WEBVTT - Remaining an Equity Bull and Two Weeks Until the Election 0:00:00.120 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.960 --> 0:00:16.360 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.400 --> 0:00:19.880 at seven am Eastern on applecar Player, Android Auto with 0:00:19.920 --> 0:00:23.360 the Bloomberg Business App. Listen on demand wherever you get 0:00:23.360 --> 0:00:26.239 your podcasts, or watch us live on YouTube. 0:00:26.440 --> 0:00:27.560 Joining us now. 0:00:27.680 --> 0:00:31.800 From Morgan Stanley Mike Wilson, their CEO and chief US 0:00:32.440 --> 0:00:34.760 equity strategist, thrilled that he will be with us for 0:00:34.840 --> 0:00:37.919 this extensive half hour, and say good morning to Global 0:00:38.040 --> 0:00:40.600 Wall Street. Mike Wilson, I'm going to do this in 0:00:40.640 --> 0:00:43.320 a classy way and I'm not going to mince words 0:00:43.360 --> 0:00:43.920 about it. 0:00:44.640 --> 0:00:45.879 I'm death on. 0:00:46.120 --> 0:00:50.479 Fan distribution analysis where you So I've talked to Dominic 0:00:50.560 --> 0:00:54.200 Constant and Credit Sweee and Amozoa about this. You set 0:00:54.280 --> 0:00:56.960 up a single point now and you do a set 0:00:56.960 --> 0:01:00.480 of what ifs three years out, five years obtained years, 0:01:00.760 --> 0:01:03.080 and you come up with a pretty little fan of 0:01:03.120 --> 0:01:06.640 what ifs. I don't see that in Mike Wilson research. 0:01:07.080 --> 0:01:10.920 I see guestimates, the rigor of an Excel spreadsheet. I 0:01:10.959 --> 0:01:15.440 see single points, scattered dot charts. Can fam distributions like 0:01:15.520 --> 0:01:18.120 one of your competitors came up with this week to 0:01:18.160 --> 0:01:22.160 give us a three percent SPX. Can fan distributions work. 0:01:24.360 --> 0:01:24.520 Well? 0:01:24.560 --> 0:01:26.240 I think it depends on how you utilize them. I 0:01:26.319 --> 0:01:29.840 mean we we do a bullbear based case. We've done 0:01:29.880 --> 0:01:32.160 that for you know, the duration of as long as 0:01:32.200 --> 0:01:34.880 we've had this job, and I think every investor does that. 0:01:34.959 --> 0:01:37.360 It's called a risk reward. It's what's my upside, what's 0:01:37.360 --> 0:01:40.920 my downside? And then you basically skew your you know, 0:01:41.120 --> 0:01:43.520 your positioning based on whether you think the downside or 0:01:43.600 --> 0:01:45.560 upside case is more likely. Whether we're talking about a 0:01:45.560 --> 0:01:48.200 single stock or the S and P five hundred, So 0:01:48.200 --> 0:01:48.920 it's no different. 0:01:49.120 --> 0:01:51.240 I don't think that's a unique approach. 0:01:51.400 --> 0:01:53.840 I think that's the way most investors think about how 0:01:53.840 --> 0:01:56.040 to put money to work, and so I think I 0:01:56.040 --> 0:01:56.760 think it works. 0:01:56.760 --> 0:01:58.160 But I mean doesn't mean you're going to be right. 0:01:58.840 --> 0:01:59.880 That's the That's the thing. 0:01:59.840 --> 0:02:02.240 Like like do you bet on the bull case or 0:02:02.280 --> 0:02:04.520 you've been on the barcase at any given time? 0:02:04.600 --> 0:02:07.320 Depends on how they go out. Is it play out 0:02:07.320 --> 0:02:08.359 the way you think it plays out? 0:02:08.480 --> 0:02:11.480 Paul, you live this it credits suite where Dominique was 0:02:11.480 --> 0:02:15.360 sitting there trying to do extrapolations in future forecasts of 0:02:15.480 --> 0:02:18.440 interest rates, and he and Irid Jersey have these wispy 0:02:18.480 --> 0:02:19.959 little charts that they. 0:02:19.919 --> 0:02:22.400 Enjoyed being wrong on for over a decade. 