WEBVTT - Surveillance: Battleground Florida With Rep. Waltz 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.640 --> 0:00:27.440 Bloomberg dot Com, and of course on the Bloomberg twenty 0:00:27.480 --> 0:00:29.280 eight days to the election. And of course some of 0:00:29.280 --> 0:00:32.320 the nuances here gets pushed aside by the brute force 0:00:32.360 --> 0:00:36.000 of politics. Michael Waltz understands that he is a Republican 0:00:36.240 --> 0:00:39.840 from Florida, the sixth Congressional District. This is from Jacksonville 0:00:39.840 --> 0:00:43.200 in the south of Jacksonville down. He is the Congressman 0:00:43.280 --> 0:00:46.680 of Daytona Beach. Michael Walls, thank you so much for 0:00:46.760 --> 0:00:49.640 rejoining us. It was good to see you the other day. 0:00:50.120 --> 0:00:54.360 Your guy has to win Florida. Your district is twelve 0:00:55.000 --> 0:00:58.920 percent Hispanic. How does he get the Hispanic vote? How 0:00:58.960 --> 0:01:03.279 does he get the increase seen Cuban vote in Miami. Well, 0:01:03.320 --> 0:01:06.959 I can tell you he's doing very well with the 0:01:07.040 --> 0:01:10.240 Cuban vote and the Venezuelan vote. For one simple reason, 0:01:10.600 --> 0:01:15.360 the words socialism doesn't doesn't ring too well with with 0:01:15.520 --> 0:01:19.039 that part of the Hispanic vote. These are people who 0:01:19.040 --> 0:01:22.880 have suffered personally, who have lost family members or still 0:01:22.880 --> 0:01:27.200 have family members suffering in Cuba, in Venezuela under the 0:01:27.240 --> 0:01:30.240 Madureau regime and under the remnants of the Castro regime, 0:01:30.680 --> 0:01:35.039 and the move by the progressive left, UH to actively 0:01:35.200 --> 0:01:40.640 say and advocate socialist policies and really driving Hispanic towards 0:01:40.760 --> 0:01:43.520 the president and towards Republican Party. Well said, you've stated 0:01:43.560 --> 0:01:47.080 your case. Do you see any indication that Mr Biden 0:01:47.160 --> 0:01:51.080 of Delaware has decided to support the far left of 0:01:51.120 --> 0:01:55.880 the liberals on that matter or is he running more centrist? Well, 0:01:55.920 --> 0:01:57.880 I think he's been kind of all over the place, 0:01:58.440 --> 0:02:00.720 to be honest with you. At some point he was 0:02:00.920 --> 0:02:03.920 for the Green New Deal. It's on his website. Then 0:02:03.960 --> 0:02:07.280 in the debate he says it's not his plan. His 0:02:07.480 --> 0:02:11.040 vice president certainly is pounded the table for Medicare for all. 0:02:11.560 --> 0:02:14.720 He brought in the progressive left into his working groups 0:02:14.800 --> 0:02:19.560 for healthcare. Uh. Look, government run healthcare is not the solution. Uh. 0:02:19.680 --> 0:02:21.760 Look at the problems with the v A, which I 0:02:21.760 --> 0:02:25.640 hope we'll talk about, which runs from the government twelve 0:02:25.720 --> 0:02:28.800 hundred hospitals and pres and yet still is not serving 0:02:28.800 --> 0:02:31.600 our veterans. That's the best example of where the left 0:02:31.680 --> 0:02:34.200 wants to go and and I absolutely do think that 0:02:34.240 --> 0:02:37.480 will dominate Biden's policies. I'm sure that you want a 0:02:37.560 --> 0:02:40.919 debate in Miami just for bragging points for Florida and 0:02:40.960 --> 0:02:43.440 all that. The governor no doubt wants a debate in 0:02:43.520 --> 0:02:46.680 Miami as well. How do we do a debate in 0:02:46.800 --> 0:02:52.400 Miami that fits the realities of one candidate healthy and 0:02:52.440 --> 0:02:58.360 the other one rather ill. Well, the typical course of 0:02:58.400 --> 0:03:02.480 the virus in the quarantine, uh, should be done by 0:03:02.560 --> 0:03:06.639 that debate in another ten days. The president is looking 0:03:06.919 --> 0:03:10.440 much better, uh, and I think at that point will 0:03:10.480 --> 0:03:13.240 be able to have the debate. They'll stay socially distanced. 