> 00:10:43,280 Speaker 1: small caps are always in the epicenter of. One is 207 00:10:43,600 --> 00:10:46,000 Speaker 1: their risk on or risk off, So bad news generally 208 00:10:46,040 --> 00:10:48,800 Speaker 1: small caps go down, but then sometimes they benefit in 209 00:10:48,840 --> 00:10:51,160 Speaker 1: a more fundamental way, and they don't always get credit 210 00:10:51,200 --> 00:10:54,200 Speaker 1: for that. I think it's even more complicated right now. Yes, 211 00:10:54,240 --> 00:10:56,760 Speaker 1: small caps are more domestic, so things like the small 212 00:10:56,760 --> 00:10:59,800 Speaker 1: cap banks really no exposure to the trade war unless 213 00:10:59,800 --> 00:11:03,319 Speaker 1: we get pulled into a recession um. But other than 214 00:11:03,360 --> 00:11:06,640 Speaker 1: that they should be fine. Retailers are more complicated because 215 00:11:06,640 --> 00:11:08,680 Speaker 1: they have margin pressures, and it goes back to these 216 00:11:08,679 --> 00:11:11,120 Speaker 1: cost pressures that we can't really measure, we can't really 217 00:11:11,160 --> 00:11:14,040 Speaker 1: screen for. But what we know is that smaller companies 218 00:11:14,080 --> 00:11:17,200 Speaker 1: in any sector have less scale, They have less bargaining power, 219 00:11:17,520 --> 00:11:20,280 Speaker 1: they have less of an ability to manage issues like this. 220 00:11:20,360 --> 00:11:24,080 Speaker 1: They can't manage their supply coins changed quite as deftly 221 00:11:24,120 --> 00:11:26,040 Speaker 1: as the big cap companies, and I think that's what's 222 00:11:26,080 --> 00:11:28,480 Speaker 1: hurting them right now. Another thing I caught my eyes. 223 00:11:28,679 --> 00:11:32,640 Speaker 1: You have a preference for financials energy and financials energies 224 00:11:32,679 --> 00:11:35,600 Speaker 1: one story, but I'm kind of surprised that financials giving 225 00:11:35,640 --> 00:11:37,960 Speaker 1: our our guy Brian here has been writing about this 226 00:11:38,080 --> 00:11:42,960 Speaker 1: panic buying and treasuries. I mean, uh, flat inverted yield curves. Uh. 227 00:11:43,360 --> 00:11:45,400 Speaker 1: You know, intuitively you would think would be bad for 228 00:11:45,520 --> 00:11:47,520 Speaker 1: net interest margins at financials. So what are you saying 229 00:11:47,559 --> 00:11:51,319 Speaker 1: there to Carl. So we think the yield curve, it's 230 00:11:51,360 --> 00:11:53,280 Speaker 1: when it really hurts the banks. We think it's more 231 00:11:53,280 --> 00:11:55,520 Speaker 1: about the economic signal that it's sending, and we tell 232 00:11:55,559 --> 00:11:57,920 Speaker 1: people continue to look at the preponderance of the evidence. 233 00:11:57,920 --> 00:12:00,360 Speaker 1: The yield curve is one signal. Um, we don't think 234 00:12:00,360 --> 00:12:02,480 Speaker 1: the U S economy is going to tip into recession 235 00:12:02,520 --> 00:12:04,760 Speaker 1: this year, but we do admit and acknowledge that it's 236 00:12:04,760 --> 00:12:07,920 Speaker 1: an anchor, it's an overhang, it's a problem. Um. We 237 00:12:08,120 --> 00:12:11,240 Speaker 1: like the valuation story and financials. We like the fact 238 00:12:11,240 --> 00:12:14,320 Speaker 1: that investors are starting to to really struggle to find 239 00:12:14,320 --> 00:12:16,920 Speaker 1: more defensive places to hide in the market. Healthcare has 240 00:12:16,920 --> 00:12:19,400 Speaker 1: really broken down as a defensive proxy. So we think 241 00:12:19,400 --> 00:12:21,840 Speaker 1: the relative immunity of something like the trade war and 242 00:12:21,840 --> 00:12:25,040 Speaker 1: the financials could actually benefit them. But but the the 243 00:12:25,120 --> 00:12:27,640 Speaker 1: yield curve is definitely a problem. That's a good segue 244 00:12:27,679 --> 00:12:30,120 Speaker 1: in you Brian the yield curve is inverted again, We're 245 00:12:30,160 --> 00:12:33,199 Speaker 1: all gonna die, right, that's the signal again? Do I 246 00:12:33,240 --> 00:12:35,920 Speaker 1: have it right? So? What what tell us about what 247 00:12:35,960 --> 00:12:37,840 Speaker 1: you've been writing? You you had a piece talking about 248 00:12:37,880 --> 00:12:41,199 Speaker 1: this panic buying and treasuries. But it doesn't sound like 249 00:12:41,280 --> 00:12:43,840 Speaker 1: you think it's been overdone. That you think these yields 250 00:12:43,840 --> 00:12:46,760 Speaker 1: are lower for longer. To use a catch phrase from 251 00:12:46,840 --> 00:12:48,440 Speaker 1: from a few years ago, I mean, is that where 252 00:12:48,480 --> 00:12:51,280 Speaker 1: we are again. We're back to this permanent low yield environment. 253 00:12:51,280 --> 00:12:53,440 Speaker 1: I mean it feels like that's sort of the end game, 254 00:12:53,520 --> 00:12:56,120 Speaker 1: no matter how you spin it, right. I mean, there's 255 00:12:56,160 --> 00:13:00,559 Speaker 1: been so much build up of debt across the world. Uh, 256 00:13:00,600 --> 00:13:04,920 Speaker 1: you know, economy has become so financialized, everyone's exposed to equities. 