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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays

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Speaker 2: at seven am Eastern on applecar Player, Android Auto with

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Speaker 2: the Bloomberg Business App. Listen on demand wherever you get

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Speaker 2: your podcasts, or watch us live on YouTube.

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Speaker 3: Joining us now.

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Speaker 4: From Morgan Stanley Mike Wilson, their CEO and chief US

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Speaker 4: equity strategist, thrilled that he will be with us for

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Speaker 4: this extensive half hour, and say good morning to Global

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Speaker 4: Wall Street. Mike Wilson, I'm going to do this in

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Speaker 4: a classy way and I'm not going to mince words

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Speaker 4: about it.

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Speaker 3: I'm death on.

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Speaker 4: Fan distribution analysis where you So I've talked to Dominic

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Speaker 4: Constant and Credit Sweee and Amozoa about this. You set

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Speaker 4: up a single point now and you do a set

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Speaker 4: of what ifs three years out, five years obtained years,

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Speaker 4: and you come up with a pretty little fan of

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Speaker 4: what ifs. I don't see that in Mike Wilson research.

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Speaker 4: I see guestimates, the rigor of an Excel spreadsheet. I

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Speaker 4: see single points, scattered dot charts. Can fam distributions like

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Speaker 4: one of your competitors came up with this week to

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Speaker 4: give us a three percent SPX. Can fan distributions work.

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Speaker 3: Well?

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Speaker 5: I think it depends on how you utilize them. I

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Speaker 5: mean we we do a bullbear based case. We've done

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Speaker 5: that for you know, the duration of as long as

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Speaker 5: we've had this job, and I think every investor does that.

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Speaker 5: It's called a risk reward. It's what's my upside, what's

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Speaker 5: my downside? And then you basically skew your you know,

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Speaker 5: your positioning based on whether you think the downside or

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Speaker 5: upside case is more likely. Whether we're talking about a

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Speaker 5: single stock or the S and P five hundred, So

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Speaker 5: it's no different.

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Speaker 6: I don't think that's a unique approach.

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Speaker 5: I think that's the way most investors think about how

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Speaker 5: to put money to work, and so I think I

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Speaker 5: think it works.

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Speaker 6: But I mean doesn't mean you're going to be right.

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Speaker 6: That's the That's the thing.

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Speaker 5: Like like do you bet on the bull case or

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Speaker 5: you've been on the barcase at any given time?

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Speaker 6: Depends on how they go out. Is it play out

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Speaker 6: the way you think it plays out?

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Speaker 4: Paul, you live this it credits suite where Dominique was

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Speaker 4: sitting there trying to do extrapolations in future forecasts of

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Speaker 4: interest rates, and he and Irid Jersey have these wispy

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Speaker 4: little charts that they.

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Speaker 3: Enjoyed being wrong on for over a decade.

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Speaker 7: Exactly right. And so, Mike, you know, one of the

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Speaker 7: things I think a lot of investors are thinking about

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Speaker 7: here is we think about it kind of what's the

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Speaker 7: next leg to this market in any direction? Is what's

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Speaker 7: going to lead us? There is you know, kind of

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Speaker 7: for most of our listeners and viewers, technology has been

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Speaker 7: the sector that's led this market for you know, positive

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Speaker 7: or negative. How do you think about technology and the

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Speaker 7: tech sector? And I don't know if that that's just

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Speaker 7: AI or broader in terms of a leadership position for

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Speaker 7: this market.

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Speaker 5: Well, I think that's a little bit of of a

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Speaker 5: mistake to say it's just been tech, because the reality

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Speaker 5: is that if you look at the technology sector in

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Speaker 5: an equal weight basis, or just look at the average

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Speaker 5: technology stock, it's actually underperformed the S and P five hundred,

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Speaker 5: which really worked in the last i'd.

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Speaker 6: Say two years and really the last ten years.

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Speaker 5: Is high quality, large cap stocks that can operate in

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Speaker 5: the environment that we're been given and the environment we've

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Speaker 5: described this very clearly, which is we're in a situation

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Speaker 5: where you're in a fiscal dominance where the government is

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Speaker 5: just getting bigger and bigger every year, and in doing so,

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Speaker 5: they're essentially crowding out a good chunk of the private economy.

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Speaker 5: And so who benefits in the world that we live

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Speaker 5: in Large cap companies with scale, who can operate in

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Speaker 5: this environment, and that's what's working.

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Speaker 6: So it's not just tech companies.

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Speaker 5: I mean, it's consumer discretionary companies, it's healthcare companies, it's

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Speaker 5: even some energy companies. Okay, Like, if you have scale

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Speaker 5: and you're operating well, that's what's driving the index Hired,

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Speaker 5: that's what has been driving the index higher. That's starting

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Speaker 5: to change a little bit here recently with the mag

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Speaker 5: seven underperforming since July and there's a bit of a

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Speaker 5: broadening out going on. But the broadening out is still

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Speaker 5: happening at the kind of quality level, meaning the market

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Speaker 5: still doesn't really want to go down the quality curve

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Speaker 5: or two companies that have bad balance sheets, etc. They're

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Speaker 5: still they're just going into different high quality stocks across

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Speaker 5: the complex.

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Speaker 7: Mike, we're kind of just starting to get into the

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Speaker 7: teeth of this earning season. We've had some really good

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Speaker 7: numbers coming out of global wall streets so far. What

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Speaker 7: do you think the market needs to see out of

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Speaker 7: corporate America over the next couple of weeks in terms.

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Speaker 5: Of earnings, Well, you're right, I mean, like as usual,

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Speaker 5: companies have managed the numbers lower going into the quarter.

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Speaker 6: That's not unusual.

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Speaker 5: This quarter was a little bit more negative in terms

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Speaker 5: of the revision. So that the bar has been lowered,

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Speaker 5: they're going to jump over the bar and with the market,

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Speaker 5: like what investors are going to what they're going to

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Speaker 5: buy or companies that not only beat the lower bar,

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Speaker 5: but then give you some confidence that there's actually some

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Speaker 5: acceleration coming. The thing that's been missing in the last

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Speaker 5: three or four quarters is we don't have any broad

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Speaker 5: acceleration and order growth or or you know, where's the

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Speaker 5: exogenous positive gross shock going to come that's going to

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Speaker 5: ride you know, lift all rising boats. And so that's

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Speaker 5: why it's become very idiosyncratic, right that there's a lot

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Speaker 5: of winners and there's a lot of losers right now,

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Speaker 5: and if there's share gains going on, and those are

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Speaker 5: the things that investors are keying off of. Who's operating

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Speaker 5: well in this environment? And I think that's going to

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Speaker 5: continue to be the game it's played.

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Speaker 4: I mean, I mean, you know, I look at Mike Wilson,

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Speaker 4: like in video you got Joe Moore, Joseph Moore covering.

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Speaker 4: I know you guys are not speaking terms, but when

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Speaker 4: you listen to a guy like Joseph Moore on Nvidia,

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Speaker 4: you're more than Stantley. How far out is your terminal

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Speaker 4: value on megs seven and on the rocket stock?

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Speaker 3: In Vidia?

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Speaker 4: Do you have to justify its existence by going out

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Speaker 4: not three years but seven? Or dare I say a decade?

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Speaker 6: Actually, Joe and I had dinner last night with some clients,

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Speaker 6: so we are speaking.

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Speaker 4: Okay, Well, tell us about the dinner. Stop stop, this

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Speaker 4: is too much. Tell us about the dinner. Mike will

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Speaker 4: soon give.

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Speaker 6: Us something very enjoyable.

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Speaker 5: It's a very enjoyable dinner with about twenty clients. It's

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Speaker 5: excellent food and great conversation. But Joe, I mean, look,

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Speaker 5: Joe has had the right view. He's been very bullish

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Speaker 5: on the AI winners, and he hasn't been very bullish

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Speaker 5: on the broader semi conductor complex.

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Speaker 6: Right, and this this is a perfect.

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Speaker 5: Microcosm what we're just talking about. Even within semiconductors. Okay,

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Speaker 5: you have the big winners, which everybody knows, and then

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Speaker 5: you have a bunch of companies that really just aren't

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Speaker 5: seeing any acceleration in their business because the global economy

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Speaker 5: is kind of and that's what we got. And so

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Speaker 5: in the case of a video, I mean, Joe's had

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Speaker 5: a great call. I mean, he's not looking seven years out,

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Speaker 5: because it's silly to try and predict that, but he

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Speaker 5: is looking out probably several years. We talked about that

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Speaker 5: last night, which is there's a lot of visibility for

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Speaker 5: twenty five and then twenty six is when the visibility

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Speaker 5: starts to come down. So at the stock we'll start

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Speaker 5: to discount that at some point. Right now, you know,

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Speaker 5: the momentum is quite good.

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Speaker 4: I mean, Mike Wilson, I got to ask this question.

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Speaker 4: We got to go to break and we're ready to

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Speaker 4: come back with mister Wilson Teams two. Mike Wilson, when

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Speaker 4: you heard that James Gorman was going to Disney you know,

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Speaker 4: were you like, you know, like the football player leaving

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Speaker 4: the field, We're going to Disneyland. I mean, what were

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Speaker 4: your thoughts when your fearless leader who changed your company

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Speaker 4: announced he's going to wander over and help mister Eiger

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Speaker 4: at Disney.