0:03:13.240 --> 0:03:16.320 Their teams will say, uh, well, we'll stay apart and 0:03:16.320 --> 0:03:18.679 say distance as well. Very few people are going to 0:03:18.760 --> 0:03:21.280 be allowed into the room. But I think that debate 0:03:21.400 --> 0:03:24.639 is important for people to hear, and it's important per 0:03:24.639 --> 0:03:27.120 our earlier point on where the left wants to go 0:03:27.280 --> 0:03:30.520 in terms of what it calls democratic socialism. To have 0:03:30.639 --> 0:03:34.760 that in Miami in the midst of people whose relatives, 0:03:34.840 --> 0:03:38.840 family members, and even themselves have suffered. Uh. There is 0:03:38.880 --> 0:03:43.880 a huge refugee population of Venezuelan population, that is that 0:03:43.960 --> 0:03:48.560 has been brutalized by the by the Madureau regime in Venezuela. 0:03:49.080 --> 0:03:51.160 And uh And I think that's a debate that needs 0:03:51.160 --> 0:03:54.440 to be had in a great place to have it. Congressman, 0:03:54.480 --> 0:03:56.240 I think we can anticipate one of the questions that 0:03:56.240 --> 0:03:59.040 will be host next week, and I do want to 0:03:59.400 --> 0:04:01.280 I'd love to here what your response to this question 0:04:01.280 --> 0:04:04.200 would be. If someone posts the question, if the President 0:04:04.240 --> 0:04:07.080 can't keep the White House safe from COVID nineteen, how 0:04:07.120 --> 0:04:12.160 did you protect the country. What is the answer to that, Congressman, Well, look, 0:04:12.160 --> 0:04:14.600 I think the President has kept the White House safe 0:04:14.680 --> 0:04:17.920 for the for an extraordinary amount of time to this year. 0:04:17.960 --> 0:04:21.520 I've personally been in and out a number of times, 0:04:21.520 --> 0:04:24.560 on and off of Air Force one. Uh. Look, at 0:04:24.600 --> 0:04:26.880 the end of the day, no one said that this 0:04:27.000 --> 0:04:30.600 virus would never spread. Uh. The goal was to flatten 0:04:30.640 --> 0:04:34.000 the curve, to get a hospital system that could to 0:04:34.040 --> 0:04:37.120 buy our hospital system time to handle it and not 0:04:37.200 --> 0:04:42.680 become completely overwhelmed while we march towards therapeutics and the vaccine. 0:04:43.160 --> 0:04:45.080 Uh So, if those were our goals which we have 0:04:45.200 --> 0:04:47.640 to which we have to keep an eye on, I 0:04:47.680 --> 0:04:50.599 think we have largely hit those. Meanwhile, I do think 0:04:50.640 --> 0:04:54.680 Biden needs to be held accountable for uh, for not 0:04:54.839 --> 0:04:58.400 wanting to shutdown from China, for not wanting to shutdown 0:04:58.480 --> 0:05:02.640 from Europe, for calling them policies zeno phobic, and for 0:05:02.839 --> 0:05:07.240 himself and his advisors early on not advocating for some 0:05:07.320 --> 0:05:10.080 of the stronger policies that the president put in place. 0:05:11.120 --> 0:05:14.279 I think cossmen going on here in terms of what 0:05:14.360 --> 0:05:17.200 he would have done had he be president. And again, 0:05:17.279 --> 0:05:19.120 that's what debates are for, and that's what's going to 0:05:19.200 --> 0:05:21.960 come out. Congressman, just real quick, do you think that 0:05:22.040 --> 0:05:26.200 President Trump has handled the own virus in his cabinet 0:05:26.240 --> 0:05:29.760 for himself well, given the fact that he's currently uh 0:05:29.839 --> 0:05:33.400 displaying himself not wearing a mask and going for what 0:05:33.520 --> 0:05:35.599 some people have called a joy ride in front of 0:05:35.600 --> 0:05:41.000 his supporters with Secret Service members in the same car. Yeah. Look, 0:05:41.040 --> 0:05:43.039 so there's there's a big difference when you have the 0:05:43.160 --> 0:05:46.839 luxury of just being a candidate versus when you have 0:05:46.960 --> 0:05:49.520 to govern and when you have to lead, and you 0:05:49.560 --> 0:05:53.240 have to lead with agency and cabinet heads that have 0:05:53.320 --> 0:05:56.000 to leave the Defense Department, of State Department and others. 