1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,200 --> 00:00:30,840 Speaker 2: Five hundred up fifteen percent. Nastak Composite up nineteen percent 7 00:00:31,280 --> 00:00:33,360 Speaker 2: year to date. Every year we have the naysayers, Oh, 8 00:00:33,400 --> 00:00:35,160 Speaker 2: next year is just can't live up to it, can't 9 00:00:35,159 --> 00:00:37,479 Speaker 2: live up to it. Let's let's find out what our 10 00:00:37,520 --> 00:00:41,000 Speaker 2: next guest thinks about all of this. And our next 11 00:00:41,000 --> 00:00:43,599 Speaker 2: guest is here in studio with us, Alicia Levine, head 12 00:00:43,600 --> 00:00:47,159 Speaker 2: of investment strategy at BNY Wealth. Alicia isn't going to 13 00:00:47,240 --> 00:00:50,239 Speaker 2: be I mean, can twenty twenty six live up to 14 00:00:50,280 --> 00:00:52,080 Speaker 2: the numbers of twenty twenty five? 15 00:00:53,200 --> 00:00:55,880 Speaker 3: So we think yes, but we think it's a non 16 00:00:55,960 --> 00:00:58,920 Speaker 3: linear year this year and the way that was nonlinear 17 00:01:00,120 --> 00:01:04,679 Speaker 3: twenty five. Ultimately a year ago, we had a sixty 18 00:01:04,760 --> 00:01:07,480 Speaker 3: six hundred price target on the S and P and 19 00:01:07,560 --> 00:01:08,479 Speaker 3: we're ending more. 20 00:01:08,440 --> 00:01:10,679 Speaker 4: Or less here. We moved our target up. 21 00:01:10,800 --> 00:01:13,679 Speaker 3: You know, mad year as the market's recovered from you know, 22 00:01:13,760 --> 00:01:17,080 Speaker 3: peak Terra funcertainty. We're looking for seventy six hundred next year. 23 00:01:17,120 --> 00:01:19,000 Speaker 3: We just don't think it's linear. We are looking for 24 00:01:19,040 --> 00:01:22,720 Speaker 3: thirteen percent earnings growth, margins are expanding. In the end, 25 00:01:22,800 --> 00:01:25,760 Speaker 3: like there'll be policy noise, you know, there'll be issues 26 00:01:25,760 --> 00:01:28,560 Speaker 3: with maybe the dollar or with bond markets as Japan 27 00:01:29,480 --> 00:01:32,280 Speaker 3: is I see, But ultimately, you know. 28 00:01:32,319 --> 00:01:33,759 Speaker 4: The fundamentals are the fundamentals. 29 00:01:33,800 --> 00:01:35,800 Speaker 3: And every year the Pannicans tell you why this is 30 00:01:35,880 --> 00:01:39,000 Speaker 3: the year that it's all going to fall apart. And 31 00:01:39,040 --> 00:01:43,720 Speaker 3: what we've learned is corporate America is amazingly resilient. Think 32 00:01:43,720 --> 00:01:45,880 Speaker 3: of the shocks that have come in the last five years, 33 00:01:45,920 --> 00:01:48,160 Speaker 3: and we've another thing that's happened is earnings have moved 34 00:01:48,200 --> 00:01:49,760 Speaker 3: higher and margins have moved higher. 35 00:01:50,440 --> 00:01:50,960 Speaker 5: Good point. 36 00:01:51,160 --> 00:01:53,440 Speaker 2: So yeah, But I mean my question then becomes, what 37 00:01:53,440 --> 00:01:56,800 Speaker 2: about the job market, Because I mean, the pandemic was 38 00:01:56,800 --> 00:01:58,640 Speaker 2: a once in a lifetime sort of thing. So if 39 00:01:58,640 --> 00:02:01,760 Speaker 2: you take that out of the picture, on unemployment hasn't 40 00:02:01,760 --> 00:02:04,080 Speaker 2: been this high in years. If that, if the market 41 00:02:04,120 --> 00:02:07,200 Speaker 2: really starts to crack, so does that become the big 42 00:02:07,320 --> 00:02:07,960 Speaker 2: the big problem for. 43 00:02:08,200 --> 00:02:10,600 Speaker 3: So I think this shue really is the labor market here, 44 00:02:10,639 --> 00:02:12,480 Speaker 3: and I think it's good that the Fed is cutting 45 00:02:12,600 --> 00:02:15,320 Speaker 3: and it's good that they've restarted the cycle over the summer. 46 00:02:15,360 --> 00:02:18,919 Speaker 3: I think Christopher Waller was really frankly far ahead on this, 47 00:02:19,360 --> 00:02:22,040 Speaker 3: seeing the cracks in the labor market earlier then the 48 00:02:22,080 --> 00:02:25,760 Speaker 3: official data was telling us that's the risk here. What 49 00:02:25,800 --> 00:02:28,240 Speaker 3: you're going to have though, in the first part of 50 00:02:28,280 --> 00:02:31,880 Speaker 3: the year is one hundred and sixty billion dollars coming 51 00:02:31,919 --> 00:02:35,440 Speaker 3: back to households through the tax code, so they'll be 52 00:02:35,600 --> 00:02:38,240 Speaker 3: immediate fiscal stimulus. And on top of that, you have 53 00:02:38,240 --> 00:02:41,000 Speaker 3: about two hundred billion coming towards the corporate sector for 54 00:02:41,120 --> 00:02:46,200 Speaker 3: capex and investing. And when corporates are raising cap x, 55 00:02:46,600 --> 00:02:51,200 Speaker 3: you don't get lower unemployed. You don't get lower employment, right, 56 00:02:51,240 --> 00:02:54,640 Speaker 3: so you sustain employment when there is capex. I think 57 00:02:55,240 --> 00:02:58,000 Speaker 3: this quarter is probably the worst quarter of the year. 58 00:02:58,080 --> 00:03:01,079 Speaker 3: It's probably we're feeling the slow down. Certainly the six 59 00:03:01,200 --> 00:03:04,680 Speaker 3: week shutdown was not helpful. Some of that growth that 60 00:03:04,720 --> 00:03:06,720 Speaker 3: we miss is going to come back in the first 61 00:03:06,800 --> 00:03:09,239 Speaker 3: quarter of next year. Some of it's gone forever. We're 62 00:03:09,280 --> 00:03:12,440 Speaker 3: feeling the effects of that this quarter. So this massive 63 00:03:12,440 --> 00:03:14,760 Speaker 3: fiscal stimulus coming in the first half of the year, 64 00:03:15,160 --> 00:03:16,359 Speaker 3: and the Feds in a cutting sente. 65 00:03:16,480 --> 00:03:19,800 Speaker 6: Well, I'm sem Alexis. Alicia is on my starting five 66 00:03:20,000 --> 00:03:22,600 Speaker 6: of the all American over educated team. Here we go, 67 00:03:22,919 --> 00:03:27,240 Speaker 6: undergraduate from Brown. I just okay, that's fine. Masters and 68 00:03:27,280 --> 00:03:30,720 Speaker 6: a doctorate from Chicago. Can we stop in philosophy? 69 00:03:30,720 --> 00:03:31,280 Speaker 5: And we stop? 70 00:03:31,840 --> 00:03:35,160 Speaker 6: Then a postdoc from Stanford, and let's do another post 71 00:03:35,200 --> 00:03:38,200 Speaker 6: doc from Harvard. I mean enough already, I mean, come on, 72 00:03:38,320 --> 00:03:42,000 Speaker 6: get to work, Alicia. It's unbelievab. Every time I read this, 73 00:03:42,040 --> 00:03:45,440 Speaker 6: I'm like, read enough already, Alicia. We had some really 74 00:03:45,480 --> 00:03:47,560 Speaker 6: good earnings from corporate America this year. I mean the 75 00:03:47,680 --> 00:03:49,680 Speaker 6: second quarter, third quarter earnings have been really good. Are 76 00:03:49,720 --> 00:03:51,680 Speaker 6: they enough to support this market going forward? 