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Speaker 5: Well that was a while ago, and he's now the

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Speaker 5: chairman of the board. It doesn't surprise me at all, James.

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Speaker 5: It's really really good at this, you know, managing companies.

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Speaker 5: He did a great job here. I wish him the

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Speaker 5: best and I think it's exciting for him. So it's

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Speaker 5: the next great chapter for him.

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Speaker 4: Mike Wilson, Morgan Stanley with us. Mike, the clearest memories

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Speaker 4: of the right of passage of Ready Graham Dodd where

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Speaker 4: they started with railroad stocks in the nineteen thirties. And

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Speaker 4: the one thing that has not changed from Graham, Dodd

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Speaker 4: and Coddle is ratio analysis. So whether it's pe P,

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Speaker 4: d ebadah P to this P this, the answer is

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Speaker 4: there's movement of the numerator and movement of the denominator.

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Speaker 4: Let us begin the discussion. Mike Wilson, is the market rich?

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Speaker 4: Is the market overpriced?

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Speaker 5: Well, that's an easy question and it's definitely rich. The

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Speaker 5: better question is isn't overpriced? And that is in the

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Speaker 5: eye of the beholder.

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Speaker 6: I mean, who am I to say that it's overpriced?

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Speaker 5: If something happens in the future that we don't expect, however,

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Speaker 5: your odds of success. And here's one thing about valuation,

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Speaker 5: tom As you well know, valuation in the short term

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Speaker 5: is useless, okay, but valuation in the long term, meaning

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Speaker 5: seven plus years, is perfect.

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Speaker 6: So it's pretty easy to sit.

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Speaker 5: Back and say that stocks are overpriced and rich and

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Speaker 5: your expected returns over seven to ten year period are

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Speaker 5: probably pretty modest, but.

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Speaker 6: That doesn't mean you shouldn't be invested.

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Speaker 5: And there are many stocks within the stock market that

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Speaker 5: are not expensive. So you know, it's like I said,

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Speaker 5: it's a market of stocks, not a stock market. And

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Speaker 5: that's the way we've been approaching it for the last year.

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Speaker 5: As you know, we've been less focused on the index

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Speaker 5: level and much more focused on trying to be in

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Speaker 5: the right places and try to help people outperform the index,

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Speaker 5: which is really our job.

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Speaker 7: And Mike, you recently upgraded the financials and we saw

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Speaker 7: some good earnings just a few days ago from some

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Speaker 7: of the big financial players. What's the call there on

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Speaker 7: financials these days?

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Speaker 6: Well, that was definitely part of it.

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Speaker 5: So, you know, we noticed that going into earning season,

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Speaker 5: expectations had come down a lot of the bigger institutions

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Speaker 5: had lowered expectations.

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Speaker 6: So it was an easy bar to jump over, easier.

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Speaker 5: Than others even and you know, with the bull steepener

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Speaker 5: just going on in rates since the labor market came out,

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Speaker 5: that's actually quite positive for big banks, and so just

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Speaker 5: that was an easy call in many ways, it's worked

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Speaker 5: out so far, knock on wood. We do think there's

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Speaker 5: follow through because from our data it shows anyways that

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Speaker 5: most institutional investors are still underweight to sector, and I

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Speaker 5: think so financials, at least large cap quality financials look

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Speaker 5: to be a good place to be.

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Speaker 6: Still.

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Speaker 7: You may have noticed we've got an election coming up

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Speaker 7: in two weeks. When you talk to your clients, how

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Speaker 7: do you kind of frame that in in the short

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Speaker 7: term here and maybe even intermediate term.

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Speaker 5: Yeah, I mean the election has definitely taken a lot

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Speaker 5: of the era out of the room, as it usually

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Speaker 5: does at this time of the contest. It's you know,

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Speaker 5: it's very closely measured by the polls, not as closely

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Speaker 5: measured by the bending sites. As you know, it's sort

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Speaker 5: of sixty sixty five percent Trump now, and the market

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Speaker 5: has kind of taken notice to that.

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Speaker 6: So what I would say is that the market has

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Speaker 6: definitely moved.

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Speaker 5: Into sort of a Trump victory, if not a Republican

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Speaker 5: sweep victory, and the stocks and areas of the market

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Speaker 5: that would do better, and financials is part of that,

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Speaker 5: by the way, under a Trump win has started to perform.

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Speaker 6: And so I think the setup now is.

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Speaker 5: Such that if the market plays out, or if the

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Speaker 5: election plays out the way the market's expecting, there's probably

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Speaker 5: limited upside in those areas that will do well under

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Speaker 5: a Trump victory. And I think the surprise would be

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Speaker 5: as the Paris wins and some of these trades are

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Speaker 5: going to have to unwind. So this is really front

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Speaker 5: and center right now for the next two to three weeks.

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Speaker 5: I think this is probably fifty to six percent of

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Speaker 5: the conversations we have. People are trying to just manage this,

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Speaker 5: and then once the election's over, I think then the

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Speaker 5: market will look forward to, Okay, what should I be

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Speaker 5: owning now now that this event is behind us into

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Speaker 5: twenty twenty five.

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Speaker 4: Mike Wilson, the heart of the matter, which is you

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Speaker 4: were cautious on the market while we had a leg

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Speaker 4: up in this two year whatever it is bullmarket. But

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Speaker 4: the great Mike Wilson reality is you were invested. I

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Speaker 4: didn't see Mike Wilson timing the market in this bull market.

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Speaker 4: Forget about shorts. I mean, trust me, folks, I've been

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Speaker 4: short and wrong. I've enjoyed that feeling. Good morning, Jim Chanos,

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Speaker 4: the giant of all this. But Mike Wilson on market timing.

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Speaker 4: If one thing we've seen here, Mike, it's just a

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Speaker 4: brutal exercise, isn't it.

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Speaker 5: Oh yeah, there's you know, there's a whole graveyard of

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Speaker 5: people of market timers. You know, we we do it

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Speaker 5: as part of our job.

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Speaker 6: We have to.

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Speaker 5: We asked, we're asked by clients that kind of you know,

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Speaker 5: whether it's the S and P five hundred or or

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Speaker 5: sectors or stocks. I mean, that's our job, and that's

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Speaker 5: it's most you know, asset manager's job is to try

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Speaker 5: and time when to buy certain stocks or do certain

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Speaker 5: things with their investments. And I mean, look, sometimes we

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Speaker 5: get to right, sometimes we get it wrong. I would

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Speaker 5: say we had a stretch where I felt like we

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Speaker 5: got everything right, and of course that never lasts. The

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Speaker 5: good news about investing is you can always change your mind,

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Speaker 5: which we've done, and we've you know, raised our targets,

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Speaker 5: and we've changed our strategy to to deal with what

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Speaker 5: the market's giving us. And that's really the game is

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Speaker 5: just take what the market gives you. Don't fight what

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Speaker 5: the market's telling you. That's the best analyst in the

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Speaker 5: world is what the market internals are saying. We use

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Speaker 5: it as part of our process, actually, and I think

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Speaker 5: that's that's the best way to be. Just be humble

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Speaker 5: about it, and and you know, don't don't be afraid

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Speaker 5: to say, hey, we're wrong. I mean, like I think

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Speaker 5: some of you are expected to be right all the

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Speaker 5: time and nobody is. And being wrong is not a sin.

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Speaker 5: It's just you know, staying on the wrong side of

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Speaker 5: things for too long as it is a problem.

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Speaker 3: But Paul, the heart of this is Wilson's playing.

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Speaker 4: He's participating in the market with Gina mar and Adams

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Speaker 4: and Brian Belski coming up in all these people that

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Speaker 4: are going to go to cash, I mean, come on,

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Speaker 4: in this.

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Speaker 3: Bull market, they've been wiped out, yeah.

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Speaker 7: I absolutely, And don't try to time the markets. What

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Speaker 7: we've heard from the pros, including Mike Mike Wilson, Mike,

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Speaker 7: as we think about, you know, going into twenty twenty

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Speaker 7: five should we be focusing I mean, what's going to

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Speaker 7: drive this market? Is it going to be the fed

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Speaker 7: in the parlor game to Tom hates the play, or

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Speaker 7: is it going to be good old fundamental earnings and

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Speaker 7: fundamentals and that kind of thing.

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Speaker 6: Well, it's all the above.

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Speaker 5: But I think the thing that we're going to focus,

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Speaker 5: that we're focused on right now anyways, is Look, we've

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Speaker 5: been in this world of fiscal dominance for a while.

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Speaker 5: We've gotten that right from twenty twenty one. We traded

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Speaker 5: it really well at the beginning. We didn't trade it

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Speaker 5: well so so to speak, in twenty two, twenty three,

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Speaker 5: or in twenty three in particular and even into this year.

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Speaker 5: But I think the consequences of that now are going

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Speaker 5: to come front and center. And what I mean by

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Speaker 5: that is what we're focused on is, you know, the

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Speaker 5: dollar and rates. Does that come back into the picture again,

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Speaker 5: which then makes equities you know, vulnerable to a.

