1 00:00:13,920 --> 00:00:17,680 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:18,200 --> 00:00:20,400 Speaker 1: My name is Mike Reagan. I'm a senior editor at 3 00:00:20,400 --> 00:00:24,480 Speaker 1: Bloomberg and HUMBLDNNA higher across Acid reporter with Bloomberk and 4 00:00:24,640 --> 00:00:27,000 Speaker 1: this week on the show, well, we've got some bad 5 00:00:27,040 --> 00:00:30,520 Speaker 1: news for you. We're come to think of it, maybe 6 00:00:30,560 --> 00:00:33,600 Speaker 1: it's actually good news. It's hard to tell these days 7 00:00:33,640 --> 00:00:35,720 Speaker 1: if you have your eyes on the market, since we're 8 00:00:35,720 --> 00:00:38,960 Speaker 1: back in an upside down world where strong economic reports 9 00:00:39,000 --> 00:00:41,800 Speaker 1: can cause stocks to drop on concerns that they will 10 00:00:41,840 --> 00:00:45,080 Speaker 1: make the Federal Reserve maintain its aggressive efforts to tame 11 00:00:45,120 --> 00:00:49,520 Speaker 1: inflation through interest rate increases. But it's definitely good news 12 00:00:49,520 --> 00:00:51,880 Speaker 1: that we have a global market strategist at a major 13 00:00:51,920 --> 00:00:55,240 Speaker 1: firm here to help unpack it all for us. But first, Viltano, 14 00:00:55,280 --> 00:00:57,280 Speaker 1: before we get to the guest, I have to ask, 15 00:00:57,280 --> 00:00:59,680 Speaker 1: how was your trip to London? It was really fun 16 00:00:59,720 --> 00:01:02,400 Speaker 1: and I want to thank all of the cross acid 17 00:01:02,440 --> 00:01:06,200 Speaker 1: reporters and editors over in London who were so so 18 00:01:06,280 --> 00:01:08,600 Speaker 1: nice to me and welcome me and we went out 19 00:01:08,600 --> 00:01:11,600 Speaker 1: for drinks and had a really good time. Oh that's good. 20 00:01:11,360 --> 00:01:14,880 Speaker 1: Did did uh? Did they all join your professional network 21 00:01:14,920 --> 00:01:20,280 Speaker 1: on LinkedIn. Yeah, I'm friends with all of them on LinkedIn. Yeah, yeah, yeah, Yeah, 22 00:01:20,280 --> 00:01:22,640 Speaker 1: you've got quite a following on LinkedIn. Yeah. I think 23 00:01:23,080 --> 00:01:27,080 Speaker 1: it's a small type, tight knit group of maybe like 24 00:01:27,319 --> 00:01:30,040 Speaker 1: three thousand people or so, I would say. Yeah, Yet 25 00:01:30,200 --> 00:01:34,160 Speaker 1: I am not yet up to snop to join your 26 00:01:34,840 --> 00:01:40,399 Speaker 1: professional network on LinkedIn? Is that me, the one who's 27 00:01:40,560 --> 00:01:44,840 Speaker 1: edited how many of your stories as a podcast guest's 28 00:01:45,040 --> 00:01:47,319 Speaker 1: even a big LinkedIn guy? I can't even believe I 29 00:01:47,400 --> 00:01:50,200 Speaker 1: actually I'm going to send my request to be in 30 00:01:50,240 --> 00:01:53,600 Speaker 1: your professional network. I wasn't gonna. I think I'm not 31 00:01:53,640 --> 00:01:55,400 Speaker 1: even sure I did it on purpose. I think it 32 00:01:55,480 --> 00:01:59,640 Speaker 1: was like a butt dial. I'm sure rarely on LinkedIn. 33 00:02:00,120 --> 00:02:02,120 Speaker 1: I feel like if you're on LinkedIn, you're looking for 34 00:02:02,160 --> 00:02:04,280 Speaker 1: a job. I don't want my employers to think I'm 35 00:02:04,280 --> 00:02:08,120 Speaker 1: out there looking for a job. And somehow the fact 36 00:02:08,120 --> 00:02:11,320 Speaker 1: that I'm not in your professional network on LinkedIn, I 37 00:02:11,360 --> 00:02:13,320 Speaker 1: don't you think it probably bothers me. It does not 38 00:02:13,760 --> 00:02:17,600 Speaker 1: bother me. I'm going to resend my requestsional I don't 39 00:02:18,840 --> 00:02:21,840 Speaker 1: work on LinkedIn. Yeah no, And you're not welcoming it, 40 00:02:21,919 --> 00:02:25,520 Speaker 1: to be honest, because if for listeners who aren't familiar 41 00:02:25,560 --> 00:02:28,560 Speaker 1: with this. Mike tweeted about this. He called me out. 42 00:02:28,960 --> 00:02:31,760 Speaker 1: I hadn't accepted his friend Is it a friend request? 