0:02:23.000 --> 0:02:25.040 Exactly right. And so, Mike, you know, one of the 0:02:25.040 --> 0:02:27.520 things I think a lot of investors are thinking about 0:02:27.520 --> 0:02:29.760 here is we think about it kind of what's the 0:02:29.840 --> 0:02:33.120 next leg to this market in any direction? Is what's 0:02:33.120 --> 0:02:35.160 going to lead us? There is you know, kind of 0:02:35.200 --> 0:02:38.240 for most of our listeners and viewers, technology has been 0:02:38.280 --> 0:02:42.079 the sector that's led this market for you know, positive 0:02:42.160 --> 0:02:44.280 or negative. How do you think about technology and the 0:02:44.360 --> 0:02:46.600 tech sector? And I don't know if that that's just 0:02:46.760 --> 0:02:49.880 AI or broader in terms of a leadership position for 0:02:49.919 --> 0:02:50.400 this market. 0:02:51.800 --> 0:02:53.680 Well, I think that's a little bit of of a 0:02:53.720 --> 0:02:57.000 mistake to say it's just been tech, because the reality 0:02:57.040 --> 0:02:59.520 is that if you look at the technology sector in 0:02:59.600 --> 0:03:01.800 an equal weight basis, or just look at the average 0:03:01.800 --> 0:03:05.920 technology stock, it's actually underperformed the S and P five hundred, 0:03:06.160 --> 0:03:08.360 which really worked in the last i'd. 0:03:08.200 --> 0:03:10.120 Say two years and really the last ten years. 0:03:10.240 --> 0:03:14.840 Is high quality, large cap stocks that can operate in 0:03:14.880 --> 0:03:17.720 the environment that we're been given and the environment we've 0:03:17.760 --> 0:03:21.240 described this very clearly, which is we're in a situation 0:03:21.280 --> 0:03:23.679 where you're in a fiscal dominance where the government is 0:03:23.720 --> 0:03:26.680 just getting bigger and bigger every year, and in doing so, 0:03:26.720 --> 0:03:30.680 they're essentially crowding out a good chunk of the private economy. 0:03:31.120 --> 0:03:33.200 And so who benefits in the world that we live 0:03:33.240 --> 0:03:37.000 in Large cap companies with scale, who can operate in 0:03:37.000 --> 0:03:39.360 this environment, and that's what's working. 0:03:39.400 --> 0:03:40.640 So it's not just tech companies. 0:03:40.680 --> 0:03:44.960 I mean, it's consumer discretionary companies, it's healthcare companies, it's 0:03:45.040 --> 0:03:48.000 even some energy companies. Okay, Like, if you have scale 0:03:48.000 --> 0:03:51.119 and you're operating well, that's what's driving the index Hired, 0:03:51.160 --> 0:03:53.280 that's what has been driving the index higher. That's starting 0:03:53.320 --> 0:03:55.839 to change a little bit here recently with the mag 0:03:55.920 --> 0:03:58.720 seven underperforming since July and there's a bit of a 0:03:58.760 --> 0:04:01.480 broadening out going on. But the broadening out is still 0:04:01.520 --> 0:04:05.280 happening at the kind of quality level, meaning the market 0:04:05.360 --> 0:04:08.000 still doesn't really want to go down the quality curve 0:04:08.720 --> 0:04:11.880 or two companies that have bad balance sheets, etc. They're 0:04:11.880 --> 0:04:15.040 still they're just going into different high quality stocks across 0:04:15.320 --> 0:04:16.039 the complex. 0:04:17.279 --> 0:04:19.279 Mike, we're kind of just starting to get into the 0:04:19.360 --> 0:04:22.000 teeth of this earning season. We've had some really good 0:04:22.080 --> 0:04:24.960 numbers coming out of global wall streets so far. What 0:04:25.000 --> 0:04:27.480 do you think the market needs to see out of 0:04:28.160 --> 0:04:30.359 corporate America over the next couple of weeks in terms. 0:04:30.160 --> 0:04:34.000 Of earnings, Well, you're right, I mean, like as usual, 0:04:34.080 --> 0:04:37.120 companies have managed the numbers lower going into the quarter. 0:04:37.200 --> 0:04:38.159 That's not unusual. 