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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: us live on YouTube.

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Speaker 2: Anastasia Moroso she joins us. She's a chief investment strategist

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Speaker 2: at I Capital. Anastasia, we'll get to the markets overall.

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Speaker 2: I want to talk to you about what has been

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Speaker 2: a little bit different tech the private market. I just

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Speaker 2: did a read for Commonwealth.

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Speaker 3: We go down.

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Speaker 2: We talked to these Commonwealth folks, these advisors. They're talking

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Speaker 2: about private equity, private credit, hedge funds, is alternative investments.

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Speaker 2: What do you guys see at I Capital in terms

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Speaker 2: of the demand for private investments.

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Speaker 4: Right, Well, we obviously see a very big pickup in

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Speaker 4: demand for private investments, and anythink that's been the story

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Speaker 4: of ramping up over the last time years. That's how

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Speaker 4: long I Capital has been around, or a little bit longer.

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Speaker 4: But really in the last three or four years since

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Speaker 4: I've joined, I've seen this immense pickup in demand for alternatives,

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Speaker 4: and I think part of that has been because you know,

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Speaker 4: private investors have been looking at what institutions have been

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Speaker 4: making in let's say private equity, buyout strategies or private credit,

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Speaker 4: and they wanted to expand their portfolios to that.

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Speaker 3: You know.

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Speaker 4: Part of the interest also, I think picked up when

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Speaker 4: back in twenty twenty two you saw the sixty forty

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Speaker 4: portfolio that was down seventeen percent, but a lot of

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Speaker 4: these private market strategies held up really well and in

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Speaker 4: some cases delivered really strong positive returns. So I see

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Speaker 4: an immense demand for alternatives, and we do actually have

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Speaker 4: quarterly flows that we're able to share that we see

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Speaker 4: on our platform where private clients are allocating, and private

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Speaker 4: credit has definitely been an area of focus and area

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Speaker 4: of interest. It's about thirty seven percent of the flows

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Speaker 4: that we see on the platform. It's a little bit

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Speaker 4: lower than last quarter, but it's still a one trend,

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Speaker 4: which is an up trend that we're seeing in private credit.

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Speaker 4: Private equity is interesting because it's about forty seven percent

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Speaker 4: of the flows that we see on the platform, and

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Speaker 4: that is actually a sizeable pickup from last quarter. So

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Speaker 4: that tells me that investors are seeing the valuation environment stabilize.

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Speaker 4: These questions about well, don't private markets, you know, don't

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Speaker 4: properly just valuations. I think those questions are now behind us,

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Speaker 4: and investors are feeling comfortable to step into things like

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Speaker 4: private credit. The other thing I would mention, Paul, infrastructure

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Speaker 4: investing has really been attracting a lot of interest. When

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Speaker 4: we look at the flows, we saw initially all the

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Speaker 4: real asset flows go into real estate, but that number

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Speaker 4: has started to pair back as infrastructure investing has picked up.

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Speaker 4: So I would say tremendous interests. The question is not

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Speaker 4: why alternatives, but how which ones and how much.

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Speaker 5: Does the trajectory suggest that private credit will exceed private

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Speaker 5: equity at some point?

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Speaker 4: I mean, I think it's on that trajectory, but I really,

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Speaker 4: you know, can see the two being neck and neck,

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Speaker 4: because the truth is they serve a different purpose in

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Speaker 4: the portfolio. And if you look at public equities and

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Speaker 4: you think about forward looking returns, maybe they're a little

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Speaker 4: bit lower than we've seen in the last you know,

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Speaker 4: ten some years. So that's why I go to private equity.

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Speaker 4: That's your potential for extra returns, and when you think

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Speaker 4: about private credit, that's really your potential for extra income

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Speaker 4: in the portfolio. So I think the two serve very

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Speaker 4: different purposes, but investors are increasingly seeing them as an

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Speaker 4: extension of what can I do in equities and what

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Speaker 4: can I do in credit?

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Speaker 5: Who are those investors? It's not mom and pop.

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Speaker 4: Well, maybe not mom and pop just yeah, but I

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Speaker 4: will say, you know, look, you know that the typical

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Speaker 4: allocation for institutions is about forty percent, maybe in some

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Speaker 4: cases fifty percent. The typical allocation for an ultra high

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Speaker 4: network ultra high net worth investors about fifteen percent. But

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Speaker 4: if when you look at financial advisors that alternative fifteen

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Speaker 4: fifteen percent, Yes, but when you look at some of

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Speaker 4: the smaller investors they may work within RIA advisor that

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Speaker 4: you were mentioning, the allocations tend to be much smaller.

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Speaker 4: And the stats that I see is at thirty six

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Speaker 4: percent of advisors, those RIA advisors allocate to alternatives, and

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Speaker 4: if they do, that percentage tends to be something like

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Speaker 4: five percent. So there's a tremendous amount of interest and

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Speaker 4: potential for future growth in this adoption of alternatives, because

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Speaker 4: most advisors we talk to in survey do see those

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Speaker 4: allocations rising. And you know, John, it's not yet every

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Speaker 4: single investor that has alternatives in their portfolio. But that's

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Speaker 4: something that we're really focused on in I Capital is

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Speaker 4: how can you bring down the minimums, How can you

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Speaker 4: reduce the friction? You know, how can you build structures

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Speaker 4: that are suitable for individual investors?

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Speaker 2: So are you concerned about the rising allocation to all

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Speaker 2: turners because they are higher risk because of the in

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Speaker 2: part through the lower liquidity. Are you concerned about that?

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Speaker 2: How do you talk about that with your capital client?

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Speaker 4: Well, I would say there are different kinds of risks,

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Speaker 4: and you know, there's a mark to market risk and

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Speaker 4: there's a getting whipsod in the markets based on how

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Speaker 4: many rate cuts we're projecting or not. And from that standpoint,

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Speaker 4: I would actually argue the public markets may be riskier

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Speaker 4: because there's this sentiment factor, there is this technical dislocation

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Speaker 4: that's very much possible in public markets on a daily basis.