43 00:02:31,800 --> 00:02:35,160 Speaker 1: I don't know what do they call it on It's 44 00:02:35,280 --> 00:02:37,800 Speaker 1: request to be a member of your professional yes, exactly, 45 00:02:37,840 --> 00:02:40,120 Speaker 1: And and I didn't accept it. And you know what, 46 00:02:40,280 --> 00:02:42,400 Speaker 1: now that you called me out, I'm not going to 47 00:02:42,480 --> 00:02:46,240 Speaker 1: do it. I m dumb. I'm dumbfounded by this. I 48 00:02:46,280 --> 00:02:49,840 Speaker 1: am dumbfounded by this. I will get my revenge on somehow. 49 00:02:50,520 --> 00:02:53,160 Speaker 1: You will find out. I imagine this week's guest is 50 00:02:53,200 --> 00:02:55,840 Speaker 1: a member of your professional note. Oh yeah, for sure. No, 51 00:02:56,000 --> 00:02:58,960 Speaker 1: we've been friends for a really long time. No, but 52 00:02:59,000 --> 00:03:00,560 Speaker 1: I do, I do want to bring it. Bring him in. 53 00:03:00,600 --> 00:03:04,480 Speaker 1: It's Anthony Saglane Benny. He's the global market strategist at 54 00:03:04,560 --> 00:03:08,480 Speaker 1: amery Prise Financial. Anthony, welcome to the show. Welcome to 55 00:03:08,480 --> 00:03:11,959 Speaker 1: the podcast, and welcome to my my LinkedIn network. Yeah, 56 00:03:12,320 --> 00:03:15,320 Speaker 1: thanks thanks for having me. Uh, Like Mike, my my 57 00:03:15,520 --> 00:03:18,239 Speaker 1: LinkedIn network is not nearly as big as yours. So 58 00:03:18,600 --> 00:03:20,880 Speaker 1: for somebody who says they're not, they don't know what 59 00:03:21,000 --> 00:03:25,320 Speaker 1: to do on LinkedIn. It's a little suspicious. It's a 60 00:03:25,360 --> 00:03:28,560 Speaker 1: little suspicious. Keep calling me out. I'm just gonna send 61 00:03:28,560 --> 00:03:32,840 Speaker 1: all I'm gonna decline all of those. Yeah. Yeah, but uh, Anthony, 62 00:03:32,880 --> 00:03:35,360 Speaker 1: maybe just to start you can you send us a 63 00:03:35,400 --> 00:03:38,560 Speaker 1: couple of notes right before we started the podcast, and 64 00:03:38,600 --> 00:03:40,720 Speaker 1: you said that we are entering a good news is 65 00:03:40,840 --> 00:03:43,040 Speaker 1: bad news market and I wanted to ask you why 66 00:03:43,360 --> 00:03:44,800 Speaker 1: that is and if you could just sort of lay 67 00:03:44,880 --> 00:03:47,320 Speaker 1: that up for us. Yeah. Yeah, I mean, I think 68 00:03:47,320 --> 00:03:49,920 Speaker 1: over the last couple of weeks, the markets have really 69 00:03:50,480 --> 00:03:53,880 Speaker 1: kind of settled into this idea um of of a, 70 00:03:54,360 --> 00:03:56,920 Speaker 1: you know, are we headed for a recession? And then 71 00:03:57,040 --> 00:04:00,600 Speaker 1: be is it going to be prompted by the Fed 72 00:04:00,760 --> 00:04:04,560 Speaker 1: raising interest rates too aggressively? And so what I mean 73 00:04:04,640 --> 00:04:07,920 Speaker 1: by a good news is bad news type of market 74 00:04:08,040 --> 00:04:12,920 Speaker 1: environment is the hotter that economic news comes in versus 75 00:04:13,000 --> 00:04:17,080 Speaker 1: expectations kind of implies that maybe the Fed will need 76 00:04:17,120 --> 00:04:20,600 Speaker 1: to continue to raise interest rates more aggressively. And so 77 00:04:20,680 --> 00:04:23,400 Speaker 1: you saw so a little bit of that in the 78 00:04:23,520 --> 00:04:27,880 Speaker 1: reaction on the May employment report on Friday, where you know, 79 00:04:27,920 --> 00:04:33,279 Speaker 1: we created three jobs in May, unemployment rate held steady 80 00:04:33,279 --> 00:04:36,520 Speaker 1: at three point six percent for for the third straight month. 