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Speaker 6: Correction at the at the macro level.

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Speaker 5: We'll see, but I think that's going to be like

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Speaker 5: right now, what we saw in the last couple of

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Speaker 5: days is rates are breaking out about the two in

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Speaker 5: or day moving average.

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Speaker 6: We're seeing actually turn premium come back.

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Speaker 5: Into the market. The dollar has been very strong, and

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Speaker 5: that's a governor on liquidity. So I think that's the

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Speaker 5: thing we're going to be watching going in twenty twenty five.

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Speaker 5: And of course what we've been waiting for is this reacceleration.

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Speaker 5: It seems to be elusive, and so what we need

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Speaker 5: to see is we need to see growth accelerate next year.

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Speaker 5: We have acceleration in our forecast twelve percent urach growth

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Speaker 5: for next year after about probably seven or eight this year.

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Speaker 6: So that is good, but that's price.

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Speaker 5: I think we need to see more than twelve percent

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Speaker 5: aries growth next year to get this market to really

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Speaker 5: power higher at the index level.

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Speaker 4: Yeah, Mike, I'm supposed to ask now Dodgers or Yankees,

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Speaker 4: but I realize for you that's a secondary effort. Michigan

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Speaker 4: State or Michigan. I mean, what do you think there

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Speaker 4: in a rebuilding year at ann Arbor.

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Speaker 5: Yeah, I mean, this is this is one that's more

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Speaker 5: important to Michigan fans than than than you might think.

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Speaker 5: I mean, house state of Michigan State. You cannot lose

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Speaker 5: those games. It doesn't matter, no excuses. You got to

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Speaker 5: show up. And I'm confident that Big Blue will show

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Speaker 5: up this weekend.

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Speaker 3: Nice, oh Big Blue. See you got the Dodgers in there.

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Speaker 4: You know, we got the Dodgers in Mike Wilson, thank

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Speaker 4: you so much with Morgan Stanley.

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Speaker 3: Huge response from mister Wilson.

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Speaker 2: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 2: weekday afternoons from seven to ten, or wan't just live

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Speaker 2: on YouTube.

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Speaker 7: Neither you nor Alex Steele will go Lulu Lemmon right now.

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Speaker 8: Now.

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Speaker 7: It's a little bit, a little bit too much.

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Speaker 3: I was so old. We had, you know, for our socks.

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Speaker 4: We had garter straps, you know, like the garter beilt things.

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Speaker 3: And then they went away from that.

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Speaker 4: I wonder are they doing Lululemon now, you know the

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Speaker 4: hold the shin pads on them. I don't know.

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Speaker 3: There are you duneks Bloomberg Savannahs. This morning.

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Speaker 4: All of our economic coverage just brought you by Commonwealth,

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Speaker 4: supporting more than two thousand independent financial advisors, a two

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Speaker 4: to one advisor to staff ratio, small firm attentiveness, big

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00:16:15,560 --> 00:16:19,320
Speaker 4: advisor impact. Go to Commonwealth dot com to learn about

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00:16:19,360 --> 00:16:24,880
Speaker 4: their consultative support in technology. When we invented this act

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Speaker 4: years ago we knew it was singularly the conversation of

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Speaker 4: our guests and the honor of going from Mike Wilson

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Speaker 4: of Morgan Stanley to Brian Belski of BEMO Capital Markets

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Speaker 4: is what the show is all about. We welcome all

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Speaker 4: of you across the nation and we'll get the Minnesota

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Speaker 4: in a moment. Brian, you have killed it on this

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Speaker 4: bull market. Let's get back to first principles. What's a

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Speaker 4: gloom crew get wrong?

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Speaker 3: Stay invested? You know, going back to the hockey thing.

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Speaker 9: Do you remember the silver things that we connected to

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Speaker 9: your sock that sometimes you got get them wet they

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Speaker 9: bring or they'd rust that I'm not old.

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Speaker 3: Or they broke off and you'd have to get a

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Speaker 3: dime exactly to do it exactly, and.

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Speaker 1: You hoped it wasn't so, you know, at least it's

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Speaker 1: like blushing. I mean, it's hockey talk. We're not going

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Speaker 1: to talk about taking showers and six no no, no, no, no, no,

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Speaker 1: no, no road game. What does a gloom crew get wrong?

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Speaker 3: I think stay invested.

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Speaker 9: I think trying not to time. I think people have

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Speaker 9: become so afraid to be wrong they don't want to

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Speaker 9: be right. I think part of this is a function

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Speaker 9: of what happened during the tech wreck that was exacerbated

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Speaker 9: during the Great Financial Crisis, which created the generational buying opportunity.

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Speaker 9: In two thousand and nine, when we came out with

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Speaker 9: our twenty five year Secular Bowl, Maarkt called twenty ten.

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Speaker 9: So we remain resolute on this. We're entering year three

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Speaker 9: of the Bowl, and I think you know, going forward,

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Speaker 9: our longer term trend has been normalization. We've been talking

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Speaker 9: about it for three years.

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Speaker 3: But I've been dying to get you on. I'm so happy,

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Speaker 3: Thank you so much from Europe.

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Speaker 4: And Paul's got a million questions. Let me go right here.

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Speaker 4: You're a research note. Is one of hyper acuity. A

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Speaker 4: competitive firm is just done a fan distribution exercise out

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Speaker 4: ten years. I look at it with my math knowledge

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Speaker 4: and I'm like, Okay, I get it's a marketing exercise.

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Speaker 4: But what is the value of a ten year fan

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Speaker 4: distribution extrapolation? Your Denny's on the top of the green line.

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Speaker 4: It's seven percent. Roaring twenties. I just I lost Brian acuity.

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Speaker 4: Tell us about.

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Speaker 3: Fan distributions of ten years. We're on radio, keep it clean.

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Speaker 9: We're on the radio, keep it clean, you know, listen

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Speaker 9: the ten year spectrum and any anytime when you're talking

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Speaker 9: about those kind of things, I think people all of

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Speaker 9: a sudden get glossy eyed, because it's really more about

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Speaker 9: ten days now right now or ten weeks and the

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Speaker 9: ten year thing. If you look at just the compounding

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Speaker 9: and your growthry of the stock market just historically, let's

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Speaker 9: say it's let's just give it thirteen percent, twelve to

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Speaker 9: thirteen percent, I think we're heading back into that. What

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Speaker 9: we see recently is out of the norm. So I

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Speaker 9: think over the next ten years we can clearly get

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Speaker 9: up to that seven percent line easy with a dividend,

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Speaker 9: and then with just cash flow appreciation, I think we

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Speaker 9: can get low double digits, which also will be in

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Speaker 9: line with where we're going to see earnings growth as well.

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Speaker 3: And so I think there's several.

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Speaker 9: Areas of the US market that are understated and earnings

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Speaker 9: that people are kind of missing right now, and so

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Speaker 9: I think that's what's really going to drive us for

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Speaker 9: at least the next three to five years.

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Speaker 7: What do we need sector leadership here? Do we need

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Speaker 7: tech to lead this market? Because I think a lot

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Speaker 7: of investors have become accustomed to tech leading. Yes, whether

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Speaker 7: it's just broadly tech or AI, this technique to lead

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Speaker 7: us over the next several years.

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Speaker 9: I think tech needs to perform. And what we've said

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Speaker 9: for about a decade now, we come up with these

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Speaker 9: kind of themes that people hopefully remember, and we've said

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Speaker 9: that there's a certain sample of the technology sector, Paul,

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Speaker 9: that is now the new consumer staples. And so I

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Speaker 9: go back to nineteen ninety five ninety six on my

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Speaker 9: old Dame Bosworth days, and I think that you know,

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Speaker 9: we're heading back into those type of nifty to fifty goldilocks,

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Speaker 9: strong earnings growth, steady performance, cutting interest rates. In the

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Speaker 9: new consumer staples, quite frankly, are Microsoft, Nvidia, Apple, Amazon,

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Speaker 9: the Google machine, the Netflix machine, and I think they

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Speaker 9: need to continue to perform with the market. But the

439
00:20:19,480 --> 00:20:21,920
Speaker 9: new leadership in tech is going to be qualcomm AMD,

440
00:20:21,960 --> 00:20:23,000
Speaker 9: those types of names.

441
00:20:23,240 --> 00:20:26,600
Speaker 7: So what do you kind of getting into the teeth

442
00:20:26,600 --> 00:20:28,280
Speaker 7: of earnings right now? We had some pretty good numbers

443
00:20:28,280 --> 00:20:30,399
Speaker 7: out of the Wall Street so far. What do you

444
00:20:30,400 --> 00:20:32,240
Speaker 7: need to see from corporate America going forward?

445
00:20:32,359 --> 00:20:34,240
Speaker 9: I think corporate America, I think you've seen such a

446
00:20:34,480 --> 00:20:39,920
Speaker 9: such a great, great secular change in terms of cash flow, distribution,

447
00:20:40,240 --> 00:20:43,439
Speaker 9: balance sheet management, discernibility of earnings. I think that's what

448
00:20:43,480 --> 00:20:46,199
Speaker 9: people are missing, Paul, and I think Corporate America has

449
00:20:46,240 --> 00:20:48,120
Speaker 9: done a great job kind of on the cost side

450
00:20:48,160 --> 00:20:50,040
Speaker 9: of things. Now we need to see more revenue growth.

