WEBVTT - World Braces for Iran's Response After US Strikes

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Welcome to the Bloomberg day Break Asia Podcast. I'm Doug Prisner.

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<v Speaker 2>Iran is facing its most perilous moment in decades. This

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<v Speaker 2>after the US and Israel attacked Iran's nuclear facilities. It

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<v Speaker 2>was Saturday night in the US. President Trump authorized a

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<v Speaker 2>massive strike, even though he previously hinted at a delay.

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<v Speaker 2>Here is Trump as he addressed the nation in televised

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<v Speaker 2>remarks late Saturday.

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<v Speaker 3>Iranski nuclear and Richmond facilities have been completely and totally obliterated. Aranda,

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<v Speaker 3>bully of the Middle East, must now make peace. If

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<v Speaker 3>they do not, future attacks would be far greater and

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<v Speaker 3>a lot easier.

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<v Speaker 2>The mission was dubbed Operation Midnight Hammer. It used B

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<v Speaker 2>two stealth bombers, Tomahawk missiles, and precision guided weapons to

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<v Speaker 2>disable three Irani nuclear facilities. In a moment, we'll take

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<v Speaker 2>a look at market implications of the strikes. I'll be

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<v Speaker 2>joined by Gene Goldman. He is the chief investment officer

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<v Speaker 2>at SETA Financial Group. But we begin in Washington, where

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<v Speaker 2>we heard earlier from John Bolton, former US Ambassador to

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<v Speaker 2>the United Nations. He spoke with Bloomberg's Bounce of Power

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<v Speaker 2>host Joe Matthew and Kaylee Lyons.

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<v Speaker 4>I don't know what you make of this rhetorical dance

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<v Speaker 4>that we're hearing about the extent of damage. Starting with

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<v Speaker 4>President Trump suggesting that Fourdeaux was obliterated, we've heard more

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<v Speaker 4>tempered comments from the Chairman of the Joint Chiefs and

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<v Speaker 4>other analysts who are looking at this, including the IAEA.

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<v Speaker 5>Did we go far enough? Well, I don't think the

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<v Speaker 5>job is finished.

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<v Speaker 6>I think it's very difficult to make evaluations of how

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<v Speaker 6>effectively been for example, at foordoh which by definition was

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<v Speaker 6>under a mountain and it's very difficult to see inside.

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<v Speaker 6>But my guess is that what the Chairman of the

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<v Speaker 6>Joint Chiefs, General Cain said is accurate that there were

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<v Speaker 6>severe damage. We'll be checking further and seeing what happened.

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<v Speaker 5>There are a lot of.

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<v Speaker 6>Other pieces, though, that need to be put into play here.

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<v Speaker 6>We know we've seen from overhead photographs that during the

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<v Speaker 6>sixty plus days of negotiation that President Trump offered, the

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<v Speaker 6>Iranians did a fair amount of work trying to move

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<v Speaker 6>perhaps uranium stockpiles, perhaps sensitive machinery out of some of

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<v Speaker 6>these key target areas. We may or may not know

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<v Speaker 6>where that is, but I don't think this is over yet.

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<v Speaker 6>Just on the mission of destroying these three sides.

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<v Speaker 7>Well, and on that mission, administration officials have maintained today

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<v Speaker 7>that the objective was solely to focus on Iran's nuclear capabilities,

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<v Speaker 7>that this objective was not regime change. But sir, even

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<v Speaker 7>if it wasn't the objective, could that still be the

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<v Speaker 7>end result?

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<v Speaker 5>And how well exactly?

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<v Speaker 6>And even as we just heard the President has been

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<v Speaker 6>tweeting about regime change.

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<v Speaker 5>I mean, I think regime change has.

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<v Speaker 6>To be the objective because the Eye Tollas are never

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<v Speaker 6>going to give up their pursuit of nuclear weapons.

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<v Speaker 5>They have to be worst out of power.

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<v Speaker 6>That's the only shot we have at really lasting peace

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<v Speaker 6>and security in the Middle East. And a strike like

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<v Speaker 6>this and potentially others, and certainly Israel's ongoing attacks can

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<v Speaker 6>disrupt the regime, can destabilize it. Look at the choice

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<v Speaker 6>that the top military officials and Keiia Tollas now have

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<v Speaker 6>to face after the US attack.