77 00:03:51,680 --> 00:03:54,400 Speaker 3: They're definitely enough to support the market. So again, let's 78 00:03:54,400 --> 00:03:57,120 Speaker 3: go back twelve months ago. The market is trading at 79 00:03:57,200 --> 00:04:00,840 Speaker 3: twenty one point six times earnings, and the pans are saying, 80 00:04:01,080 --> 00:04:03,840 Speaker 3: there's no way the market's moving higher because you know, 81 00:04:03,920 --> 00:04:06,400 Speaker 3: the SMP is overvalued. 82 00:04:06,880 --> 00:04:08,120 Speaker 4: We've never been this high. 83 00:04:08,120 --> 00:04:10,280 Speaker 3: We haven't been this high since twenty twenty one, and 84 00:04:10,280 --> 00:04:12,960 Speaker 3: then before that it's two thousand, right, so then you 85 00:04:12,960 --> 00:04:13,840 Speaker 3: get the bubble talk. 86 00:04:14,080 --> 00:04:15,119 Speaker 4: So what happened this year? 87 00:04:15,240 --> 00:04:18,320 Speaker 3: Earnings came in at thirteen and a half percent, beating 88 00:04:18,440 --> 00:04:22,520 Speaker 3: estimates by about six percent overall, driving the markets higher. 89 00:04:22,520 --> 00:04:25,000 Speaker 3: And so the market's up fifteen sixteen percent. Alexis, as 90 00:04:25,000 --> 00:04:27,600 Speaker 3: you said, on the back of earnings, because the multiple 91 00:04:28,000 --> 00:04:31,040 Speaker 3: is only responsible for about fifteen or twenty percent of 92 00:04:31,120 --> 00:04:33,560 Speaker 3: the S and P price moving up this year. 93 00:04:33,880 --> 00:04:35,799 Speaker 4: So next year you need those earnings. 94 00:04:35,800 --> 00:04:37,880 Speaker 3: Like, if you don't have earnings, you have a problem 95 00:04:37,880 --> 00:04:39,880 Speaker 3: in the market because the multiple is high. But as 96 00:04:39,920 --> 00:04:42,880 Speaker 3: long as that comes through, you know the market can 97 00:04:42,920 --> 00:04:44,839 Speaker 3: move higher. Here But again, like are you are you 98 00:04:44,920 --> 00:04:49,359 Speaker 3: moving to a place where this supports for appreciation are narrowing? 99 00:04:49,440 --> 00:04:52,880 Speaker 3: And probably that's the case. We can't see multiples moving 100 00:04:53,000 --> 00:04:54,040 Speaker 3: much higher from here. 101 00:04:54,800 --> 00:04:56,920 Speaker 2: What about I just want to talk about oil because 102 00:04:56,920 --> 00:04:58,719 Speaker 2: it's just fascinating to me what's been going on with 103 00:04:58,760 --> 00:05:02,520 Speaker 2: oil and how you see that playing into the landscape 104 00:05:02,600 --> 00:05:06,160 Speaker 2: or opportunities or lack thereof in the new year. 105 00:05:06,160 --> 00:05:07,080 Speaker 5: Because the world is. 106 00:05:07,000 --> 00:05:10,799 Speaker 2: A wash in oil and the smart money is betting 107 00:05:10,880 --> 00:05:13,520 Speaker 2: on crude oil remaining in the mid fifties, you know, 108 00:05:13,600 --> 00:05:15,159 Speaker 2: for most, if not all, next year. 109 00:05:15,560 --> 00:05:19,239 Speaker 3: Look, I mean that part of the Trump administration's plan 110 00:05:19,440 --> 00:05:22,520 Speaker 3: was to get oil prices down. You see agreements with 111 00:05:22,560 --> 00:05:26,479 Speaker 3: Saudi they're pumping, and so that is part of the 112 00:05:26,480 --> 00:05:28,920 Speaker 3: plan to bring inflation down. And once of course oil 113 00:05:28,960 --> 00:05:34,719 Speaker 3: prices are lower, the disinflation filters through everything in inflation 114 00:05:34,800 --> 00:05:37,920 Speaker 3: readings and inflation overall in the economy. So we do 115 00:05:37,920 --> 00:05:41,640 Speaker 3: think all oil prices probably are moving lower here. You know, 116 00:05:41,720 --> 00:05:46,279 Speaker 3: if there is any kind of deal with Ukukraine and Russia. 117 00:05:46,320 --> 00:05:48,280 Speaker 3: And I know a lot of people have lost a 118 00:05:48,320 --> 00:05:50,440 Speaker 3: lot of sleep over whether or not this can happen, 119 00:05:50,480 --> 00:05:53,360 Speaker 3: but if there's a Russia Ukraine deal, then you bring 120 00:05:53,480 --> 00:05:57,080 Speaker 3: Russian oil back onto the market, So you're going to have, 121 00:05:57,279 --> 00:06:00,160 Speaker 3: you know, a flood of supply. And so we think 122 00:06:00,200 --> 00:06:04,599 Speaker 3: that oil prices are probably tame, whether it's fifty or lower. 123 00:06:04,640 --> 00:06:07,000 Speaker 3: You know, we're not experts in oil pricing, but you know, 124 00:06:07,040 --> 00:06:09,000 Speaker 3: supply demands, there'll be a lot of supply. 125 00:06:09,760 --> 00:06:12,320 Speaker 6: Alicia, we've had some very nice returns in the US 126 00:06:12,360 --> 00:06:14,640 Speaker 6: stock markets, but boy, if you look at EMA, I mean, 127 00:06:15,080 --> 00:06:19,160 Speaker 6: twenty thirty fifty gains its credit on a currency adjusted basis. 128 00:06:18,880 --> 00:06:19,560 Speaker 4: It's infamble. 129 00:06:19,720 --> 00:06:22,360 Speaker 6: What do you think about the US non US allocation 130 00:06:22,440 --> 00:06:23,239 Speaker 6: for twenty six. 131 00:06:23,200 --> 00:06:24,720 Speaker 4: So it's a great question. 132 00:06:25,160 --> 00:06:28,679 Speaker 3: The dollar dropped ten percent in the first quarter, yep, okay, 133 00:06:29,000 --> 00:06:32,200 Speaker 3: and that's when rest of world outperformed massively. 134 00:06:32,920 --> 00:06:36,400 Speaker 4: Since and since July first, the dollar has actually gone nowhere. 135 00:06:36,440 --> 00:06:40,080 Speaker 3: It's in that stable it's that stable Dixie range really 136 00:06:40,080 --> 00:06:42,640 Speaker 3: for the last six months. So I think the question 137 00:06:43,480 --> 00:06:45,960 Speaker 3: for and as a result, by the way, the S 138 00:06:45,960 --> 00:06:48,839 Speaker 3: and P is outperformed rest of world by about five 139 00:06:48,880 --> 00:06:52,240 Speaker 3: percent since April first, So since the tariff shock and 140 00:06:52,320 --> 00:06:56,840 Speaker 3: the recovery and tech driving the growth out of the 141 00:06:56,880 --> 00:06:59,240 Speaker 3: lows and then the rest of the market taking over. 142 00:06:59,320 --> 00:07:03,359 Speaker 3: Since September, the SMP is outperform rest of world since 143 00:07:03,400 --> 00:07:06,600 Speaker 3: that time. But on an annual basis, absolutely the SMP 144 00:07:06,720 --> 00:07:08,640 Speaker 3: is farleg okay. So what do we do for next year? 145 00:07:08,920 --> 00:07:11,440 Speaker 3: I think the answer is the dollar, Like what is 146 00:07:11,440 --> 00:07:13,760 Speaker 3: your view on the dollar? If you think the dollar 147 00:07:13,800 --> 00:07:17,280 Speaker 3: moves a couple of percentage points lower, then this possible. 148 00:07:17,360 --> 00:07:18,960 Speaker 3: Rest of world up performs, but you're not going to 149 00:07:18,960 --> 00:07:22,040 Speaker 3: see a twenty to thirty percent outperformance as you saw 150 00:07:22,160 --> 00:07:24,960 Speaker 3: this year. The steper year curve is interesting because that 151 00:07:25,040 --> 00:07:29,440 Speaker 3: is global and financials are in every index, so Japan, 152 00:07:30,120 --> 00:07:34,080 Speaker 3: Europe and emerging markets financials are massively part of the indussy. 