0:04:38.240 --> 0:04:41.440 This quarter was a little bit more negative in terms 0:04:41.480 --> 0:04:43.559 of the revision. So that the bar has been lowered, 0:04:43.560 --> 0:04:45.440 they're going to jump over the bar and with the market, 0:04:45.520 --> 0:04:47.440 like what investors are going to what they're going to 0:04:47.480 --> 0:04:49.920 buy or companies that not only beat the lower bar, 0:04:50.400 --> 0:04:52.680 but then give you some confidence that there's actually some 0:04:52.760 --> 0:04:55.479 acceleration coming. The thing that's been missing in the last 0:04:55.480 --> 0:04:57.599 three or four quarters is we don't have any broad 0:04:57.680 --> 0:05:01.320 acceleration and order growth or or you know, where's the 0:05:01.440 --> 0:05:04.160 exogenous positive gross shock going to come that's going to 0:05:04.240 --> 0:05:06.560 ride you know, lift all rising boats. And so that's 0:05:06.600 --> 0:05:09.400 why it's become very idiosyncratic, right that there's a lot 0:05:09.400 --> 0:05:11.280 of winners and there's a lot of losers right now, 0:05:11.960 --> 0:05:14.640 and if there's share gains going on, and those are 0:05:14.640 --> 0:05:17.159 the things that investors are keying off of. Who's operating 0:05:17.200 --> 0:05:19.560 well in this environment? And I think that's going to 0:05:19.720 --> 0:05:21.000 continue to be the game it's played. 0:05:21.600 --> 0:05:24.640 I mean, I mean, you know, I look at Mike Wilson, 0:05:24.680 --> 0:05:28.039 like in video you got Joe Moore, Joseph Moore covering. 0:05:28.240 --> 0:05:30.680 I know you guys are not speaking terms, but when 0:05:30.720 --> 0:05:33.800 you listen to a guy like Joseph Moore on Nvidia, 0:05:34.640 --> 0:05:38.080 you're more than Stantley. How far out is your terminal 0:05:38.200 --> 0:05:41.520 value on megs seven and on the rocket stock? 0:05:41.600 --> 0:05:42.039 In Vidia? 0:05:42.120 --> 0:05:45.400 Do you have to justify its existence by going out 0:05:45.520 --> 0:05:49.520 not three years but seven? Or dare I say a decade? 0:05:51.279 --> 0:05:53.400 Actually, Joe and I had dinner last night with some clients, 0:05:53.400 --> 0:05:55.320 so we are speaking. 0:05:55.440 --> 0:05:57.760 Okay, Well, tell us about the dinner. Stop stop, this 0:05:57.800 --> 0:06:00.200 is too much. Tell us about the dinner. Mike will 0:06:00.240 --> 0:06:00.640 soon give. 0:06:00.600 --> 0:06:01.840 Us something very enjoyable. 0:06:01.920 --> 0:06:04.839 It's a very enjoyable dinner with about twenty clients. It's 0:06:04.880 --> 0:06:08.240 excellent food and great conversation. But Joe, I mean, look, 0:06:08.320 --> 0:06:10.560 Joe has had the right view. He's been very bullish 0:06:10.600 --> 0:06:13.440 on the AI winners, and he hasn't been very bullish 0:06:13.560 --> 0:06:16.560 on the broader semi conductor complex. 0:06:16.640 --> 0:06:18.720 Right, and this this is a perfect. 0:06:18.320 --> 0:06:22.200 Microcosm what we're just talking about. Even within semiconductors. Okay, 0:06:22.240 --> 0:06:24.640 you have the big winners, which everybody knows, and then 0:06:24.680 --> 0:06:26.520 you have a bunch of companies that really just aren't 0:06:26.560 --> 0:06:29.360 seeing any acceleration in their business because the global economy 0:06:29.400 --> 0:06:32.240 is kind of and that's what we got. And so 0:06:32.680 --> 0:06:34.280 in the case of a video, I mean, Joe's had 0:06:34.279 --> 0:06:37.120 a great call. I mean, he's not looking seven years out, 0:06:37.160 --> 0:06:38.760 because it's silly to try and predict that, but he 0:06:38.839 --> 0:06:41.200 is looking out probably several years. We talked about that 0:06:41.279 --> 0:06:43.640 last night, which is there's a lot of visibility for 0:06:43.800 --> 0:06:46.440 twenty five and then twenty six is when the visibility 0:06:46.800 --> 0:06:49.440 starts to come down. So at the stock we'll start 0:06:49.480 --> 0:06:52.080 to discount that at some point. Right now, you know, 0:06:52.120 --> 0:06:53.200 the momentum is quite good. 0:06:54.200 --> 0:06:56.920 I mean, Mike Wilson, I got to ask this question. 