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<v Speaker 5>They've been beaten.

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<v Speaker 6>Badly by the Israelis ever since Hamasa's attack on out

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<v Speaker 6>of Gaza on October seventh, twenty twenty three.

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<v Speaker 5>Now they have to make a choice.

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<v Speaker 6>Do they want to take on a second military adversary

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<v Speaker 6>in the form of the United States.

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<v Speaker 5>They may well do it. Look, it's a regime.

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<v Speaker 6>Run by medieval religious fanatics. They may well retaliate against

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<v Speaker 6>the United States, but they will be making a big

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<v Speaker 6>mistake from the point of view of regime survival.

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<v Speaker 4>Well, when we consider the day after, whether it's an

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<v Speaker 4>attack on the alasad Air basis we saw for the

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<v Speaker 4>killing of Costume Solo mony, maybe against Bahrain, the home

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<v Speaker 4>of the Fifth Fleet. Maybe it's something we're not thinking

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<v Speaker 4>of here. What would be the US response?

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<v Speaker 5>What should it be?

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<v Speaker 6>Well, I think there are three categories of possible targets. One,

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<v Speaker 6>obviously is more attacks on Israel. Second would be a

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<v Speaker 6>tax against the Golf Arab States, the oil producing nations

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<v Speaker 6>of the Golf, And third on the US deployed military forces,

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<v Speaker 6>our consulates, our embassies, private American citizens in the region,

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<v Speaker 6>and terrorist attacks against Americans and others around the world,

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<v Speaker 6>including in this country. Obviously, our first concern is the Americans,

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<v Speaker 6>but we're going to do everything we can to defend Israel,

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<v Speaker 6>and I think we should make it clear to the

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<v Speaker 6>Golf Arab states and Jordan and Egypt that will be

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<v Speaker 6>defending them too. We have a common interest against this

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<v Speaker 6>Iranian threat, and it really at this point is much

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<v Speaker 6>harder for Iran to do what they might like to do,

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<v Speaker 6>given the pounding that they've been taking from Israel, given

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<v Speaker 6>that their terrorist proxies Hamas and Hezbela have been badly beaten,

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<v Speaker 6>their key ally, the Aside regime in.

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<v Speaker 5>Syria has fallen.

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<v Speaker 6>This is not the Iran it was on October the sixth,

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<v Speaker 6>twenty twenty three, that's for sure.

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<v Speaker 7>Well, as we consider what capabilities Iran may have to

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<v Speaker 7>retaliate militarily, what if it just is in the form

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<v Speaker 7>of Iran no longer cooperating or participating in, say, the

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<v Speaker 7>Nuclear Non Proliferation Treaty, no longer allowing IAEA inspectors to

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<v Speaker 7>monitor what Iran is doing. Even if we may have

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<v Speaker 7>diminished the threat of Iran's nuclear capability in the short term,

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<v Speaker 7>does that not potentially risk if they were to exit

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<v Speaker 7>that agreement much greater danger in the long term.

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<v Speaker 5>Now, it wouldn't make any difference at all.

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<v Speaker 6>They've been violating the Nuclear Non Proliferation Treaty for twenty

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<v Speaker 6>five or thirty years, as it is now because their

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<v Speaker 6>commitment under that treaty was not to seek nuclear weapons

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<v Speaker 6>in any form, and that's exactly what they've been doing.

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<v Speaker 5>So withdrawal from the treaties just meaningless.

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<v Speaker 6>And as for the IAEA, look, it's it's been excluded

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<v Speaker 6>from key sites, the weaponization activities, and many others for

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<v Speaker 6>quite some time.

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<v Speaker 5>IAEA is a good agency.

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<v Speaker 6>I have a lot of respect for it, but it's

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<v Speaker 6>not an intelligence agency. Frequently, the most important information that

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<v Speaker 6>the IAE deals with we have given them.

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<v Speaker 4>Iran's parliament has voted to close the Strait of horror moves.