81 00:04:36,839 --> 00:04:41,200 Speaker 1: By all accounts, the employment backdrop is very strong. Um. 82 00:04:41,240 --> 00:04:44,200 Speaker 1: But on top of that, those numbers came in above 83 00:04:44,360 --> 00:04:48,320 Speaker 1: the three three thousand that was expected in the markets 84 00:04:48,400 --> 00:04:52,039 Speaker 1: declined because that the idea is is that as long 85 00:04:52,080 --> 00:04:55,400 Speaker 1: as the labor market remains strong, as long as economic 86 00:04:55,480 --> 00:04:59,320 Speaker 1: activity is moving above what I think in census an 87 00:04:59,839 --> 00:05:03,159 Speaker 1: I estimates are, it implies that the Fed may have 88 00:05:03,240 --> 00:05:06,080 Speaker 1: to raise interest rates more aggressively. And so I think 89 00:05:06,160 --> 00:05:08,159 Speaker 1: as we move through the couple of the next couple 90 00:05:08,200 --> 00:05:11,039 Speaker 1: of weeks and a couple of months, um data that 91 00:05:11,120 --> 00:05:13,800 Speaker 1: comes in hotter than expected, you would expect that the 92 00:05:13,839 --> 00:05:18,039 Speaker 1: market would greet that more negatively, and then data that 93 00:05:18,120 --> 00:05:21,200 Speaker 1: comes in a little bit weaker but not too weak 94 00:05:21,600 --> 00:05:26,039 Speaker 1: would be greeted positively. That we call it this goldilocks 95 00:05:26,200 --> 00:05:30,039 Speaker 1: kind of scenario where economic momentum is declining but not 96 00:05:30,320 --> 00:05:33,919 Speaker 1: so much that fears of a recession start to set in. 97 00:05:34,240 --> 00:05:36,520 Speaker 1: I think it's a tall order, but um, I think 98 00:05:36,560 --> 00:05:38,720 Speaker 1: that's where we are in the market environment right now. 99 00:05:38,960 --> 00:05:40,919 Speaker 1: You know, I think the question on a lot of 100 00:05:40,960 --> 00:05:44,680 Speaker 1: people's minds is a there's there's a lot of sort 101 00:05:44,720 --> 00:05:47,839 Speaker 1: of wishful thinking and fingers being crossed all over Wall 102 00:05:47,880 --> 00:05:51,039 Speaker 1: Street that inflation may have peaked, that we may have 103 00:05:51,080 --> 00:05:53,680 Speaker 1: seen the worst of it. But it raises the question 104 00:05:53,720 --> 00:05:56,520 Speaker 1: of well, what's next, and you know, how low does 105 00:05:56,560 --> 00:05:59,440 Speaker 1: it have to go for the Fed to be um 106 00:05:59,480 --> 00:06:02,200 Speaker 1: if not completely done with raising interest rates, at least 107 00:06:02,440 --> 00:06:04,919 Speaker 1: to your point, be a little less aggressive and maybe 108 00:06:04,920 --> 00:06:09,479 Speaker 1: switch back to basis point increases, which some are hoping 109 00:06:09,560 --> 00:06:12,600 Speaker 1: for maybe in the fall. So I'm wondering how you're 110 00:06:12,680 --> 00:06:16,040 Speaker 1: thinking about that, is is a slow, steady grind lower 111 00:06:16,640 --> 00:06:19,720 Speaker 1: in inflation in the cards? Do you think or NFL 112 00:06:19,880 --> 00:06:23,919 Speaker 1: is that? Is that enough to cause the Fed to 113 00:06:24,040 --> 00:06:28,960 Speaker 1: dial it back to basis point increases? Yeah? Uh, you know, 114 00:06:29,120 --> 00:06:31,240 Speaker 1: I think that's it's kind of a loaded question because 115 00:06:31,320 --> 00:06:33,200 Speaker 1: I think it depends on where you're looking at when 116 00:06:33,240 --> 00:06:37,200 Speaker 1: you're talking about inflation. So our view is that yes, 117 00:06:37,440 --> 00:06:41,240 Speaker 1: inflation has likely peaked. When you look at break even spreads, UM, 118 00:06:41,360 --> 00:06:44,240 Speaker 1: you look out two or three years, the bond market 119 00:06:44,279 --> 00:06:47,640 Speaker 1: is telling you that that inflation like likely peaked. However, 120 00:06:48,080 --> 00:06:49,840 Speaker 1: you know, does it really make a difference to a 121 00:06:49,839 --> 