257 00:13:05,240 --> 00:13:07,800 Speaker 1: I mean, the only way to sort of keep all 258 00:13:07,840 --> 00:13:11,800 Speaker 1: of this going without some sort of major problem is 259 00:13:11,880 --> 00:13:14,520 Speaker 1: by keeping yields low. And that's what we've seen in 260 00:13:14,600 --> 00:13:17,520 Speaker 1: Japan for a long time. It's what we've seen in 261 00:13:17,559 --> 00:13:20,440 Speaker 1: Europe and in the US. The Fed was able to 262 00:13:20,480 --> 00:13:23,959 Speaker 1: get several rate hikes off, but ultimately they're going to 263 00:13:24,040 --> 00:13:26,680 Speaker 1: have the lower rates again at some point, and so 264 00:13:27,080 --> 00:13:28,960 Speaker 1: it is a concern. I mean, I think that in 265 00:13:29,000 --> 00:13:33,040 Speaker 1: the short term, the rally has gone quite far. Jeff 266 00:13:33,040 --> 00:13:36,080 Speaker 1: Gunlack came out on Twitter and said, you know, we've 267 00:13:36,120 --> 00:13:38,680 Speaker 1: seen the top people are gonna sort of have buyers 268 00:13:38,760 --> 00:13:41,960 Speaker 1: remorse now, um, and I think that's probably right. I mean, 269 00:13:42,040 --> 00:13:44,520 Speaker 1: the tenure yield is below the lower bound of the 270 00:13:44,520 --> 00:13:47,839 Speaker 1: FED funds rate. So if the Fed's gonna stay on hold, Uh, 271 00:13:47,880 --> 00:13:49,680 Speaker 1: it doesn't look what are you doing quite so good? 272 00:13:49,720 --> 00:13:51,800 Speaker 1: What are you doing at you know, to twenty? But 273 00:13:52,320 --> 00:13:55,319 Speaker 1: it's it's sort of feels like we're in this environment 274 00:13:55,360 --> 00:13:58,160 Speaker 1: where the Fed's not going to raise anymore. That's for sure, 275 00:13:58,600 --> 00:14:01,079 Speaker 1: they might cut at some point in the next two years, 276 00:14:01,240 --> 00:14:03,000 Speaker 1: and so bond traders are trying to get ahead of 277 00:14:03,040 --> 00:14:05,839 Speaker 1: this and that's why you see the long end rally 278 00:14:05,920 --> 00:14:08,559 Speaker 1: and the curve invert. How much dispersion do you actually 279 00:14:08,559 --> 00:14:10,520 Speaker 1: see in Wall Street views right now, because I know 280 00:14:10,600 --> 00:14:12,959 Speaker 1: you look at Bank of America, they're calling for yields 281 00:14:13,000 --> 00:14:15,800 Speaker 1: potentially to fall to two point out five on the tenure. 282 00:14:16,000 --> 00:14:19,200 Speaker 1: Then you mentioned Jeff Gunlack, I know, Macro Risk Advisors, 283 00:14:19,200 --> 00:14:20,760 Speaker 1: a couple of other shops have come out and said, 284 00:14:21,000 --> 00:14:22,960 Speaker 1: we are going to see a popping interest rates. We 285 00:14:23,040 --> 00:14:25,720 Speaker 1: can't stay around two point two. I mean, are you 286 00:14:25,800 --> 00:14:28,160 Speaker 1: just seeing a lot of different opinions at this point 287 00:14:28,200 --> 00:14:30,560 Speaker 1: in time. I mean, I think it's pretty universal right 288 00:14:30,600 --> 00:14:34,760 Speaker 1: now that everyone's coming down because they're following the market. Um, 289 00:14:34,880 --> 00:14:38,240 Speaker 1: that's for sure. That it seems like, especially among economists, 290 00:14:38,280 --> 00:14:43,160 Speaker 1: there's a major reluctance to capitulate and say we're heading 291 00:14:43,200 --> 00:14:45,680 Speaker 1: back down towards two percent when it seemed very clear 292 00:14:45,720 --> 00:14:48,720 Speaker 1: that we were headed towards three and possibly even four percent. 293 00:14:49,720 --> 00:14:55,800 Speaker 1: But among the fixed income treasuries interest rates strategists specifically, 294 00:14:56,240 --> 00:14:58,360 Speaker 1: there is a feeling that we're sort of stuck in 295 00:14:58,400 --> 00:15:01,360 Speaker 1: a range. We've sort of seen the top for this 296 00:15:01,480 --> 00:15:04,160 Speaker 1: cycle back in October and November when the yield was 297 00:15:04,560 --> 00:15:08,280 Speaker 1: three point two three point five per cent um. So, 298 00:15:08,600 --> 00:15:10,600 Speaker 1: you know, I guess we'll sort of see what happens here. 299 00:15:10,640 --> 00:15:13,960 Speaker 1: But I think the uh, the move is definitely lower 300 00:15:14,000 --> 00:15:31,720 Speaker 1: now now. Laurie, Obviously a big part of this move 301 00:15:31,760 --> 00:15:34,800 Speaker 1: into bonds is likely people getting a little spooked at 302 00:15:34,880 --> 00:15:37,520 Speaker 1: at the stock market. Uh. You wrote recently that you 303 00:15:37,560 --> 00:15:40,880 Speaker 1: do think people will come in and quote unquote by 304 00:15:40,920 --> 00:15:43,840 Speaker 1: the dip to use uh everyone's favorite catchphrase. But we're 305 00:15:43,880 --> 00:15:46,280 Speaker 1: not quite there yet. What sort of downside do you 306 00:15:46,360 --> 00:15:48,840 Speaker 1: think we need for to bring in those dip buyers 307 00:15:48,880 --> 00:15:51,160 Speaker 1: and will it require a catalyst? You know, what, will 308 00:15:51,200 --> 00:15:53,840 Speaker 1: it be a midnight tweet from a certain president to 309 00:15:53,880 --> 00:15:56,720 Speaker 1: do it? What evaluations? What, what would cause that dip 310 00:15:56,760 --> 00:15:59,160 Speaker 1: buying instinct to kick in? Well, well, I think that 311 00:15:59,440 --> 00:16:01,360 Speaker 1: I don't think we're going to get there on valuation. 312 00:16:01,440 --> 00:16:04,000 Speaker 1: Our valuation model has been pretty stretched and it's getting 313 00:16:04,000 --> 00:16:06,120 Speaker 1: a little bit better, but we're kind of nowhere near 314 00:16:06,200 --> 00:16:08,560 Speaker 1: cheap territory yet. So I think that's off the table 315 00:16:08,600 --> 00:16:11,400 Speaker 1: as the catalyst to get people back in. I do 316 00:16:11,520 --> 00:16:14,840 Speaker 1: think you have to look back at history to some extent, 317 00:16:15,440 --> 00:16:19,640 Speaker 1: and if you go back to we had these ferocious 318 00:16:19,720 --> 00:16:21,840 Speaker 1: rallies off the bottom, but they had these you know, 319 00:16:21,880 --> 00:16:24,680 Speaker 1: sort of different periods of consolidation that we're sparked by 320 00:16:24,720 --> 00:16:26,200 Speaker 1: different things, and a lot of them went down to 321 00:16:26,240 --> 00:16:29,240 Speaker 1: about ten And that seems to be the line in 322 00:16:29,280 --> 00:16:32,680 Speaker 1: the sand where within the context of recovery, the market says, Okay, 323 00:16:32,680 --> 00:16:35,440 Speaker 1: if we go any farther, we're pricing in a growth scare, 324 00:16:35,480 --> 00:16:38,640 Speaker 1: We're pricing in a really dire economic scenario. I think 325 00:16:38,640 --> 00:16:42,320 Speaker 1: you watched that ten percent markets around fifty this time around. 