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<v Speaker 4>As you've heard. You may not take that seriously, John Bolton,

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<v Speaker 4>but I wonder what our capability would be if we

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<v Speaker 4>see Iran begin to lay minds. Could we stop that

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<v Speaker 4>or is there another way that they could close the straight?

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<v Speaker 6>Well, there are a number of ways they could try

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<v Speaker 6>and do it, and that's why we've put substantially greater

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<v Speaker 6>naval assets in the region more on the way. This

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<v Speaker 6>is something I think that maybe more bluster than anything else,

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<v Speaker 6>can raise the level of danger.

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<v Speaker 5>But we're fully aware that.

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<v Speaker 6>This has been a possibility and if they try it,

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<v Speaker 6>it won't simply be clearing minds away from the strait

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<v Speaker 6>of horror moves that we do. I expect we would

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<v Speaker 6>put much of the Iranian navy on the bottom of

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<v Speaker 6>the Red Sea, and we would be striking other targets

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<v Speaker 6>inside Iran. This is a no win proposition for them

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<v Speaker 6>if they up the stakes that way.

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<v Speaker 7>All right, John Bolton, former US Ambassador to the UN

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<v Speaker 7>and former National Security Advisor under the first Trump administration.

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<v Speaker 7>Thank you.

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<v Speaker 2>Welcome back to the Daybreak Asia podcast. I'm Doug Chrisner.

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<v Speaker 2>We're seeing market reaction to the US attack on Iran's

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<v Speaker 2>three main nuclear sites. Stock index futures or down, Crude

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<v Speaker 2>oil prices are higher, and treasury bonds are being boosted

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<v Speaker 2>by some haven buying. For a closer look at market action,

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<v Speaker 2>I'm joined now by Gene Goldman. He is the chief

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<v Speaker 2>investment officer at Satara Financial Group. Jean joins us here

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<v Speaker 2>in our New York studio. Nice of you to drop

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<v Speaker 2>by on a Sunday in the US. We're focused very

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<v Speaker 2>much on the developments with respect to the US strikes

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<v Speaker 2>on nuclear targets in Iran. I'm curious just to how

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<v Speaker 2>you're thinking about this right now.

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<v Speaker 1>Sure, I think if you think about the weekend, and

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<v Speaker 1>obviously the US hit Iran and investors are hitting the

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<v Speaker 1>brakes on the markets right now. And this is for us.

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<v Speaker 1>We're not saying this is any type of you know,

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<v Speaker 1>this is just a detour, not any type of derailment.

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<v Speaker 1>What do you mean by that?

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<v Speaker 4>Is?

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<v Speaker 1>Yes, this what we're seeing play out is a classic

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<v Speaker 1>market playbook. We're seeing, you know, safe haven investments rise,

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<v Speaker 1>gold dollar for example, US egletes are a weeker. We

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<v Speaker 1>see some overnight futures, of course, we also see treasuries.

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<v Speaker 1>We do think that the yalkurb will flatten a bit,

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<v Speaker 1>especially some upper pressure and short term yields downward pressure

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<v Speaker 1>as potential recession worries start to push down lower yields.

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<v Speaker 1>Oil of course up two to three percent. Everything is

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<v Speaker 1>playing out as we expect. The big question is what's next.

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<v Speaker 1>What's going to happen after this? Does Iran shut down

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<v Speaker 1>the straight up poor moose? I mean I don't think

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<v Speaker 1>they will. I mean twenty percent of oil goes through

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<v Speaker 1>that straight upore moose. China is going to push back politically.

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<v Speaker 1>The US will push back, you know, militarily or politically.

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<v Speaker 1>Does ira attack US interests in the middle East. With

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<v Speaker 1>all it said, though, we do think any pullback is

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<v Speaker 1>going to be a buying opportunity because you think about this,

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<v Speaker 1>we've pretty much eliminated a terrorist threat, We've pretty much

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<v Speaker 1>eliminated a nuclear threat, and you take all this together,

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<v Speaker 1>if you look at the fact that geopolitical risks and

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<v Speaker 1>geopolitical uncertainty in the last big nine big events, the

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<v Speaker 1>S and P five hundred was positive about a year

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<v Speaker 1>later and seven of the nine. We're not too worried.