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Speaker 4: So from that perspective, I would argue some of the

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Speaker 4: alternatives that don't have to get marked to market every

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Speaker 4: single day may actually be a better risk adjusted return,

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Speaker 4: you know, part of your portfolio. But you bring up

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Speaker 4: a good point, of course, which is the liquidity, and

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Speaker 4: you know, yes, individual investor does need liquidity. Do they

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Speaker 4: need one hundred percent liquidity No, you know, but are

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Speaker 4: they able to take some illiquidity risk? Probably yes. So

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Speaker 4: that's why we don't see the allocations going to forty

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Speaker 4: or fifty percent for individuals as they are for institutions,

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Speaker 4: but up to a twenty percent allocation. I think that's

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Speaker 4: how you square that risk of having the liquidity but

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Speaker 4: at the same time giving yourself potential for higher income,

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Speaker 4: for higher potential returns and also diversification.

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Speaker 5: Does the word private mean opaque when it comes to

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Speaker 5: investing and just about everything.

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Speaker 4: Look, sometimes that is the perception, but I wouldn't say

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Speaker 4: that's the reality. And you know, private means it doesn't

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Speaker 4: get traded on a day to day basis. Private in

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Speaker 4: the case of private credit, for example, means that most

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Speaker 4: of these are by and whole long term securities that

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Speaker 4: are meant to be held until maturity. And yes, there's

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Speaker 4: this perception that because you know, you can't see the

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Speaker 4: mark every single day, you know, there's lack of transparency.

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Speaker 4: But the truth is that these assets do get valued

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Speaker 4: on a quarterly basis. These assets are audited on an

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Speaker 4: annual basis, and you know, one of the things that

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Speaker 4: we're really focused on it. Capital is bringing that transparency

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Speaker 4: by putting those performance numbers in front of investors so

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Speaker 4: they're readily able to see them. And look, they're always

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Speaker 4: going to be with a lag, because that's just the

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Speaker 4: mechanics of private markets. You have to get the valuations

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Speaker 4: and you have to get the reporting in. But what

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Speaker 4: I can say, over the last fifteen years, if you

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Speaker 4: look at the sixty forty portfolio relative to all the

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Speaker 4: different private market strategies, most of those private market strategies

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Speaker 4: have handedly outperformed the sixty to forty. For example, buy out,

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Speaker 4: growth equity delivering your turns of fifteen fourteen or fifteen percent,

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Speaker 4: private credit about nine percent. So it's been a very

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Speaker 4: compelling place.

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Speaker 2: To be tying in people looking for higher returns in

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Speaker 2: the alternative space. I'm going to tie that in with

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Speaker 2: a report we came out of Goldman Sachs earlier this

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Speaker 2: week where they were forecasting much lower returns for public

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Speaker 2: equity markets over the next decade versus this prior decade,

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Speaker 2: maybe you know, low single digits. They were talking about

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Speaker 2: thirty percent.

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Speaker 6: What did you think of that?

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Speaker 4: You know, look, there's a lot of variables that go

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Speaker 4: into that, and in fact the report site's five different variables.

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Speaker 4: But the thing about that is they're most likely treated

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Speaker 4: as static variables versus something that's going to evolve. And

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Speaker 4: of course, on the surface, it makes a lot of sense.

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Speaker 4: And when equities are trading at twenty two times multiple,

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Speaker 4: if that's your starting point, the forward looking returns mechanically

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Speaker 4: a little be lower, you know, based on that. You know,

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Speaker 4: there's also this concern about the concentration risk and the

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Speaker 4: max seven companies that maybe are not going to be

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Speaker 4: able to deliver. You know, Look, I do think returns

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Speaker 4: because of valuations and equities should be somewhat lower than

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Speaker 4: they have been in the past. But valuation aside, the

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Speaker 4: US economy is most likely still going to continue to grow,

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Speaker 4: It's most likely still going to continue to innovate. So

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Speaker 4: I think if companies deliver that seven to ten percent

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Speaker 4: earnings growth despite valuations, which maybe bring the overall returns

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Speaker 4: down a little bit, I still think we would be

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Speaker 4: towards the top of the range, which is about seven percent.

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Speaker 2: Nastacia, thank you so much for joining us. Anastacia Amoroso.

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Speaker 2: She's a chief investment strategist at Eye. Couple of joinings

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Speaker 2: here in a Bloomberg in and Director Broker studio.

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Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

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Speaker 7: David Gerrow joins us now one of as many duties

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Speaker 7: he's with a big take, providing intellectual input there on

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Speaker 7: our politics and out links center for our economy. David,

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Speaker 7: excuse me, I got their plague, folks. What can I say, David,

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Speaker 7: as simple as I can. Aren't elections supposed to be close?

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Speaker 6: They are, but we really haven't had one this close,

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Speaker 6: or at least as close as these polls indicate, for

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Speaker 6: for a long time. So in nineteen sixty, well yeah,

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Speaker 6: you look. You look at the latest Bloomberg Morning Console

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Speaker 6: poll for one for the other. The margin of arya

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Speaker 6: here one percent, so just really on a knife's edge,

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Speaker 6: and you know there shouldn't be a lot here. That's

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Speaker 6: surprising to regular listeners to this program or any sentient

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Speaker 6: beings in this country today. I mean, we have known

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Speaker 6: that this raise has been an close. This is kind

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Speaker 6: of confirmation that's the case in these seven swing states.

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Speaker 2: Eleven pm, November fifth.

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Speaker 5: Are we going to know anything I work in that weekend.

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Speaker 6: We're working that week and I think that's safe to say. Now, Look,

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Speaker 6: it's it's likely to be a race. It's going to

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Speaker 6: take a long time to get a final result on

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Speaker 6: and so I'm going to be in Pennsylvania for election

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Speaker 6: night itself, and I've been in touch with a lot

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Speaker 6: of election offices around the state. Many of them are

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Speaker 6: just emphasizing how careful they're going to be about getting

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Speaker 6: these counts done. Yes, we're going to get on official

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Speaker 6: results from them the night of, but it's going to

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Speaker 6: take days, I think, to get those confirmed, based on

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Speaker 6: just the procedures that they have in place, but also

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Speaker 6: just how much attention is being paid to this. And

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Speaker 6: then we know, of course, there are legions of lawyers

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Speaker 6: in the wings who are waiting to pounce on anything

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Speaker 6: that might be seen as untowited or wrong.