153 00:07:34,200 --> 00:07:37,560 Speaker 3: So the steeper Yell curve also could move markets higher. 154 00:07:37,920 --> 00:07:40,880 Speaker 3: And our client base, we're overweight US, that's our client base, 155 00:07:40,960 --> 00:07:44,000 Speaker 3: and they believe in US exceptionalism. But we have a 156 00:07:44,000 --> 00:07:46,360 Speaker 3: healthy allocation to rest of world, and we just raised 157 00:07:46,360 --> 00:07:49,560 Speaker 3: actually our allocation in emerging markets equity end debt. 158 00:07:49,920 --> 00:07:51,000 Speaker 4: All right, yeah, all right? 159 00:07:51,000 --> 00:07:53,760 Speaker 2: What about commodities? I'm thinking precious metals. So is it 160 00:07:53,800 --> 00:07:56,240 Speaker 2: going to be another like standout year here? Are they 161 00:07:56,320 --> 00:07:57,400 Speaker 2: going to finally take a breather? 162 00:07:57,920 --> 00:08:00,360 Speaker 3: Unlikely to be the kind of view we had this year. 163 00:08:00,360 --> 00:08:02,680 Speaker 3: I think silver is something of a catch up trade 164 00:08:03,080 --> 00:08:06,040 Speaker 3: hasn't moved this way in the last twenty five thirty years. 165 00:08:06,240 --> 00:08:08,560 Speaker 3: I think on gold, it's very interesting. There's a new 166 00:08:08,600 --> 00:08:13,000 Speaker 3: factor here because it's no longer sort of gauging fiat 167 00:08:13,040 --> 00:08:16,400 Speaker 3: currency and whether central banks are too liquid or not. 168 00:08:16,520 --> 00:08:19,120 Speaker 3: It's really a central bank trade now because when the 169 00:08:19,240 --> 00:08:22,600 Speaker 3: US put sanctions on the Russian Central Bank, that was it. 170 00:08:22,760 --> 00:08:26,400 Speaker 3: Every every rogue nation or like soon to be rogue 171 00:08:26,480 --> 00:08:29,600 Speaker 3: nations started buying gold, and so again supply and demand 172 00:08:30,080 --> 00:08:32,800 Speaker 3: now there is a massive demand for gold assets, and 173 00:08:32,840 --> 00:08:35,200 Speaker 3: so we do think gold can move higher into next year. 174 00:08:36,200 --> 00:08:37,360 Speaker 4: That's not the same move as we. 175 00:08:37,280 --> 00:08:40,120 Speaker 3: See like, you can't you can't have the parabola every year. 176 00:08:40,320 --> 00:08:40,560 Speaker 5: Yep. 177 00:08:41,280 --> 00:08:43,319 Speaker 6: The Fed seems to be in a cutting mode here. 178 00:08:43,320 --> 00:08:45,360 Speaker 6: How important is that to your backdrop here? 179 00:08:45,480 --> 00:08:48,360 Speaker 3: Hugely, hugely, hugely like the biggest like you know what, 180 00:08:48,720 --> 00:08:49,760 Speaker 3: what's the nightmare? 181 00:08:50,240 --> 00:08:54,000 Speaker 4: The nightmare is you know that the FED wakes up. 182 00:08:54,040 --> 00:08:57,520 Speaker 3: We have, you know, massive growth and inflation's over four percent, 183 00:08:57,840 --> 00:09:01,880 Speaker 3: and the Fed pivots pivs to a hiking cycle. So 184 00:09:02,320 --> 00:09:06,520 Speaker 3: a cutting or a waiting is fine for this market. 185 00:09:06,720 --> 00:09:09,720 Speaker 3: The hiking would not be fine. That is not in 186 00:09:10,040 --> 00:09:13,920 Speaker 3: any scenario we have. But clearly that is the lynchpin 187 00:09:14,000 --> 00:09:15,280 Speaker 3: to the risk of the market here. 188 00:09:15,400 --> 00:09:18,120 Speaker 2: But that would mean inflation would have to really take 189 00:09:18,400 --> 00:09:22,080 Speaker 2: a leg up right, And so far the numbers, if 190 00:09:22,120 --> 00:09:24,560 Speaker 2: you believe them, don't seem to be pointing in that they're. 191 00:09:24,440 --> 00:09:26,760 Speaker 3: Calling for inflation the second half of the year to 192 00:09:26,840 --> 00:09:29,000 Speaker 3: be much lower than it is now. You're cycling the 193 00:09:29,040 --> 00:09:31,319 Speaker 3: tariff issues. You're going to be done with that by 194 00:09:31,360 --> 00:09:33,800 Speaker 3: May June. It's going to move lower. And actually the 195 00:09:33,840 --> 00:09:36,800 Speaker 3: recent CPI, I know that there have been some issues 196 00:09:36,800 --> 00:09:39,400 Speaker 3: with OER and putting a zero in for the inflation 197 00:09:39,520 --> 00:09:41,920 Speaker 3: month over month, but Ultimately, I think the move was 198 00:09:41,960 --> 00:09:44,680 Speaker 3: too large on the CPI for it to be only 199 00:09:44,800 --> 00:09:48,080 Speaker 3: a data issue. There was softness all over there, and 200 00:09:48,160 --> 00:09:51,040 Speaker 3: actually housing costs and rental costs have been moving lower 201 00:09:51,080 --> 00:09:54,120 Speaker 3: for the last twelve months, so maybe there's some rebound, 202 00:09:54,160 --> 00:09:57,079 Speaker 3: but there is some disinflation in the system, and you're 203 00:09:57,080 --> 00:09:59,000 Speaker 3: going to lap the tariff issues by the spring. 204 00:09:59,520 --> 00:10:01,040 Speaker 5: We should thank you so much for joining us. 205 00:10:01,080 --> 00:10:01,800 Speaker 4: Really appreciate it. 206 00:10:01,840 --> 00:10:05,760 Speaker 6: Alisia Levine, She's had an investment strategy at BNY Malthon. 207 00:10:05,800 --> 00:10:08,040 Speaker 6: We appreciate her coming in to our Bloomberg and Act 208 00:10:08,160 --> 00:10:11,000 Speaker 6: proper studio. Stay with us or from Bloomberg Surveillance coming 209 00:10:11,080 --> 00:10:12,160 Speaker 6: up after. 210 00:10:11,880 --> 00:10:24,160 Speaker 1: This, you're listening to the Bloomberg Surveillance podcast. Catch us 211 00:10:24,200 --> 00:10:27,560 Speaker 1: Live weekday afternoons from seven to ten am Eastern Listen 212 00:10:27,600 --> 00:10:31,160 Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app, 213 00:10:31,360 --> 00:10:33,120 Speaker 1: or watch us Live on YouTube. 214 00:10:33,200 --> 00:10:36,280 Speaker 6: A lot of economic data this week, the Ego Go function. 215 00:10:36,400 --> 00:10:37,480 Speaker 6: I was on that all the time. 216 00:10:37,559 --> 00:10:39,959 Speaker 2: Yeah, thanks to the government shutdown, we're trying to play catch. 217 00:10:39,840 --> 00:10:41,880 Speaker 6: Up, trying to play catch up here, So let's get 218 00:10:41,880 --> 00:10:43,760 Speaker 6: a little bit of a review here and what we 219 00:10:43,800 --> 00:10:45,760 Speaker 6: can think about going forward with this economy in twenty 220 00:10:45,760 --> 00:10:47,360 Speaker 6: twenty six, we can do that with our friend windin 221 00:10:47,800 --> 00:10:50,680 Speaker 6: chief economists at the Bank of Nasau. When we got 222 00:10:51,040 --> 00:10:53,400 Speaker 6: labor market data, we got some inflation data. What did 223 00:10:53,440 --> 00:10:55,120 Speaker 6: you take away from some of the government data this week? 224 00:10:55,280 --> 00:10:57,160 Speaker 5: First of all, thanks guys for having me. It's always 225 00:10:57,160 --> 00:11:01,079 Speaker 5: a pleasure to be here. Look, there's some murmuring about, hey, 226 00:11:01,120 --> 00:11:03,800 Speaker 5: you know, there's some of this data maybe kind of sketchy. 