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<v Speaker 1>We're taking this as a buying opportunity if market's modestly pullback.

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<v Speaker 2>So do we have to be prepared for oil prices

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<v Speaker 2>remaining at higher levels? And if you look at that

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<v Speaker 2>in concert with the inflationary risk, let's say, of tariffs,

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<v Speaker 2>are we in an environment right now where stagflation is

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<v Speaker 2>still a threat, which is to say that we could

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<v Speaker 2>see an upward tick in inflationary pressures and maybe declining

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<v Speaker 2>growth or no growth.

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<v Speaker 1>That's a great question, because we do think inflation is

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<v Speaker 1>going to rise. I mean, we haven't seen the effective

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<v Speaker 1>tariffs yet in terms of economic data. We have seen

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<v Speaker 1>you as you know, when tariffs first come out, they

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<v Speaker 1>tend to be pretty much deflationary because as you have

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<v Speaker 1>demand destruction and you have pressure on economically sensitive commodities oil, copper,

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<v Speaker 1>for example. But now this puts a little put upward

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<v Speaker 1>pressure oil to an extent. But remember, we have significant

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<v Speaker 1>capacity in terms of oil. You know, you look at

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<v Speaker 1>you know the amount of oil that we are producing,

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<v Speaker 1>the amount oiler we're drilling, the amount oil we can export.

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<v Speaker 1>So I'm not too worried about this sulus. If you

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<v Speaker 1>look at the US strategic reserves. We bought out of

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<v Speaker 1>oil over the last few months in anticipation of this,

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<v Speaker 1>so there was some I think advanced warning in terms

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<v Speaker 1>that we were buying a lot of oil in advance.

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<v Speaker 1>All this together, we do think inflation does rise because

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<v Speaker 1>I do think, as Powell said last week in this

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<v Speaker 1>press conference, he said that we're going to get some

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<v Speaker 1>data in July and in terms of where inflation is headed.

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<v Speaker 1>And I do think some of those July data points

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<v Speaker 1>will be a little bit higher than expected, not the

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<v Speaker 1>headline inflation, but more the core inflation when you take

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<v Speaker 1>out food and energy. I do think the terriffts will

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<v Speaker 1>finally work their way in and at the end of

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<v Speaker 1>the day, one of our key themes is that are

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<v Speaker 1>We've said throughout the year, we don't think the FED

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<v Speaker 1>cuts as rates as much as they said they would,

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<v Speaker 1>So right now they're pricing into the market's pricing in two.

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<v Speaker 1>We think zero one for this year they should be.

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<v Speaker 1>The economy is weakening, we get that, but the inflation

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<v Speaker 1>is a bigger worry.

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<v Speaker 2>So we heard from FED Governor Chris Waller last Friday.

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<v Speaker 2>He seemed to set the table for the possibility of

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<v Speaker 2>a July cut. Is that prematurity.

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<v Speaker 1>I think that's way premature. I think think about you know, obviously,

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<v Speaker 1>I'm going to keep pause in this a little bit.

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<v Speaker 1>I mean, he's grappling to be the next FED chair

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<v Speaker 1>and if you look at some of the odds, there's

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<v Speaker 1>an eighty percent chance he becomes a FED chair to

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<v Speaker 1>replace Pale next May. At the end of the day, though,

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<v Speaker 1>he's one person, one vote. And I do think even

0:11:29.160 --> 0:11:32.839
<v Speaker 1>you saw Daily on San Francisco's Daily came on Friday

0:11:32.840 --> 0:11:34.920
<v Speaker 1>and she also said we need to wait on data.

0:11:35.000 --> 0:11:36.840
<v Speaker 1>And if you listen to the Jay Palace press conference,

0:11:36.880 --> 0:11:38.800
<v Speaker 1>all his key points were we need to wait, we

0:11:38.880 --> 0:11:41.599
<v Speaker 1>need to be very data depends that data, analyze the

0:11:41.679 --> 0:11:44.600
<v Speaker 1>data and focus and wait because I as I do believe.