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Speaker 7: What people engaged in this ask me, is Georgia that

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Speaker 7: seems to be the You mentioned Arizona weeks ago, but Georgia.

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Speaker 7: Trump is ahead in Georgia. Are we supposed to be surprised?

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Speaker 6: That is probably one of the closes this races of

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Speaker 6: these seven and has been for a long time. I

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Speaker 6: think that it's a must win for the former president.

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Speaker 6: It's one that Vice President Harris would like to win.

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Speaker 6: She's going to be there today with former President Obama

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Speaker 6: and with Bruce Springsteen for a big event. Donald Trump

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Speaker 6: was there last night for a big rally, So they're

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Speaker 6: investing a lot in it. This is a state that

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Speaker 6: has early voting. People have been going to the polls

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Speaker 6: already and the turnout has been incredibly strong. So to summarize,

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Speaker 6: very important for both of these candidates of more paramount importance.

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Speaker 6: I think for former President Trump, what do we.

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Speaker 3: Know about down ballot?

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Speaker 2: Is it as close there?

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Speaker 7: Don ballot?

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Speaker 3: They explained Reggae like, no one exactly.

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Speaker 6: Is it as close to their David, It's very close,

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Speaker 6: and it's going to take some time as well to

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Speaker 6: kind of find out what the composition the balance is

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Speaker 6: going to be in both the House and the Senate.

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Speaker 6: You know, it's interesting you watch how these rallies unfold.

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Speaker 6: H Donald Trump isn't one to sort of envelop or

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Speaker 6: elevate those down ballot from him. Yes, they show up

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Speaker 6: at his rallies but that's of course not the star

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Speaker 6: of the show. They're not the star of the show.

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Speaker 6: You see Vice President Harris on stage with a number

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Speaker 6: of these candidates for Senate and how especially in these

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Speaker 6: contested races, so you know, both parties are paying close

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Speaker 6: attention to how all of this shakes out. And you

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Speaker 6: look at that map of the United States, we focus

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Speaker 6: on not just swing states or swing districts, but sort

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Speaker 6: of swing neighborhoods. Almost a lot of those dovetail with

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Speaker 6: these very hotly contested congressional races.

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Speaker 7: Do celebrities matter? Do people actually vote? Because Lisa Mateo's

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Speaker 7: on stage of someone I would?

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Speaker 6: I think that, you know, we're seeing this push now

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Speaker 6: twelve days out to get people off the couch and

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Speaker 6: to the polls, or to go to the mailbox to

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Speaker 6: mail in that ballot. And so I think that the

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Speaker 6: excitement surrounding these events elevated by the fact that Eminem's there,

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Speaker 6: Bruce Springsteen is there, or Jason Aldan down in Georgia.

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Speaker 6: I mean, both of these candidates are leaning on that,

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Speaker 6: and it kind of is emblematic of the fact that

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Speaker 6: they want to create excitement, then they want to reach

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Speaker 6: out to people who again might have some apathy or

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Speaker 6: in we about this note this has gone for what

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Speaker 6: eight nine months, and are getting just tired of the

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Speaker 6: whole process.

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Speaker 2: What I understand, David, it's a story about getting out

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Speaker 2: the vote. Does either side have any particular strength relative

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Speaker 2: to the other in terms of getting out the vote?

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Speaker 6: We know much more about the details of and the

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Speaker 6: composition of the team that Kamala Harris has in place.

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Speaker 6: She's raised more than a billion dollars in this campaign,

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Speaker 6: which is just extraordinary and what could art kind of

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Speaker 6: reprehensible as well. That's where we are in American politics.

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Speaker 6: That money matters so much. But we know that she's

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Speaker 6: deploying that across this country, yes, in those swing states,

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Speaker 6: but beyond hiring staff, spending a lot of money on advertisements,

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Speaker 6: both digital and television traditional advertising. The Trump ground game

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Speaker 6: is I don't want to say it's more secret. We

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Speaker 6: just have less information on what that's like. They have

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Speaker 6: confidence that they have it, but again they raise less

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Speaker 6: money than the vice president.

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Speaker 7: Harris has your great chart, Nancy Cook's great, great chart

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Speaker 7: here for a big take shows the margin of error. Clearly.

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Speaker 7: It tells me this poll's total beloaning because we have

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Speaker 7: no idea what we're doing within the margin of error.

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Speaker 7: What did you learn from twenty twenty two about margin

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Speaker 7: of era where so many got it wrong?

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Speaker 6: Well, I mean I learned a lot from twenty twenty two.

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Speaker 6: You know, it's a little different because it wasn't a

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Speaker 6: presidential election, but I think that there is people are

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Speaker 6: right to be skeptical of all of the polling that

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Speaker 6: we have, and of course ours is one of many,

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Speaker 6: and I think a difference this year is just how

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Speaker 6: many polls we have, how inundated we are with them,

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Speaker 6: and how important it is just kind of look at

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Speaker 6: them all in complements. So the particular special sauce that

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Speaker 6: we have is since October of twenty twenty three we've

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Speaker 6: really just focused on these seven swing states and kind

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Speaker 6: of charted both how these candidates are doing, of course

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Speaker 6: it was Joe Biden until it was Kamala Harris, how

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Speaker 6: they've been doing, but also what issues are important to voters.

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Speaker 6: And I think as we've seen you look at you

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Speaker 6: mentioned that chart, there's another great chart there that that

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Speaker 6: Nancy Cook and her colleagues have made that shows just

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Speaker 6: how the economy has been the paramount issue for voters

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Speaker 6: from the very beginning by such a wide margin. Beneath

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Speaker 6: it our immigration and abortion, but it is the economy

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Speaker 6: that these voters care about. I think that's something that

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Speaker 6: stands out to me in our poll. That's something that

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Speaker 6: I can I can get a lot of credence in

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Speaker 6: from from the pole. You know, the key question is

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Speaker 6: which kenid do you trust to handle the economy going forward?