00:06:53,600 Speaker 1: consumer if you know, and the CPI number goes from 122 00:06:53,640 --> 00:06:56,799 Speaker 1: eight point five percent in March to say eight point 123 00:06:56,839 --> 00:07:00,719 Speaker 1: two percent in May, um employee, and it's still high. 124 00:07:01,040 --> 00:07:03,640 Speaker 1: Prices at the pump and food are still high, and 125 00:07:03,680 --> 00:07:07,880 Speaker 1: those those parts of inflation are likely to linger longer, 126 00:07:08,400 --> 00:07:11,600 Speaker 1: and so I I think there will be a gradual 127 00:07:11,760 --> 00:07:14,960 Speaker 1: decline in inflation. But even if you look at our 128 00:07:15,000 --> 00:07:19,520 Speaker 1: own estimates, we see CPI kind of ending the year 129 00:07:19,520 --> 00:07:23,679 Speaker 1: at around six percent, that that's still three times higher 130 00:07:23,720 --> 00:07:26,520 Speaker 1: than what the FED wants inflation to be on a 131 00:07:26,600 --> 00:07:32,760 Speaker 1: longer term basis. So I feel that inflation likely moderates 132 00:07:32,760 --> 00:07:35,720 Speaker 1: a supply chains kind of ease the food and energy 133 00:07:35,760 --> 00:07:38,720 Speaker 1: as a separate component, and I think that will remain elevated. 134 00:07:39,000 --> 00:07:42,320 Speaker 1: But as long as wage inflation moves down and some 135 00:07:42,400 --> 00:07:46,040 Speaker 1: of the core components of inflation move moved down, then 136 00:07:46,080 --> 00:07:48,480 Speaker 1: I think that will give the Fed a little bit 137 00:07:48,520 --> 00:07:51,720 Speaker 1: of room to start, like you sacremental moves in the 138 00:07:51,800 --> 00:07:54,720 Speaker 1: in the coming meetings in September UH and then I 139 00:07:54,720 --> 00:07:56,920 Speaker 1: think the markets could react a little bit more positively 140 00:07:57,040 --> 00:08:00,000 Speaker 1: to that, because they'll have gotten to neutral by that point, 141 00:08:00,720 --> 00:08:03,360 Speaker 1: And if they don't have to or getting close to neutral, 142 00:08:03,560 --> 00:08:05,880 Speaker 1: and if they don't really have to move past neutral, 143 00:08:06,200 --> 00:08:08,559 Speaker 1: then I think opportunities are being created in the stock 144 00:08:08,640 --> 00:08:11,520 Speaker 1: market if that doesn't look like it's the case, And 145 00:08:11,520 --> 00:08:14,280 Speaker 1: and maybe we're at seven or seven and a half 146 00:08:14,320 --> 00:08:16,560 Speaker 1: percent by the end of the year, then I think 147 00:08:16,600 --> 00:08:18,360 Speaker 1: the FED will need to be more aggressive and they 148 00:08:18,400 --> 00:08:21,480 Speaker 1: may push into that restrictive zone, which then I think, 149 00:08:21,600 --> 00:08:26,400 Speaker 1: you know, makes odds of further declines in the stock market, Um, 150 00:08:26,440 --> 00:08:28,480 Speaker 1: you know greater. I was actually going to ask you 151 00:08:28,520 --> 00:08:30,520 Speaker 1: about this about the latter half of the year, because 152 00:08:30,560 --> 00:08:32,800 Speaker 1: we've been writing a bit about this, where we have 153 00:08:32,840 --> 00:08:35,640 Speaker 1: a lot of people saying that inflation is peaking, and 154 00:08:35,679 --> 00:08:39,720 Speaker 1: they're looking at some indicators of still good economic data 155 00:08:39,760 --> 00:08:42,760 Speaker 1: and so on, and they're saying that potentially the second 156 00:08:42,800 --> 00:08:44,679 Speaker 1: half of the year might be a bit better than, 157 00:08:44,800 --> 00:08:47,360 Speaker 1: you know, less rough than the first half. So I'm 158 00:08:47,400 --> 00:08:50,040 Speaker 1: wondering your view on that. Yeah, I think from an 159 00:08:50,040 --> 00:08:54,520 Speaker 1: economic standpoint, we we write a lot about this as well. 160 00:08:54,559 --> 00:08:57,360 Speaker 1: I mean that the consumer isn't good