227 00:11:04,280 --> 00:11:07,080 Speaker 5: It's incomplete, but you know, you can quibble about all 228 00:11:07,120 --> 00:11:08,800 Speaker 5: you want, maybe take here or take there. But really 229 00:11:08,880 --> 00:11:11,800 Speaker 5: the underlying signal through all its noises that the labor 230 00:11:11,800 --> 00:11:14,840 Speaker 5: market is cracking and inflation is coming now. So to me, 231 00:11:14,920 --> 00:11:18,000 Speaker 5: that sets up fed easy next year, more than what 232 00:11:18,040 --> 00:11:21,200 Speaker 5: the market's pricing in. I would just note the last 233 00:11:21,200 --> 00:11:24,000 Speaker 5: seven months starting in May, we've only added about one 234 00:11:24,080 --> 00:11:28,640 Speaker 5: hundred and twenty thousand jobs total seven months. The sevenths 235 00:11:28,640 --> 00:11:32,199 Speaker 5: before that was one point two million. If you're adding 236 00:11:32,760 --> 00:11:36,320 Speaker 5: Chair Powell's assertion that monthly games are overstayed by sixty k, 237 00:11:36,400 --> 00:11:38,600 Speaker 5: then we're talking about you know, minus three hundred hundred 238 00:11:38,640 --> 00:11:41,800 Speaker 5: negative negative, So you know, it's and all the other 239 00:11:41,880 --> 00:11:44,760 Speaker 5: sort of current adp Ravellio all the other I think 240 00:11:44,840 --> 00:11:47,320 Speaker 5: data really supports that. So, yes, you can quibble about 241 00:11:48,040 --> 00:11:50,360 Speaker 5: the reliability to data, but I think it's a signals 242 00:11:50,400 --> 00:11:50,839 Speaker 5: very clear. 243 00:11:51,200 --> 00:11:54,360 Speaker 2: So the market is seems to be banking on two 244 00:11:54,559 --> 00:11:57,240 Speaker 2: interest rate cuts next year from the Fed. Powell was 245 00:11:57,240 --> 00:12:00,679 Speaker 2: a bit conservative and seem to mess signal one, where 246 00:12:00,760 --> 00:12:01,679 Speaker 2: are you at and all of that. 247 00:12:01,800 --> 00:12:04,520 Speaker 5: Yeah, so I think the market is understating that the 248 00:12:04,559 --> 00:12:07,160 Speaker 5: capacity to the Fed at the ease. Again, I'm still 249 00:12:07,520 --> 00:12:09,760 Speaker 5: more worried about the labor market than I think than 250 00:12:09,840 --> 00:12:13,560 Speaker 5: many in the market. If you look at your WRPA, 251 00:12:13,600 --> 00:12:15,480 Speaker 5: your pages, it's I think the odds with January cut 252 00:12:15,480 --> 00:12:17,319 Speaker 5: are only twenty five percent, which I think is pretty 253 00:12:17,360 --> 00:12:20,199 Speaker 5: I'd say right now, I'd say it's a coin flip 254 00:12:20,240 --> 00:12:23,440 Speaker 5: depending and then with the deciding factor being the January 255 00:12:23,480 --> 00:12:26,280 Speaker 5: I'm sorry, the December jobs that comes out in early January. 256 00:12:26,640 --> 00:12:29,160 Speaker 5: So we got another jobs report, another CPI report, to 257 00:12:29,240 --> 00:12:31,559 Speaker 5: retail sales report that's going to kind of, I think, 258 00:12:31,600 --> 00:12:34,080 Speaker 5: inform the Fed. But really the trend is there. The 259 00:12:34,160 --> 00:12:37,200 Speaker 5: labor market is cracking. To Leasa's point, there's so many 260 00:12:37,200 --> 00:12:39,680 Speaker 5: companies that are starting to talk about in week outlooks 261 00:12:39,720 --> 00:12:42,840 Speaker 5: for sales consumers cutting back. I mean that's going to happen. 262 00:12:42,880 --> 00:12:44,280 Speaker 5: If the labor markets cracking. 263 00:12:44,440 --> 00:12:47,559 Speaker 6: Four point six percent unemployment rate, that's still pretty good 264 00:12:47,600 --> 00:12:48,199 Speaker 6: in my mind. 265 00:12:48,240 --> 00:12:51,199 Speaker 5: But what's underneath that that? Yeah, so I think you 266 00:12:51,240 --> 00:12:53,120 Speaker 5: have to see where we where we came from. Remember 267 00:12:53,160 --> 00:12:56,240 Speaker 5: we bottom at three point four percent and twenty twenty three. 268 00:12:56,679 --> 00:12:58,320 Speaker 5: You know, this whole debate about whether the Psalm rule 269 00:12:58,360 --> 00:13:00,760 Speaker 5: is still in impact because we're pretty much double what 270 00:13:00,760 --> 00:13:03,440 Speaker 5: the salmon would say in terms of recession. But now 271 00:13:03,480 --> 00:13:06,240 Speaker 5: I think most people's base cases that we have no 272 00:13:06,320 --> 00:13:07,880 Speaker 5: recession next year, and I have to I'm on board 273 00:13:07,880 --> 00:13:09,200 Speaker 5: with that, but I do think we have some slow 274 00:13:09,240 --> 00:13:12,319 Speaker 5: in growth. To me, the big issue for next year 275 00:13:12,360 --> 00:13:16,319 Speaker 5: is can the AI investment boom offset what I think 276 00:13:16,400 --> 00:13:20,000 Speaker 5: is coming a significant slow down consumer spending. That's the 277 00:13:20,080 --> 00:13:22,600 Speaker 5: to me, a million dollar question. I think it will 278 00:13:22,600 --> 00:13:25,400 Speaker 5: help offset it, but I don't think it can totally 279 00:13:26,360 --> 00:13:29,280 Speaker 5: overwhelm this. You know, the consumption consumption is seventy percent 280 00:13:29,320 --> 00:13:31,800 Speaker 5: of the US economy fixed as the investment is about 281 00:13:31,840 --> 00:13:33,960 Speaker 5: twenty percent. So it's really it's hard for us just 282 00:13:34,000 --> 00:13:38,400 Speaker 5: investment boom to really offset a big consumer slow down. 283 00:13:38,840 --> 00:13:41,280 Speaker 2: So the labor market is your biggest concern heading into 284 00:13:41,320 --> 00:13:43,920 Speaker 2: the new year. How concerned are you that we might 285 00:13:44,000 --> 00:13:45,160 Speaker 2: slip into a recession? 286 00:13:45,640 --> 00:13:47,960 Speaker 5: Yeah, so, you know again, I think that's a risk. 287 00:13:48,400 --> 00:13:51,319 Speaker 5: I think the market ods of a recession something like 288 00:13:51,360 --> 00:13:53,680 Speaker 5: twenty five to thirty percent odds. I think that's probably 289 00:13:53,679 --> 00:13:57,480 Speaker 5: are maybe a little bit high. I do think that 290 00:13:57,559 --> 00:13:59,400 Speaker 5: there is enough momentum in the US economy kind of 291 00:13:59,480 --> 00:14:02,080 Speaker 5: keep going. I just look for slow down a couple nothing, 292 00:14:02,280 --> 00:14:05,880 Speaker 5: A few rate cuts from the Fed can't, can't sort 293 00:14:05,920 --> 00:14:09,400 Speaker 5: of help. I'm looking for at least three, maybe four 294 00:14:09,440 --> 00:14:11,880 Speaker 5: cuts next year. The dot posity, as you point out 295 00:14:12,040 --> 00:14:14,760 Speaker 5: at one, which is to me just kind of silly. 296 00:14:15,200 --> 00:14:16,599 Speaker 5: We know inflation is coming down, a lot of the 297 00:14:16,600 --> 00:14:19,000 Speaker 5: tariff suff's gonna the year over year stuff will break 298 00:14:19,120 --> 00:14:22,640 Speaker 5: kind of fall off the base effect. We know the 299 00:14:22,720 --> 00:14:25,640 Speaker 5: labor markets cracking, so the you know again, you can 300 00:14:25,680 --> 00:14:27,680 Speaker 5: always kind of poke holes at what the Fed is saying. 