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Speaker 6: Fifty percent of responds to that poll in those swing states,

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Speaker 6: likely voters say it's Donald Trump. Forty five percent say

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Speaker 6: Kamala Harris. You know that that has to frustrate her.

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Speaker 6: At the same time, she's got to be happy that

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Speaker 6: number is higher than it was for Joe Biden. She

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Speaker 6: has made up some of the ground that he had

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Speaker 6: lost on that issue.

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Speaker 7: Paul, I mean, you know, I'm not the scientist on

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Speaker 7: his girl is, but on taxes they're equal, which I

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Speaker 7: did not expect.

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Speaker 2: No, No, it's it's interesting here, David. I mean Elon Musk,

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Speaker 2: that's been interesting to watch. Do you think he's had

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Speaker 2: any influencer impact here, because he's certainly been high.

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Speaker 5: Profile and make some news.

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Speaker 6: I should I should have fed on that. When yeah, yeah,

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Speaker 6: when you when you when you asked about celebrities, Sure

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Speaker 6: brought that up. What's the j gonna do cut to

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Speaker 6: the check on this, on this sweep steakes issue. Yeah,

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Speaker 6: I think that they're looking at it pretty seriously. So

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Speaker 6: those who haven't followed this. Elon Musk has said he'll

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Speaker 6: give a million dollars a day to voters Swing states

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Speaker 6: who sign a petition saying that they pledge fealty to

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Speaker 6: the First and Second Amendments. And he's you know, people

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Speaker 6: have appeared with these sizeable checks. I mean he's giving

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Speaker 6: out he's giving out these million dollar amounts. You know,

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Speaker 6: what's illegal is paying someone to vote. And what he

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Speaker 6: seems to be trying to do is skirt that by

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Speaker 6: saying I'm not doing that. I'm having I'm having them

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Speaker 6: sign a petition. But you asked about his role. I

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Speaker 6: could have talked about it when you asked about celebrity Tom.

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Speaker 6: But it's it's he's playing a huge role in Pennsylvania.

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Speaker 6: He spent seventy five million dollars in that state. He's

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Speaker 6: sort of set up an operation there. He's held town halls.

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Speaker 6: He is trying to be this link one of many

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Speaker 6: that Donald Trump has to the bro vote these young men.

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Speaker 6: And we see Donald Trump tomorrow going to sit down

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Speaker 6: with Joe Rogan who has a wildly, wildly popular podcast

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Speaker 6: What way more popular than Bigger Than the Bigger Than

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Speaker 6: the Big Tip Fight Droves And and that is the

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Speaker 6: audience he's trying to target. They were a young man

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Speaker 6: who looks.

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Speaker 7: Is the true David Ger that missus Barr is out

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Speaker 7: in a street corner in Pennsylvania waiting for Eloud to

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Speaker 7: stop buying with million dollar check.

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Speaker 6: I cannot confirm or deny that, and you know I'll

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Speaker 6: follow up on that.

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Speaker 7: Okay, David Girl, Thank you so much.

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Speaker 3: Great analysis and wat to be here.

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Speaker 7: Folks at charts are hugely informative, particularly over this foolishness

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Speaker 7: and reality of the margin of error.

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Speaker 3: Yeah, wild raising.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on applecar Play and Android

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Speaker 1: Just Say Alexa, playing Bloomberg eleven thirty address.

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Speaker 7: Now soberly and somber after hitting the ball deep the

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Speaker 7: left field with Tesla Dan Ives joins us Out, senior

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Speaker 7: equity analyst at web Bush Securities. Okay, I got a

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Speaker 7: moonshot Dan on the bullmark of Tesla from fifty to

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Speaker 7: four hundred down it goes, and it's been in a

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Speaker 7: trading range. Was the announcement that you predicted last night?

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Speaker 7: Is that enough to reinvigorate a bull market in Tesla?

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Speaker 3: Oh?

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Speaker 8: Yeah, Look, I think Aaron Judge like performance. I mean

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Speaker 8: the margins that we saw, that's a massive rebound and

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Speaker 8: now starts the point where we're gonna see margins bike

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Speaker 8: back up. Price cuts have subsided, but the out for

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Speaker 8: next year time twenty to thirty percent. That's that's basically

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Speaker 8: double what anyone expects. The bullmarket in Tesla I believe

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Speaker 8: has begun.

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Speaker 7: Okay, Dan, it's just like regular season, Aaron Judge, or playoffs,

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Speaker 7: Division Series, World Series Aaron Judge, Which Aaron.

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Speaker 8: Judge thinks, I think this is regular season. Goot, Aaron Judge,

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Speaker 8: I think this this is Tesla getting their footing back, right.

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Speaker 8: I mean, you know, you see a lot of negativity

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Speaker 8: obviously come out of Robot tax today.

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Speaker 3: It's been a tough year.

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Speaker 8: I think you're seeing a resurgence now this is sort

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Speaker 8: of this the second chapter of this growth story plan out.

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Speaker 2: Hey, Dan, what do you think investors are really focused

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Speaker 2: on now? When you think about Tesla? Is it the

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Speaker 2: you know, automotive gross margin? Is that the Robotaxi is

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Speaker 2: at the AI angle that Elon's been trying to push

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Speaker 2: for the last several quarters. Where is the focus for

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Speaker 2: investors these days?

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Speaker 8: Yeah, But I think in the near term it's really

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Speaker 8: it's about margins. You need to see margins get back

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Speaker 8: toward twenties. I mean, you can't have a mid teens

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Speaker 8: and I think that's what we saw last night. Then

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Speaker 8: it's really the delivery growth in China, which now just

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Speaker 8: had their best quarter ever. But in terms of the

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Speaker 8: longer term growth, this is an AI story. Autonomous must

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Speaker 8: give actually a lot of details on cybercabin, some other issues.