0:11:44.640 --> 0:11:45.960
<v Speaker 1>I know the FED has made a lot of mistakes,

0:11:45.960 --> 0:11:47.880
<v Speaker 1>and I've called him out a few times. I do

0:11:47.920 --> 0:11:50.000
<v Speaker 1>believe that they get this right, that inflation is actually

0:11:50.040 --> 0:11:52.640
<v Speaker 1>rising and the FED can't cut rais in this environment.

0:11:52.679 --> 0:11:55.280
<v Speaker 2>So if your mentality right now was by the dip,

0:11:55.520 --> 0:11:58.000
<v Speaker 2>are there things on your shopping list if there is

0:11:58.000 --> 0:12:01.640
<v Speaker 2>a significant pullback and a sector or an industry group

0:12:01.679 --> 0:12:02.600
<v Speaker 2>that you would be a buyer?

0:12:02.679 --> 0:12:04.480
<v Speaker 1>Yeah? I think if you take a step back, how

0:12:04.480 --> 0:12:05.800
<v Speaker 1>do you get yourself set up for it to be

0:12:05.840 --> 0:12:08.160
<v Speaker 1>in a good place when markets are volatile like this.

0:12:08.520 --> 0:12:12.720
<v Speaker 1>Number one, be diversified. Number two, focus on fundamentals to fundamentals,

0:12:12.920 --> 0:12:16.640
<v Speaker 1>focus on secular themes. Number three focus on active money manager,

0:12:16.720 --> 0:12:20.080
<v Speaker 1>especially during volatile periods, and for as an investor, focused

0:12:20.120 --> 0:12:22.600
<v Speaker 1>on policy shifts. That's how you should be situated in

0:12:22.600 --> 0:12:24.880
<v Speaker 1>an uncertain environment. Now, how do you take advantage of this?

0:12:24.960 --> 0:12:27.920
<v Speaker 1>To your question, our favorite sectors include technology, I mean

0:12:27.960 --> 0:12:33.960
<v Speaker 1>really technology, especially AI, artificial intelligence, especially cybersecurity. All those

0:12:33.960 --> 0:12:36.480
<v Speaker 1>events are going to be driving earnings growth on a

0:12:36.559 --> 0:12:39.720
<v Speaker 1>go forward basis. Financials, we do think the economy, Yes,

0:12:39.760 --> 0:12:41.520
<v Speaker 1>there's some weakness in the economy, but I think it's

0:12:41.559 --> 0:12:45.800
<v Speaker 1>a little over exaggerating some of the banking numbers. And lastly, industrials.

0:12:45.800 --> 0:12:48.760
<v Speaker 1>We've liked industrials for a long time. Geopolitical risks increasing,

0:12:48.880 --> 0:12:50.640
<v Speaker 1>it's a good opportunity for industrials.

0:12:50.760 --> 0:12:53.000
<v Speaker 2>How are you exposed offshore if at all? Right now?

0:12:53.080 --> 0:12:57.640
<v Speaker 1>Yeah, we have non US exposure through some international growth,

0:12:57.679 --> 0:13:01.760
<v Speaker 1>international value, and some emerging markets are more diversifiers. You know,

0:13:01.800 --> 0:13:04.160
<v Speaker 1>the whole thought that the US is, you know, the

0:13:04.320 --> 0:13:07.800
<v Speaker 1>US exceptionalism. Exceptionalism is dying. We don't believe that the

0:13:07.880 --> 0:13:09.840
<v Speaker 1>US is going to be the biggest, the best. I

0:13:09.840 --> 0:13:12.600
<v Speaker 1>guess what's the end. I'm really bad with mixed metaphors.

0:13:12.840 --> 0:13:16.199
<v Speaker 1>It's the best house in a terrible neighborhood with high valuations.