shape. Um, saving 161 00:08:57,480 --> 00:09:01,240 Speaker 1: rates are high, debt levels are low, they're starting to 162 00:09:01,360 --> 00:09:03,840 Speaker 1: use revolving credit a little bit more. So that's something 163 00:09:03,880 --> 00:09:07,160 Speaker 1: that we're watching. But but net net, consumers are in 164 00:09:07,200 --> 00:09:10,160 Speaker 1: good shape, and as long as the labor market remains 165 00:09:10,440 --> 00:09:13,240 Speaker 1: in good shape, then I think you're seeing a shift 166 00:09:13,440 --> 00:09:18,439 Speaker 1: in consumer behaviors, not a retrenching in spending right there, 167 00:09:18,559 --> 00:09:21,240 Speaker 1: they're spending less on goods and more on food and energy, 168 00:09:21,559 --> 00:09:24,280 Speaker 1: maybe a little bit more on services. And as kind 169 00:09:24,280 --> 00:09:27,800 Speaker 1: of that that pandemic wave of of of maybe travel 170 00:09:27,880 --> 00:09:31,040 Speaker 1: starts to ebb in the summer UM, maybe that starts 171 00:09:31,080 --> 00:09:34,680 Speaker 1: to come down. So is if inflation pressures can moderate 172 00:09:34,800 --> 00:09:38,600 Speaker 1: and employers don't retrench and spend uh in hiring, and 173 00:09:38,679 --> 00:09:42,520 Speaker 1: consumers don't retrench and spending, then I do think that 174 00:09:42,559 --> 00:09:47,360 Speaker 1: the FED has a pretty narrow bath to start um, 175 00:09:47,400 --> 00:09:50,600 Speaker 1: maybe slowing the pace of increases. And I think the 176 00:09:50,640 --> 00:09:54,120 Speaker 1: opportunities that have been created in the stock market because 177 00:09:54,240 --> 00:09:56,920 Speaker 1: I in my view, I think the stock market is 178 00:09:56,960 --> 00:09:59,360 Speaker 1: pricing in we're going to see a recession maybe by 179 00:09:59,400 --> 00:10:01,720 Speaker 1: the end of this year early next year. If that's 180 00:10:01,800 --> 00:10:05,320 Speaker 1: not the case, and the FED can really land this 181 00:10:05,480 --> 00:10:08,720 Speaker 1: plane and get a softish landing, not a hardish landing, 182 00:10:09,040 --> 00:10:11,680 Speaker 1: then I think the stock market can recover in the 183 00:10:11,720 --> 00:10:13,880 Speaker 1: second half of the year. The one thing we have 184 00:10:14,040 --> 00:10:18,160 Speaker 1: talked about is earnings, and and that has us a 185 00:10:18,160 --> 00:10:22,000 Speaker 1: little bit more concerned because earnings estimates really really haven't 186 00:10:22,000 --> 00:10:26,040 Speaker 1: been coming down and um, I think there's there's likely 187 00:10:26,400 --> 00:10:29,560 Speaker 1: based on the last week or so of of corporate 188 00:10:29,600 --> 00:10:33,240 Speaker 1: news and headlines about warning about earnings. I think we're 189 00:10:33,320 --> 00:10:35,480 Speaker 1: in for a period where animals are going to need 190 00:10:35,520 --> 00:10:38,240 Speaker 1: to adjust their earnings, and I think the market reaction 191 00:10:38,320 --> 00:10:40,959 Speaker 1: to that could be a little bit more negative. You 192 00:10:41,000 --> 00:10:45,240 Speaker 1: don't think the market has gotten price dotted already those expectations. 193 00:10:46,200 --> 00:10:48,760 Speaker 1: I think it's priced in some of it, um, not 194 00:10:48,920 --> 00:10:54,080 Speaker 1: all of it, and so UM. You know the the 195 00:10:54,160 --> 00:10:59,040 Speaker 1: warnings from Target, um And and Walmart and then obviously 196 00:10:59,120 --> 00:11:01,400 Speaker 1: Microsoft last week, a couple of couple of stocks about 197 00:11:01,440 --> 00:11:06,800 Speaker 1: either currency or inventory builds or changing consumer habits. You 198 00:11:06,840 --> 00:11:09,680 Speaker 1: would think their stock prices already reflect that, but but 199 00:11:09,720 --> 00:11:13,120 Speaker 1: they got hammered, and so I think there's