301 00:14:27,680 --> 00:14:30,120 Speaker 5: But they're looking for four point four percent unemployment in 302 00:14:30,120 --> 00:14:33,800 Speaker 5: twenty twenty six, four point two percent in twenty twenty seven. 303 00:14:33,920 --> 00:14:36,840 Speaker 5: I'm not sure how that happens unless we get out 304 00:14:36,880 --> 00:14:37,360 Speaker 5: a sleration. 305 00:14:37,680 --> 00:14:37,920 Speaker 1: Help. 306 00:14:38,000 --> 00:14:41,200 Speaker 5: Yeah, we need some helping. Fed again, nothing the fedt 307 00:14:41,240 --> 00:14:43,320 Speaker 5: it's panic time, I think, but I think they should 308 00:14:43,360 --> 00:14:45,960 Speaker 5: be cutting sort of front loading these cuts. How's the 309 00:14:46,000 --> 00:14:49,080 Speaker 5: consumer doing at there? Well, at least it gave me 310 00:14:49,120 --> 00:14:51,240 Speaker 5: sale hands. I mean I've been piping hearings over and over. Yes, 311 00:14:51,320 --> 00:14:54,000 Speaker 5: you no guidance for next year? Is the concerns consumers 312 00:14:54,040 --> 00:14:56,880 Speaker 5: coming cutting back? I'm sure you've seen all the statistics 313 00:14:56,960 --> 00:15:00,600 Speaker 5: that you know, the bulk of retail, the consumption in 314 00:15:00,640 --> 00:15:03,040 Speaker 5: taste is being driven like sort of the high twenty percent, 315 00:15:03,160 --> 00:15:07,480 Speaker 5: it's sort of income bracket, whereas something like sixty seventy 316 00:15:07,480 --> 00:15:12,920 Speaker 5: percent of the economy consumers, the lower income consumers, are struggling. 317 00:15:12,920 --> 00:15:16,239 Speaker 5: We know, we know that. That's why we're talking about affordability. 318 00:15:16,960 --> 00:15:18,720 Speaker 5: You know, for us here in this room and our 319 00:15:18,760 --> 00:15:21,680 Speaker 5: listeners probably we're feeling probably pretty okay. Really form the 320 00:15:21,680 --> 00:15:24,400 Speaker 5: majority of Americas, I think they're struggling with the inflation. 321 00:15:24,720 --> 00:15:28,560 Speaker 5: Now we're getting these layoffs, you know, tepid job growth. 322 00:15:28,640 --> 00:15:31,440 Speaker 5: So it's a struggle. It's that whole K shaped column 323 00:15:31,440 --> 00:15:33,600 Speaker 5: that we talked about. And I have this debate, is 324 00:15:33,600 --> 00:15:37,480 Speaker 5: that upward K enough to upset the downward part of 325 00:15:37,480 --> 00:15:39,240 Speaker 5: the K. And you know that's to me a big 326 00:15:39,320 --> 00:15:40,160 Speaker 5: question for next year. 327 00:15:41,200 --> 00:15:46,520 Speaker 2: So then where do you see I guess, strengthen the 328 00:15:46,560 --> 00:15:48,480 Speaker 2: economy next year. I mean, if it's not going to 329 00:15:48,520 --> 00:15:50,160 Speaker 2: be the consumer, if it's not going to be the 330 00:15:50,240 --> 00:15:53,160 Speaker 2: job market, where do we see sort of what become? 331 00:15:53,200 --> 00:15:55,400 Speaker 2: Because the consumer has been the pillar of this economy 332 00:15:55,400 --> 00:15:59,400 Speaker 2: for so long, right who sort of who are what 333 00:15:59,560 --> 00:16:02,120 Speaker 2: to provide? It's a foundation, if you will, for the economy. 334 00:16:02,200 --> 00:16:04,440 Speaker 5: Yeah, so you look, you go back to econ one 335 00:16:04,480 --> 00:16:06,800 Speaker 5: on one, you got C plus idles, G plus net exports, 336 00:16:06,880 --> 00:16:11,160 Speaker 5: so consumer se you know, cutting back G in terms 337 00:16:11,200 --> 00:16:13,400 Speaker 5: of government spanding, cutting back We've given out some tax 338 00:16:13,480 --> 00:16:16,560 Speaker 5: cuts obviously under the Big Beautiful bill, but actual government 339 00:16:16,560 --> 00:16:18,320 Speaker 5: spending is going to be I think a net negative 340 00:16:18,440 --> 00:16:21,440 Speaker 5: next year. Net exports. That's a tough one given that, 341 00:16:21,520 --> 00:16:23,520 Speaker 5: you know, with this ongoing terraff force. So it's really 342 00:16:23,640 --> 00:16:26,160 Speaker 5: up to investment. And again I keep pointing to AI 343 00:16:26,600 --> 00:16:29,680 Speaker 5: that's been a big driver why a headline growth in 344 00:16:29,720 --> 00:16:31,880 Speaker 5: the US has been so strong. It's it's, uh, you know, 345 00:16:31,880 --> 00:16:35,280 Speaker 5: all this investment in energy chip production, all that can 346 00:16:35,360 --> 00:16:38,640 Speaker 5: I sustain? Is that enough to offset again seven percent 347 00:16:38,680 --> 00:16:41,720 Speaker 5: of the economy? Again, I I don't think it can 348 00:16:41,720 --> 00:16:44,000 Speaker 5: totally offset, but it'll kind of cushion the blow. And 349 00:16:44,000 --> 00:16:46,240 Speaker 5: again the FED starts cutting rates, we get some maybe 350 00:16:46,280 --> 00:16:48,320 Speaker 5: life in the housing sector which. 351 00:16:48,120 --> 00:16:50,520 Speaker 2: Would be under pressure. Yeah, you know what's speaking of 352 00:16:50,560 --> 00:16:52,240 Speaker 2: which what is your outlook for the housing? 353 00:16:52,840 --> 00:16:55,440 Speaker 5: Yeah, so we had some nice drop in mortgage rates, 354 00:16:55,760 --> 00:16:57,160 Speaker 5: you know, as the FED was cutting, but now they've 355 00:16:57,160 --> 00:16:59,560 Speaker 5: been kind of sideways and you look at some of 356 00:16:59,560 --> 00:17:01,320 Speaker 5: the housing they well, unfortunate we haven't had a lot 357 00:17:01,360 --> 00:17:04,800 Speaker 5: of the housing data because the shutdown, it starts trickle out. 358 00:17:04,840 --> 00:17:07,520 Speaker 5: But there seems to be some sort of modest recovery underway. 359 00:17:08,119 --> 00:17:11,439 Speaker 5: But again, I think the important thing and this is 360 00:17:11,440 --> 00:17:13,639 Speaker 5: I think what the FED is puzzling with us. The 361 00:17:13,640 --> 00:17:16,199 Speaker 5: FED controls a short end, what's going off the long end, 362 00:17:16,200 --> 00:17:17,800 Speaker 5: and long end has kind of stayed elevated, and that 363 00:17:17,800 --> 00:17:19,640 Speaker 5: we need to get the long end down to get 364 00:17:19,680 --> 00:17:21,760 Speaker 5: mortgage rates down. And that's we can spend an hour 365 00:17:21,800 --> 00:17:22,560 Speaker 5: or two talking about that. 366 00:17:22,880 --> 00:17:24,439 Speaker 6: All right, Wenn, thank you so much for joining us. 367 00:17:24,480 --> 00:17:25,040 Speaker 5: Really appreciate it. 368 00:17:25,080 --> 00:17:27,959 Speaker 6: Whinin chief Econmers at the Bank of Nassault stay with 369 00:17:28,040 --> 00:17:30,719 Speaker 6: us or from Bloomberg Surveillance coming up after this. 370 00:17:39,560 --> 00:17:43,160 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 371 00:17:43,240 --> 00:17:46,399 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 372 00:17:46,480 --> 00:17:50,159 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 373 00:17:50,280 --> 00:17:51,800 Speaker 1: watch us live on YouTube. 