0:06:56.960 --> 0:06:58.120 We got to go to break and we're ready to 0:06:58.120 --> 0:07:02.400 come back with mister Wilson Teams two. Mike Wilson, when 0:07:02.400 --> 0:07:06.080 you heard that James Gorman was going to Disney you know, 0:07:06.160 --> 0:07:08.680 were you like, you know, like the football player leaving 0:07:08.720 --> 0:07:11.120 the field, We're going to Disneyland. I mean, what were 0:07:11.120 --> 0:07:15.000 your thoughts when your fearless leader who changed your company 0:07:15.480 --> 0:07:17.920 announced he's going to wander over and help mister Eiger 0:07:17.960 --> 0:07:18.520 at Disney. 0:07:19.960 --> 0:07:21.560 Well that was a while ago, and he's now the 0:07:21.600 --> 0:07:23.640 chairman of the board. It doesn't surprise me at all, James. 0:07:23.680 --> 0:07:26.600 It's really really good at this, you know, managing companies. 0:07:26.600 --> 0:07:28.480 He did a great job here. I wish him the 0:07:28.480 --> 0:07:30.760 best and I think it's exciting for him. So it's 0:07:30.760 --> 0:07:32.000 the next great chapter for him. 0:07:32.120 --> 0:07:35.760 Mike Wilson, Morgan Stanley with us. Mike, the clearest memories 0:07:36.040 --> 0:07:39.240 of the right of passage of Ready Graham Dodd where 0:07:39.240 --> 0:07:42.840 they started with railroad stocks in the nineteen thirties. And 0:07:42.880 --> 0:07:45.560 the one thing that has not changed from Graham, Dodd 0:07:45.600 --> 0:07:50.560 and Coddle is ratio analysis. So whether it's pe P, 0:07:50.760 --> 0:07:54.080 d ebadah P to this P this, the answer is 0:07:54.200 --> 0:07:57.720 there's movement of the numerator and movement of the denominator. 0:07:58.120 --> 0:08:02.119 Let us begin the discussion. Mike Wilson, is the market rich? 0:08:02.360 --> 0:08:04.120 Is the market overpriced? 0:08:06.160 --> 0:08:09.440 Well, that's an easy question and it's definitely rich. The 0:08:09.960 --> 0:08:12.160 better question is isn't overpriced? And that is in the 0:08:12.160 --> 0:08:12.960 eye of the beholder. 0:08:13.000 --> 0:08:15.120 I mean, who am I to say that it's overpriced? 0:08:15.160 --> 0:08:19.720 If something happens in the future that we don't expect, however, 0:08:20.040 --> 0:08:22.840 your odds of success. And here's one thing about valuation, 0:08:23.000 --> 0:08:26.600 tom As you well know, valuation in the short term 0:08:26.680 --> 0:08:29.800 is useless, okay, but valuation in the long term, meaning 0:08:29.880 --> 0:08:32.280 seven plus years, is perfect. 0:08:32.920 --> 0:08:34.600 So it's pretty easy to sit. 0:08:34.440 --> 0:08:38.080 Back and say that stocks are overpriced and rich and 0:08:38.360 --> 0:08:41.160 your expected returns over seven to ten year period are 0:08:41.200 --> 0:08:43.160 probably pretty modest, but. 0:08:43.120 --> 0:08:44.600 That doesn't mean you shouldn't be invested. 0:08:44.800 --> 0:08:47.600 And there are many stocks within the stock market that 0:08:47.640 --> 0:08:50.199 are not expensive. So you know, it's like I said, 0:08:50.240 --> 0:08:53.200 it's a market of stocks, not a stock market. And 0:08:53.240 --> 0:08:55.600 that's the way we've been approaching it for the last year. 0:08:55.600 --> 0:08:57.640 As you know, we've been less focused on the index 0:08:57.760 --> 0:08:59.880 level and much more focused on trying to be in 0:08:59.880 --> 0:09:04.000 the right places and try to help people outperform the index, 0:09:04.000 --> 0:09:05.080 which is really our job. 0:09:05.880 --> 0:09:08.560 And Mike, you recently upgraded the financials and we saw 0:09:08.559 --> 0:09:10.160 some good earnings just a few days ago from some 0:09:10.160 --> 0:09:12.240 of the big financial players. What's the call there on 0:09:12.280 --> 0:09:13.320 financials these days? 0:09:14.280 --> 0:09:15.400 Well, that was definitely part of it. 0:09:15.480 --> 0:09:18.120 So, you know, we noticed that going into earning season, 0:09:18.280 --> 0:09:21.800 expectations had come down a lot of the bigger institutions 0:09:21.800 --> 0:09:23.559 had lowered expectations. 