451
00:20:50,080 --> 00:20:53,440
Speaker 9: We're going to see cap x from technology. And here's

452
00:20:53,440 --> 00:20:54,280
Speaker 9: the kicker, Tom.

453
00:20:54,320 --> 00:20:54,439
Speaker 4: Here.

454
00:20:54,800 --> 00:20:56,880
Speaker 9: I think where people are missing, and I said this before,

455
00:20:57,000 --> 00:20:59,679
Speaker 9: is at financials. If you look at the average financial

456
00:20:59,720 --> 00:21:03,560
Speaker 9: section earning's growth, it's way understated. Most analysts are very negative,

457
00:21:03,760 --> 00:21:05,399
Speaker 9: and I think that's where the biggest kick is going

458
00:21:05,440 --> 00:21:06,359
Speaker 9: to come the next few years.

459
00:21:06,400 --> 00:21:09,280
Speaker 4: Hey, it was fitzit mean And to give David Cushing credit,

460
00:21:09,320 --> 00:21:12,320
Speaker 4: you did a great capex use of cash expansion in

461
00:21:12,359 --> 00:21:13,960
Speaker 4: the last forty eight hours.

462
00:21:14,320 --> 00:21:15,800
Speaker 3: Sure buybacks lead the way.

463
00:21:15,840 --> 00:21:20,120
Speaker 4: I get that, But use of cash doesn't end into

464
00:21:20,160 --> 00:21:23,480
Speaker 4: your gloom comments. Earlier of ninety nine, two thousand and

465
00:21:23,520 --> 00:21:26,200
Speaker 4: two thousand and one, there wasn't use of cash going

466
00:21:26,240 --> 00:21:26,640
Speaker 4: on then.

467
00:21:26,880 --> 00:21:29,040
Speaker 9: There wasn't if you think about that market. In that

468
00:21:29,119 --> 00:21:32,400
Speaker 9: market quote unquote bubble, it was really led by chasing

469
00:21:32,440 --> 00:21:34,359
Speaker 9: these deals and the majority of those deals were done

470
00:21:34,359 --> 00:21:37,199
Speaker 9: with stock not cash. Where we had another M and

471
00:21:37,240 --> 00:21:39,879
Speaker 9: a cycle in two thousand and seven, which was also credit.

472
00:21:39,920 --> 00:21:41,480
Speaker 9: But we haven't had a big M and A cycle

473
00:21:41,520 --> 00:21:44,720
Speaker 9: or a consolidation cycle. So I think that's where the

474
00:21:44,840 --> 00:21:47,000
Speaker 9: use of cash going forward is going to be about dividends.

475
00:21:47,440 --> 00:21:50,080
Speaker 9: Look at I mean, look at Meta, Google, Microsoft, The're

476
00:21:50,080 --> 00:21:52,680
Speaker 9: paying dividends. Apple's pain dividends, and so I think that's

477
00:21:52,720 --> 00:21:56,119
Speaker 9: going to continue. But I think the key thing from

478
00:21:56,160 --> 00:21:58,320
Speaker 9: a perspective of stock picking is you don't have to

479
00:21:58,320 --> 00:22:01,560
Speaker 9: own the index. You want to be more concentrated. And

480
00:22:01,680 --> 00:22:04,640
Speaker 9: we think stockpicking and fundamental themes are gonna win.

481
00:22:05,520 --> 00:22:09,560
Speaker 3: Is active funds gonna have their data, yes, index. Yeah.

482
00:22:09,600 --> 00:22:10,600
Speaker 3: If I walk into it.

483
00:22:10,640 --> 00:22:12,639
Speaker 9: If i walk into a big account here in town,

484
00:22:13,040 --> 00:22:14,520
Speaker 9: and I'm talking to these people that have been in

485
00:22:14,520 --> 00:22:16,360
Speaker 9: the business less than ten or fifteen years, I talk

486
00:22:16,400 --> 00:22:17,920
Speaker 9: about stockpicking.

487
00:22:17,520 --> 00:22:18,640
Speaker 3: They look scared.

488
00:22:18,840 --> 00:22:21,560
Speaker 9: I mean their eyes are glossed over because all they

489
00:22:21,560 --> 00:22:23,399
Speaker 9: do is they own two hundred and fifty stocks and

490
00:22:23,400 --> 00:22:26,440
Speaker 9: they're trying to They're trying to benchmark that they don't

491
00:22:26,480 --> 00:22:29,720
Speaker 9: know about a company theme or management or roe or

492
00:22:29,840 --> 00:22:32,359
Speaker 9: roe ROI. All they're doing is kind of swiping and

493
00:22:32,400 --> 00:22:34,320
Speaker 9: reading bullet points and doing what the hedge funds are

494
00:22:34,359 --> 00:22:36,760
Speaker 9: doing and that's why. Oh, by the way, the majority

495
00:22:36,760 --> 00:22:38,600
Speaker 9: of active management's underperforming.

496
00:22:38,800 --> 00:22:41,480
Speaker 4: Okay, one more question we we gotta get. I want

497
00:22:41,520 --> 00:22:43,680
Speaker 4: you to stay with us, Brian. I think it's important.

498
00:22:44,040 --> 00:22:48,280
Speaker 4: But the basic idea of Brian is our industrials are

499
00:22:48,280 --> 00:22:51,560
Speaker 4: all gonna act more tech like. That's a story I

500
00:22:51,560 --> 00:22:52,760
Speaker 4: don't think is being told.

501
00:22:53,440 --> 00:22:56,440
Speaker 9: There's parts of it, especially the ones that are manufacturing

502
00:22:56,480 --> 00:22:58,800
Speaker 9: more here in the United States. But from a domestic

503
00:22:58,880 --> 00:22:59,760
Speaker 9: side of things, there's things.

504
00:22:59,760 --> 00:23:01,040
Speaker 3: I mean, look at Lockheed.

505
00:23:00,760 --> 00:23:03,000
Speaker 9: Martin earnings this morning. I mean, come on, I mean,

506
00:23:03,000 --> 00:23:05,200
Speaker 9: this is a company twenty five straight years of increase

507
00:23:05,200 --> 00:23:08,240
Speaker 9: the dividend, great cashualield. So you're gonna see some technological

508
00:23:08,359 --> 00:23:10,879
Speaker 9: advancement there. But I think that's where the capex will

509
00:23:10,920 --> 00:23:11,080
Speaker 9: come in.

510
00:23:11,200 --> 00:23:13,680
Speaker 4: So I'm at luck Campanna down by the Tyger River,

511
00:23:13,760 --> 00:23:16,119
Speaker 4: oldest restaurant in the world, five hundred years old, and.

512
00:23:16,160 --> 00:23:17,920
Speaker 3: They having the Roman art. It chokes nice.

513
00:23:18,200 --> 00:23:22,679
Speaker 4: And we're watching the Minnesota Vikings try to do a

514
00:23:22,800 --> 00:23:25,720
Speaker 4: two point play late in the game.

515
00:23:25,800 --> 00:23:28,720
Speaker 3: Brian Belski, What in God's name were the Vikings thinking

516
00:23:28,800 --> 00:23:29,640
Speaker 3: it was a coaching era.

517
00:23:29,720 --> 00:23:33,040
Speaker 9: I mean, they choked, They choked on that play. I mean,

518
00:23:33,080 --> 00:23:35,760
Speaker 9: you know, Minnesota, we're five and one on the way

519
00:23:35,760 --> 00:23:36,520
Speaker 9: to six and eleven.

520
00:23:36,560 --> 00:23:37,200
Speaker 6: I mean, it's just.

521
00:23:39,359 --> 00:23:41,680
Speaker 9: If they're in Minnesota. Sportsman, you know what I'm talking about.

522
00:23:41,760 --> 00:23:44,320
Speaker 9: So there's been a rumor, by the way that twins

523
00:23:44,320 --> 00:23:46,320
Speaker 9: are for sale, the poll that family selling the twins,

524
00:23:46,320 --> 00:23:49,320
Speaker 9: and there's been a remember that buffet might sound by it. Wow,

525
00:23:49,359 --> 00:23:53,560
Speaker 9: Please God, if there's a God above, Lord Jesus, please.

526
00:23:53,280 --> 00:23:56,520
Speaker 4: Fifteen seconds left of the game. Jake Bate's forty four yards.

527
00:23:56,560 --> 00:24:01,400
Speaker 4: Michael Barr Lions, am I even lyons Vikings.

528
00:24:01,640 --> 00:24:05,080
Speaker 3: It's glory for the essential to the North.

529
00:24:04,880 --> 00:24:06,360
Speaker 9: Is now the best division in football.

530
00:24:06,400 --> 00:24:10,200
Speaker 3: Think about that, Michael Barr, would you care to comment? Wow?

531
00:24:11,480 --> 00:24:14,800
Speaker 10: I mean, but you got a point, all seriousness, it's

532
00:24:14,920 --> 00:24:17,800
Speaker 10: you know, there are other divisions out there that are tougher.