there's a 200 00:11:13,320 --> 00:11:17,959 Speaker 1: larger resetting that needs to go into the market as 201 00:11:18,040 --> 00:11:22,520 Speaker 1: analysts bring in their earnings expectations. Um. You know, whether 202 00:11:22,559 --> 00:11:26,280 Speaker 1: it's fifties, sixties, seventy five built in the stocks, I 203 00:11:26,280 --> 00:11:29,080 Speaker 1: don't know, But I do think if we're heading into 204 00:11:29,120 --> 00:11:33,280 Speaker 1: the second quarter earning season and more companies start to warn, 205 00:11:33,800 --> 00:11:35,120 Speaker 1: I think that could be a little bit of a 206 00:11:35,120 --> 00:11:38,160 Speaker 1: headwind for stock prices over the near term. Over the 207 00:11:38,240 --> 00:11:40,520 Speaker 1: very near term, Well, what do you make of some 208 00:11:40,600 --> 00:11:43,040 Speaker 1: of the companies that have been coming out with the warnings. 209 00:11:43,440 --> 00:11:45,520 Speaker 1: Target was a big one. I remember a couple of 210 00:11:45,559 --> 00:11:48,160 Speaker 1: months ago, and it feels like maybe that was sort 211 00:11:48,160 --> 00:11:50,760 Speaker 1: of the start of this trend. It was restoration hardware 212 00:11:50,800 --> 00:11:53,040 Speaker 1: where they had come out with a bunch of warnings. 213 00:11:53,080 --> 00:11:57,280 Speaker 1: So how are you thinking about what CEOs are telling us? 214 00:11:57,320 --> 00:12:00,920 Speaker 1: And also what's some you know, some of the top 215 00:12:00,960 --> 00:12:05,839 Speaker 1: brasset banks are telling us. Yeah, yeah, Um, I think 216 00:12:05,880 --> 00:12:07,840 Speaker 1: it's a it's a there's a lot of cross currents 217 00:12:07,880 --> 00:12:10,920 Speaker 1: coming from companies right now. Um. I think I think 218 00:12:11,000 --> 00:12:14,040 Speaker 1: some of it is supplied chain driven. Um, you know, 219 00:12:14,120 --> 00:12:16,680 Speaker 1: think about it if you're if you're a retailer and 220 00:12:16,720 --> 00:12:19,240 Speaker 1: you're you're trying to order goods and you can't get 221 00:12:19,280 --> 00:12:21,959 Speaker 1: goods on time. You know, are you double ordering or 222 00:12:22,000 --> 00:12:24,440 Speaker 1: you triple ordering? Are you ordering ahead of time to 223 00:12:24,480 --> 00:12:26,880 Speaker 1: get those in and then it's not coming in and 224 00:12:26,920 --> 00:12:29,120 Speaker 1: then it comes all in at once, and then you 225 00:12:29,120 --> 00:12:32,000 Speaker 1: you know, and then consumer trendits have changed, and now 226 00:12:32,000 --> 00:12:34,160 Speaker 1: you've got a bunch of change stories. So I think 227 00:12:34,240 --> 00:12:37,960 Speaker 1: some of it is very specific to supply chains. And 228 00:12:38,000 --> 00:12:41,000 Speaker 1: then I think some of it is based on changes 229 00:12:41,120 --> 00:12:45,120 Speaker 1: in demand and reactions to inflation. So, um, you know, 230 00:12:45,200 --> 00:12:48,960 Speaker 1: with with Russia invading Ukraine, Uh, it put what was 231 00:12:49,040 --> 00:12:53,600 Speaker 1: already a tight oil market it's an even tighter market, 232 00:12:53,960 --> 00:12:58,280 Speaker 1: and so oil prices have dramatically shifted higher. Food prices 233 00:12:58,720 --> 00:13:02,280 Speaker 1: uh dramatically shifted to higher. So at least for the 234 00:13:02,600 --> 00:13:05,720 Speaker 1: lower wage earners, they've had to shift more of their 235 00:13:05,760 --> 00:13:09,560 Speaker 1: spending to those types of items, so there's less money, 236 00:13:09,760 --> 00:13:13,240 Speaker 1: less discretionary to money to spend on goods. And then 237 00:13:13,280 --> 00:13:18,400 Speaker 1: I think higher income individuals have been shifting their um 238 00:13:18,480 --> 00:13:23,040 Speaker 1: They're they're spending away from things like restoration hardware during 239 00:13:23,040 --> 