326 00:16:42,760 --> 00:16:46,160 Speaker 1: My sense is there investors will say, Okay, we're not 327 00:16:46,240 --> 00:16:48,440 Speaker 1: in the recession camp. This has probably gone too far, 328 00:16:48,480 --> 00:16:50,840 Speaker 1: and that's what where they'll step back in now. Hypothetically, 329 00:16:50,960 --> 00:16:53,000 Speaker 1: if the data deteriorates, you know, we're looking at the 330 00:16:53,000 --> 00:16:55,720 Speaker 1: I s M numbers, get some close to fifty that 331 00:16:55,920 --> 00:17:01,040 Speaker 1: you know lyne in the sand between contraction and expansion. Uh, 332 00:17:01,160 --> 00:17:03,920 Speaker 1: if you have a ten percent equity dip and a 333 00:17:04,000 --> 00:17:06,080 Speaker 1: sub fifty I s M, I mean, is is the 334 00:17:06,119 --> 00:17:09,560 Speaker 1: same whole true? And and maybe some other disturbing economic data. 335 00:17:09,680 --> 00:17:11,960 Speaker 1: I think if the ten percent doesn't hold and you 336 00:17:12,000 --> 00:17:15,480 Speaker 1: get deteriorating economic data in a significant way, that says, okay, 337 00:17:15,680 --> 00:17:18,120 Speaker 1: the recession issue was back on the table for this year. 338 00:17:18,440 --> 00:17:21,119 Speaker 1: You're looking at type decline. I mean, that's what we 339 00:17:21,240 --> 00:17:24,880 Speaker 1: basically saw happen on the December lows, and that's that's 340 00:17:24,880 --> 00:17:27,760 Speaker 1: pretty close to what your average recessionary drop is peaked 341 00:17:27,760 --> 00:17:30,119 Speaker 1: a trough. Is that what the bond market is pricing 342 00:17:30,160 --> 00:17:33,000 Speaker 1: in mil Brian, I mean the idea of low growth, 343 00:17:33,119 --> 00:17:36,320 Speaker 1: low inflation. Obviously the market is now looking for a 344 00:17:36,400 --> 00:17:39,000 Speaker 1: FED rate cut. Yeah, I mean I think that's going 345 00:17:39,080 --> 00:17:41,800 Speaker 1: to be the real big that that that's sort effectively 346 00:17:41,920 --> 00:17:45,840 Speaker 1: bond traders are sort of daring the Fed to do 347 00:17:46,119 --> 00:17:47,920 Speaker 1: a rate cut, And I mean, I think that if 348 00:17:47,920 --> 00:17:51,800 Speaker 1: the data comes in week, the Fed will respond. But 349 00:17:52,440 --> 00:17:55,160 Speaker 1: I don't think that the Fed really wants to sort 350 00:17:55,200 --> 00:17:58,679 Speaker 1: of let the market steer its direction, at least throughout 351 00:17:58,720 --> 00:18:01,639 Speaker 1: the rest of this year. I think seems like a 352 00:18:01,680 --> 00:18:05,400 Speaker 1: reasonable time when the Fed may start to see signs 353 00:18:05,480 --> 00:18:08,439 Speaker 1: of weakness and reason to sort of start start dropping 354 00:18:08,520 --> 00:18:11,639 Speaker 1: rates a little bit in hopes of this fabled soft 355 00:18:11,720 --> 00:18:15,760 Speaker 1: landing um. But I think they're really really going to 356 00:18:15,800 --> 00:18:17,520 Speaker 1: try to look through We sort of saw that most 357 00:18:17,560 --> 00:18:21,080 Speaker 1: recently with the sort of transitory comments on inflation. People 358 00:18:21,080 --> 00:18:23,879 Speaker 1: were expecting that the Fed was going to change its tune, 359 00:18:24,240 --> 00:18:28,080 Speaker 1: noticed that inflation was missing two percent constantly and acknowledge that. 360 00:18:28,160 --> 00:18:31,000 Speaker 1: But j Pollo did not want to go there. Now 361 00:18:31,080 --> 00:18:34,480 Speaker 1: another commun out out this week, Brian is Uh and 362 00:18:34,520 --> 00:18:37,360 Speaker 1: I think this stems from Bloomberg Television sent a bunch 363 00:18:37,400 --> 00:18:40,040 Speaker 1: of people out to PIMCO in southern California. I'm not 364 00:18:40,080 --> 00:18:42,879 Speaker 1: saying I'm jealous that, you know, some people got to 365 00:18:42,880 --> 00:18:44,960 Speaker 1: go to California. I'm not saying I'm not jealous either, 366 00:18:45,080 --> 00:18:47,080 Speaker 1: But but they came back with an interesting story, and 367 00:18:47,160 --> 00:18:50,199 Speaker 1: that is that Pimco has gotten pretty bearish on credit, 368 00:18:50,320 --> 00:18:53,920 Speaker 1: but walk us through they're thinking on why they're they're 369 00:18:53,960 --> 00:18:56,879 Speaker 1: sort of getting a little scared about the credit markets. Yeah, So, 370 00:18:56,920 --> 00:19:00,159 Speaker 1: I mean, I respect pimco uh and their investor is 371 00:19:00,160 --> 00:19:03,160 Speaker 1: a ton and I think they're right to point out that. 372 00:19:03,240 --> 00:19:05,159 Speaker 1: I think they said that the corporate credit was the 373 00:19:05,240 --> 00:19:08,119 Speaker 1: riskiest that they've ever seen or to some extent, and 374 00:19:08,160 --> 00:19:11,840 Speaker 1: that cells we're gonna have a bunch of losses when 375 00:19:11,880 --> 00:19:15,720 Speaker 1: the cycle turns, and that's true, but it's also not 376 00:19:15,840 --> 00:19:19,040 Speaker 1: exactly the most novel point of view that we've ever seen, right. 