0:13:16.240 --> 0:13:19.120
<v Speaker 1>All that stuff taken together, there's I think it's exaggerated

0:13:19.120 --> 0:13:22.760
<v Speaker 1>in terms of the US exceptionalism actually weakning. I know

0:13:22.800 --> 0:13:25.240
<v Speaker 1>the dollar is weakened about twelve thirteen percent this year,

0:13:25.640 --> 0:13:27.920
<v Speaker 1>but if you think about next year, our earnings growth,

0:13:28.040 --> 0:13:31.200
<v Speaker 1>our economic growth looks better than Europe, looks better than Asia,

0:13:31.360 --> 0:13:35.640
<v Speaker 1>especially in Japan. If you look at our average age,

0:13:35.640 --> 0:13:38.080
<v Speaker 1>our average age is younger than Europe than also in

0:13:38.160 --> 0:13:40.360
<v Speaker 1>Japan and Also, at the end of the day, you

0:13:40.480 --> 0:13:42.760
<v Speaker 1>have better economic growth. And I do think I've talked

0:13:42.800 --> 0:13:44.000
<v Speaker 1>about this when we were on I was on your

0:13:44.000 --> 0:13:46.640
<v Speaker 1>show last time. We do think we win the terraff war.

0:13:47.000 --> 0:13:49.000
<v Speaker 1>We do think we win the terrafar against the other country.

0:13:49.200 --> 0:13:50.440
<v Speaker 1>At the end of the day, you think about this,

0:13:50.679 --> 0:13:52.880
<v Speaker 1>you look at tariffs, we are not going to get

0:13:52.960 --> 0:13:55.880
<v Speaker 1>the full you know, tariff surplus at you know, President

0:13:55.920 --> 0:13:57.520
<v Speaker 1>Trump wont But the end of the day, we'll be

0:13:57.520 --> 0:14:01.199
<v Speaker 1>in the right direction and those few less tariff rates

0:14:01.240 --> 0:14:03.200
<v Speaker 1>will actually help our economy. And if you look at

0:14:03.240 --> 0:14:06.040
<v Speaker 1>twenty twenty six earnings growth esseens for the S and

0:14:06.040 --> 0:14:08.640
<v Speaker 1>P five hundred, they're actually rising in this whole environment.

0:14:08.720 --> 0:14:10.640
<v Speaker 1>This is the fact that we do think a better

0:14:10.720 --> 0:14:12.240
<v Speaker 1>tariff environment for US companies.

0:14:12.360 --> 0:14:14.080
<v Speaker 2>So I hear the case that you're making to be

0:14:14.160 --> 0:14:17.120
<v Speaker 2>long US equities right now? Are you avoiding the bond market?

0:14:17.520 --> 0:14:18.880
<v Speaker 2>Are there opportunities there?

0:14:18.960 --> 0:14:19.120
<v Speaker 6>Oh?

0:14:19.200 --> 0:14:21.640
<v Speaker 1>No, So let's just say for a sixty to forty portfolio,

0:14:21.680 --> 0:14:24.120
<v Speaker 1>we have you know, forty percent fixed income. But what

0:14:24.200 --> 0:14:26.080
<v Speaker 1>we are avoiding, we're avoiding high yield. We think high

0:14:26.120 --> 0:14:29.480
<v Speaker 1>yield is super expensive, spreads are super narrow, not praising

0:14:29.640 --> 0:14:33.200
<v Speaker 1>any bad news within fixed income itself. That we love duration.

0:14:33.560 --> 0:14:37.880
<v Speaker 1>We love high quality treasuries, high quality corporates. The reason

0:14:37.920 --> 0:14:39.600
<v Speaker 1>we do is that we do think the treasury yields

0:14:39.600 --> 0:14:42.600
<v Speaker 1>are going to stay between say four to five percent

0:14:42.600 --> 0:14:45.360
<v Speaker 1>for some time. The peak for treasury should be about

0:14:45.360 --> 0:14:48.280
<v Speaker 1>the year of a year nominal gdp US growth. That's

0:14:48.320 --> 0:14:51.160
<v Speaker 1>about five oh seven last time I checked, and that's

0:14:51.160 --> 0:14:53.120
<v Speaker 1>sort of the peak in terms of where rates should

0:14:53.160 --> 0:14:55.280
<v Speaker 1>be for the ten year treasury. You know, we're hovering

0:14:55.320 --> 0:14:58.200
<v Speaker 1>around there right now. We'll see. And also we do

0:14:58.280 --> 0:15:00.280
<v Speaker 1>think we've increased duration. We do think yield going to

0:15:00.320 --> 0:15:03.200
<v Speaker 1>come back down eventually. We also think that the Fed

0:15:03.920 --> 0:15:06.600
<v Speaker 1>may become a little bit too. You know, they've said

0:15:06.600 --> 0:15:09.840
<v Speaker 1>they're very not no longer preemptive, but much more reactive.