0:09:22.960 --> 0:09:25.440 So it was an easy bar to jump over, easier. 0:09:25.080 --> 0:09:27.960 Than others even and you know, with the bull steepener 0:09:28.080 --> 0:09:30.839 just going on in rates since the labor market came out, 0:09:30.920 --> 0:09:33.960 that's actually quite positive for big banks, and so just 0:09:34.200 --> 0:09:37.080 that was an easy call in many ways, it's worked 0:09:37.080 --> 0:09:39.320 out so far, knock on wood. We do think there's 0:09:39.360 --> 0:09:42.640 follow through because from our data it shows anyways that 0:09:42.800 --> 0:09:46.520 most institutional investors are still underweight to sector, and I 0:09:46.520 --> 0:09:50.760 think so financials, at least large cap quality financials look 0:09:50.800 --> 0:09:51.640 to be a good place to be. 0:09:51.720 --> 0:09:53.000 Still. 0:09:53.440 --> 0:09:55.360 You may have noticed we've got an election coming up 0:09:55.520 --> 0:09:58.160 in two weeks. When you talk to your clients, how 0:09:58.200 --> 0:10:00.720 do you kind of frame that in in the short 0:10:00.800 --> 0:10:02.920 term here and maybe even intermediate term. 0:10:03.320 --> 0:10:05.240 Yeah, I mean the election has definitely taken a lot 0:10:05.280 --> 0:10:07.320 of the era out of the room, as it usually 0:10:07.320 --> 0:10:09.800 does at this time of the contest. It's you know, 0:10:09.800 --> 0:10:13.560 it's very closely measured by the polls, not as closely 0:10:13.600 --> 0:10:17.199 measured by the bending sites. As you know, it's sort 0:10:17.240 --> 0:10:20.600 of sixty sixty five percent Trump now, and the market 0:10:20.640 --> 0:10:22.000 has kind of taken notice to that. 0:10:22.120 --> 0:10:24.280 So what I would say is that the market has 0:10:24.320 --> 0:10:25.280 definitely moved. 0:10:25.040 --> 0:10:27.600 Into sort of a Trump victory, if not a Republican 0:10:27.720 --> 0:10:31.280 sweep victory, and the stocks and areas of the market 0:10:31.320 --> 0:10:33.320 that would do better, and financials is part of that, 0:10:33.360 --> 0:10:37.400 by the way, under a Trump win has started to perform. 0:10:37.920 --> 0:10:40.320 And so I think the setup now is. 0:10:40.200 --> 0:10:43.080 Such that if the market plays out, or if the 0:10:43.160 --> 0:10:45.920 election plays out the way the market's expecting, there's probably 0:10:45.920 --> 0:10:48.280 limited upside in those areas that will do well under 0:10:48.320 --> 0:10:50.360 a Trump victory. And I think the surprise would be 0:10:50.360 --> 0:10:52.440 as the Paris wins and some of these trades are 0:10:52.480 --> 0:10:55.320 going to have to unwind. So this is really front 0:10:55.360 --> 0:10:57.440 and center right now for the next two to three weeks. 0:10:58.240 --> 0:11:00.439 I think this is probably fifty to six percent of 0:11:00.440 --> 0:11:02.880 the conversations we have. People are trying to just manage this, 0:11:03.480 --> 0:11:05.360 and then once the election's over, I think then the 0:11:05.400 --> 0:11:07.880 market will look forward to, Okay, what should I be 0:11:08.040 --> 0:11:10.880 owning now now that this event is behind us into 0:11:10.920 --> 0:11:11.960 twenty twenty five. 0:11:12.280 --> 0:11:14.960 Mike Wilson, the heart of the matter, which is you 0:11:15.000 --> 0:11:17.400 were cautious on the market while we had a leg 0:11:17.520 --> 0:11:21.120 up in this two year whatever it is bullmarket. But 0:11:21.200 --> 0:11:24.800 the great Mike Wilson reality is you were invested. I 0:11:24.840 --> 0:11:28.880 didn't see Mike Wilson timing the market in this bull market. 