377 00:19:19,040 --> 00:19:21,639 Speaker 1: I mean, we know that triple b's now make up 378 00:19:21,760 --> 00:19:25,520 Speaker 1: three trillion dollars worth of the investment grade index. That's 379 00:19:25,520 --> 00:19:28,800 Speaker 1: a lot, and companies have gone down the credit scale 380 00:19:29,080 --> 00:19:31,800 Speaker 1: in order to you know, lock in you know a 381 00:19:31,840 --> 00:19:34,720 Speaker 1: lot of debt, but also you know expand, and that's 382 00:19:34,760 --> 00:19:37,080 Speaker 1: like one way they can do that. And Cellos are 383 00:19:37,119 --> 00:19:39,199 Speaker 1: two thirds of the market, so obviously they are going 384 00:19:39,240 --> 00:19:41,840 Speaker 1: to take the majority of the losses. So I mean, 385 00:19:42,040 --> 00:19:44,560 Speaker 1: I think that they are barish, but they're also sort 386 00:19:44,600 --> 00:19:47,760 Speaker 1: of just more broadly acknowledging that things are probably gonna 387 00:19:47,800 --> 00:19:50,840 Speaker 1: get tougher from here on out. We're a decade into 388 00:19:50,920 --> 00:19:54,639 Speaker 1: the expansion, and you know, everyone keeps saying we're in 389 00:19:54,680 --> 00:19:57,840 Speaker 1: the eighthitting or the night fitting or ex tratings or 390 00:19:57,880 --> 00:20:02,119 Speaker 1: whatever like. Ultimately, at some point they're gonna be right, 391 00:20:02,160 --> 00:20:03,679 Speaker 1: and they have got three to five year outlooks, so 392 00:20:03,720 --> 00:20:06,000 Speaker 1: they say, you know, the next three to five years, 393 00:20:06,080 --> 00:20:08,959 Speaker 1: we're probably gonna end the game, and uh, you know, 394 00:20:09,280 --> 00:20:11,760 Speaker 1: something's gonna turn and things are not going to be 395 00:20:11,840 --> 00:20:14,840 Speaker 1: so rosy for just plowing into whatever has the highest deal. 396 00:20:14,960 --> 00:20:16,520 Speaker 1: You know, it's funny. I feel like I've read about 397 00:20:16,600 --> 00:20:19,600 Speaker 1: ten different obituaries for the credit cycle over the last 398 00:20:19,680 --> 00:20:23,159 Speaker 1: five years, and recession is always two years away and 399 00:20:23,160 --> 00:20:26,760 Speaker 1: it hasn't happened. But Laurie, Uh, you know, obviously the thinking, 400 00:20:27,000 --> 00:20:29,280 Speaker 1: the traditional thinking is that the credit markets sort of 401 00:20:29,640 --> 00:20:33,040 Speaker 1: uh lead the equity markets to some degree. Um, I'm 402 00:20:33,040 --> 00:20:35,600 Speaker 1: curious if you buy that. And also if we are 403 00:20:35,720 --> 00:20:39,760 Speaker 1: in for a worsening in the credit markets. Um, you know, 404 00:20:39,760 --> 00:20:43,120 Speaker 1: obviously the last time that happened was a big deal, uh, 405 00:20:43,600 --> 00:20:47,640 Speaker 1: caused the Great Recession, caused you know this enormous bear 406 00:20:47,760 --> 00:20:50,280 Speaker 1: market in stocks, I mean focused on the mortgage market, 407 00:20:50,320 --> 00:20:54,600 Speaker 1: but is the equity market a little more insulated from 408 00:20:54,680 --> 00:20:57,120 Speaker 1: problems in the credit land than it was then? UM, 409 00:20:57,520 --> 00:20:59,719 Speaker 1: And you know what you're thinking, how how do you 410 00:21:00,080 --> 00:21:02,520 Speaker 1: sort of incorporate signals from the credit market into how 411 00:21:02,520 --> 00:21:04,760 Speaker 1: you're looking at stocks? So I would say that the 412 00:21:04,800 --> 00:21:07,520 Speaker 1: primary primary way we do it is we look at 413 00:21:07,520 --> 00:21:09,359 Speaker 1: the small cap trade and we look at high yield, 414 00:21:09,359 --> 00:21:11,240 Speaker 1: and what's the signal that we're getting from high yield? 415 00:21:11,280 --> 00:21:13,400 Speaker 1: And we've started to see spreads widen a little bit, 416 00:21:13,440 --> 00:21:15,400 Speaker 1: which is telling us some of this weakness and small 417 00:21:15,440 --> 00:21:17,600 Speaker 1: cap is justified. But at the same time, there's nothing 418 00:21:17,680 --> 00:21:20,720 Speaker 1: particularly scary there. I mean, we spend a ton of 419 00:21:20,760 --> 00:21:22,840 Speaker 1: time on this issue. Back in the fourth quarter when 420 00:21:23,280 --> 00:21:25,960 Speaker 1: UM for for lack of a better word, every multi 421 00:21:26,040 --> 00:21:29,040 Speaker 1: asset investor I talked to, was absolutely freaking out about 422 00:21:29,080 --> 00:21:31,600 Speaker 1: debt levels in corporate America. So we we did a 423 00:21:31,600 --> 00:21:33,240 Speaker 1: ton of work on this, and what we found is 424 00:21:33,240 --> 00:21:35,240 Speaker 1: that if you look at the S and P landscape, 425 00:21:35,760 --> 00:21:38,600 Speaker 1: things are pretty manageable. Things don't look that bad interest 426 00:21:38,640 --> 00:21:42,320 Speaker 1: expense relative to sales very carefully contained. There's been a 427 00:21:42,320 --> 00:21:44,919 Speaker 1: big rise in long term debt, short term debt, variable 428 00:21:45,000 --> 00:21:47,480 Speaker 1: rate debt, it's all very low. That's the scary stuff. 429 00:21:47,800 --> 00:21:49,760 Speaker 1: When you look in the smaller companies, things don't look 430 00:21:49,840 --> 00:21:52,280 Speaker 1: quite so good. Variable rate debt has been going up. 431 00:21:52,320 --> 00:21:54,120 Speaker 1: There are certain sectors where it's a little bit worse 432 00:21:54,160 --> 00:21:56,879 Speaker 1: than others. So I feel like there are pockets of 433 00:21:57,000 --> 00:21:59,800 Speaker 1: risk in the market, but it's not as widespread, it's 434 00:21:59,840 --> 00:22:01,760 Speaker 1: not as deep as it's been in the past. In 435 00:22:01,800 --> 00:22:03,520 Speaker 1: the beginning of the year, I remember a lot of 436 00:22:03,560 --> 00:22:09,160 Speaker 1: people suggesting or advising that companies start moving investors start 437 00:22:09,160 --> 00:22:12,000 Speaker 1: moving away from companies with higher debt levels because we 438 00:22:12,000 --> 00:22:14,360 Speaker 1: were going to see higher interest rates. But now if 439 00:22:14,359 --> 00:22:16,879 Speaker 1: that is off the table, can you kind of go 440 00:22:17,000 --> 00:22:19,439 Speaker 1: back to these riskier companies that HI have higher debt levels. 