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Speaker 8: Remember a lot came out of Robotaxi bars. We actually

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Speaker 8: thought it was one of the top three events we've

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Speaker 8: ever been at, you know, in twenty five years. This

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Speaker 8: is an autonomous AI play. I believe it's the most

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Speaker 8: undervalued AI plan market for.

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Speaker 7: All of our listeners in viewers, Dan, I seriously, this

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Speaker 7: is important. Should we care about super secret speculation from

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Speaker 7: some iPhone accountable iesore on the Asian Pacific rim or

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Speaker 7: should we focus on the fact I've had to buy

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Speaker 7: three iPhones sixteens in the last two weeks.

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Speaker 8: Yeah, we mean you've talked about this for many years,

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Speaker 8: me and Paul and I just I disagree with this analysis.

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Speaker 8: And I think many have been wrong on Apple for

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Speaker 8: really the last four or five years, trying to kind

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Speaker 8: of do gymnastics to get negative.

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Speaker 3: We've been Asian two times in the last eight weeks.

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Speaker 8: I believe this will be the strongest iPhone year ever

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Speaker 8: when it's all said and done.

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Speaker 3: And I think trying to kind of like pick the.

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Speaker 8: Spots yell fire in a crowd theater, I get it,

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Speaker 8: but I just I don't see it.

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Speaker 3: I believe this.

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Speaker 8: Is this is the start of a move toward a

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Speaker 8: three hundred dollars stock and Apple.

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Speaker 2: So when you said you've been in Asia, and that's

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Speaker 2: really important, Dan, because a lot of folks, I think rightfully,

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Speaker 2: so kind of say one of the big drivers here

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Speaker 2: are the big swing issues for Apple is China not

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Speaker 2: only at twenty percent of their revenue, but it's obviously

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Speaker 2: a huge part of their supply chain. How do you

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Speaker 2: you China and in Apple's positioning in China versus what

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Speaker 2: are some you know, really strong local competitors.

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Speaker 8: Yeah, I mean, look, there's one hundred million iPhones in

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Speaker 8: China in a window of an upgrade opportunity to just

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Speaker 8: forget Ai. When you look what's happening in China. I mean,

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Speaker 8: I think that you're gonna have China growth even we're

437
00:21:24,320 --> 00:21:27,160
Speaker 8: off tough comms. It's going to be up anywhere from

438
00:21:27,320 --> 00:21:30,680
Speaker 8: eighteen to twenty five percent over the next called three

439
00:21:30,800 --> 00:21:34,720
Speaker 8: four quarters. When that all plays out, that's how you're

440
00:21:34,760 --> 00:21:37,280
Speaker 8: now going to get to street numbers that have to

441
00:21:37,280 --> 00:21:41,560
Speaker 8: move higher for Apple, not lower. And services is going

442
00:21:41,640 --> 00:21:43,680
Speaker 8: to be a huge driver there. And I think that's

443
00:21:43,720 --> 00:21:47,040
Speaker 8: why we're looking a four trillion dollar mark ap in

444
00:21:47,160 --> 00:21:49,120
Speaker 8: Apple by early next year.

445
00:21:50,240 --> 00:21:53,040
Speaker 2: So talk to us about that services business, Dan, because

446
00:21:53,040 --> 00:21:53,800
Speaker 2: that's something.

447
00:21:53,560 --> 00:21:55,800
Speaker 7: That costs to me exactly wanted to go.

448
00:21:55,880 --> 00:21:58,040
Speaker 2: Exactly, Tom. I mean, a lot of you know, bulls

449
00:21:58,040 --> 00:22:01,880
Speaker 2: hang their hat the long term hat on the services revenues.

450
00:22:02,040 --> 00:22:04,280
Speaker 2: You know, roughly twenty percent of revenue. It's got nice

451
00:22:04,440 --> 00:22:08,880
Speaker 2: margins to that revenue stream. How do you model that out?

452
00:22:08,960 --> 00:22:10,920
Speaker 2: The services side of the Apple Store.

453
00:22:11,280 --> 00:22:14,960
Speaker 8: If you model out services just as a separate business,

454
00:22:15,320 --> 00:22:17,720
Speaker 8: you're talking about what's going to be one hundred and

455
00:22:17,720 --> 00:22:20,800
Speaker 8: twenty five hundred and fifty billion dollar revenue stream next

456
00:22:20,800 --> 00:22:25,119
Speaker 8: three four years with double the margroos margins of the

457
00:22:25,200 --> 00:22:26,359
Speaker 8: hardware business.

458
00:22:26,600 --> 00:22:28,560
Speaker 3: And I believe the valuation.

459
00:22:28,160 --> 00:22:32,600
Speaker 8: For the services business alone is two trillion dollar valuation

460
00:22:32,920 --> 00:22:34,520
Speaker 8: just for services.

461
00:22:34,800 --> 00:22:36,720
Speaker 7: Well, this is key, you know. And then I was

462
00:22:36,800 --> 00:22:39,200
Speaker 7: just over in Europe and I really saw in ear

463
00:22:39,240 --> 00:22:42,080
Speaker 7: full of the Apple ecosystem being used by all different

464
00:22:42,080 --> 00:22:45,480
Speaker 7: classes of people as well on a global basis. What

465
00:22:45,680 --> 00:22:49,400
Speaker 7: is the margin of the ecosystem?

466
00:22:49,520 --> 00:22:52,480
Speaker 3: I mean, look, if you look, if you look today

467
00:22:52,560 --> 00:22:55,520
Speaker 3: in terms of the margin of the ecosystem, it's basically

468
00:22:56,400 --> 00:23:05,159
Speaker 3: it's thirty. They've essentially increased their margin profile two to

469
00:23:05,240 --> 00:23:08,600
Speaker 3: three hundred BIPs globally in terms of what they're being

470
00:23:08,600 --> 00:23:11,159
Speaker 3: able to do at scale and scoop. I think that

471
00:23:11,440 --> 00:23:14,320
Speaker 3: when even what we've seen in Europe, I think the

472
00:23:14,440 --> 00:23:18,000
Speaker 3: biggest issue right now is when you think about AI

473
00:23:18,400 --> 00:23:21,320
Speaker 3: right and you think about what they're driving that is

474
00:23:21,359 --> 00:23:24,840
Speaker 3: going to be a US and essentially Asia and specifically

475
00:23:24,960 --> 00:23:28,560
Speaker 3: China centric story for the next eighteen months. That are

476
00:23:28,640 --> 00:23:30,960
Speaker 3: the group core growth drivers for Apple.