374 00:17:52,000 --> 00:17:54,560 Speaker 2: Let's get a reality check now with Katie Kaminski, chief 375 00:17:54,600 --> 00:17:58,320 Speaker 2: research strategist at Alpha Simplex. Katie, thanks for being with us. 376 00:17:58,600 --> 00:18:00,720 Speaker 2: What's the I guess if you had a name the 377 00:18:00,760 --> 00:18:04,760 Speaker 2: top three trends to look for in stocks in twenty 378 00:18:04,800 --> 00:18:07,320 Speaker 2: twenty six, tick through those for us, what would they be? 379 00:18:08,280 --> 00:18:11,600 Speaker 7: Well, I'd say, I mean, I think the AI trend 380 00:18:11,840 --> 00:18:13,879 Speaker 7: is the one that we've been following, but we have 381 00:18:14,119 --> 00:18:18,440 Speaker 7: seen some broadening in the last six weeks or so, 382 00:18:18,440 --> 00:18:20,240 Speaker 7: so I think it's going to be about finding the 383 00:18:20,280 --> 00:18:23,480 Speaker 7: winners and losers of this theme. And also we've seen 384 00:18:23,520 --> 00:18:26,960 Speaker 7: a lot of interesting action outside the United States, excluding 385 00:18:26,960 --> 00:18:31,080 Speaker 7: of course China. So I think for equities it's definitely 386 00:18:31,119 --> 00:18:34,280 Speaker 7: still a very positive signal. But we have seen a 387 00:18:34,320 --> 00:18:37,880 Speaker 7: lot of uncertainty recently, just given the range of possible 388 00:18:37,960 --> 00:18:41,560 Speaker 7: outcomes for next year, and I think we're kind of 389 00:18:41,600 --> 00:18:44,880 Speaker 7: watching this idea of extreme market environments for next year, 390 00:18:44,920 --> 00:18:49,520 Speaker 7: either really good or really challenging, depending on how things unfold. 391 00:18:50,400 --> 00:18:55,080 Speaker 6: So we've got the Fed Katie cutting interest rates. I 392 00:18:55,119 --> 00:18:57,800 Speaker 6: guess the market's discounting maybe a couple more rate cuts 393 00:18:58,680 --> 00:19:01,959 Speaker 6: in twenty twenty six. How does that kind of influence 394 00:19:02,480 --> 00:19:06,280 Speaker 6: kind of the trend theory for fixed income in twenty 395 00:19:06,320 --> 00:19:06,800 Speaker 6: twenty six. 396 00:19:07,920 --> 00:19:10,600 Speaker 7: This is actually something that I've been thinking a lot about, 397 00:19:10,680 --> 00:19:14,680 Speaker 7: and the reason is we've actually seen yields rising more recently. 398 00:19:14,720 --> 00:19:17,760 Speaker 7: I mean, look at today, You've seen also yields rising 399 00:19:17,880 --> 00:19:23,359 Speaker 7: globally across different economies such as Australia, Japan, and so 400 00:19:23,440 --> 00:19:26,359 Speaker 7: I think what's been interesting is the trend signals and 401 00:19:26,400 --> 00:19:30,199 Speaker 7: fixed income have actually moved to short views. So that 402 00:19:30,320 --> 00:19:33,880 Speaker 7: seems a little at odds with this idea that Fed 403 00:19:33,960 --> 00:19:36,800 Speaker 7: is cutting rates. So I think what we worry about 404 00:19:37,359 --> 00:19:39,920 Speaker 7: is that you may have a lower short term rate, 405 00:19:40,440 --> 00:19:43,640 Speaker 7: but that longer term rates may stay a little higher 406 00:19:44,040 --> 00:19:47,479 Speaker 7: than what a lot of investors are hoping for for 407 00:19:47,560 --> 00:19:50,919 Speaker 7: next year, especially given the potential for inflation. But of 408 00:19:51,040 --> 00:19:53,960 Speaker 7: course this week we saw a good inflation number, we 409 00:19:54,000 --> 00:19:57,400 Speaker 7: see energies down, So that leaves us kind of scratching 410 00:19:57,400 --> 00:20:00,480 Speaker 7: our heads a little bit about what will happen with 411 00:20:00,520 --> 00:20:03,760 Speaker 7: the fixed income markets now that signals are very muted 412 00:20:04,000 --> 00:20:06,200 Speaker 7: and even short internationally. 413 00:20:07,080 --> 00:20:10,040 Speaker 2: Let's bounce over to commodities, because gee, what a year 414 00:20:10,080 --> 00:20:14,800 Speaker 2: it's been for the metals, right, yeah, I mean commodity markets. 415 00:20:15,320 --> 00:20:17,320 Speaker 2: Investors have been loving up their metals, and we're not 416 00:20:17,400 --> 00:20:20,199 Speaker 2: just talking about gold, silver, along for the ride, copper 417 00:20:20,359 --> 00:20:24,639 Speaker 2: as well, even though inflation is stabilizing, I guess if 418 00:20:24,920 --> 00:20:27,560 Speaker 2: you're to believe the latest numbers that we've gotten, So 419 00:20:28,000 --> 00:20:31,359 Speaker 2: what's the outlook for twenty twenty six, especially if inflation 420 00:20:32,080 --> 00:20:34,600 Speaker 2: doesn't really make a lot of noise for the market. 421 00:20:35,359 --> 00:20:38,360 Speaker 7: Well, this is a really interesting point because we've been 422 00:20:38,400 --> 00:20:42,440 Speaker 7: watching these metals trends very closely and they have been 423 00:20:42,520 --> 00:20:46,800 Speaker 7: extraordinary this year. And what is really confusing from an 424 00:20:46,840 --> 00:20:50,840 Speaker 7: inflation perspective is that, you know, you see things that 425 00:20:50,880 --> 00:20:53,399 Speaker 7: are really important, like energies that are down quite a 426 00:20:53,440 --> 00:20:56,719 Speaker 7: bit this year, but you see the metal block that 427 00:20:57,000 --> 00:21:00,480 Speaker 7: has moved counter to that particular theme, and so you 428 00:21:00,560 --> 00:21:03,440 Speaker 7: have to start asking, like, what does this mean fundamentally? 429 00:21:03,560 --> 00:21:05,760 Speaker 7: Is this something that could be a catalyst or is 430 00:21:05,840 --> 00:21:09,000 Speaker 7: this something that's just out of sync with sort of 431 00:21:09,040 --> 00:21:13,680 Speaker 7: the inflation narrative altogether. It is concerning, particularly with copper 432 00:21:13,720 --> 00:21:17,760 Speaker 7: and other base metals, because these are directly linked to 433 00:21:18,200 --> 00:21:22,040 Speaker 7: industry and to production, so that would be an input 434 00:21:22,080 --> 00:21:25,480 Speaker 7: to something that could impact inflation. I think there's just 435 00:21:25,560 --> 00:21:29,000 Speaker 7: offsetting forces and the energies and other areas that have 436 00:21:29,119 --> 00:21:31,800 Speaker 7: kind of made it less of an extreme. 437 00:21:31,400 --> 00:21:33,600 Speaker 5: Impact, Katie. 438 00:21:33,359 --> 00:21:36,800 Speaker 6: The US dollar sold off pretty sharply there in the 439 00:21:36,800 --> 00:21:38,760 Speaker 6: beginning of the year when we had all that uncertainty 440 00:21:38,760 --> 00:21:42,359 Speaker 6: about the tariff rollout in April. But since then, I 441 00:21:42,400 --> 00:21:44,480 Speaker 6: don't know, it's kind of stabilized, maybe come back a 442 00:21:44,560 --> 00:21:47,080 Speaker 6: little bit here, but I don't see any trend for 443 00:21:47,080 --> 00:21:49,480 Speaker 6: the US dollar other than I guess we're just sitting 444 00:21:49,520 --> 00:21:50,720 Speaker 6: here at this level. What do you think? 