441 00:22:19,680 --> 00:22:21,840 Speaker 1: I think that you can, as long as you think 442 00:22:21,880 --> 00:22:24,440 Speaker 1: we're not headed into a recession eminently. I think as 443 00:22:24,440 --> 00:22:27,120 Speaker 1: soon as the recession chatter picks up again that you'll 444 00:22:27,119 --> 00:22:29,160 Speaker 1: start to see people put those trades that they put 445 00:22:29,160 --> 00:22:31,360 Speaker 1: on in the fourth quarter, they'll go right go right 446 00:22:31,359 --> 00:22:32,480 Speaker 1: back to them. But if you're kind of in this 447 00:22:32,560 --> 00:22:36,159 Speaker 1: goldilocks scenario or the sluggish growth environment, you're probably okay. 448 00:22:36,160 --> 00:22:37,840 Speaker 1: To look for bargains, and we did see a lot 449 00:22:37,840 --> 00:22:40,399 Speaker 1: of investors hunting around for bargains and and some of 450 00:22:40,400 --> 00:22:42,679 Speaker 1: those more highly leveraged areas. You know, we used to 451 00:22:42,680 --> 00:22:44,679 Speaker 1: hear a lot about this on consumer staples as a 452 00:22:44,720 --> 00:22:46,920 Speaker 1: reason not to buy the staples companies. But nobody talks 453 00:22:46,960 --> 00:22:49,119 Speaker 1: about it anymore, you know, Laurie. I also noticed you 454 00:22:49,160 --> 00:22:54,000 Speaker 1: had a government studies. Yes, so it's coming in handy 455 00:22:54,040 --> 00:22:56,600 Speaker 1: these days. I guess it is. It is more than 456 00:22:56,640 --> 00:22:58,960 Speaker 1: you probably thought it would. I never thought I'd actually 457 00:22:59,000 --> 00:23:03,560 Speaker 1: be putting my degree to here we go. So you know, 458 00:23:03,560 --> 00:23:05,960 Speaker 1: we're getting to that point where politics and markets are 459 00:23:05,960 --> 00:23:09,120 Speaker 1: are about or on a collision course again for next year. Uh, 460 00:23:09,280 --> 00:23:12,320 Speaker 1: walk us through how we should think about that, you know, um, 461 00:23:13,040 --> 00:23:16,680 Speaker 1: how how closely should we watch the poll numbers? Um, 462 00:23:17,560 --> 00:23:19,399 Speaker 1: that sort of thing. So I think you've got to 463 00:23:19,480 --> 00:23:21,480 Speaker 1: keep an eye on them. And I think, to be honest, 464 00:23:21,680 --> 00:23:24,880 Speaker 1: investors are really underestimating the amount of political risk that's 465 00:23:24,880 --> 00:23:26,680 Speaker 1: out there. I think we're all focused on the trade 466 00:23:26,680 --> 00:23:28,960 Speaker 1: war right now, but I think the next big political 467 00:23:29,000 --> 00:23:32,640 Speaker 1: issue that's coming back is election. And when you when 468 00:23:32,680 --> 00:23:34,240 Speaker 1: you go through when you think about how it can 469 00:23:34,320 --> 00:23:37,840 Speaker 1: impact markets, on an issue and an industry basis, it 470 00:23:37,920 --> 00:23:41,000 Speaker 1: gets pretty you know, frightening is not exactly the right word, 471 00:23:41,000 --> 00:23:44,040 Speaker 1: but it gets really concerning. UM. We did again a 472 00:23:44,040 --> 00:23:46,639 Speaker 1: couple of surveys. We talked to investors, we talked to 473 00:23:46,640 --> 00:23:49,199 Speaker 1: our analysts, and with our analysts we said, look at 474 00:23:49,240 --> 00:23:52,359 Speaker 1: your industry. Give us an issue, you know, think about 475 00:23:52,400 --> 00:23:54,800 Speaker 1: it from an issue perspective. Don't just tell me Republicans, 476 00:23:54,960 --> 00:23:57,040 Speaker 1: you know, are better for the marketing Democrats are bad. 477 00:23:57,040 --> 00:23:58,640 Speaker 1: We don't want to hear that, but you know, look 478 00:23:58,680 --> 00:24:01,200 Speaker 1: at your industry. Is there something that Democratic contenders are 479 00:24:01,200 --> 00:24:03,800 Speaker 1: talking about that could be bad for your stocks? And 480 00:24:03,880 --> 00:24:05,960 Speaker 1: we went through. We found a whole big list and 481 00:24:06,000 --> 00:24:08,199 Speaker 1: we mapped it out by sector and we found that 482 00:24:08,240 --> 00:24:12,359 Speaker 1: it was really you know, consumer staples, utilities, UM rates, 483 00:24:12,720 --> 00:24:15,560 Speaker 1: UM and industrials. Oddly enough, we're really the only areas 484 00:24:15,600 --> 00:24:19,520 Speaker 1: that didn't have some specific policy issue that the progressive 485 00:24:19,520 --> 00:24:22,680 Speaker 1: candidates on the Democrats, UM, you know, would would would hurt. 486 00:24:23,119 --> 00:24:25,879 Speaker 1: Is there any overarching concern about the tax rate that 487 00:24:25,920 --> 00:24:28,160 Speaker 1: these cliporate tax cuts we've saw in the last couple 488 00:24:28,200 --> 00:24:30,919 Speaker 1: of years? Will will you know? I had I had 489 00:24:30,960 --> 00:24:32,840 Speaker 1: a few analysts mentioned that when we did it in 490 00:24:32,840 --> 00:24:34,760 Speaker 1: the survey, but I'll tell you honestly, it does not 491 00:24:34,840 --> 00:24:38,080 Speaker 1: come up at all in conversations with investors. It's arguably 492 00:24:38,119 --> 00:24:40,119 Speaker 1: something we should be thinking about a little bit as 493 00:24:40,160 --> 00:24:42,439 Speaker 1: a risk, UM, but I think it's more issues like 494 00:24:42,480 --> 00:24:45,840 Speaker 1: Medicare for all, drug pricing, green no Deal um, tech 495 00:24:45,920 --> 00:24:48,720 Speaker 1: sector regulation where you know, we've seen Elizabeth Warren in 496 00:24:48,720 --> 00:24:52,880 Speaker 1: particular be very vocal breaks and and they're the market leader, 497 00:24:52,960 --> 00:24:55,240 Speaker 1: So that does get to be, you know, very concerning 498 00:24:55,440 --> 00:24:58,160 Speaker 1: with healthcare. Does this kind of become a binary trade? Well, 499 00:24:58,280 --> 