0:05:56.440 --> 0:05:59.039 UH and and other critical departments. You have to be 0:05:59.080 --> 0:06:02.080 out there. You have to find ways to walk and 0:06:02.160 --> 0:06:04.600 chew gum. And I think that's been the President's message 0:06:04.640 --> 0:06:10.320 all along, is we cannot go to shutdown. It's just 0:06:10.640 --> 0:06:13.960 it's just not a responsible policy. We were talking about 0:06:14.120 --> 0:06:17.080 veterans a moment ago. You know, we're seeing a twining 0:06:18.360 --> 0:06:23.000 spike in veteran suicides just in the last year because 0:06:23.080 --> 0:06:26.599 of the isolations that are are getting put in place 0:06:26.720 --> 0:06:30.440 by mandatory shutdown. So I think the President's messages we 0:06:30.520 --> 0:06:32.520 have to find ways to say if we do both, 0:06:32.800 --> 0:06:35.599 we have to find he has to govern and to lead. 0:06:36.240 --> 0:06:39.039 Uh and and I think that's what he's been trying 0:06:39.080 --> 0:06:42.880 to do. Congressman, fantastic to have you on the program today. 0:06:42.880 --> 0:06:44.479 Hopefully we can have you back soon. Thanks for giving 0:06:44.520 --> 0:06:47.320 us your time. Congressman Michael Waltz there joining us on 0:06:47.360 --> 0:06:54.760 the latest. Waking up after sleeping for the last four 0:06:54.760 --> 0:06:58.440 months or so. Peter Chick, Academy Securities, head of macro Strategy. Peter, 0:06:58.600 --> 0:07:01.000 now you've been paying attention. Don't worry. I'm just joking. 0:07:01.160 --> 0:07:03.480 Let's stop with this bond market and treasuries in the 0:07:03.520 --> 0:07:05.599 action of the last twenty four page tour. In your view, 0:07:06.000 --> 0:07:09.240 was it a data the I s M better upside surprise? 0:07:09.360 --> 0:07:12.400 Was it the president's health seemingly according to his doctors, 0:07:12.400 --> 0:07:14.600 on the road to recovery, or was it the polls 0:07:14.840 --> 0:07:17.480 and the polls this morning as well. I think the 0:07:17.480 --> 0:07:20.440 polls are certainly helping because of pushing us towards stimulus. 0:07:20.600 --> 0:07:22.559 And I think the reality has no matter who wins, 0:07:22.720 --> 0:07:25.280 we're gonna see stimulus. We're gonna see more quote unquote 0:07:25.280 --> 0:07:27.440 band aid stimulus, like we're seeing where they're trying to 0:07:27.440 --> 0:07:29.680 make people whole. But the market is starting the price 0:07:29.760 --> 0:07:32.240 in that. We're gonna see infrastructure stimulus. We're gonna see 0:07:32.240 --> 0:07:34.840 real spending that is going to drop a lot more 0:07:34.840 --> 0:07:37.520 bonds into the bond market. It's already been having some 0:07:37.600 --> 0:07:40.440 trouble digesting bonds for the past month in the treasury market. 0:07:40.720 --> 0:07:42.040 So I think you see the ten year ago to 0:07:42.080 --> 0:07:44.080 at least one percent, maybe one and a quarter percent. 0:07:45.040 --> 0:07:49.440 I'm looking, Peter at the failure of two yield rallies 0:07:49.480 --> 0:07:53.000 since March. In the land of point figure, it's called 0:07:53.000 --> 0:07:56.680 a double pole high top. It's really an ugly a thing. 0:07:56.800 --> 0:07:58.679 We go up and yield and then we go down 0:07:59.120 --> 0:08:00.760 and then we go up been yield When we go 0:08:00.800 --> 0:08:04.400 down again, what does that signal to you? I think 0:08:04.400 --> 0:08:06.320 that we've kind of hit the limits of where we 0:08:06.320 --> 0:08:08.600 can get into terms of lower yields. So that's another 0:08:08.600 --> 0:08:11.000 reason higher yields. Also, when we had that stock market 0:08:11.040 --> 0:08:14.200 volatility recently and we are down on stocks, treasury is 0:08:14.240 --> 0:08:16.480 barely budged, yet another negative sign that that's not going 0:08:16.520 --> 0:08:18.800 to take much to push yields higher. And then finally, 0:08:18.800 --> 0:08:20.920 I know the move index, which is an index that 0:08:20.960 --> 0:08:23.880 really looks at implied volatility and the treasury market. I 0:08:23.880 --> 0:08:25.720 know it's a little bit wonky, but it's been very 0:08:25.840 --> 0:08:28.520 very low, telling me that people haven't been hedging any 0:08:28.520 --> 0:08:30.960 sort of interest rate risk. So again another reason, I 0:08:30.960 --> 0:08:34.080 think we're susceptible to a fairly rapid move to one 0:08:34.120 --> 0:08:35.960 to one and a quarter percent on the tenure Peter. 