0:11:29.000 --> 0:11:31.720 Forget about shorts. I mean, trust me, folks, I've been 0:11:31.760 --> 0:11:35.920 short and wrong. I've enjoyed that feeling. Good morning, Jim Chanos, 0:11:35.960 --> 0:11:40.640 the giant of all this. But Mike Wilson on market timing. 0:11:40.840 --> 0:11:44.040 If one thing we've seen here, Mike, it's just a 0:11:44.280 --> 0:11:46.200 brutal exercise, isn't it. 0:11:48.040 --> 0:11:50.559 Oh yeah, there's you know, there's a whole graveyard of 0:11:50.600 --> 0:11:53.440 people of market timers. You know, we we do it 0:11:53.440 --> 0:11:54.360 as part of our job. 0:11:54.679 --> 0:11:55.200 We have to. 0:11:55.320 --> 0:11:58.000 We asked, we're asked by clients that kind of you know, 0:11:58.200 --> 0:12:00.120 whether it's the S and P five hundred or or 0:12:00.160 --> 0:12:03.240 sectors or stocks. I mean, that's our job, and that's 0:12:03.320 --> 0:12:05.880 it's most you know, asset manager's job is to try 0:12:05.880 --> 0:12:09.040 and time when to buy certain stocks or do certain 0:12:09.080 --> 0:12:11.880 things with their investments. And I mean, look, sometimes we 0:12:11.920 --> 0:12:13.400 get to right, sometimes we get it wrong. I would 0:12:13.400 --> 0:12:15.520 say we had a stretch where I felt like we 0:12:15.840 --> 0:12:19.000 got everything right, and of course that never lasts. The 0:12:19.040 --> 0:12:21.760 good news about investing is you can always change your mind, 0:12:22.160 --> 0:12:24.360 which we've done, and we've you know, raised our targets, 0:12:24.400 --> 0:12:26.840 and we've changed our strategy to to deal with what 0:12:26.880 --> 0:12:29.000 the market's giving us. And that's really the game is 0:12:29.080 --> 0:12:32.120 just take what the market gives you. Don't fight what 0:12:32.200 --> 0:12:34.800 the market's telling you. That's the best analyst in the 0:12:34.840 --> 0:12:37.080 world is what the market internals are saying. We use 0:12:37.120 --> 0:12:39.720 it as part of our process, actually, and I think 0:12:39.760 --> 0:12:41.640 that's that's the best way to be. Just be humble 0:12:41.640 --> 0:12:44.360 about it, and and you know, don't don't be afraid 0:12:44.360 --> 0:12:46.240 to say, hey, we're wrong. I mean, like I think 0:12:46.320 --> 0:12:48.400 some of you are expected to be right all the 0:12:48.400 --> 0:12:51.640 time and nobody is. And being wrong is not a sin. 0:12:51.679 --> 0:12:54.319 It's just you know, staying on the wrong side of 0:12:54.360 --> 0:12:55.760 things for too long as it is a problem. 0:12:55.840 --> 0:12:57.840 But Paul, the heart of this is Wilson's playing. 0:12:57.880 --> 0:13:00.800 He's participating in the market with Gina mar and Adams 0:13:00.960 --> 0:13:03.800 and Brian Belski coming up in all these people that 0:13:03.880 --> 0:13:08.080 are going to go to cash, I mean, come on, 0:13:08.679 --> 0:13:09.120 in this. 0:13:09.040 --> 0:13:12.600 Bull market, they've been wiped out, yeah. 0:13:12.400 --> 0:13:15.080 I absolutely, And don't try to time the markets. What 0:13:15.080 --> 0:13:17.480 we've heard from the pros, including Mike Mike Wilson, Mike, 0:13:17.559 --> 0:13:20.160 as we think about, you know, going into twenty twenty 0:13:20.160 --> 0:13:23.160 five should we be focusing I mean, what's going to 0:13:23.240 --> 0:13:24.800 drive this market? Is it going to be the fed 0:13:24.960 --> 0:13:26.880 in the parlor game to Tom hates the play, or 0:13:26.920 --> 0:13:29.240 is it going to be good old fundamental earnings and 0:13:29.280 --> 0:13:30.480 fundamentals and that kind of thing. 0:13:32.040 --> 0:13:32.880 Well, it's all the above. 0:13:32.920 --> 0:13:34.319 But I think the thing that we're going to focus, 0:13:34.320 --> 0:13:37.240 that we're focused on right now anyways, is Look, we've 0:13:37.240 --> 0:13:39.360 been in this world of fiscal dominance for a while. 