00:13:26,360 Speaker 1: the pandemic, where they're buying furniture and things for the home, 240 00:13:26,840 --> 00:13:29,080 Speaker 1: and now they're out traveling. Now they're going on trips 241 00:13:29,120 --> 00:13:32,000 Speaker 1: like you went to London right what California? Recently? I 242 00:13:32,040 --> 00:13:34,679 Speaker 1: did a lot of ski trips in the winter. So 243 00:13:34,960 --> 00:13:38,520 Speaker 1: I've shifted my own spending in ways that is spending 244 00:13:38,600 --> 00:13:40,760 Speaker 1: less on good So I think we just have to 245 00:13:40,880 --> 00:13:45,320 Speaker 1: move through some of the supply chain issues, see some normalization, 246 00:13:45,800 --> 00:13:48,800 Speaker 1: and then consumer trends have to normalize, and I think 247 00:13:48,800 --> 00:13:51,480 Speaker 1: that's what they're doing. Um. I just think we have 248 00:13:51,600 --> 00:13:55,160 Speaker 1: this backdrop of really high energy and food prices that 249 00:13:55,200 --> 00:13:59,320 Speaker 1: are creating noise and how investors, how consumers are spending 250 00:14:00,040 --> 00:14:01,600 Speaker 1: and I think it's just going to take time to 251 00:14:01,679 --> 00:14:04,800 Speaker 1: move through that. The bottom line is it makes it 252 00:14:04,920 --> 00:14:09,719 Speaker 1: very challenging for for companies, particular retailers to navigate that. 253 00:14:10,200 --> 00:14:13,360 Speaker 1: And then for some of the financial companies, Uh, some 254 00:14:13,400 --> 00:14:17,160 Speaker 1: of the earnings warnings that we've seen, you've seen this 255 00:14:17,240 --> 00:14:19,920 Speaker 1: is not the environment to bring I p O s 256 00:14:20,040 --> 00:14:23,360 Speaker 1: or no deals or mergerent acquisitions. Right, So a lot 257 00:14:23,360 --> 00:14:27,000 Speaker 1: of that investment banking um is really dried up. And 258 00:14:27,320 --> 00:14:29,560 Speaker 1: so you know a lot of banks have warned about that. 259 00:14:29,880 --> 00:14:33,760 Speaker 1: Consumer trends are still strong. Banks should still benefit from 260 00:14:34,800 --> 00:14:38,320 Speaker 1: rising that interest margins, those rates move higher, they should 261 00:14:38,320 --> 00:14:41,440 Speaker 1: benefit from that. That's a tail wind, but the headwind 262 00:14:41,680 --> 00:14:45,400 Speaker 1: is investment bankings down trading activity. Will see what that 263 00:14:45,480 --> 00:14:47,760 Speaker 1: looks like. You know, by the way, if we're headed 264 00:14:47,800 --> 00:14:50,440 Speaker 1: for a recession, to hear some of the commentary from 265 00:14:50,480 --> 00:14:53,680 Speaker 1: Jamie Diamond, and you know, is it superstorm standing or 266 00:14:53,720 --> 00:14:57,200 Speaker 1: is it just like a category one hurricane? Um, how 267 00:14:57,240 --> 00:15:00,760 Speaker 1: we navigate that, how banks get through that will depend. 268 00:15:00,800 --> 00:15:03,760 Speaker 1: I think as an investor, this is the time to 269 00:15:03,840 --> 00:15:06,640 Speaker 1: kind of rain in the horns a little bit um, 270 00:15:06,800 --> 00:15:11,240 Speaker 1: be balanced across your portfolios, make sure you're properly diversified, 271 00:15:11,280 --> 00:15:14,240 Speaker 1: don't take too much risk on on either end, and 272 00:15:14,280 --> 00:15:17,400 Speaker 1: I think, well, you you'll be able to weather this volatility. 