0:08:36.080 --> 0:08:38.040 That sounds like a lot given the stasis we've seen 0:08:38.040 --> 0:08:40.360 in the bond market recently. Will that get the Feds attention? 0:08:41.480 --> 0:08:45.040 I don't think so. You know, I think above one 0:08:45.120 --> 0:08:48.079 percent they start paying attention and then they maybe start 0:08:48.120 --> 0:08:49.960 doing things to ensure that we don't get above one 0:08:50.000 --> 0:08:51.720 in a quarter. But I do think if you look 0:08:51.720 --> 0:08:53.920 at the FEDS messaging for the past month or two, 0:08:54.320 --> 0:08:57.440 they would not be unhappy to see slightly higher yields 0:08:57.480 --> 0:08:59.640 and a steeper curve. Right. I think the FETE has 0:08:59.640 --> 0:09:02.400 done in much much better job than the ECB trying 0:09:02.400 --> 0:09:04.680 to ensure that banks can make some money. Right, we 0:09:04.720 --> 0:09:06.840 are not going to negative yields. I hate negative yields. 0:09:06.880 --> 0:09:08.920 I think they're the worst thing possible for the economy. 0:09:09.160 --> 0:09:11.240 So we're not gonna get negative yields. I think the 0:09:11.280 --> 0:09:13.760 Fed actually wants to see a steeper yield curve, and 0:09:13.760 --> 0:09:17.080 bizarrely enough against very very circular. But they talk about 0:09:17.120 --> 0:09:20.439 inflation expectations. That's a calculation from that anyway, so it 0:09:20.520 --> 0:09:23.560 suits their agenda. We'll pay to tell that to the 0:09:23.559 --> 0:09:26.480 Cleaytland Fed. Laret Amesta out yesterday saying quote, I can 0:09:26.520 --> 0:09:29.520 imagine wanting to shift to longer term treasuries as we 0:09:29.600 --> 0:09:31.920 did during the Great Recession. How do you frame that one? 0:09:33.040 --> 0:09:34.520 I think they are going to be very careful not 0:09:34.559 --> 0:09:36.120 to let it get above one and a quarter percent. 0:09:36.240 --> 0:09:39.280 So as we start seeing higher yields or model higher yields, 0:09:39.360 --> 0:09:41.840 I think first the FED will step up buy more treasuries. 0:09:42.000 --> 0:09:44.080 Then we'll go back hearing a little bit more about 0:09:44.120 --> 0:09:47.200 yield curve control, and I think we are stuck in 0:09:47.240 --> 0:09:50.040 this world. We potentially see real negative yields in the US, 0:09:50.400 --> 0:09:52.880 you know, very negative. And that's one reason I remained 0:09:52.880 --> 0:09:55.800 barish on the dollar. Is any inflation, which would normally 0:09:55.800 --> 0:09:58.480 express itself in higher yields is going to be camped 0:09:58.480 --> 0:10:01.200 down by the FED and money is gonna have to 0:10:01.200 --> 0:10:03.720 find itself somewhere else, So it's going to express itself 0:10:03.720 --> 0:10:06.320 in dollar weakness. So inflation is going to be dollar weakness, 0:10:06.600 --> 0:10:09.280 not higher yields because of the Fed. Does it matter 0:10:09.280 --> 0:10:12.559 to you, Peter is a market guy that the economists 0:10:12.600 --> 0:10:19.520 are partitioning inflation among goods and services. Goods inflation, maybe 0:10:20.000 --> 0:10:24.160 service sector looks like substantial disinflation. Does that stuff matter 0:10:24.240 --> 0:10:26.839 to you? It does a little bit. But I think 0:10:26.840 --> 0:10:29.839 over the long term we will see an equalization. I 0:10:29.880 --> 0:10:33.400 do think if we get this infrastructure spending for the 0:10:33.480 --> 0:10:35.920 first time in a long long time, we might see 0:10:35.960 --> 0:10:39.480 some real competition to hire mid level type employees, people 0:10:39.480 --> 0:10:43.040 who can manage plants, people who can manage production facilities, 0:10:43.240 --> 0:10:45.560 and that could actually create wage inflation, which has been 0:10:45.559 --> 0:10:47.880 really lacking for the last ten years. So, given the 0:10:47.880 --> 0:10:49.920 fact that you do think that bonds will sell off, 0:10:49.960 --> 0:10:52.400 do you think that it is inconsistent for equities to 0:10:52.440 --> 0:10:54.240 continue to rally in tandem or do you think that 0:10:54.280 --> 0:10:57.560 they