0:15:09.840 --> 0:15:13.040
<v Speaker 1>That puts the question of a potential need to accelerate

0:15:13.120 --> 0:15:15.280
<v Speaker 1>rate cuts next year. I know the Fed came out

0:15:15.280 --> 0:15:17.640
<v Speaker 1>in their dot plug and said we cut rates only once,

0:15:17.680 --> 0:15:19.640
<v Speaker 1>and they reduced that from two to one. I do

0:15:19.720 --> 0:15:21.880
<v Speaker 1>think they cut more next year and less this year.

0:15:22.040 --> 0:15:23.560
<v Speaker 1>That's a good play for duration.

0:15:23.720 --> 0:15:26.360
<v Speaker 2>I'm wondering if you're focused at all on the fiscal

0:15:26.400 --> 0:15:30.200
<v Speaker 2>situation in Washington. The big beautiful bill. Right now, it's

0:15:30.240 --> 0:15:33.760
<v Speaker 2>being hammered out in the Senate. This may be something

0:15:33.800 --> 0:15:37.200
<v Speaker 2>that misses the July fourth deadline. I think that's highly

0:15:37.240 --> 0:15:41.000
<v Speaker 2>probable right now. Is it part of the conversations that

0:15:41.040 --> 0:15:43.120
<v Speaker 2>you're having at your firm whether or not we get

0:15:43.120 --> 0:15:45.320
<v Speaker 2>the kind of tax cuts to the extent that the

0:15:45.360 --> 0:15:48.280
<v Speaker 2>market was preparing for. Is there anything in this bill

0:15:48.320 --> 0:15:49.440
<v Speaker 2>that you're concerned about?

0:15:49.680 --> 0:15:51.320
<v Speaker 1>Well, I mean, obviously the big sticking point of this

0:15:51.400 --> 0:15:54.440
<v Speaker 1>assault tax. We're watching that very carefully. We're also watching

0:15:54.480 --> 0:15:57.760
<v Speaker 1>where do the Republicans and Democrats pay for this? Where

0:15:57.800 --> 0:15:59.840
<v Speaker 1>does it get paid for? But the good news is

0:15:59.840 --> 0:16:02.840
<v Speaker 1>that if you look at tariff revenues, tariff revenues are

0:16:02.960 --> 0:16:05.080
<v Speaker 1>likely to be between two hundred and fifty to four

0:16:05.160 --> 0:16:08.840
<v Speaker 1>hundred billion dollars. That's a good sort of pro growth opportunity,

0:16:09.000 --> 0:16:11.520
<v Speaker 1>and that those tariff revenues are recycled back into the

0:16:11.520 --> 0:16:15.440
<v Speaker 1>economy in pro growth areas like tax cuts or like

0:16:16.120 --> 0:16:18.400
<v Speaker 1>some type of stimulus. That's good. That helps us avoid

0:16:18.440 --> 0:16:21.120
<v Speaker 1>any type of recession. We're optimistic about that, and we

0:16:21.160 --> 0:16:23.880
<v Speaker 1>do think you combine a potential for a big beautiful

0:16:23.920 --> 0:16:27.080
<v Speaker 1>bill plus second half deregulation that goes back to one

0:16:27.120 --> 0:16:30.600
<v Speaker 1>of our favorite sectors, financials. Deregulation will definitely help financials

0:16:30.640 --> 0:16:32.160
<v Speaker 1>and help our whole industry.

0:16:32.200 --> 0:16:33.840
<v Speaker 2>But it was only a couple of weeks ago that

0:16:33.920 --> 0:16:36.160
<v Speaker 2>there was a tantrum of sorts in the bond market

0:16:36.160 --> 0:16:39.680
<v Speaker 2>on concern about higher deficits. That doesn't trouble you at all.