533
00:24:18,080 --> 00:24:21,760
Speaker 10: But I will admit that the Vikings turned out way

534
00:24:21,840 --> 00:24:23,440
Speaker 10: tougher than I thought they were going to be because

535
00:24:23,480 --> 00:24:25,920
Speaker 10: they were undefeated and then we showed up.

536
00:24:26,240 --> 00:24:27,920
Speaker 3: And he's not talking about.

537
00:24:29,359 --> 00:24:31,399
Speaker 9: So that if you think about the defense of the

538
00:24:31,480 --> 00:24:34,919
Speaker 9: Vikings and just I think that Campbell's done such an

539
00:24:34,960 --> 00:24:37,480
Speaker 9: amazing job with the Lions. I think the Bears are

540
00:24:37,560 --> 00:24:40,480
Speaker 9: way over their skis. But the Packers too, they just

541
00:24:40,560 --> 00:24:43,320
Speaker 9: keep I hate the Packers for the record, and a

542
00:24:43,400 --> 00:24:45,120
Speaker 9: man with a good friend of mine later today, that's

543
00:24:45,119 --> 00:24:48,359
Speaker 9: a huge Packers fan. But I despise. I love people

544
00:24:48,359 --> 00:24:50,679
Speaker 9: from Wisconsin, but I hate Wisconsin sports fans. I mean

545
00:24:50,720 --> 00:24:53,080
Speaker 9: when they whenever the whenever the puck drops or the

546
00:24:53,119 --> 00:24:55,840
Speaker 9: ball gets thrown, their crazy, lovely people. But when it

547
00:24:55,880 --> 00:24:59,720
Speaker 9: comes to sports crazy. But I think those three teams

548
00:24:59,720 --> 00:25:02,520
Speaker 9: are way understated. There's smash mouth football. It's kind of

549
00:25:02,520 --> 00:25:04,520
Speaker 9: like the Olden I mean, they're all winning.

550
00:25:04,800 --> 00:25:08,159
Speaker 4: It's like a huge skew to excellence if they But

551
00:25:08,240 --> 00:25:10,880
Speaker 4: the thing is, the Dodgers Yankees are big cities, big

552
00:25:10,920 --> 00:25:12,080
Speaker 4: money and all that.

553
00:25:12,240 --> 00:25:14,680
Speaker 3: How does NFC Central do it the North? How do

554
00:25:14,760 --> 00:25:15,800
Speaker 3: they do it rather well?

555
00:25:15,840 --> 00:25:18,760
Speaker 9: I think, first and foremost the Vikings they really scored

556
00:25:19,040 --> 00:25:23,159
Speaker 9: with Kevin as a coach, just like the Packers did

557
00:25:23,160 --> 00:25:26,160
Speaker 9: a great job of the floor in Campbell in the lines.

558
00:25:26,240 --> 00:25:29,400
Speaker 9: All three understated coaches when they came in, and they've

559
00:25:29,400 --> 00:25:32,480
Speaker 9: done a wonderful job. I think it's scheming. With Brian

560
00:25:32,520 --> 00:25:35,040
Speaker 9: Flores running the defense too, it's all that scheming.

561
00:25:35,280 --> 00:25:38,719
Speaker 2: Brian Belski, thank you so much, coming This is the

562
00:25:38,760 --> 00:25:43,160
Speaker 2: Bloomberg Surveillance Podcast. Listen live each weekday starting at seven

563
00:25:43,200 --> 00:25:46,240
Speaker 2: am Eastern on applecar Play and Android Auto with the

564
00:25:46,240 --> 00:25:49,640
Speaker 2: Bloomberg Business App. You can also listen live on Amazon

565
00:25:49,680 --> 00:25:53,040
Speaker 2: Alexa from our flagship New York station, Just say Alexa

566
00:25:53,200 --> 00:25:54,879
Speaker 2: playing Bloomberg eleven thirty.

567
00:25:55,560 --> 00:25:58,160
Speaker 3: We're gonna do something different here. Are you pulled out?

568
00:25:58,200 --> 00:25:59,160
Speaker 3: Paul sure?

569
00:25:59,359 --> 00:26:03,119
Speaker 4: I am lucky completely and Bloomberg, I'm sure we'll have

570
00:26:03,160 --> 00:26:05,840
Speaker 4: a world class high count poll right now.

571
00:26:06,080 --> 00:26:07,560
Speaker 3: Yeah, my head is spinning.

572
00:26:07,720 --> 00:26:12,360
Speaker 4: I'm like completely completely pulled out joining us.

573
00:26:12,480 --> 00:26:14,240
Speaker 3: Now we're not going to talk about polls.

574
00:26:14,840 --> 00:26:18,840
Speaker 4: Professor Schiller Wendy Schiller Definitive Civics Book for America of

575
00:26:18,880 --> 00:26:21,840
Speaker 4: course at Brown University with all her work there and

576
00:26:22,000 --> 00:26:27,440
Speaker 4: international relations. Wendy, I want to go back to Andrew Jackson, banners,

577
00:26:27,480 --> 00:26:31,560
Speaker 4: Badger's parades, barbecues if I'm elected, free beer.

578
00:26:32,280 --> 00:26:34,879
Speaker 3: And while we're at a Kissing Babies, I saw President

579
00:26:34,920 --> 00:26:36,639
Speaker 3: Obama kissing a baby.

580
00:26:36,800 --> 00:26:40,080
Speaker 4: Is McDonald's French Fries the new Kissing Babies?

581
00:26:41,240 --> 00:26:43,800
Speaker 11: Well, I mean, I think I'm looking forward to seeing

582
00:26:43,840 --> 00:26:47,159
Speaker 11: this Madison Square Garden event. I think that former President

583
00:26:47,200 --> 00:26:49,320
Speaker 11: Trump is hosting as if it's sort of a pre

584
00:26:49,440 --> 00:26:52,800
Speaker 11: inaugural party and you know, sort of saying, hey, listen,

585
00:26:52,880 --> 00:26:54,720
Speaker 11: I'm a winner and I'm going to win, and let's

586
00:26:54,720 --> 00:26:57,639
Speaker 11: start partying and celebrating. It's really, I think, a fairly

587
00:26:57,680 --> 00:27:02,280
Speaker 11: brilliant campaign move because it tells his base you know,

588
00:27:02,320 --> 00:27:04,800
Speaker 11: I'm gonna win, and then it also helps fuel any

589
00:27:04,800 --> 00:27:07,720
Speaker 11: objections he has to the outcome. So so he's starting to,

590
00:27:08,119 --> 00:27:10,480
Speaker 11: you know, return to that Andrew Jackson populism.

591
00:27:10,520 --> 00:27:12,680
Speaker 12: You know, you know very well that Andrew.

592
00:27:12,480 --> 00:27:14,960
Speaker 11: Jackson threw the equivalent of a keg party for his

593
00:27:15,000 --> 00:27:17,280
Speaker 11: inauguration and they trashed.

594
00:27:16,920 --> 00:27:18,880
Speaker 12: The White House. They had kick everybody out.

595
00:27:19,040 --> 00:27:21,560
Speaker 4: And we miss Robert Remeny every day. I read all

596
00:27:21,560 --> 00:27:25,720
Speaker 4: three volumes of his definitive work. And Jackson folks visit

597
00:27:25,840 --> 00:27:29,159
Speaker 4: the Hermitage if you can Eastern Nashville. It is just

598
00:27:29,600 --> 00:27:32,560
Speaker 4: you walk out the beck door the Hermitage and there's

599
00:27:32,560 --> 00:27:38,560
Speaker 4: the slave cottage right there, and you just stop. Wendy Schiller,

600
00:27:38,600 --> 00:27:42,040
Speaker 4: how was the vice president campaigning? Is she kissing babies?

601
00:27:43,240 --> 00:27:46,159
Speaker 11: Well, she's basically trying to plot all the stops in

602
00:27:46,240 --> 00:27:49,480
Speaker 11: what will be, you know, an extraordinarily close election. It

603
00:27:49,520 --> 00:27:52,320
Speaker 11: reminds me of Bush Gore, we really didn't know who

604
00:27:52,400 --> 00:27:54,320
Speaker 11: was gonna win, and it turns out after election day

605
00:27:54,359 --> 00:27:56,560
Speaker 11: we didn't know who's gonna win either. So I think

606
00:27:56,640 --> 00:27:59,720
Speaker 11: this is where you know, you're no stone turned, no voter,

607
00:27:59,800 --> 00:28:02,560
Speaker 11: lie left out, you know, the opposite sort of what

608
00:28:02,640 --> 00:28:04,080
Speaker 11: Hillary Clinton did in twenty sixteen.

609
00:28:04,520 --> 00:28:06,600
Speaker 12: And I think the Harris campaign is counting on the

610
00:28:06,600 --> 00:28:07,560
Speaker 12: fact that Donald.

611
00:28:07,320 --> 00:28:09,639
Speaker 11: Trump did not win in twenty twenty that in fact,

612
00:28:09,920 --> 00:28:10,760
Speaker 11: you know, the last time he.