will continue uh their rush upward based on this 0:10:57.679 --> 0:11:01.199 extra support fiscally as well as an improving economy with 0:11:01.280 --> 0:11:03.280 the end of the pandemic. You know one thing, I'll 0:11:03.320 --> 0:11:05.360 say It's probably gonna sound crazy, but I actually like 0:11:05.440 --> 0:11:08.160 dividend stocks, and dividend stocks would normally do poorly as 0:11:08.240 --> 0:11:10.880 yields are rising, but dividend stocks did not respond at 0:11:10.920 --> 0:11:12.800 all for the past two months to low yields. So 0:11:12.840 --> 0:11:14.760 I think you're gonna see a little bit of a normalization, 0:11:14.800 --> 0:11:16.840 almost what I'm calling a reversal trade. I would have 0:11:16.840 --> 0:11:18.680 called it a reopening trade a couple of months ago, 0:11:18.960 --> 0:11:20.920 but we moved so far beyond that, I think it's 0:11:20.920 --> 0:11:24.920 a reversal trade. I do think big tech is particularly susceptible. 0:11:25.640 --> 0:11:28.480 Depending on who wins, they may be a target for 0:11:28.559 --> 0:11:30.480 paying a lot of the bills, so I'd be a 0:11:30.480 --> 0:11:32.480 little bit more nervous there. I continue to like the 0:11:32.480 --> 0:11:35.560 performance that we've seen in reopening I really like the 0:11:35.559 --> 0:11:37.560 fact that the Russell two thousand has been doing well 0:11:37.600 --> 0:11:39.800 of late, So I think we could see a real strong, 0:11:40.240 --> 0:11:43.560 smaller company, domestic focused rally for the next two months 0:11:43.760 --> 0:11:46.679 as the spending company. To let's separate these issues out, 0:11:46.679 --> 0:11:49.000 because we standed can flight two different issues. I think 0:11:49.440 --> 0:11:52.959 there are events that squeeze positions and there are events 0:11:53.000 --> 0:11:55.760 that drive durabile change. Now, the thing that pay put 0:11:55.760 --> 0:11:58.439 a worried about going into November is that we don't 0:11:58.480 --> 0:12:01.920 have a result. The thing that squeezes positions is that 0:12:02.000 --> 0:12:06.040 we do have one. That's the somebody, the who that 0:12:06.200 --> 0:12:09.000 is what drives dura will change. Now, if somebody wins 0:12:09.280 --> 0:12:11.760 i e. Biden, you get a democratic sweep, that will 0:12:11.760 --> 0:12:14.240 squeeze positions. I would argue the other side as well, 0:12:14.280 --> 0:12:16.520 if you've got a red wave that was squeeze positions too. 0:12:16.880 --> 0:12:20.920 But what drives durable changes, that's the person the policy. 0:12:21.160 --> 0:12:23.200 Are we confined in the two issues at the moment, 0:12:24.280 --> 0:12:25.880 I think a little bit. But I think when you 0:12:25.920 --> 0:12:27.840 really look beyond the message, and what's going to be 0:12:27.880 --> 0:12:30.960 most important to me is will we get fiscal stimulus, 0:12:30.960 --> 0:12:33.800 will we get infrastructure spending, Will we try and rebuild 0:12:33.800 --> 0:12:37.200 a manufacturing base, and to me, the messaging from both 0:12:37.240 --> 0:12:40.360 sides is actually very similar. So if I think about 0:12:40.400 --> 0:12:42.440 what's going to be the most important next year is 0:12:42.600 --> 0:12:45.480 do we drive fiscal stimulus, I think the answer is yes. 0:12:45.520 --> 0:12:47.920 Regardless of who wins, how we pay for it might 0:12:47.920 --> 0:12:49.839 shift a little bit, but that's kind of why I'm 0:12:49.920 --> 0:12:52.120 very optimistic, and I suspect that at the end of 0:12:52.880 --> 0:12:55.679 one we will have a better job situation in the 0:12:55.800 --> 0:13:00.559 US than we had at the start of pay A 0:13:00.600 --> 0:13:05.680 cash offs. As always Piotr Academy Securities had a macross strategy. 0:13:06.840 --> 0:13:08.480 You got to be in the market to play in 0:13:08.520 --> 0:13:11.360 the market, and Robert Dahl of Moving has done that 0:13:11.480 --> 0:13:14.480 for years. Bob dal joins us this morning. Bob, how 0:13:14.480 --> 0:13:17.400 do you stay in the market here with all this uncertainty? 