445 00:21:51,800 --> 00:21:53,800 Speaker 4: So this is a good point. A lot of people 446 00:21:53,840 --> 00:21:55,680 Speaker 4: are forecasting a weaker dollar. 447 00:21:57,000 --> 00:21:58,080 Speaker 6: Smilance coming out. 448 00:21:57,960 --> 00:22:01,479 Speaker 7: Of great cuts, but we just haven't seen those moves 449 00:22:01,520 --> 00:22:03,800 Speaker 7: come to fruition yet. We do see a lot of 450 00:22:04,200 --> 00:22:07,680 Speaker 7: a lot of volatility or bouncing around against against different currencies. 451 00:22:08,400 --> 00:22:12,440 Speaker 7: I read there's a lot of lot of location from 452 00:22:12,480 --> 00:22:19,560 Speaker 7: seven to eight globally, and that is an address to 453 00:22:19,720 --> 00:22:22,760 Speaker 7: an easy narrative. I do think at some point, should 454 00:22:22,760 --> 00:22:25,920 Speaker 7: we get aggressive rate cuts, we should expect a weeker dollar, 455 00:22:26,840 --> 00:22:29,000 Speaker 7: but that is just not in the data yet. 456 00:22:30,040 --> 00:22:31,760 Speaker 2: And what are your thoughts or what are you hearing 457 00:22:31,800 --> 00:22:37,280 Speaker 2: from clients with regards to possible moderate mild recession maybe 458 00:22:37,280 --> 00:22:40,159 Speaker 2: in the first half of twenty twenty six. 459 00:22:41,480 --> 00:22:43,840 Speaker 7: I think, I mean, the timing of that is going 460 00:22:43,880 --> 00:22:46,600 Speaker 7: to be tricky. We do think that we are in 461 00:22:46,600 --> 00:22:50,840 Speaker 7: an environment with relatively extreme outcomes. Look at China, it's 462 00:22:50,880 --> 00:22:55,679 Speaker 7: in a completely different place Australia Japan that you know, 463 00:22:55,760 --> 00:22:59,080 Speaker 7: you may see swings which are extreme in both directions. 464 00:22:59,160 --> 00:23:03,240 Speaker 7: The challenge for an investors is to project that, yes, 465 00:23:03,640 --> 00:23:05,480 Speaker 7: guarantee there's going to be a recession. 466 00:23:05,760 --> 00:23:07,880 Speaker 4: What you really need to think about is that. 467 00:23:07,920 --> 00:23:11,320 Speaker 7: These sort of flux in market conditions can take a 468 00:23:11,320 --> 00:23:14,840 Speaker 7: long time. So maybe we could actually have strong enough 469 00:23:14,880 --> 00:23:17,680 Speaker 7: growth and we don't actually see any sort of reversion 470 00:23:17,800 --> 00:23:21,200 Speaker 7: or some of these concerning scenarios until a couple of 471 00:23:21,280 --> 00:23:23,680 Speaker 7: months from now. So I think it's hard to predict 472 00:23:24,040 --> 00:23:26,679 Speaker 7: timing on these type of events, so preparing for it 473 00:23:26,720 --> 00:23:28,320 Speaker 7: may not be the right choice. 474 00:23:28,560 --> 00:23:30,680 Speaker 6: All right, Katie, thanks so much. We always appreciate getting 475 00:23:30,680 --> 00:23:32,600 Speaker 6: a few minutes of your time. Thank you so much, Katiekaminski. 476 00:23:32,720 --> 00:23:36,280 Speaker 6: She's a chief research strategist at Alpha Sinquick stay with 477 00:23:36,359 --> 00:23:39,159 Speaker 6: us or from Bloomberg Surveillance coming up after. 478 00:23:38,920 --> 00:23:51,199 Speaker 1: This, you're listening to the Bloomberg Surveillance podcast. Catch us 479 00:23:51,280 --> 00:23:54,600 Speaker 1: live weekday afternoons from seven to ten am Eastern Listen 480 00:23:54,680 --> 00:23:58,280 Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app, 481 00:23:58,400 --> 00:23:59,640 Speaker 1: or watch us live. 482 00:23:59,480 --> 00:24:02,120 Speaker 6: On YouTube very well, maybe the highlight of the day. 483 00:24:02,640 --> 00:24:05,240 Speaker 6: He's MATEO and newspapers, Lisa, what do you got. 484 00:24:05,080 --> 00:24:05,520 Speaker 4: For all Right? 485 00:24:05,520 --> 00:24:07,679 Speaker 8: We got a big event on Netflix tonight. Do you 486 00:24:07,800 --> 00:24:10,680 Speaker 8: know this guys? Twenty eight year old YouTuber Jake Paul 487 00:24:10,840 --> 00:24:11,880 Speaker 8: is back in the ring again. 488 00:24:12,000 --> 00:24:14,320 Speaker 4: Yes, yeah, I heard this is I got all. 489 00:24:14,200 --> 00:24:16,960 Speaker 8: The ads on my on my Netflix maj So remember 490 00:24:17,000 --> 00:24:19,760 Speaker 8: the big Netflix fight against Mike Tyson, right, that was huge? 491 00:24:20,119 --> 00:24:23,440 Speaker 8: But now he's fighting a guy a little bit, you know. 492 00:24:23,520 --> 00:24:24,359 Speaker 4: Bigger than he is. 493 00:24:24,440 --> 00:24:28,160 Speaker 8: Okay, So it's former World Olympic champion Anthony Joshua. He's 494 00:24:28,160 --> 00:24:31,679 Speaker 8: different from fifty eight year old Tyson back then. This 495 00:24:31,760 --> 00:24:34,800 Speaker 8: guy's thirty six, okay, but he's six foot six. He's 496 00:24:34,800 --> 00:24:38,119 Speaker 8: five inches taller than Paul. He has nearly two decades 497 00:24:38,160 --> 00:24:41,040 Speaker 8: of boxing experience, twenty five wins by knockout, and he's 498 00:24:41,080 --> 00:24:43,000 Speaker 8: thirty pounds heavier than Paul. 499 00:24:43,240 --> 00:24:44,240 Speaker 2: Is Paul going down? 500 00:24:44,520 --> 00:24:44,960 Speaker 5: I don't know. 501 00:24:45,080 --> 00:24:47,320 Speaker 4: I think he might be going down on this one. 502 00:24:47,480 --> 00:24:48,560 Speaker 4: But here's watching that. 503 00:24:49,200 --> 00:24:50,080 Speaker 5: Oh, I saw him. 504 00:24:51,480 --> 00:24:53,960 Speaker 8: I'm a boxing fan, you are, but I just want 505 00:24:53,960 --> 00:24:55,000 Speaker 8: to see him get his butt kicked. 506 00:24:55,080 --> 00:24:57,440 Speaker 4: And can I say that? I'm sorry? 507 00:24:57,680 --> 00:24:58,919 Speaker 5: Wow, I did not know that. 508 00:24:59,000 --> 00:25:01,280 Speaker 8: But either way he's going to take home around one 509 00:25:01,359 --> 00:25:03,199 Speaker 8: hundred million dollars if you win loses. 510 00:25:03,400 --> 00:25:07,160 Speaker 5: If he wins or loses, how much one hundred million? Wow? 511 00:25:07,280 --> 00:25:11,120 Speaker 6: I think maybe I'll go in the guy there, Holy Netflix, 512 00:25:11,160 --> 00:25:13,040 Speaker 6: I mean just more sports on Netflix. 513 00:25:13,800 --> 00:25:14,800 Speaker 4: It's more sports. 514 00:25:14,880 --> 00:25:17,280 Speaker 8: And last time I watched, like, there were a couple glitches, 515 00:25:17,320 --> 00:25:22,160 Speaker 8: Like because so many Netflix as an audience of sixty 516 00:25:22,200 --> 00:25:26,159 Speaker 8: million households worldwide, it's a new brainer for Netflix to 517 00:25:26,240 --> 00:25:26,880 Speaker 8: run this thing. 518 00:25:27,240 --> 00:25:30,240 Speaker 4: Yeah, but he draws the crowds like people love. 519 00:25:30,080 --> 00:25:32,639 Speaker 8: This guy used to be a social media influencer right 520 00:25:32,720 --> 00:25:35,480 Speaker 8: October just twenty eight, you know, but then he found 521 00:25:35,520 --> 00:25:38,760 Speaker 8: this call for boxing, and you know what, Hey, maybe 522 00:25:38,760 --> 00:25:41,520 Speaker 8: he'll win. I don't know to watch, I guess a 523 00:25:41,840 --> 00:25:42,880 Speaker 8: curious to find out. 524 00:25:43,000 --> 00:25:45,359 Speaker 5: Bring us to the report back Monday morning, ladies. Thank you, 525 00:25:45,720 --> 00:25:47,280 Speaker 5: I'm not watching exactly. 