0:13:39.400 --> 0:13:42.720 We've gotten that right from twenty twenty one. We traded 0:13:42.720 --> 0:13:44.280 it really well at the beginning. We didn't trade it 0:13:44.320 --> 0:13:46.320 well so so to speak, in twenty two, twenty three, 0:13:46.679 --> 0:13:49.440 or in twenty three in particular and even into this year. 0:13:49.760 --> 0:13:52.560 But I think the consequences of that now are going 0:13:52.640 --> 0:13:54.120 to come front and center. And what I mean by 0:13:54.160 --> 0:13:56.520 that is what we're focused on is, you know, the 0:13:56.640 --> 0:14:00.720 dollar and rates. Does that come back into the picture again, 0:14:01.120 --> 0:14:04.440 which then makes equities you know, vulnerable to a. 0:14:04.600 --> 0:14:06.640 Correction at the at the macro level. 0:14:07.240 --> 0:14:09.560 We'll see, but I think that's going to be like 0:14:09.679 --> 0:14:11.160 right now, what we saw in the last couple of 0:14:11.200 --> 0:14:12.880 days is rates are breaking out about the two in 0:14:12.960 --> 0:14:13.760 or day moving average. 0:14:13.760 --> 0:14:16.320 We're seeing actually turn premium come back. 0:14:16.160 --> 0:14:18.640 Into the market. The dollar has been very strong, and 0:14:18.679 --> 0:14:21.400 that's a governor on liquidity. So I think that's the 0:14:21.400 --> 0:14:23.360 thing we're going to be watching going in twenty twenty five. 0:14:23.400 --> 0:14:26.479 And of course what we've been waiting for is this reacceleration. 0:14:26.640 --> 0:14:28.960 It seems to be elusive, and so what we need 0:14:29.000 --> 0:14:31.400 to see is we need to see growth accelerate next year. 0:14:31.440 --> 0:14:34.040 We have acceleration in our forecast twelve percent urach growth 0:14:34.040 --> 0:14:36.160 for next year after about probably seven or eight this year. 0:14:36.920 --> 0:14:38.760 So that is good, but that's price. 0:14:38.840 --> 0:14:40.440 I think we need to see more than twelve percent 0:14:40.520 --> 0:14:42.960 aries growth next year to get this market to really 0:14:43.040 --> 0:14:44.400 power higher at the index level. 0:14:44.640 --> 0:14:47.400 Yeah, Mike, I'm supposed to ask now Dodgers or Yankees, 0:14:47.440 --> 0:14:51.120 but I realize for you that's a secondary effort. Michigan 0:14:51.240 --> 0:14:55.120 State or Michigan. I mean, what do you think there 0:14:55.160 --> 0:14:57.000 in a rebuilding year at ann Arbor. 0:14:58.680 --> 0:15:00.560 Yeah, I mean, this is this is one that's more 0:15:00.560 --> 0:15:03.080 important to Michigan fans than than than you might think. 0:15:03.160 --> 0:15:05.400 I mean, house state of Michigan State. You cannot lose 0:15:05.400 --> 0:15:08.520 those games. It doesn't matter, no excuses. You got to 0:15:08.560 --> 0:15:11.240 show up. And I'm confident that Big Blue will show 0:15:11.320 --> 0:15:11.840 up this weekend. 0:15:12.280 --> 0:15:14.400 Nice, oh Big Blue. See you got the Dodgers in there. 0:15:14.440 --> 0:15:17.120 You know, we got the Dodgers in Mike Wilson, thank 0:15:17.160 --> 0:15:18.520 you so much with Morgan Stanley. 0:15:18.760 --> 0:15:20.360 Huge response from mister Wilson. 0:15:25.680 --> 0:15:29.560 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:15:29.640 --> 0:15:37.240 weekday afternoons from seven to ten, or wan't just live 0:15:37.360 --> 0:15:38.680 on YouTube. 0:15:39.480 --> 0:15:42.600 Neither you nor Alex Steele will go Lulu Lemmon right now. 0:15:42.680 --> 0:15:42.840 Now. 0:15:42.840 --> 0:15:44.160 It's a little bit, a little bit too much. 0:15:44.320 --> 0:15:47.000 I was so old. We had, you know, for our socks. 0:15:47.080 --> 0:15:51.200 We had garter straps, you know, like the garter beilt things. 