477
00:23:30,720 --> 00:23:35,480
Speaker 7: What's your single best idea right now? Everybody and everything,

478
00:23:35,520 --> 00:23:38,399
Speaker 7: but what's the Danai single best idea right now?

479
00:23:38,840 --> 00:23:42,840
Speaker 8: It's been the messy of AI Polunteer, best pure play

480
00:23:42,880 --> 00:23:46,240
Speaker 8: AI game out there that it's that that continues to

481
00:23:46,320 --> 00:23:50,520
Speaker 8: be our best idea along of course with Apple, Mirosoft

482
00:23:50,560 --> 00:23:51,639
Speaker 8: Tesla talk to.

483
00:23:51,680 --> 00:23:53,399
Speaker 2: Us about Palenteer. A lot of people don't know what

484
00:23:53,440 --> 00:23:55,040
Speaker 2: that is. I'm going to ask you just what do

485
00:23:55,119 --> 00:23:56,840
Speaker 2: they do and why is it your best idea?

486
00:23:57,359 --> 00:24:03,119
Speaker 3: Yeah? I mean Volunteer is what makes them so unique.

487
00:24:03,560 --> 00:24:06,159
Speaker 8: When you think about AI and you got Godfather of

488
00:24:06,160 --> 00:24:09,960
Speaker 8: Ai Jensen a video, the way that you actually build

489
00:24:09,960 --> 00:24:13,359
Speaker 8: out use cases for enterprises is pound Teer.

490
00:24:14,000 --> 00:24:16,320
Speaker 3: So when we think about AI and you think about.

491
00:24:16,080 --> 00:24:20,240
Speaker 8: The AI revolution, they're is a software company that essentially

492
00:24:20,240 --> 00:24:24,359
Speaker 8: builds use cases on top of what video what the

493
00:24:24,440 --> 00:24:27,960
Speaker 8: hyperscalers build. That's why we believe this is just you know,

494
00:24:28,200 --> 00:24:30,480
Speaker 8: to me, it's one of the most unique memes I've

495
00:24:30,480 --> 00:24:30,920
Speaker 8: ever seen.

496
00:24:31,160 --> 00:24:34,480
Speaker 7: Dennis, Thank you so much. Congratulations on Tesla. Must admit

497
00:24:34,920 --> 00:24:36,960
Speaker 7: victory left there from mister Rives this morning.

498
00:24:37,000 --> 00:24:38,920
Speaker 3: He is at what Bush.

499
00:24:44,240 --> 00:24:48,480
Speaker 1: This is the Bloomberg surveillance podcast. Listen live each weekday

500
00:24:48,600 --> 00:24:51,800
Speaker 1: starting at seven am Eastern on applecar Play and Android

501
00:24:51,840 --> 00:24:54,760
Speaker 1: Auto with the Bloomberg Business app. You can also watch

502
00:24:54,840 --> 00:24:58,080
Speaker 1: us live every weekday on YouTube and always on the

503
00:24:58,119 --> 00:24:59,120
Speaker 1: Bloomberg terminal.

504
00:25:00,720 --> 00:25:05,160
Speaker 2: Geopolitics, they are meeting in Washington, d C. As we speak,

505
00:25:05,640 --> 00:25:10,520
Speaker 2: A lot on their plate, as they discussed global geopolitical events,

506
00:25:10,600 --> 00:25:14,240
Speaker 2: obviously in the Middle East, in Ukraine, in Asia, A

507
00:25:14,280 --> 00:25:16,720
Speaker 2: lot on the plate. You think about climate change is

508
00:25:16,760 --> 00:25:19,879
Speaker 2: another global issue. A lot's going on there. Nadia Kaledino

509
00:25:20,280 --> 00:25:23,680
Speaker 2: joins us. She is the president of the European Investment Bank.

510
00:25:24,000 --> 00:25:27,560
Speaker 2: She joined us from a Washington, DC bureau. Nadia, thanks

511
00:25:27,560 --> 00:25:30,320
Speaker 2: so much for joining us here. You're down in Washington,

512
00:25:30,400 --> 00:25:32,880
Speaker 2: DC at the IMF. Could you give us a sense

513
00:25:32,920 --> 00:25:35,760
Speaker 2: or what are some of the key topics that you

514
00:25:35,760 --> 00:25:37,800
Speaker 2: guys are focused on down there in Washington.

515
00:25:39,000 --> 00:25:41,399
Speaker 9: Well, it's a pleasure to be here, and indeed, a

516
00:25:41,400 --> 00:25:44,679
Speaker 9: lot on our fleet. As you were saying, there's been

517
00:25:44,720 --> 00:25:48,120
Speaker 9: a lot of discussion about the economic outlook and the resilience,

518
00:25:48,200 --> 00:25:52,000
Speaker 9: the remarkable resilience of the global economy, but also the

519
00:25:52,040 --> 00:25:56,960
Speaker 9: current risks derived from the geopolitical tensions, uncertainty and fragmentation

520
00:25:57,080 --> 00:26:00,040
Speaker 9: of global markets, and we will also be talking a

521
00:26:00,040 --> 00:26:04,160
Speaker 9: lot about climate action, climate finance and how to support

522
00:26:04,280 --> 00:26:06,439
Speaker 9: most vulnerable countries around the world.

523
00:26:06,960 --> 00:26:09,320
Speaker 5: I have a dumb question for you, Nadia. Could you

524
00:26:09,400 --> 00:26:14,480
Speaker 5: explain exactly what the European Investment Bank is and does?