00:25:00,680 Speaker 1: you know, it's it's interesting on healthcare, we actually think 500 00:25:00,760 --> 00:25:03,080 Speaker 1: that and tech have risked on both sides of the 501 00:25:03,080 --> 00:25:06,800 Speaker 1: political aisle. And you go all the way back to election, 502 00:25:06,800 --> 00:25:09,000 Speaker 1: Trump was talking about drug pricing and he started to 503 00:25:09,000 --> 00:25:10,720 Speaker 1: talk about it a little bit this year as well. 504 00:25:11,000 --> 00:25:12,639 Speaker 1: And if you go back to the mid term elections, 505 00:25:12,640 --> 00:25:15,680 Speaker 1: the Democrats are convinced that they did very well UM 506 00:25:15,720 --> 00:25:18,439 Speaker 1: and the House races in particular on the basis of 507 00:25:18,560 --> 00:25:22,399 Speaker 1: campaigning on healthcare. Republicans are aware of that, UM and 508 00:25:22,440 --> 00:25:24,600 Speaker 1: with the White House support, we actually think odds are 509 00:25:24,640 --> 00:25:27,320 Speaker 1: something does happen on healthcare regardless of how the election 510 00:25:27,400 --> 00:25:30,320 Speaker 1: comes out, just because both sides are very, very attuned 511 00:25:30,359 --> 00:25:32,480 Speaker 1: to it as an issue that their constituents care about. 512 00:25:33,000 --> 00:25:35,600 Speaker 1: Brand does anyone in the bondom market care about the elections? 513 00:25:35,640 --> 00:25:37,760 Speaker 1: I mean, clearly, no one's going to run on a 514 00:25:37,800 --> 00:25:41,840 Speaker 1: balanced budget, mom, assuming right, I mean, I guess MMT 515 00:25:42,080 --> 00:25:44,560 Speaker 1: sort of creeps into the conversation every now and then, 516 00:25:44,600 --> 00:25:47,560 Speaker 1: and the idea of just running persistent deficits and letting 517 00:25:47,600 --> 00:25:50,880 Speaker 1: fiscal spending uh carry the day. You know, that could 518 00:25:50,880 --> 00:25:53,919 Speaker 1: boost long term rates UM with the prospect of of 519 00:25:54,119 --> 00:25:56,960 Speaker 1: higher growth and also just sort of a bigger debt 520 00:25:56,960 --> 00:26:00,679 Speaker 1: load um. But specific policy proposals least sort of on 521 00:26:00,760 --> 00:26:03,320 Speaker 1: the you know, more macro side. I think it's a 522 00:26:03,320 --> 00:26:06,119 Speaker 1: little bit too soon to say on that really is 523 00:26:06,119 --> 00:26:08,679 Speaker 1: not that far away, scarily, I can't believe it, and 524 00:26:08,720 --> 00:26:11,040 Speaker 1: the debates are starting soon. I mean, I think that's 525 00:26:11,040 --> 00:26:14,000 Speaker 1: why equity investors really need to pay attention, because they 526 00:26:14,040 --> 00:26:15,680 Speaker 1: are going to get hit over the head with these 527 00:26:15,720 --> 00:26:18,920 Speaker 1: issues starting in a few weeks. With that said, though, Mike, 528 00:26:19,200 --> 00:26:21,920 Speaker 1: I believe it is that time. Yeah, it's my favorite time, 529 00:26:22,240 --> 00:26:25,720 Speaker 1: the week, our regular ritual. The craziest thing I ever 530 00:26:25,760 --> 00:26:30,720 Speaker 1: saw in markets parentheses this week, Sarah I'm going to 531 00:26:30,840 --> 00:26:32,960 Speaker 1: start with you, what do you get? Okay, So we 532 00:26:33,000 --> 00:26:35,680 Speaker 1: don't really usually venture into the commodities market this week, 533 00:26:35,760 --> 00:26:40,080 Speaker 1: but I thought something pretty interesting did happen. Um So, 534 00:26:40,119 --> 00:26:42,199 Speaker 1: one of our reporters did point out that if you 535 00:26:42,280 --> 00:26:45,840 Speaker 1: look at the ratio of soybean futures to corn, it 536 00:26:45,960 --> 00:26:48,879 Speaker 1: is now at the lowest in six years. No, but 537 00:26:48,920 --> 00:26:51,399 Speaker 1: there's there's a reason. There's a reason for it, because 538 00:26:51,480 --> 00:26:55,520 Speaker 1: that sounds more like a recipe problem. Right, Well, there's 539 00:26:55,520 --> 00:26:57,280 Speaker 1: going to be good news that will come out of it. 540 00:26:57,359 --> 00:27:00,960 Speaker 1: But the idea is that when you land and an acre, 541 00:27:01,359 --> 00:27:05,840 Speaker 1: you get more corn soybeans poor acres, so the ratio 542 00:27:05,920 --> 00:27:08,520 Speaker 1: has to be higher an order for farmers to say 543 00:27:08,520 --> 00:27:12,000 Speaker 1: it's worth it to plant soybeans over corn. So because 544 00:27:12,040 --> 00:27:14,119 Speaker 1: that has now dropped so low, the idea is we 545 00:27:14,160 --> 00:27:20,240 Speaker 1: could get more corn this summer. Excited, wonderful, you're really 546 00:27:20,359 --> 00:27:22,560 Speaker 1: enthused right now, Brian. Yeah, Well in front of it 547 00:27:22,760 --> 00:27:26,920 Speaker 1: was I love my corn, Larry, did they warny about 548 00:27:26,920 --> 00:27:29,359 Speaker 1: our gimmick? Here the craziest thing we've ever seen in markets? 549 00:27:29,400 --> 00:27:31,360 Speaker 1: I am actually a listener of the podcast, so I 550 00:27:31,400 --> 00:27:35,680 Speaker 1: was very well prepared for that. Fantastic all right, let's 551 00:27:35,720 --> 00:27:37,800 Speaker 1: what do you got? Okay, So I actually I've been 552 00:27:37,840 --> 00:27:40,960 Speaker 1: debating between two, and I think the one I'll start with. 553 00:27:41,000 --> 00:27:43,640 Speaker 1: I'll just keep it in the political realm given our 554 00:27:43,640 --> 00:27:46,760 Speaker 1: conversation earlier. But what really jumped out at me, and 555 00:27:46,800 --> 00:27:48,280 Speaker 1: I think this is one of those things I'll just 556 00:27:48,320 --> 00:27:50,840 Speaker 1: sort of never forget, is watching Bob Muller do his 557 00:27:50,880 --> 00:27:54,720 Speaker 1: press conference at the Department of Justice UM, insisting that 558 00:27:54,840 --> 00:27:58,000 Speaker 1: his report spoke for itself. And the reason I bring 559 00:27:58,119 --> 00:28:01,640 Speaker 1: this up is it just to me hitomized how odd 560 00:28:02,440 --> 00:28:06,560 Speaker 1: things have been as an equity strategist since I have 561 00:28:06,680 --> 00:28:09,480 Speaker 1: talked about politics more than I was ever told that 562 00:28:09,520 --> 00:28:12,199 Speaker 1: I should. It used to be that we were, you know, 563 00:28:12,200 --> 00:28:14,120 Speaker 1: we were supposed to stay out of the political realm. 