613
00:28:10,760 --> 00:28:11,840
Speaker 12: Ran, he did lose.

614
00:28:12,240 --> 00:28:14,760
Speaker 11: So they're you know, keeping the faith the polls are

615
00:28:14,800 --> 00:28:16,719
Speaker 11: going in the opposite direction. I don't want to talk

616
00:28:16,760 --> 00:28:19,879
Speaker 11: about that, but there are hidden things that could change

617
00:28:19,920 --> 00:28:22,720
Speaker 11: things up. Like in Arizona, there is abortion on the ballot,

618
00:28:23,080 --> 00:28:25,359
Speaker 11: and you know, not everybody is always truthful with a

619
00:28:25,400 --> 00:28:28,160
Speaker 11: pollster when that kind of subject is on the ballot

620
00:28:28,240 --> 00:28:29,520
Speaker 11: about who they're going to vote for.

621
00:28:29,840 --> 00:28:31,280
Speaker 12: So and the same thing is true Florida.

622
00:28:31,320 --> 00:28:34,000
Speaker 11: But it looks like Arizona may have a hidden surprise

623
00:28:34,080 --> 00:28:36,000
Speaker 11: at the end of the day. So that's what I'm

624
00:28:36,000 --> 00:28:38,280
Speaker 11: looking at, sort of where could we see a surprise

625
00:28:38,360 --> 00:28:40,760
Speaker 11: outcome in one of these states that it looks like Trump.

626
00:28:40,520 --> 00:28:43,280
Speaker 7: Is doing very well In Wendy at eleven PM on

627
00:28:43,400 --> 00:28:46,040
Speaker 7: election night, we know who the new president is.

628
00:28:47,240 --> 00:28:50,560
Speaker 11: Unless there is just a really big sweep tilt towards Trump,

629
00:28:50,720 --> 00:28:52,479
Speaker 11: I don't think so. I mean, if Harris is going

630
00:28:52,520 --> 00:28:54,200
Speaker 11: to win this election, we're not going to know that,

631
00:28:54,480 --> 00:28:58,040
Speaker 11: partially because mail in ballots in some states like Pennsylvania

632
00:28:58,280 --> 00:29:01,560
Speaker 11: are not opened and certified and count did fully until

633
00:29:01,600 --> 00:29:04,480
Speaker 11: all of the in person balloting is counted. So that's

634
00:29:04,480 --> 00:29:05,960
Speaker 11: going to take us a couple of days, as it

635
00:29:06,000 --> 00:29:08,680
Speaker 11: did before. We know George is going to be very tight.

636
00:29:08,720 --> 00:29:12,240
Speaker 11: We're seeing massive early voting in person. The vast majority

637
00:29:12,240 --> 00:29:14,800
Speaker 11: of early voting in North Carolina George has been in person,

638
00:29:15,120 --> 00:29:17,560
Speaker 11: so those votes are counted easily. So you know, it

639
00:29:17,600 --> 00:29:19,520
Speaker 11: could be that those results come in earlier than they

640
00:29:19,520 --> 00:29:20,360
Speaker 11: did in twenty twenty.

641
00:29:21,600 --> 00:29:27,000
Speaker 7: So given that backdrop, is there any strategy for either

642
00:29:27,080 --> 00:29:30,280
Speaker 7: candidate either then to just simply spend time in these

643
00:29:30,440 --> 00:29:31,120
Speaker 7: swing states?

644
00:29:31,960 --> 00:29:34,320
Speaker 11: Well, I mean, the Democrats do have a very strong

645
00:29:34,360 --> 00:29:37,040
Speaker 11: turnout game. And the one thing that we haven't been

646
00:29:37,080 --> 00:29:39,920
Speaker 11: looking at enough in the last couple of weeks the

647
00:29:39,920 --> 00:29:42,360
Speaker 11: election are how Senate campaigns.

648
00:29:41,840 --> 00:29:44,920
Speaker 12: In swing states will affect turnout and voter choice.

649
00:29:45,200 --> 00:29:46,520
Speaker 11: You know, are you really going to go into the

650
00:29:46,520 --> 00:29:50,360
Speaker 11: ballot booth and vote for you know, women diego in Arizona.

651
00:29:49,960 --> 00:29:51,400
Speaker 12: And then vote for Donald Trump.

652
00:29:51,600 --> 00:29:54,240
Speaker 11: Are you going to vote for you know, Tammy Baldwin

653
00:29:54,320 --> 00:29:55,920
Speaker 11: Wisconsin and Donald Trump.

654
00:29:56,160 --> 00:29:58,480
Speaker 12: You know, we're seeing those Democrats holding.

655
00:29:58,120 --> 00:30:01,120
Speaker 11: Their ground by a couple of points, doing better than

656
00:30:01,200 --> 00:30:04,120
Speaker 11: Kamala Harris. So how many of those voters just don't

657
00:30:04,200 --> 00:30:07,080
Speaker 11: vote in the presidential election which costs Harris a vote,

658
00:30:07,480 --> 00:30:09,840
Speaker 11: or do they actually ultimately say, well, I'm just going

659
00:30:09,880 --> 00:30:11,080
Speaker 11: to vote for Harris too.

660
00:30:11,480 --> 00:30:12,920
Speaker 12: We just don't know they're going to tilt.

661
00:30:12,960 --> 00:30:15,920
Speaker 11: But those Senate Democrats are holding It's pretty steady in

662
00:30:15,960 --> 00:30:18,000
Speaker 11: swing states, and that's a curiosity.

663
00:30:18,000 --> 00:30:19,520
Speaker 12: We haven't seen that in a couple of years.

664
00:30:20,840 --> 00:30:23,760
Speaker 7: So I guess the key issues here are down ballid

665
00:30:23,800 --> 00:30:26,160
Speaker 7: as well. I mean, in addition to the presidential election,

666
00:30:26,320 --> 00:30:29,080
Speaker 7: is there what's the feeling now? Is it relates to

667
00:30:29,120 --> 00:30:30,760
Speaker 7: the House and the Senate?

668
00:30:31,400 --> 00:30:33,800
Speaker 11: Well, I mean, I think you know, people are saying

669
00:30:33,840 --> 00:30:36,400
Speaker 11: that if Trump wins and he tells these states can

670
00:30:36,520 --> 00:30:39,120
Speaker 11: be a trifecta the democ Republicans, you know, they have

671
00:30:39,200 --> 00:30:41,280
Speaker 11: to win fewer seats to keep the House than the

672
00:30:41,280 --> 00:30:43,680
Speaker 11: Democrats have to win to take the House and the

673
00:30:43,720 --> 00:30:44,840
Speaker 11: Senate will go Republican.

674
00:30:44,880 --> 00:30:47,479
Speaker 12: The question is what's the margin. So you're looking at

675
00:30:47,480 --> 00:30:48,160
Speaker 12: a trifecta.

676
00:30:48,320 --> 00:30:51,240
Speaker 11: You're looking at, you know, unified party government under Trump,

677
00:30:51,360 --> 00:30:53,920
Speaker 11: that's what you're looking at. You know, if people decide

678
00:30:54,000 --> 00:30:58,160
Speaker 11: they want Trump back, and I mean independent voters, disaffected Republicans,

679
00:30:58,320 --> 00:31:00,960
Speaker 11: and they really don't want Harris, then you're probably going

680
00:31:01,040 --> 00:31:01,880
Speaker 11: to see a trifecta.

681
00:31:01,920 --> 00:31:03,400
Speaker 12: And we'll probably see some changes.

682
00:31:03,160 --> 00:31:06,440
Speaker 11: In twenty twenty six in response to that trifecta. So

683
00:31:06,520 --> 00:31:08,280
Speaker 11: it could be just a repeat of twenty sixteen and

684
00:31:08,360 --> 00:31:11,040
Speaker 11: twenty eighteen what we're looking at down the road. But

685
00:31:11,080 --> 00:31:15,080
Speaker 11: people should be prepared for Donald Trump presidency and unified

686
00:31:15,120 --> 00:31:19,640
Speaker 11: government and a Kama Harris presidency with divided government. So

687
00:31:19,680 --> 00:31:21,600
Speaker 11: there are two very different scenarios that we're facing at

688
00:31:21,640 --> 00:31:22,280
Speaker 11: the pwal level.

689
00:31:22,960 --> 00:31:25,520
Speaker 4: And now, folks, And I was thinking to Wendy, you know,

690
00:31:25,640 --> 00:31:26,760
Speaker 4: flying back, folks.

691
00:31:26,960 --> 00:31:28,960
Speaker 3: All of a sudden and suddenly.

692
00:31:28,480 --> 00:31:32,120
Speaker 4: It's the topic no one's really talking about. And for

693
00:31:32,360 --> 00:31:35,880
Speaker 4: some of us of a certain vintage, it was the

694
00:31:36,120 --> 00:31:38,560
Speaker 4: topic fifty years ago.

695
00:31:38,960 --> 00:31:39,959
Speaker 3: The gender gap.

696
00:31:40,640 --> 00:31:46,000
Speaker 4: Professor Schiller, the gender gap today, how is it distinctive

697
00:31:46,240 --> 00:31:50,520
Speaker 4: from what I knew years ago with the editor at Cosmopopan.