525
00:26:15,960 --> 00:26:18,800
Speaker 9: Yes? No, of course, the European Investment Bank is one

526
00:26:18,880 --> 00:26:22,040
Speaker 9: of the European institutions. It was created when the European

527
00:26:22,040 --> 00:26:25,840
Speaker 9: institutions were created, you know, decades ago, and it is

528
00:26:25,880 --> 00:26:29,240
Speaker 9: the largest multilateral financial institution in the world, with a

529
00:26:29,280 --> 00:26:32,320
Speaker 9: six hundred billion balance sheet. We do ninety percent of

530
00:26:32,359 --> 00:26:36,040
Speaker 9: our investments inside the EU, financing all the key infrastructures

531
00:26:36,040 --> 00:26:43,040
Speaker 9: from energy trains, also innovative investments in frontline companies from

532
00:26:43,080 --> 00:26:47,080
Speaker 9: tier technologies, and ten percent outside the EU. But I

533
00:26:47,119 --> 00:26:49,480
Speaker 9: mean eight to nine billion euros a year, so we're

534
00:26:49,480 --> 00:26:53,440
Speaker 9: a very important partner of the multilateral family.

535
00:26:54,000 --> 00:26:57,280
Speaker 2: Nadia, in terms of infrastructure, talk to us about the

536
00:26:57,320 --> 00:27:00,840
Speaker 2: European Investment Bank and its view on what's transpiring in Ukraine.

537
00:27:00,920 --> 00:27:06,439
Speaker 2: What is the EIB doing now and then in the

538
00:27:06,520 --> 00:27:09,520
Speaker 2: years ahead for the good folks of the Ukraine.

539
00:27:10,080 --> 00:27:13,760
Speaker 9: Yes, we're currently probably the most important investment partner to

540
00:27:13,880 --> 00:27:17,320
Speaker 9: the Ukrainian government. We had a round table yesterday where

541
00:27:17,359 --> 00:27:20,040
Speaker 9: there was a very strong support. I was impressed by

542
00:27:20,080 --> 00:27:22,680
Speaker 9: the very strong statements that were made around the table

543
00:27:22,720 --> 00:27:26,639
Speaker 9: to support Ukraine. Our support to Ukraineism wavering is about

544
00:27:27,040 --> 00:27:30,160
Speaker 9: peace and security for Europe, of course, and the EIB

545
00:27:30,600 --> 00:27:33,720
Speaker 9: is investing right now, focusing and supporting Ukraine in the

546
00:27:33,760 --> 00:27:37,280
Speaker 9: run up to the winter, so repairs and resilience of

547
00:27:37,480 --> 00:27:41,720
Speaker 9: energy infrastructures and going beyond the energy sector, we're supporting

548
00:27:41,760 --> 00:27:48,560
Speaker 9: investments in housing, schools, education and also private companies. We

549
00:27:48,760 --> 00:27:52,200
Speaker 9: just launched an export credit guarantee facility which has been

550
00:27:52,240 --> 00:27:56,480
Speaker 9: oversubscribed for European companies trading with Ukraine. So we will

551
00:27:56,480 --> 00:27:59,160
Speaker 9: continue to support Ukraine now during the war and hopefully

552
00:27:59,280 --> 00:28:00,800
Speaker 9: very soon in the reconstruction.

553
00:28:01,200 --> 00:28:04,760
Speaker 5: What is the European Green Deal and what's your investment there?

554
00:28:06,160 --> 00:28:08,560
Speaker 9: Well, more than fifty percent of our annual investments go

555
00:28:08,680 --> 00:28:12,719
Speaker 9: to the green transition, and that's why we're consolidating our

556
00:28:12,760 --> 00:28:15,439
Speaker 9: role as the Climate Bank. And this has to do

557
00:28:15,480 --> 00:28:18,280
Speaker 9: with the energy transition we just discussed, but also the

558
00:28:18,320 --> 00:28:22,080
Speaker 9: deployment of net zero technologies from green hydrogen to other

559
00:28:22,160 --> 00:28:25,879
Speaker 9: green fuels, and also making sure that Europe continues to

560
00:28:25,920 --> 00:28:28,800
Speaker 9: be one of the leading players worldwide when it comes

561
00:28:28,800 --> 00:28:32,359
Speaker 9: to green tech, and I think that we're getting on

562
00:28:32,440 --> 00:28:34,800
Speaker 9: with it. The private sector is also getting on with it.

563
00:28:35,080 --> 00:28:38,520
Speaker 9: Just yesterday we released a very interesting investment survey that

564
00:28:38,600 --> 00:28:41,680
Speaker 9: shows that European companies, more than sixty percent of European

565
00:28:41,720 --> 00:28:45,200
Speaker 9: companies are actually investing in green technologies, and I think

566
00:28:45,200 --> 00:28:47,440
Speaker 9: that's very good news, so that we can really move

567
00:28:47,480 --> 00:28:51,120
Speaker 9: to a net zero economy and make climate and competitiveness

568
00:28:51,200 --> 00:28:52,600
Speaker 9: just two sides of the same coin.

569
00:28:54,160 --> 00:28:56,560
Speaker 2: Nadie, across the twenty seven countries in the European Union,

570
00:28:56,680 --> 00:28:59,920
Speaker 2: where are the biggest concerns for you right now? Were

571
00:29:00,160 --> 00:29:02,760
Speaker 2: you maybe spending most of your time or more of

572
00:29:02,800 --> 00:29:03,200
Speaker 2: your time?

573
00:29:04,360 --> 00:29:07,040
Speaker 9: Well, we invest in the twenty seven member states, and

574
00:29:07,280 --> 00:29:10,400
Speaker 9: we are investing very heavily right now in this green

575
00:29:10,440 --> 00:29:15,080
Speaker 9: transition to make sure also that Europe becomes strategically independent.