0:13:18.760 --> 0:13:23.480 You recognize that the underlying economic fundamentals and therefore earnings 0:13:23.520 --> 0:13:26.679 were in a reflationary period. You all just summed it 0:13:26.760 --> 0:13:30.559 up very well. In the West, You're doing great, You're 0:13:30.559 --> 0:13:33.680 doing great. You see, we're about to get amazing third 0:13:33.720 --> 0:13:36.000 quarter g d P. I know that's history. The good 0:13:36.040 --> 0:13:39.800 third quarter earnings, reasonable outlook for the fourth quarter, fiscal 0:13:39.880 --> 0:13:45.640 policy package or not. We're seeing precious medals. We're seeing 0:13:45.679 --> 0:13:50.679 industrial commodities moving up. We're obviously the stock market cyclicals 0:13:50.679 --> 0:13:52.640 are beginning to do do a little bit better, and 0:13:52.720 --> 0:13:56.080 even the bond market is waking up to say inflation 0:13:56.160 --> 0:13:59.360 is not gonna be zero forever. What'd you make of 0:13:59.360 --> 0:14:02.320 the relative still right now, Bob, between Europe the United States? 0:14:02.360 --> 0:14:05.040 Three months ago, the happy talk around Europe was almost 0:14:05.040 --> 0:14:07.600 defini and they don't hear much of it anymore. And 0:14:07.600 --> 0:14:10.320 the momentum, relatively speaking, is not in Europe right now. 0:14:10.640 --> 0:14:14.240 It's in the US, Bob, no question about it. Our 0:14:14.280 --> 0:14:18.920 economy came back faster because our policy, mixed was gargantial 0:14:19.160 --> 0:14:22.120 and fast. I mean, you can't find another period in 0:14:22.200 --> 0:14:25.680 history monetary and fiscal policy was this quick and this aggressive, 0:14:26.160 --> 0:14:28.880 and that has buoyed our economy and getting got us 0:14:29.000 --> 0:14:31.920 out of what could have gotten to be a longer 0:14:31.960 --> 0:14:34.520 and deeper recession when we shut the economy off. And 0:14:34.640 --> 0:14:37.800 that's why the US is doing well. So I sense 0:14:37.840 --> 0:14:40.920 where you want to be the United States over potentially Europe. 0:14:40.960 --> 0:14:43.200 Let's talk about where in the United States you'd like 0:14:43.280 --> 0:14:46.240 to be. Yesterday we saw that internal rotation that the 0:14:46.320 --> 0:14:48.720 likes of JP Morgan, Government, Sacks and others are talking 0:14:48.760 --> 0:14:51.920 about that moved to the cyclical parts of the equity market. Bob, 0:14:51.960 --> 0:14:53.680 why do you think we can have a sustainable move 0:14:53.760 --> 0:14:57.440 there and not just a position squeeze. Well, there is 0:14:57.480 --> 0:15:00.480 some position squeezing going on, no question. I think it's 0:15:00.560 --> 0:15:02.960 not an either or. I think it's a both end. 0:15:03.480 --> 0:15:06.280 If you've been successful in equities, you've had you know, 0:15:06.320 --> 0:15:10.080 technology and healthcare, and not many small stocks and not 0:15:10.120 --> 0:15:13.480 many cyclicals until the last few weeks. Now it's at 0:15:13.520 --> 0:15:16.640 both end. We had to run, for example, in financials 0:15:16.760 --> 0:15:19.760 yesterday today it might be the tech stocks coming on again. 0:15:20.080 --> 0:15:23.520 We've had this rotation with an upward trend that's going 0:15:23.520 --> 0:15:26.800 to continue. I like some of the consumer cyclical names, 0:15:26.800 --> 0:15:30.000 the best buys, Low's targets, even the some of the 0:15:30.040 --> 0:15:33.760 home builders. I'm not giving up on healthcare. I think 0:15:33.800 --> 0:15:36.240 they're there there, There are good news they're regardless of 0:15:36.560 --> 0:15:39.360 who gets selected. The stocks are not expensive, so they're 0:15:39.360 --> 0:15:42.400 the places I would camp out. Where's the cash flow? 0:15:42.960 --> 0:15:47.000 Can you reinvested for some growth? And are you doing 0:15:47.040 --> 0:15:50.880 well and making up money and cash flow in an 0:15:51.000 --> 0:15:54.600 environment that is post coronavirus. But the most read story 0:15:54.720 --> 0:15:57.560 on the Bloomberg yesterday. How to do with Wall Street 0:15:57.600 --> 0:16:00.760 analysts saying that a Biden win could be a bull 0:16:00.800 --> 0:16:03.360 case for US equities. And there's a lot of pushback, 0:16:03.400 --> 0:16:05.800 people saying it's just people going with their political beliefs. 