526 00:25:47,359 --> 00:25:48,240 Speaker 4: I'll give you the recap. 527 00:25:48,240 --> 00:25:50,840 Speaker 8: Okay, this is a worry for travelers right if you're 528 00:25:50,840 --> 00:25:54,560 Speaker 8: going through the holiday season. Experts are saying, be very 529 00:25:54,600 --> 00:25:57,919 Speaker 8: careful because scammers are taking advantage of it. They're posing 530 00:25:57,920 --> 00:26:01,160 Speaker 8: as airline agents and they're taking a lot of people's money. 531 00:26:01,160 --> 00:26:03,920 Speaker 8: So this is the FTC. They're calling it business imposter, 532 00:26:04,040 --> 00:26:07,200 Speaker 8: business and impersonator scams. And it happened. This is a 533 00:26:07,240 --> 00:26:10,000 Speaker 8: Bloomberg article. It happened to the journalist who wrote the article. 534 00:26:10,119 --> 00:26:13,159 Speaker 8: Oh so and I get a credit tell your story 535 00:26:13,160 --> 00:26:14,840 Speaker 8: because you're like, how could you fall for that? 536 00:26:14,880 --> 00:26:17,720 Speaker 2: But she did, and she I almost did. I was 537 00:26:17,960 --> 00:26:19,879 Speaker 2: planning a trip from my family a year ago. They 538 00:26:19,920 --> 00:26:21,639 Speaker 2: get on the phone with you right away. They sound 539 00:26:21,640 --> 00:26:24,960 Speaker 2: really professional, they say, and ask all the right things. 540 00:26:24,960 --> 00:26:27,120 Speaker 2: And I was about to give my credit card information 541 00:26:27,200 --> 00:26:29,640 Speaker 2: and something said, this doesn't sound they call you? 542 00:26:29,680 --> 00:26:30,760 Speaker 4: Did you call I called them? 543 00:26:30,800 --> 00:26:33,159 Speaker 2: Because when you do the search right, yes, a Google 544 00:26:33,200 --> 00:26:36,240 Speaker 2: search or whatever search, the fake stuff comes up first 545 00:26:36,240 --> 00:26:38,159 Speaker 2: with an eight eight eight number that looked like it 546 00:26:38,200 --> 00:26:40,640 Speaker 2: was the airline's number, but it wasn't. So the big 547 00:26:40,680 --> 00:26:44,280 Speaker 2: takeaway go to the website of that, or use the 548 00:26:44,320 --> 00:26:44,879 Speaker 2: app of that. 549 00:26:44,920 --> 00:26:47,560 Speaker 5: Airline. I learned that on tickets. I got scammed for 550 00:26:47,600 --> 00:26:48,800 Speaker 5: the Eagles. 551 00:26:48,359 --> 00:26:51,879 Speaker 6: At this sphere, remember that, And the day off, I'm 552 00:26:51,880 --> 00:26:53,480 Speaker 6: about to hop on the go to the airport, and 553 00:26:53,520 --> 00:26:56,960 Speaker 6: I realized I don't have tickets. These tickets didn't arrive, 554 00:26:57,040 --> 00:26:58,400 Speaker 6: and that was expensive. 555 00:26:58,440 --> 00:26:59,560 Speaker 5: So I learned that. 556 00:26:59,760 --> 00:27:02,080 Speaker 6: My So now I just go you have to go right. 557 00:27:02,000 --> 00:27:04,440 Speaker 5: To what the source? Yeah, and it's true. 558 00:27:04,480 --> 00:27:06,560 Speaker 8: And she was saying, like she called the number and 559 00:27:06,600 --> 00:27:08,280 Speaker 8: the person picked up on the first ring, and she 560 00:27:08,359 --> 00:27:09,600 Speaker 8: was like, I shouldn't known. 561 00:27:11,320 --> 00:27:14,080 Speaker 4: Because usually you're waiting forever to talk to someone air too. 562 00:27:14,359 --> 00:27:16,359 Speaker 6: Exactly, all right, Olive Garden, be careful. 563 00:27:16,760 --> 00:27:18,880 Speaker 8: Okay, So this is a sign of inflation are affecting 564 00:27:19,000 --> 00:27:22,040 Speaker 8: America's dining habits. So you have Olive Garden. Remember the 565 00:27:22,080 --> 00:27:24,960 Speaker 8: never Ending Possible, Right, that's the whole thing. Now, Olive 566 00:27:25,000 --> 00:27:29,320 Speaker 8: Garden's serving lighter portions and apparently it's working. People love it. 567 00:27:29,640 --> 00:27:32,159 Speaker 8: They're having trouble keeping up with demand. We're talking smaller 568 00:27:32,240 --> 00:27:35,840 Speaker 8: questions like thirteen to fifteen bucks. But this is something 569 00:27:35,840 --> 00:27:37,359 Speaker 8: they don't even market like, I have. 570 00:27:37,400 --> 00:27:37,960 Speaker 4: Never heard of this. 571 00:27:38,119 --> 00:27:38,600 Speaker 7: Lighter men. 572 00:27:39,359 --> 00:27:41,520 Speaker 8: Yeah, you're used to like the never Ending Possible, but 573 00:27:41,840 --> 00:27:44,440 Speaker 8: it's working for them. About forty percent of Olive Garden 574 00:27:44,520 --> 00:27:47,960 Speaker 8: menus offer this portion in the most recent quarter. Another 575 00:27:48,000 --> 00:27:50,359 Speaker 8: twenty percent are added recently, so they say, you know what, 576 00:27:50,440 --> 00:27:52,520 Speaker 8: this is working, maybe we should keep going with this. 577 00:27:52,560 --> 00:27:55,080 Speaker 6: It's most I mean, you know, Europeans come over here, 578 00:27:55,119 --> 00:27:57,600 Speaker 6: they say, oh my goodness, the portions are so huge. 579 00:27:58,119 --> 00:27:59,840 Speaker 2: And then you go to olive Garden you go, wow, 580 00:28:00,320 --> 00:28:02,640 Speaker 2: they're really huge. Maybe a lot of people were taking 581 00:28:02,680 --> 00:28:05,280 Speaker 2: doggy bags home when they realized we're wasting food or 582 00:28:05,480 --> 00:28:05,920 Speaker 2: I don't know. 583 00:28:06,359 --> 00:28:06,960 Speaker 5: That's what they say. 584 00:28:06,960 --> 00:28:08,200 Speaker 8: And they say, you know, it's not even like the 585 00:28:08,200 --> 00:28:09,800 Speaker 8: weight loss drugs, because you think that would be a 586 00:28:09,800 --> 00:28:11,600 Speaker 8: thing because people are eating less. But they say, no, 587 00:28:11,680 --> 00:28:12,840 Speaker 8: it's just they can't afford. 588 00:28:13,240 --> 00:28:15,800 Speaker 2: You know, I guess if the police got if the 589 00:28:15,920 --> 00:28:17,800 Speaker 2: food got smaller, but so did the price. 590 00:28:18,080 --> 00:28:19,000 Speaker 5: Yeah, I'm okay with that. 591 00:28:19,000 --> 00:28:22,239 Speaker 6: That's fine, Yeah, exactly, all right, at least maday what 592 00:28:22,240 --> 00:28:22,919 Speaker 6: the newspapers. 593 00:28:22,960 --> 00:28:23,760 Speaker 4: We appreciate that. 594 00:28:24,359 --> 00:28:29,199 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 595 00:28:29,320 --> 00:28:33,600 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 596 00:28:33,720 --> 00:28:37,199 Speaker 1: seven to ten am Eastern on Bloomberg dot com. The 597 00:28:37,280 --> 00:28:41,320 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 598 00:28:41,320 --> 00:28:44,719 Speaker 1: can also watch us live every weekday on YouTube and 599 00:28:44,920 --> 00:28:46,640 Speaker 1: always on the Bloomberg terminal