576
00:29:15,200 --> 00:29:17,680
Speaker 9: You know, the war in Ukraine has shown us that

577
00:29:17,800 --> 00:29:19,920
Speaker 9: being dependent on other parts of the world and in

578
00:29:19,960 --> 00:29:24,000
Speaker 9: particular fossil fuel producers, it's a vulnerability for Europe. And

579
00:29:24,040 --> 00:29:27,040
Speaker 9: so there's a strong determination to make the green transition

580
00:29:27,120 --> 00:29:30,440
Speaker 9: a European success, and we're very much focusing here, but

581
00:29:30,520 --> 00:29:32,880
Speaker 9: of course we're also stepping up our support to europe

582
00:29:32,920 --> 00:29:39,480
Speaker 9: security and defense industry, digitalization, social infrastructures, trying to make

583
00:29:39,520 --> 00:29:42,640
Speaker 9: sure that we continue to be a prosperous part of

584
00:29:42,680 --> 00:29:44,880
Speaker 9: the world and also protecting our values.

585
00:29:45,320 --> 00:29:49,880
Speaker 5: And how dependent is your investment portfolio on US policy,

586
00:29:50,000 --> 00:29:52,600
Speaker 5: specifically the outcome of the election here.

587
00:29:54,160 --> 00:29:58,240
Speaker 9: Well, we obviously will continue to be closely partnering with

588
00:29:58,760 --> 00:30:05,600
Speaker 9: whoever is leading the US government, and the transatlantic relationship

589
00:30:05,640 --> 00:30:07,720
Speaker 9: I think is quite strategic and it is a win

590
00:30:07,840 --> 00:30:11,040
Speaker 9: win relationship both to the US and to Europe. So

591
00:30:11,080 --> 00:30:14,320
Speaker 9: we have every interest to continue to build close ties

592
00:30:15,040 --> 00:30:17,280
Speaker 9: from the cultural point of view, from the economic and

593
00:30:17,320 --> 00:30:19,640
Speaker 9: financial point of view, and of course from the security

594
00:30:19,640 --> 00:30:22,560
Speaker 9: and defense point of view too, And that doesn't influence

595
00:30:22,600 --> 00:30:26,800
Speaker 9: really our investment activities at the EIB. We will continue

596
00:30:26,880 --> 00:30:30,479
Speaker 9: to be a very important investment player inside the EU

597
00:30:30,560 --> 00:30:31,840
Speaker 9: and of course around the world.

598
00:30:32,800 --> 00:30:35,720
Speaker 2: So as Europe I think, adapts to the new world

599
00:30:35,800 --> 00:30:38,960
Speaker 2: where Russia is much more of an adversary than maybe

600
00:30:38,960 --> 00:30:41,840
Speaker 2: they were prior to the invasion of the Ukraine. Are

601
00:30:41,880 --> 00:30:43,840
Speaker 2: most of the member states in the EU are they

602
00:30:43,880 --> 00:30:47,520
Speaker 2: operating as if at least for the foreseeable future, Russia

603
00:30:47,560 --> 00:30:50,600
Speaker 2: will not be in any way shape or form an

604
00:30:50,640 --> 00:30:51,520
Speaker 2: economic partner.

605
00:30:54,080 --> 00:30:54,280
Speaker 3: Well.

606
00:30:54,360 --> 00:30:58,200
Speaker 9: Right now we're focusing very much in supporting Ukraine. I

607
00:30:58,280 --> 00:31:01,640
Speaker 9: hope that these war ends as possible, and that we

608
00:31:01,760 --> 00:31:05,640
Speaker 9: can see how the new global order is shaping up

609
00:31:05,680 --> 00:31:08,000
Speaker 9: in a manner which is more constructive. What we're seeing

610
00:31:08,040 --> 00:31:11,960
Speaker 9: in the last years is growing tensions, growing wars, and

611
00:31:12,040 --> 00:31:14,479
Speaker 9: that obviously is not good for the global economy, and

612
00:31:14,480 --> 00:31:19,040
Speaker 9: that is not good for the citizens perception of stability

613
00:31:19,080 --> 00:31:21,360
Speaker 9: and happiness, if I may put it this way. So

614
00:31:21,440 --> 00:31:23,200
Speaker 9: I really hope that we can move to a more

615
00:31:23,200 --> 00:31:26,960
Speaker 9: constructive approach throughout the world. From the perspective of the

616
00:31:26,960 --> 00:31:30,080
Speaker 9: European Investment Bank and from the perspective of the multilateral

617
00:31:30,120 --> 00:31:33,640
Speaker 9: development institutions more broadly, that we're gathering here in Washington

618
00:31:33,680 --> 00:31:36,640
Speaker 9: these days, I think that we're showing that we're walking

619
00:31:36,680 --> 00:31:40,479
Speaker 9: the talk. We're becoming as effective as possible, working as

620
00:31:40,520 --> 00:31:43,840
Speaker 9: a system, co operating closely together so that we can

621
00:31:43,880 --> 00:31:47,640
Speaker 9: play the role that we're called to in supporting global

622
00:31:47,680 --> 00:31:51,520
Speaker 9: stability and also bringing prosperity and protecting most vulnerable countries

623
00:31:51,560 --> 00:31:54,440
Speaker 9: around the world. I think that these shows that together

624
00:31:54,480 --> 00:31:58,680
Speaker 9: were stronger and that cooperating we can get further and

625
00:31:58,760 --> 00:32:01,080
Speaker 9: faster than by attention and conflict.

626
00:32:01,160 --> 00:32:03,880
Speaker 2: Of course, Nadia, thank you so much for joining us.

627
00:32:03,920 --> 00:32:06,240
Speaker 2: We really appreciate you taking some time to speak with us.

628
00:32:06,280 --> 00:32:10,440
Speaker 2: Nadia Calvino, President of the European Investment Bank. The IMF

629
00:32:10,600 --> 00:32:14,280
Speaker 2: is meeting in Washington, DC this week and obviously a

630
00:32:14,280 --> 00:32:16,640
Speaker 2: lot on the Clayton in terms of geopolitics and financing.

631
00:32:17,280 --> 00:32:21,719
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

632
00:32:21,880 --> 00:32:26,000
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

633
00:32:26,120 --> 00:32:29,160
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the

634
00:32:29,280 --> 00:32:33,080
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

635
00:32:33,120 --> 00:32:36,400
Speaker 1: can also watch us live every weekday on YouTube and

636
00:32:36,560 --> 00:32:38,120
Speaker 1: always on the Bloomberg terminal