0:15:51.280 --> 0:15:52.440 And then they went away from that. 0:15:52.520 --> 0:15:54.880 I wonder are they doing Lululemon now, you know the 0:15:54.920 --> 0:15:56.880 hold the shin pads on them. I don't know. 0:15:57.320 --> 0:16:03.800 There are you duneks Bloomberg Savannahs. This morning. 0:16:03.800 --> 0:16:06.640 All of our economic coverage just brought you by Commonwealth, 0:16:07.040 --> 0:16:10.840 supporting more than two thousand independent financial advisors, a two 0:16:10.880 --> 0:16:15.520 to one advisor to staff ratio, small firm attentiveness, big 0:16:15.560 --> 0:16:19.320 advisor impact. Go to Commonwealth dot com to learn about 0:16:19.360 --> 0:16:24.880 their consultative support in technology. When we invented this act 0:16:25.120 --> 0:16:29.480 years ago we knew it was singularly the conversation of 0:16:29.560 --> 0:16:32.680 our guests and the honor of going from Mike Wilson 0:16:33.160 --> 0:16:37.520 of Morgan Stanley to Brian Belski of BEMO Capital Markets 0:16:37.600 --> 0:16:39.960 is what the show is all about. We welcome all 0:16:40.000 --> 0:16:43.360 of you across the nation and we'll get the Minnesota 0:16:43.480 --> 0:16:46.680 in a moment. Brian, you have killed it on this 0:16:46.800 --> 0:16:50.120 bull market. Let's get back to first principles. What's a 0:16:50.160 --> 0:16:51.760 gloom crew get wrong? 0:16:52.000 --> 0:16:54.400 Stay invested? You know, going back to the hockey thing. 0:16:54.440 --> 0:16:56.640 Do you remember the silver things that we connected to 0:16:56.680 --> 0:16:59.800 your sock that sometimes you got get them wet they 0:16:59.800 --> 0:17:04.760 bring or they'd rust that I'm not old. 0:17:04.080 --> 0:17:05.800 Or they broke off and you'd have to get a 0:17:05.920 --> 0:17:09.160 dime exactly to do it exactly, and. 0:17:09.080 --> 0:17:12.240 You hoped it wasn't so, you know, at least it's 0:17:12.280 --> 0:17:16.080 like blushing. I mean, it's hockey talk. We're not going 0:17:16.119 --> 0:17:19.359 to talk about taking showers and six no no, no, no, no, no, 0:17:19.200 --> 0:17:21.880 no, no road game. What does a gloom crew get wrong? 0:17:21.960 --> 0:17:22.960 I think stay invested. 0:17:23.200 --> 0:17:26.040 I think trying not to time. I think people have 0:17:26.200 --> 0:17:28.240 become so afraid to be wrong they don't want to 0:17:28.280 --> 0:17:31.240 be right. I think part of this is a function 0:17:31.280 --> 0:17:34.640 of what happened during the tech wreck that was exacerbated 0:17:35.040 --> 0:17:38.840 during the Great Financial Crisis, which created the generational buying opportunity. 0:17:38.840 --> 0:17:40.399 In two thousand and nine, when we came out with 0:17:40.440 --> 0:17:43.080 our twenty five year Secular Bowl, Maarkt called twenty ten. 0:17:43.320 --> 0:17:45.920 So we remain resolute on this. We're entering year three 0:17:45.960 --> 0:17:49.000 of the Bowl, and I think you know, going forward, 0:17:49.240 --> 0:17:51.720 our longer term trend has been normalization. We've been talking 0:17:51.720 --> 0:17:52.920 about it for three years. 0:17:52.720 --> 0:17:54.800 But I've been dying to get you on. I'm so happy, 0:17:54.920 --> 0:17:56.600 Thank you so much from Europe. 0:17:56.320 --> 0:17:59.720 And Paul's got a million questions. Let me go right here. 0:17:59.480 --> 0:18:04.119 You're a research note. Is one of hyper acuity. A 0:18:04.200 --> 0:18:09.720 competitive firm is just done a fan distribution exercise out 0:18:09.880 --> 0:18:14.320 ten years. I look at it with my math knowledge 0:18:14.680 --> 0:18:17.320 and I'm like, Okay, I get it's a marketing exercise. 0:18:17.680 --> 0:18:21.480 But what is the value of a ten year fan 0:18:21.560 --> 0:18:26.000 distribution extrapolation? Your Denny's on the top of the green line. 0:18:26.320 --> 0:18:31.320 It's seven percent. Roaring twenties. I just I lost Brian acuity. 0:18:31.720 --> 0:18:32.720 Tell us about. 0:18:32.480 --> 0:18:36.359