0:16:06.040 --> 0:16:08.080 But Bob, do you adhere to this narrative that a 0:16:08.160 --> 0:16:11.680 Democrat sweep both of the of the Senate, the House 0:16:11.800 --> 0:16:17.440 and the presidency would be positive for markets? Probably initially, yes, 0:16:17.600 --> 0:16:21.960 because we will get a fiscal policy spending that will 0:16:22.000 --> 0:16:24.840 buoy the economy further, probably more than of the re 0:16:24.960 --> 0:16:28.920 election of Donald Trump, particularly if it's a mixed congress 0:16:28.960 --> 0:16:31.800 in that sense. Longer term, you know, if you're gonna 0:16:31.840 --> 0:16:35.080 have tax increases, are gonna have reregulation, that's not great 0:16:35.120 --> 0:16:37.560 for the market. So there could be this within the 0:16:37.640 --> 0:16:41.840 air of the positive reflationary trade, as I mentioned, getting 0:16:41.880 --> 0:16:45.400 a goose the bit from some fiscal policy spending, and 0:16:45.440 --> 0:16:49.640 then people will wake up and say not so fast. Well, 0:16:49.680 --> 0:16:52.080 and this has to do particularly with tech stocks, big 0:16:52.120 --> 0:16:54.280 tex stocks, because not only do you have an increasing 0:16:54.320 --> 0:16:58.160 antitrust sentiment that is growing certainly among the Democratic Party 0:16:58.160 --> 0:17:00.440 in Washington, d C. But as you said, the talk 0:17:00.480 --> 0:17:04.680 tax changes that Joe Biden would implement would disproportionately hit 0:17:04.880 --> 0:17:08.480 big tech companies. According to analysis by Bank of America, 0:17:08.640 --> 0:17:12.720 would you go underweight tech in a Democrat suite? I 0:17:12.720 --> 0:17:15.280 wouldn't go underweight. I would probably have less in a 0:17:15.400 --> 0:17:18.119 Democrat suite than I would if if the president is 0:17:18.760 --> 0:17:22.000 re elected, but I wouldn't go underweight. The underlying growth 0:17:22.080 --> 0:17:26.399 is just so powerful. COVID was a positive for the 0:17:26.440 --> 0:17:31.159 tech sector. Look we're gonna have under either administration continued 0:17:31.320 --> 0:17:35.920 queries of those companies, and look at Camel's nose under 0:17:35.960 --> 0:17:39.600 the tent. The government wants more money from these companies, 0:17:39.600 --> 0:17:42.440 and they that will hurt the multiples. I'm not sure 0:17:42.440 --> 0:17:45.200 it's going to hurt the earnings. Hi, Bob, great to 0:17:45.240 --> 0:17:47.560 catch up, sir, don't leave us along next time. All 0:17:47.640 --> 0:17:56.320 that ve chief eculty strategist, Thank you very much. Right 0:17:56.359 --> 0:18:01.240 now is something very spiritual. She is Carla Harris of Jacksonville, 0:18:01.320 --> 0:18:05.040 who never said no. Starting with the Radcliffe Choral Society, 0:18:05.480 --> 0:18:08.760 she carved out a singing a legit singing and music career, 0:18:08.800 --> 0:18:13.280 including wonderful appearances at Carnegie Hall, and in the meantime 0:18:13.760 --> 0:18:16.840 worked for Morgan Stanley. She is now Vice Chairman and 0:18:16.920 --> 0:18:20.600 Senior Senior Client Adviser. We're thrilled that Ms Harris could 0:18:20.680 --> 0:18:24.240 join us this morning on things Wall Street, but also 0:18:24.480 --> 0:18:28.480 things of this society in America right now, Carla, is 0:18:28.520 --> 0:18:32.040 a spirit that got you out of Jacksonville to Radcliffe. 0:18:32.119 --> 0:18:34.720 Is it still there? I would have to say it's 0:18:34.880 --> 0:18:37.280 very much still here and the live and kick it. Tom, 0:18:37.280 --> 0:18:39.399 how are you this morning? We're very good, wonderful to 0:18:39.440 --> 0:18:42.320 have you with us. I'd like you to interpret for 0:18:42.440 --> 0:18:45.879 us what Wall Street can do to allow a nation 0:18:45.960 --> 0:18:49.400 to heal and move forward. Yes, I'll tell you. One 0:18:49.400 --> 0:18:51.320 of the things that Wall Street can do it as 0:18:51.359 --> 0:18:53.960 providers of capital, is to make sure that those who 0:18:54.040 --> 0:18:57.080 don't have equal access to capital get that access. And 0:18:57.119 --> 0:18:59.000 that's one of the things we've done in Morgan Stanley. 