564 00:28:14,160 --> 00:28:16,600 Speaker 1: That was too controversial. We cannot get out of meetings 565 00:28:16,640 --> 00:28:20,360 Speaker 1: this year UM without talking about politics. I purposefully try 566 00:28:20,400 --> 00:28:22,080 Speaker 1: not to bring it up a lot of the time. 567 00:28:22,720 --> 00:28:25,080 Speaker 1: But but what I think was interesting to me is 568 00:28:25,119 --> 00:28:27,600 Speaker 1: that it's something that's really not on investors radars, yet 569 00:28:27,640 --> 00:28:29,800 Speaker 1: it was right there, front and center on the Bloomberg 570 00:28:30,080 --> 00:28:32,080 Speaker 1: And I do think it has implications if you if 571 00:28:32,119 --> 00:28:34,600 Speaker 1: you talk to most equity investors, they'll tell you, we 572 00:28:34,640 --> 00:28:37,000 Speaker 1: don't think impeachment's going to happen. We're ignoring this. We 573 00:28:37,080 --> 00:28:39,240 Speaker 1: did a survey back in September and we asked people 574 00:28:39,280 --> 00:28:42,280 Speaker 1: how markets would react if Trump got impeached but not convicted, 575 00:28:42,560 --> 00:28:45,120 Speaker 1: and people were completely split. They had no idea how 576 00:28:45,160 --> 00:28:46,960 Speaker 1: to trade it. They we asked them, what would you 577 00:28:46,960 --> 00:28:48,440 Speaker 1: buy and what would you sell? They had no idea 578 00:28:48,520 --> 00:28:50,840 Speaker 1: what to buy or sell. So they're just totally ignoring 579 00:28:50,840 --> 00:28:52,360 Speaker 1: it because they don't know what to do and they 580 00:28:52,400 --> 00:28:55,000 Speaker 1: don't think it's likely to happen. But I do think 581 00:28:55,040 --> 00:28:57,960 Speaker 1: the fact that you know, we saw Muller insists that 582 00:28:58,000 --> 00:29:00,920 Speaker 1: this report speaks for itself. Well, it's seems like it doesn't. 583 00:29:01,280 --> 00:29:03,320 Speaker 1: This issue is not going away, and I do think 584 00:29:03,320 --> 00:29:07,360 Speaker 1: we have to consider how that impacts the elections, where 585 00:29:07,560 --> 00:29:09,720 Speaker 1: the vast majority of people I talked to think that 586 00:29:09,720 --> 00:29:11,720 Speaker 1: Trump is going to win. I personally think it's going 587 00:29:11,800 --> 00:29:15,240 Speaker 1: to be close. Um, And I think we're just setting 588 00:29:15,320 --> 00:29:17,520 Speaker 1: up for another year where we're going to be paying 589 00:29:17,520 --> 00:29:20,320 Speaker 1: attention to things like this. We're going to be spending 590 00:29:20,400 --> 00:29:23,720 Speaker 1: much more time than historically we would on on an election, right, 591 00:29:23,720 --> 00:29:25,720 Speaker 1: and no one will trust any of the polls at all. 592 00:29:25,840 --> 00:29:27,680 Speaker 1: It's got to be about a thirty point spread, I 593 00:29:27,720 --> 00:29:29,959 Speaker 1: think for people to trust the polls. I was. I 594 00:29:30,000 --> 00:29:32,040 Speaker 1: was writing a note at eleven o'clock on the last 595 00:29:32,120 --> 00:29:34,560 Speaker 1: presidential election at night. I had to redo it. Then 596 00:29:34,720 --> 00:29:37,560 Speaker 1: in the night I had to redo it. Um. You know, 597 00:29:37,560 --> 00:29:39,040 Speaker 1: I'm sure I'm going to be up all night when 598 00:29:39,040 --> 00:29:41,880 Speaker 1: this one comes around as well. All right, Bran Chapada, 599 00:29:42,040 --> 00:29:44,600 Speaker 1: I have a strong faith in you. As far as 600 00:29:44,600 --> 00:29:46,880 Speaker 1: picking out crazy things in markets. You know, I didn't 601 00:29:46,960 --> 00:29:52,400 Speaker 1: plan this, But I am also going with the commodity space. 602 00:29:51,320 --> 00:29:55,800 Speaker 1: Eight years ago I started at Bloomberg as an agricultural 603 00:29:56,040 --> 00:30:00,400 Speaker 1: commodities reporters. So going back to going back to my roots, UM, 604 00:30:00,440 --> 00:30:05,400 Speaker 1: looking at coffee pine intended, did you ever write I 605 00:30:05,400 --> 00:30:07,520 Speaker 1: remember about corn, and I rede about soybeans. I not 606 00:30:07,560 --> 00:30:11,240 Speaker 1: write about the fabled ratio that Sarah brought up. No, 607 00:30:11,400 --> 00:30:15,480 Speaker 1: but UM coffee futures earlier this month, UM set the load, 608 00:30:15,520 --> 00:30:17,680 Speaker 1: depending on which contract you look at, was either the 609 00:30:17,680 --> 00:30:22,320 Speaker 1: lowest in nine years or in uh fourteen years. But 610 00:30:22,480 --> 00:30:26,120 Speaker 1: someone did not tell that to Clatch Coffee Roasters in 611 00:30:26,200 --> 00:30:30,640 Speaker 1: San Francisco, because they were offering up cups of coffee 612 00:30:31,160 --> 00:30:36,520 Speaker 1: for seventy five dollars each. It's it's insane. Uh. They 613 00:30:36,600 --> 00:30:41,520 Speaker 1: just happened to buy this very select, very premium roast 614 00:30:41,840 --> 00:30:43,960 Speaker 1: that only you know, there were only you know, a 615 00:30:44,080 --> 00:30:48,560 Speaker 1: small small batch, Whereas throughout the rest of the world. Uh, 616 00:30:48,600 --> 00:30:52,360 Speaker 1: there's just such an inundation of supply in coffee that 617 00:30:52,480 --> 00:30:55,440 