0:16:39.640 --> 0:16:41.760
<v Speaker 1>Doesn't trouble us right now. I mean unfortunate, just like

0:16:41.800 --> 0:16:45.320
<v Speaker 1>infrastructure spending, just like deficit, this will take some we

0:16:46.000 --> 0:16:49.240
<v Speaker 1>continue to be kicked down the road. Unfortunately. We're watching

0:16:49.280 --> 0:16:51.480
<v Speaker 1>it carefully, but the end of the day, this will

0:16:51.480 --> 0:16:53.440
<v Speaker 1>continue to be kicked down the road. Unfortunately. I don't

0:16:53.440 --> 0:16:54.800
<v Speaker 1>think this gets solved anytime soon.

0:16:54.880 --> 0:16:57.120
<v Speaker 2>What is the biggest concern that you are hearing from

0:16:57.160 --> 0:16:58.240
<v Speaker 2>your clients right now?

0:16:58.640 --> 0:17:02.520
<v Speaker 1>Biggest concern is valuations. You know, how do you invest

0:17:02.560 --> 0:17:04.320
<v Speaker 1>in the stock market? Tewing twenty two and a half

0:17:04.320 --> 0:17:08.560
<v Speaker 1>times forward earnings. And we tell our clients and our advisors, listen,

0:17:08.920 --> 0:17:11.560
<v Speaker 1>everything is priced to perfection. Any type of hiccup, any

0:17:11.560 --> 0:17:14.640
<v Speaker 1>type of fed uncertainty, any type of misstep from JPAL

0:17:14.960 --> 0:17:18.320
<v Speaker 1>or from a geopolitical risk. It's setting the market, is

0:17:18.320 --> 0:17:21.440
<v Speaker 1>setting it stuff up for a pullback. For maybe another correction.

0:17:21.960 --> 0:17:24.320
<v Speaker 1>But what we also say is, listen, we're continuing to

0:17:24.320 --> 0:17:27.280
<v Speaker 1>buy the dips because you think about our commy. We

0:17:27.320 --> 0:17:31.520
<v Speaker 1>have potentially nine percent earnings growth. We also have FED

0:17:31.720 --> 0:17:34.320
<v Speaker 1>not raising rates. FED is on our side. We also

0:17:34.359 --> 0:17:36.640
<v Speaker 1>have the fact that we have a pretty solid labor market.

0:17:36.720 --> 0:17:39.199
<v Speaker 1>I know it's slowing down. A solid labor market with

0:17:39.320 --> 0:17:41.720
<v Speaker 1>the fact that you have global stimulus in our global

0:17:41.760 --> 0:17:45.000
<v Speaker 1>economy and you have inflation moderating to an extent. Take

0:17:45.040 --> 0:17:47.480
<v Speaker 1>that together, we do believe that stocks will be higher

0:17:47.480 --> 0:17:48.520
<v Speaker 1>a year than they are right now.

0:17:48.600 --> 0:17:50.640
<v Speaker 2>We'll leave it there, Gene, It's always a pleasure. Thank

0:17:50.720 --> 0:17:53.160
<v Speaker 2>you so much. Jane Goldman there. He is the chief

0:17:53.200 --> 0:17:56.560
<v Speaker 2>investment officer at Satera Financial Group. Joining us here in

0:17:56.560 --> 0:18:01.720
<v Speaker 2>New York City on the Daybreak Asia Podcast. Thanks for

0:18:01.760 --> 0:18:06.399
<v Speaker 2>listening to today's episode of the Bloomberg Daybreak Asia Edition podcast.

0:18:06.720 --> 0:18:09.840
<v Speaker 2>Each weekday, we look at the story shaping markets, finance,

0:18:10.200 --> 0:18:13.280
<v Speaker 2>and geopolitics in the Asia Pacific. You can find us

0:18:13.320 --> 0:18:17.480
<v Speaker 2>on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere

0:18:17.520 --> 0:18:20.639
<v Speaker 2>else you listen. Join us again tomorrow for insight on

0:18:20.680 --> 0:18:24.800
<v Speaker 2>the market moves from Hong Kong to Singapore. And Australia.

0:18:25.240 --> 0:18:27.720
<v Speaker 2>I'm Doug Prisoner and this is Bloomberg