0:18:59.000 --> 0:19:00.800 As you know, Tom, we s thought of the Multicultural 0:19:00.840 --> 0:19:03.840 Innovation Lab four years ago and I'm so excited today 0:19:03.880 --> 0:19:06.200 because it's our demo days. So that's the big coming 0:19:06.240 --> 0:19:09.000 out date where our companies, the nine companies that have 0:19:09.080 --> 0:19:12.440 been in the lab will be will be shown to investors. 0:19:12.600 --> 0:19:15.199 And we know that here through the acumen of Betsy 0:19:15.280 --> 0:19:17.640 gray Sick looking at banking and of course then there's 0:19:17.640 --> 0:19:21.120 Ellen Zettner who's been killing it as well, and economics. 0:19:21.160 --> 0:19:24.480 Carla Harris, I want to know what we need to 0:19:24.520 --> 0:19:29.000 do to get the mathiness of your degree in economics 0:19:29.160 --> 0:19:32.600 from a Harvard How do we get women, how do 0:19:32.680 --> 0:19:38.840 we get minorities engaged in the joys of microeconomics? Well, 0:19:38.880 --> 0:19:41.240 I'll tell you a lot of it is access to education, 0:19:41.240 --> 0:19:43.679 as you know, and then access to opportunities and the 0:19:43.840 --> 0:19:46.600 entrepreneurs that are out there. It's around access to capital because, 0:19:46.600 --> 0:19:48.920 as you know, women get less than three percent of 0:19:49.000 --> 0:19:51.959 traditional VC dollars and people of color get less than 0:19:51.960 --> 0:19:54.479 two percent or one percent, depending on your source. So 0:19:54.520 --> 0:19:56.080 I think that what we can do is to make 0:19:56.080 --> 0:19:58.560 sure that they know where the capital is and give 0:19:58.560 --> 0:20:01.639 them a fair shot. And many cases, these entrepreneurs have 0:20:01.680 --> 0:20:03.720 already been de risked by the time we even see 0:20:03.800 --> 0:20:07.160 them because they've had such a much tougher journey. Carl Harris, 0:20:08.080 --> 0:20:11.160 why have we been so bad at actually providing that, 0:20:11.440 --> 0:20:15.080 you know, that capital to people that needed and really 0:20:15.080 --> 0:20:17.959 be a turning point for this. Yeah, if I want 0:20:18.000 --> 0:20:19.840 to be constructive, I'll tell you that the reason that 0:20:19.880 --> 0:20:21.720 we've been bad at it is that people like to 0:20:22.080 --> 0:20:24.240 lean on the excuse that they can't find any But 0:20:24.320 --> 0:20:26.040 that's one of the things that we've been trying to 0:20:26.080 --> 0:20:29.520 fix through our podcast, Access and Opportunity is to highlight 0:20:29.600 --> 0:20:31.959 some of these great entrepreneurs and the highlight those have 0:20:32.000 --> 0:20:34.960 already invested. Because the more you put data out there 0:20:35.040 --> 0:20:37.720 and the more you elevate the conversation, I think the 0:20:37.760 --> 0:20:40.080 more people will start to say, we're wait, there really 0:20:40.160 --> 0:20:42.880 is something there. And the companies that we've brought into 0:20:42.920 --> 0:20:45.200 our lab have gone on to raise over thirty million 0:20:45.200 --> 0:20:47.639 dollars after they've been in the lab, which means we 0:20:47.720 --> 0:20:50.399 have been successful in raising the level of visibility. And 0:20:50.480 --> 0:20:53.000 today we have over fifty four billion dollars that will 0:20:53.040 --> 0:20:55.840 be represented among the investors that have come to our 0:20:56.000 --> 0:20:59.040 virtual Demo day. Um Carla Harrison, I rememb're speaking many 0:20:59.119 --> 0:21:01.040 years ago, actually took are seeing the garden. She would 0:21:01.040 --> 0:21:02.480 go around when she was at the I m F 0:21:02.560 --> 0:21:04.360 speaking to heads of state who said, I would love 0:21:04.400 --> 0:21:07.080 to find a woman to fill that job as finance minister, 0:21:07.160 --> 0:21:09.280 as environment minister, but they're just not there. And she 0:21:09.280 --> 0:21:11.920 would show up literally and have a list and say, well, here, 0:21:11.960 --> 0:21:13.560 I have a list of names that you could look 0:21:13.600 --> 0:21:17.600