698
00:31:52,080 --> 00:31:55,720
Speaker 11: Well, the gender gap differs by generation now, so we're

699
00:31:55,720 --> 00:31:58,880
Speaker 11: seeing a bigger gender gap in older voters than we

700
00:31:59,000 --> 00:32:02,240
Speaker 11: used to see, and we're seeing in very young voters

701
00:32:02,280 --> 00:32:03,440
Speaker 11: a bigger gender gap.

702
00:32:03,360 --> 00:32:05,920
Speaker 12: In the opposite judge. And men are leaning towards.

703
00:32:05,680 --> 00:32:08,520
Speaker 11: The Republican Party and bigger numbers younger men than they

704
00:32:08,600 --> 00:32:12,000
Speaker 11: used to And younger women have always sort of leaned democratic.

705
00:32:12,280 --> 00:32:15,000
Speaker 11: Older women have been more up for grabs, and now

706
00:32:15,040 --> 00:32:18,120
Speaker 11: we're seeing in some really interesting polling older women meeting

707
00:32:18,120 --> 00:32:21,520
Speaker 11: over the age of sixty five are leaning more strongly Democratic.

708
00:32:21,880 --> 00:32:24,920
Speaker 11: So this is just a really a change. And we're

709
00:32:24,960 --> 00:32:27,600
Speaker 11: seeing the older vote, usually leaned Republican by about eight

710
00:32:27,600 --> 00:32:30,560
Speaker 11: points in polling, we're seeing that's diminished a bit.

711
00:32:31,000 --> 00:32:31,960
Speaker 12: So this is just a.

712
00:32:31,880 --> 00:32:36,320
Speaker 11: Little bit of autopsy turvy demographic change in the gender gap.

713
00:32:36,360 --> 00:32:39,880
Speaker 11: And remember the gender gap can be also hidden in

714
00:32:40,200 --> 00:32:43,640
Speaker 11: states where abortion is controversial. We saw that in twenty

715
00:32:43,680 --> 00:32:46,160
Speaker 11: twenty two in the Senate elections. We may still see

716
00:32:46,160 --> 00:32:49,440
Speaker 11: that in states like Arizona. So this is really important.

717
00:32:49,520 --> 00:32:51,320
Speaker 11: And then we're going to see what the Republicans do

718
00:32:51,480 --> 00:32:55,080
Speaker 11: on policies that affect women. After you know, obviously word

719
00:32:55,120 --> 00:32:57,520
Speaker 11: view Wade's overturned. We have the Dobb's decision. What do

720
00:32:57,600 --> 00:33:00,800
Speaker 11: they do going forward? And can they maintain any kind

721
00:33:00,800 --> 00:33:04,560
Speaker 11: of legiance among women if they continue down a path

722
00:33:04,920 --> 00:33:07,640
Speaker 11: of policies that do not necessarily favor women.

723
00:33:07,880 --> 00:33:11,360
Speaker 4: When do we really appreciate your commitment to Bloomberg Surveillance.

724
00:33:11,400 --> 00:33:14,360
Speaker 4: She'll be with us now through and after the election

725
00:33:14,680 --> 00:33:18,440
Speaker 4: is well. Wendy Schiller of Brown University can't say enough,

726
00:33:18,480 --> 00:33:20,000
Speaker 4: folks about the planning for the election.

727
00:33:25,560 --> 00:33:29,880
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

728
00:33:29,960 --> 00:33:33,160
Speaker 2: starting at seven am Eastern on applecar Play and Android

729
00:33:33,160 --> 00:33:36,120
Speaker 2: Auto with the Bloomberg Business app. You can also watch

730
00:33:36,200 --> 00:33:39,440
Speaker 2: us live every weekday on YouTube and always on the

731
00:33:39,440 --> 00:33:40,360
Speaker 2: Bloomberg terminal.

732
00:33:40,440 --> 00:33:41,040
Speaker 3: This is a thrill.

733
00:33:41,120 --> 00:33:45,560
Speaker 4: Incredibly busy. Francisco Blanche joins US now driving commodities at

734
00:33:45,560 --> 00:33:48,680
Speaker 4: Bank of American. What's great about him is it's not

735
00:33:48,760 --> 00:33:51,480
Speaker 4: just Brent. What's Brent Crude going to do? Move on

736
00:33:51,800 --> 00:33:54,880
Speaker 4: Francisco Blanche here now with an essay a number of

737
00:33:55,000 --> 00:33:59,960
Speaker 4: days ago. Is gold a safer investment than full faith?

738
00:34:00,080 --> 00:34:01,560
Speaker 3: Think credit? The United States?

739
00:34:01,600 --> 00:34:05,680
Speaker 4: From the cash room at the treasury, treasuries, Francisco, blanche

740
00:34:05,800 --> 00:34:09,359
Speaker 4: and gold. Is it going to three thousand Francisco.

741
00:34:10,480 --> 00:34:13,520
Speaker 8: That's our target for next year, tom So we expected

742
00:34:13,600 --> 00:34:15,240
Speaker 8: to get there over the next fulve months.

743
00:34:15,320 --> 00:34:18,600
Speaker 4: What does it signal in particularly versus full faith and

744
00:34:18,680 --> 00:34:19,959
Speaker 4: credit American debt.

745
00:34:21,719 --> 00:34:24,000
Speaker 8: Well, there's there's a few things going on. First, I

746
00:34:24,000 --> 00:34:27,239
Speaker 8: would say that, as you know, two and a half

747
00:34:27,320 --> 00:34:31,120
Speaker 8: years ago, the US and the European governments decided to

748
00:34:31,160 --> 00:34:36,359
Speaker 8: freeze Russian center bank assets. And as you're Julio ware,

749
00:34:36,600 --> 00:34:41,960
Speaker 8: central bank assets are essentially are you know, a rainy

750
00:34:42,040 --> 00:34:46,840
Speaker 8: day fund, so to speak, for nations and for financial systems.

751
00:34:46,960 --> 00:34:49,120
Speaker 8: So I think as a result of that decision to

752
00:34:49,160 --> 00:34:52,040
Speaker 8: freeze those assets, about again, about half of the Russian

753
00:34:52,040 --> 00:34:57,800
Speaker 8: center bank acids, we've seen a big rotation away from

754
00:34:58,000 --> 00:35:04,800
Speaker 8: from treasuries and and European government bonds into gold across

755
00:35:04,880 --> 00:35:09,120
Speaker 8: the global center bank community. Remember, these chaps don't care

756
00:35:09,200 --> 00:35:11,600
Speaker 8: so much about return, well, they really care about his safety.

757
00:35:12,120 --> 00:35:15,000
Speaker 8: And by virtue of freezing those assets, we made them

758
00:35:15,200 --> 00:35:18,680
Speaker 8: unsafe or a little unsafe for some. Again, not unsafe

759
00:35:18,719 --> 00:35:21,640
Speaker 8: for you or for me, but definitely unsafe if you

760
00:35:21,760 --> 00:35:26,200
Speaker 8: are outside the US, Europe, sphere, and there's many center

761
00:35:26,239 --> 00:35:29,200
Speaker 8: banks that feel a little bit trapped between this kind

762
00:35:29,200 --> 00:35:33,040
Speaker 8: of US Europe and Russia China dynamic, so that's been.

763
00:35:32,920 --> 00:35:33,560
Speaker 6: A big factor.

764
00:35:33,719 --> 00:35:36,600
Speaker 8: And then of course we've also seen interest rate cuts

765
00:35:36,640 --> 00:35:39,640
Speaker 8: which have finally started to grow some interest from investors

766
00:35:40,400 --> 00:35:40,719
Speaker 8: as on.

767
00:35:40,719 --> 00:35:42,880
Speaker 7: One of the many reasons I like Francisco's research is

768
00:35:42,880 --> 00:35:46,600
Speaker 7: he has an exhibit Exhibit six point one acronym list

769
00:35:46,680 --> 00:35:49,200
Speaker 7: for all the acronyms and what they mean in his research.

770
00:35:49,280 --> 00:35:53,040
Speaker 7: So thank you for that, Francisco. It helps reading your research.

771
00:35:53,239 --> 00:35:56,959
Speaker 7: Talk to us about global energy here, Francisco, we've had

772
00:35:57,200 --> 00:36:00,640
Speaker 7: a big risk premium put into Brent crew w TIA crud.

773
00:36:01,120 --> 00:36:04,279
Speaker 7: That part of that risk premium came out, but now

774
00:36:04,280 --> 00:36:06,080
Speaker 7: it's kind of creeping back. How do you think about

775
00:36:06,920 --> 00:36:09,160
Speaker 7: the cost of global oil these days?