Speaker 1: these futures were taking a tumble. So uh, you know, 618 00:30:55,480 --> 00:30:58,640 Speaker 1: in San Francisco they are immune to the to the 619 00:30:58,640 --> 00:31:01,080 Speaker 1: sort of cheapening of of coffee. I want to meet 620 00:31:01,120 --> 00:31:03,720 Speaker 1: someone that brought a seventy In fact, I might even 621 00:31:03,720 --> 00:31:05,440 Speaker 1: buy that cup of coffee just to see if it's 622 00:31:05,440 --> 00:31:09,600 Speaker 1: just that. It's the Oscars for coffee, they told the 623 00:31:10,480 --> 00:31:13,560 Speaker 1: Sacramento be So it's pretty good. There this good competition 624 00:31:13,600 --> 00:31:16,840 Speaker 1: for the craziest thing we've ever seen in markets this week, Sarah, 625 00:31:16,840 --> 00:31:19,480 Speaker 1: I'll tell you mine. You set the precedent by going 626 00:31:19,520 --> 00:31:22,400 Speaker 1: into the art market a few weeks ago, which I 627 00:31:22,440 --> 00:31:25,200 Speaker 1: think is a valid it's a tradeable asset class. It's 628 00:31:25,360 --> 00:31:29,040 Speaker 1: quickly becoming my favorite market as far as crazy things go. Uh. 629 00:31:29,080 --> 00:31:30,480 Speaker 1: And I'll tell you about the story the New York 630 00:31:30,520 --> 00:31:33,560 Speaker 1: Times had this week. It's about this artist named Peter 631 00:31:33,720 --> 00:31:37,719 Speaker 1: Max who was very popular in the hippie air and lately, 632 00:31:38,120 --> 00:31:40,920 Speaker 1: uh in recent years, they've made a business out of 633 00:31:41,080 --> 00:31:45,480 Speaker 1: auctioning off his artwork on cruise ships. Um, there's galleries 634 00:31:45,480 --> 00:31:48,280 Speaker 1: on cruise ships and that The idea is basically, you're 635 00:31:48,360 --> 00:31:52,280 Speaker 1: on a cruise, you're having a good time. You may 636 00:31:52,280 --> 00:31:55,480 Speaker 1: be having a few cocktails. Maybe don't have the WiFi 637 00:31:55,600 --> 00:31:58,160 Speaker 1: to check on the prices of the of what this 638 00:31:58,200 --> 00:32:00,800 Speaker 1: guy's are typically sells for. So next thing you know, 639 00:32:00,800 --> 00:32:02,360 Speaker 1: you're off the cruise and you're like, wait, I paid 640 00:32:02,360 --> 00:32:04,600 Speaker 1: how much? How much for what now? So they jack 641 00:32:04,680 --> 00:32:06,680 Speaker 1: up the prices on the cruise ship. Well yeah, yeah, 642 00:32:06,800 --> 00:32:09,800 Speaker 1: apparently that's that's what the allegation in the which makes 643 00:32:09,880 --> 00:32:12,120 Speaker 1: last sense glory. Imagine if they only sold stocks on 644 00:32:12,160 --> 00:32:18,440 Speaker 1: cruise ships and liked in the world, I'll pay a 645 00:32:18,480 --> 00:32:21,800 Speaker 1: thousand of share. Now. If that's not crazy enough, it 646 00:32:21,800 --> 00:32:25,920 Speaker 1: gets even crazier. Now, poor Peter Max is getting older, 647 00:32:25,920 --> 00:32:28,719 Speaker 1: he's suffering from dementia. It's not clear that he can 648 00:32:28,800 --> 00:32:33,040 Speaker 1: even paint anymore. Yet they have the studio with quote 649 00:32:33,120 --> 00:32:37,200 Speaker 1: unquote assistant artists who basically are making paintings in the 650 00:32:37,280 --> 00:32:40,600 Speaker 1: style of Peter Max. And then he comes in like 651 00:32:40,760 --> 00:32:42,479 Speaker 1: every now and then and just signs his name to 652 00:32:42,520 --> 00:32:44,920 Speaker 1: all of them, and then they sent him off to 653 00:32:44,920 --> 00:32:50,600 Speaker 1: the cruise ship where they're selling so allegedly at least 654 00:32:50,600 --> 00:32:52,480 Speaker 1: not all of them are him. I mean the implication 655 00:32:52,520 --> 00:32:55,959 Speaker 1: of the stories that none of them are his basically, uh, 656 00:32:56,040 --> 00:33:00,560 Speaker 1: nothing about that's good by say lose. But but the 657 00:33:01,000 --> 00:33:03,240 Speaker 1: the the art markets so crazy that I'm wondering if 658 00:33:03,240 --> 00:33:04,920 Speaker 1: this will just drive prices up there, like, oh, I 659 00:33:04,960 --> 00:33:07,080 Speaker 1: got one of the fake Peter max Is that your 660 00:33:07,120 --> 00:33:09,600 Speaker 1: time's heard about. So it's pretty crazy. That's the craziest 661 00:33:09,640 --> 00:33:11,800 Speaker 1: thing I've I've ever seen markets that might That's got 662 00:33:11,800 --> 00:33:13,560 Speaker 1: to be all your market talk we can do for 663 00:33:13,640 --> 00:33:16,000 Speaker 1: this year. I don't know. I wouldn't be surprised if 664 00:33:16,000 --> 00:33:18,440 Speaker 1: you can come up with something new. Um. But with 665 00:33:18,480 --> 00:33:21,400 Speaker 1: that said, Brian Chapada, Loria Calvacina, thank you so much 666 00:33:21,400 --> 00:33:28,680 Speaker 1: for joining us today. What goes up? We'll be back 667 00:33:28,840 --> 00:33:31,080 Speaker 1: next week. Until then, you can find us on the 668 00:33:31,080 --> 00:33:35,320 Speaker 1: Bloomberg Terminal website and app or wherever you get your podcasts. 669 00:33:35,600 --> 00:33:37,160 Speaker 1: We love it if you took the time to rate 670 00:33:37,200 --> 00:33:40,160 Speaker 1: interview the show so more listeners can find us. And 671 00:33:40,400 --> 00:33:43,120 Speaker 1: you can find us on Twitter follow me at at 672 00:33:43,120 --> 00:33:46,840 Speaker 1: Sarah Ponzack, Mike is at reg Anonymous, Our guest Lori 673 00:33:46,960 --> 00:33:51,160 Speaker 1: Calvacina is at Lori Calvacina, and Brian Chapatta is at 674 00:33:51,320 --> 00:33:54,160 Speaker 1: b Chapada. What Goes Up is produced by Top for 675 00:33:54,240 --> 00:33:58,320 Speaker 1: Foreheads ahead of Bloomberg. Podcast is frincesca Levie. Thanks for listening, 676 00:33:58,400 --> 00:34:04,720 Speaker 1: See you next time. Don't just st