WEBVTT - Single Best Idea with Tom Keene: Jordan Rochester & Nancy Lazar

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea, really interesting today, great equity market coverage GM.

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<v Speaker 2>Martin Adams was really quite sophisticated about the linkage between

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<v Speaker 2>technical analysis, fundamental and even economics. David Rosenberg joined us

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<v Speaker 2>from Canada. Thank you to his comments on King Charles speech.

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<v Speaker 2>He said the Canadian public really wasn't grabbed by the speech.

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<v Speaker 2>It was much more about the elites and the politicians

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<v Speaker 2>and all that. Katie Kaminski on trend Out at ELF

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<v Speaker 2>Simplex in Boston was really quite good, saying there is

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<v Speaker 2>beginning to be elements of a trend in the equity market.

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<v Speaker 2>We spoke on foreign Exchange with Jordan Rochester of Missouo

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<v Speaker 2>and what's so great about the shop is they have

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<v Speaker 2>dominic constant Steve Shudo and Jordan Rochester. I asked Jordan Rochester,

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<v Speaker 2>how do you piece those three minds together.

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<v Speaker 3>What we think is there's gonna be no Fed cuts

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<v Speaker 3>this year. Steve's got one and a half percent GDP forecast,

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<v Speaker 3>but are three and a half percent inflation, So your

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<v Speaker 3>noomenal's at five and the Fed's going to be looking

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<v Speaker 3>at three and a half inflation. That's not an environment

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<v Speaker 3>where you're cutting rates, you need to have really big

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<v Speaker 3>weakness in the labor market to do so. However, what

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<v Speaker 3>Constant would point out, and what I point out too,

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<v Speaker 3>is that this market is very much inclined to say

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<v Speaker 3>that there's a very high bar to get to get

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<v Speaker 3>this market to think hikes are the next move by

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<v Speaker 3>the Fed. The market will continue to think that cuts

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<v Speaker 3>the next move, but we are of the view it

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<v Speaker 3>won't happen this year. So what that means for trades

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<v Speaker 3>is we like front end flatteners, So price out the

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<v Speaker 3>rate cuts for this year, pricing more cuts for next year,

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<v Speaker 3>because that's how this market is biased. So we have

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<v Speaker 3>a steep We're gonna have a flattening of the curve.

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<v Speaker 3>More cuts, price for twenty twenty six, less for twenty five.

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<v Speaker 2>Jordan Rochester with Missoui there in the summer is as

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<v Speaker 2>he says, no FED rate cuts this year boring. We'll

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<v Speaker 2>off to see on that. But also then he is

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<v Speaker 2>euro out to one twenty stronger euro, not immediately, but

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<v Speaker 2>a stronger euro through two thousand and twenty five. Nancy

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<v Speaker 2>Lazarre was with us with Piper Sandler. She's definitive in

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<v Speaker 2>the business, and she was absolutely blistering about capital spending.

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<v Speaker 1>Here, Nancy Lazzar, First, what's given is nominal GDP. That's

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<v Speaker 1>what's created by both monetary and physical policy. And nominal

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<v Speaker 1>GDP growth has been about five percent next year? Could

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<v Speaker 1>it move up to something a little bit more than that. Yes,

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<v Speaker 1>I've got to make some new stop.

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<v Speaker 2>Are you saying six percent nominal GDP?

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<v Speaker 1>Well, that's historically what the peak growth rate had been

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<v Speaker 1>prior to the GFC. That's not out of the question

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<v Speaker 1>going forward, as you could in place tax reform, as

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<v Speaker 1>you put in place full appreciation on capex, manufacturing structures

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<v Speaker 1>and also manufacturing equipment. Capital spending is just underappreciated as

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<v Speaker 1>the drive of growth. Without businesses and reinvesting in a country,

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<v Speaker 1>you end up with stagnation, which is what happened to

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<v Speaker 1>us after China joined WTO.

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<v Speaker 2>I can't say how unusual that conversation is. If the

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<v Speaker 2>core equation is our nation's output, our GDP, howeve you

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<v Speaker 2>measure it is consumption seventy percent, investment eleven maybe thirteen percent.

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<v Speaker 2>Then you got government spending and all the uproar over

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<v Speaker 2>the debt and the deficit, and you bolt on the

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<v Speaker 2>back end, export, imports and all. How little within financial

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<v Speaker 2>media we speak about the eye investment and that's where

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<v Speaker 2>Nancy Lazar is completely focused. Is the idea, you can't

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<v Speaker 2>create jobs in any nation unless you have capital investment,

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<v Speaker 2>capital spending. Just brilliant Nancy Lazar with Piper Sandler across

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<v Speaker 2>the nation on your commute. Don't forget serious XM Channel

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