776
00:36:10,719 --> 00:36:14,239
Speaker 8: Well, so when it comes to Brent, we have a

777
00:36:14,280 --> 00:36:17,759
Speaker 8: seventy five dollar average for next year, which is right

778
00:36:17,800 --> 00:36:20,160
Speaker 8: around with the spot prices and a little below where

779
00:36:20,280 --> 00:36:26,319
Speaker 8: for markets are, so we're not teroughly bearish. We are

780
00:36:26,560 --> 00:36:30,480
Speaker 8: more in the rangebound camp. There's there's a number of

781
00:36:31,120 --> 00:36:35,360
Speaker 8: number of analysts and agencies out there talking about this

782
00:36:35,520 --> 00:36:39,920
Speaker 8: massive surplus evolving into twenty twenty five, particularly as we

783
00:36:39,960 --> 00:36:43,560
Speaker 8: see open plus returning barrels to the market. But in reality,

784
00:36:43,840 --> 00:36:46,840
Speaker 8: we have a very very tense geo vertical situation in

785
00:36:46,840 --> 00:36:49,520
Speaker 8: the Middle East. And remember, part of the reason we've

786
00:36:49,560 --> 00:36:54,359
Speaker 8: seen a reversal imbalances is because from the White House

787
00:36:54,400 --> 00:36:57,560
Speaker 8: we've seen a very concentrated effort to push more energy

788
00:36:57,600 --> 00:37:01,239
Speaker 8: into the system after we hit ten percent of a

789
00:37:01,280 --> 00:37:02,840
Speaker 8: couple of years ago in the back of the Russia

790
00:37:02,920 --> 00:37:06,480
Speaker 8: Ukraine invasion, so we've seen effectively the release of the

791
00:37:06,640 --> 00:37:09,319
Speaker 8: spr forty percent of it. We've seen a big rump

792
00:37:09,400 --> 00:37:12,360
Speaker 8: up in US supply, and then we've seen really Russia

793
00:37:12,400 --> 00:37:16,280
Speaker 8: but also Iran and Venezuela moving up on their exports

794
00:37:16,320 --> 00:37:18,080
Speaker 8: throughout the last three three and a half years. So

795
00:37:19,000 --> 00:37:21,640
Speaker 8: I think once we go past the US election, that

796
00:37:21,880 --> 00:37:26,840
Speaker 8: pressure to keep oil prices lower or bring them, you know,

797
00:37:26,920 --> 00:37:29,359
Speaker 8: keep them below eighty or something, it kind of goes

798
00:37:29,360 --> 00:37:31,320
Speaker 8: away a little bit. I think I think the focus

799
00:37:31,480 --> 00:37:34,920
Speaker 8: comes to a politics really for the next government, whoever

800
00:37:34,920 --> 00:37:36,440
Speaker 8: that is Harris or Trump.

801
00:37:36,680 --> 00:37:39,120
Speaker 4: Francisco on gold of three thousand, thank you out on

802
00:37:39,200 --> 00:37:42,960
Speaker 4: YouTube the live chat. They're really discussing gold of three

803
00:37:43,000 --> 00:37:47,560
Speaker 4: thousand Francisco Blanche. Two ideas here. One is the ETF

804
00:37:47,680 --> 00:37:51,480
Speaker 4: Salisa Matteo is in the gold ETF fund where they

805
00:37:51,480 --> 00:37:56,120
Speaker 4: insist on taking physical delivery. It's like bitcoin, Paul, I mean,

806
00:37:56,440 --> 00:38:00,840
Speaker 4: Francisco Blanche, are we way behind in ETF's taking gold

807
00:38:01,360 --> 00:38:04,959
Speaker 4: for physical delivery and that will support the price.

808
00:38:06,360 --> 00:38:09,000
Speaker 8: Well. So, so there's plenty of ETFs that take gold

809
00:38:09,040 --> 00:38:12,399
Speaker 8: and physical delivery, and and that's definitely a price support point.

810
00:38:12,480 --> 00:38:15,800
Speaker 8: We've we've actually run Fairmata analysis on this. We found

811
00:38:15,800 --> 00:38:19,399
Speaker 8: this physically backed commater ETFs which are mostly on gold

812
00:38:19,440 --> 00:38:22,759
Speaker 8: and silver, and to positively impact prices when flows go

813
00:38:22,840 --> 00:38:25,879
Speaker 8: in and and the reverse is also true. And again,

814
00:38:25,960 --> 00:38:28,799
Speaker 8: the way I think about this is you take you're

815
00:38:28,880 --> 00:38:32,640
Speaker 8: essentially taking ounces out of circulation that would otherwise go

816
00:38:32,680 --> 00:38:38,160
Speaker 8: into jewelry or other uses. And that's why ETFs physically

817
00:38:38,200 --> 00:38:41,520
Speaker 8: tfs have an impact on prices and and and again

818
00:38:41,600 --> 00:38:43,680
Speaker 8: because interest rates went up so much in the last

819
00:38:43,719 --> 00:38:46,719
Speaker 8: couple of years, and we were trained to get paid

820
00:38:46,800 --> 00:38:49,960
Speaker 8: zero on our bank deposits and and on our safe

821
00:38:50,000 --> 00:38:54,319
Speaker 8: assets like our articles. The ramp up in in in

822
00:38:54,320 --> 00:38:58,640
Speaker 8: interest rates essentially encouraged investors in the West, in Europe

823
00:38:58,640 --> 00:39:03,239
Speaker 8: and the US to sell their gold and buy buy

824
00:39:04,280 --> 00:39:07,000
Speaker 8: texted income securities or bank.

825
00:39:07,719 --> 00:39:10,160
Speaker 4: I get you this question in Francisco. We've got time

826
00:39:10,200 --> 00:39:13,279
Speaker 4: for one more and that is emerging markets. You've got

827
00:39:13,280 --> 00:39:18,399
Speaker 4: a hockey stick chart of emerging markets buying gold. Will

828
00:39:18,400 --> 00:39:21,839
Speaker 4: that continue six percent of value? Now up to ten

829
00:39:21,880 --> 00:39:24,560
Speaker 4: percent of value? Will that vector just keep climbing?

830
00:39:26,560 --> 00:39:29,560
Speaker 8: I think I'll keep climbing over time. The biggest risk

831
00:39:29,880 --> 00:39:32,640
Speaker 8: to the goal market is and we're starting to see

832
00:39:32,640 --> 00:39:37,000
Speaker 8: a little bit already, if there is a move up,

833
00:39:37,000 --> 00:39:38,840
Speaker 8: a very sharp move up and interest rates in the

834
00:39:38,920 --> 00:39:42,360
Speaker 8: US because there's a there's a clean sweep in the election,

835
00:39:42,880 --> 00:39:45,200
Speaker 8: either on the red side or on the blue side,

836
00:39:45,239 --> 00:39:50,480
Speaker 8: We're likely going to see tax cuts, and again we

837
00:39:50,520 --> 00:39:53,360
Speaker 8: only have a very large budget deficit. I'm afraid that

838
00:39:53,440 --> 00:39:55,759
Speaker 8: may push up longer term yields and that would be

839
00:39:55,760 --> 00:39:58,799
Speaker 8: a negative on goal prices. Will be also quite a

840
00:39:58,800 --> 00:40:01,960
Speaker 8: positive turn of events for the bar. And then the

841
00:40:02,000 --> 00:40:04,960
Speaker 8: other issue is what happens to Russian Central bank assets

842
00:40:05,360 --> 00:40:09,719
Speaker 8: if the Russian war with Ukraine ends for one reason

843
00:40:09,840 --> 00:40:12,480
Speaker 8: or the other. Will Russia get their money back? This

844
00:40:12,560 --> 00:40:14,640
Speaker 8: question really matters for the goal marketing.

845
00:40:14,400 --> 00:40:17,840
Speaker 7: Might view Francisco thirty seconds left. Best value in the

846
00:40:17,880 --> 00:40:19,800
Speaker 7: global commodity space that you see right now.

847
00:40:21,200 --> 00:40:24,640
Speaker 8: I think in terms of upside potential, we still like copper,

848
00:40:25,080 --> 00:40:27,760
Speaker 8: and we still like the industrial metals. We think China's

849
00:40:27,760 --> 00:40:29,520
Speaker 8: going to put some stamas in place, and we also

850
00:40:29,520 --> 00:40:32,080
Speaker 8: need the energy transition. We'll drive those markets. And we

851
00:40:32,080 --> 00:40:34,600
Speaker 8: also like silver. By the way, we think silver is

852
00:40:34,040 --> 00:40:38,080
Speaker 8: a really good play on both the precious theme but

853
00:40:38,160 --> 00:40:43,080
Speaker 8: also on the energy transition. The best electricity conductor out

854
00:40:43,080 --> 00:40:43,840
Speaker 8: there is still.

855
00:40:43,640 --> 00:40:48,040
Speaker 4: The encyclopedic Francisco watch never enough time from Madrid. Thank

856
00:40:48,040 --> 00:40:51,160
Speaker 4: you so much, he said, commodities for Bank of America.

857
00:40:51,440 --> 00:40:55,880
Speaker 2: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

858
00:40:56,040 --> 00:40:59,640
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859
00:40:59,640 --> 00:41:03,200
Speaker 2: week a seven to ten am Eastern on Bloomberg dot com,

860
00:41:03,239 --> 00:41:06,840
Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business app.

861
00:41:07,120 --> 00:41:10,200
Speaker 2: You can also watch us live every weekday on YouTube

862
00:41:10,480 --> 00:41:12,280
Speaker 2: and always on the Bloomberg terminal.