273 00:15:17,440 --> 00:15:20,760 Speaker 1: I do think, as I said before, there are opportunities 274 00:15:20,800 --> 00:15:24,440 Speaker 1: being created in the stock market with these declines. Yeah. Yeah. 275 00:15:24,440 --> 00:15:27,000 Speaker 1: The target story is interesting to me because it's it's 276 00:15:27,040 --> 00:15:29,760 Speaker 1: sometimes hard to sort of sort out whether or not 277 00:15:29,840 --> 00:15:35,240 Speaker 1: it's a you know, execution issue with one retailer, you know, 278 00:15:35,760 --> 00:15:37,960 Speaker 1: supplying the wrong type of goods. You know, we've seen 279 00:15:38,000 --> 00:15:41,960 Speaker 1: this just in time. Supply chain notion kind of just 280 00:15:42,040 --> 00:15:45,040 Speaker 1: blown up over the past year and and trying to 281 00:15:45,120 --> 00:15:48,520 Speaker 1: navigate that. So, uh, you know, it's it's it's a 282 00:15:48,560 --> 00:15:57,200 Speaker 1: tough one. But I didn't want to, uh, Ethny ship 283 00:15:57,280 --> 00:15:59,240 Speaker 1: gears a little bit because I know you're you're a 284 00:15:59,240 --> 00:16:01,640 Speaker 1: global strateg just and and you're looking at all over 285 00:16:01,680 --> 00:16:04,560 Speaker 1: the world, and I was struck. Recently I looked at 286 00:16:04,720 --> 00:16:07,840 Speaker 1: sort of on the terminal Bloomberg terminal, you can rank 287 00:16:08,120 --> 00:16:12,760 Speaker 1: developed market equity performance over the year, and it's rare 288 00:16:12,800 --> 00:16:15,640 Speaker 1: to see the US so low in that sort of 289 00:16:15,720 --> 00:16:18,240 Speaker 1: league table. You know, I think of twenty four developed markets, 290 00:16:18,280 --> 00:16:24,120 Speaker 1: it was like twenty two or three. Um, that's that's 291 00:16:24,160 --> 00:16:25,880 Speaker 1: kind of shocking to me in a way. You know, 292 00:16:25,920 --> 00:16:28,600 Speaker 1: you would almost think of the US market in a 293 00:16:28,680 --> 00:16:31,600 Speaker 1: risky world of stocks being sort of the haven market. 294 00:16:31,640 --> 00:16:33,880 Speaker 1: But what do you think was behind that? Is it 295 00:16:34,000 --> 00:16:35,960 Speaker 1: just a matter of the sort of growth to value 296 00:16:36,240 --> 00:16:39,320 Speaker 1: rotation and the US being way more orient oriented to 297 00:16:39,800 --> 00:16:43,760 Speaker 1: two growth stocks and and you know a minuscule waiting 298 00:16:43,800 --> 00:16:47,320 Speaker 1: to say energy that is that is the leader this year? UM, 299 00:16:47,360 --> 00:16:49,680 Speaker 1: how are you thinking about the global equity markets and 300 00:16:49,840 --> 00:16:52,520 Speaker 1: and sort of the US role in them and where 301 00:16:52,560 --> 00:16:56,440 Speaker 1: the opportunity set is going forward. Yeah, that's a great question, 302 00:16:56,520 --> 00:16:58,400 Speaker 1: and I do think you're right there. There is a 303 00:16:58,480 --> 00:17:04,040 Speaker 1: component of UM, the US markets being very growth heavy, 304 00:17:04,119 --> 00:17:10,760 Speaker 1: so very technology, communication services, consumer discretionary. Those growth components 305 00:17:10,760 --> 00:17:15,160 Speaker 1: have really been where UM the stock declines have been 306 00:17:15,200 --> 00:17:18,840 Speaker 1: the greatest this year because as interest rates have reset higher, 307 00:17:19,080 --> 00:17:21,439 Speaker 1: a lot of these growth companies are priced not on 308 00:17:21,480 --> 00:17:24,720 Speaker 1: their earnings today but on their future earnings, and when 309 00:17:24,760 --> 00:17:27,320 Speaker 1: you discount that back at a higher rate, means the 310 00:17:27,440 --> 00:17:30,399 Speaker 1: value of those future earnings are are less today, and 311 00:17:30,480 --> 00:17:33,280 Speaker 1: so you've seen a shift. I think I think a 312 00:17:33,320 --> 00:17:35,800 Speaker 1: lot of that has already occurred. I think if if 313 00:17:35,880 --> 00:17:38,159 Speaker 1: I were going to look at growth stocks today and 314 00:17:38,200 --> 00:17:42,360 Speaker 1: the reset there. There there's obviously potential more downside there, 315 00:17:42,359 --> 00:17:45,440 Speaker 1: but I do think in the US market in growth 316 00:17:45,480 --> 00:17:48,520 Speaker 1: stocks in particular, a lot of damage has already been 317 00:17:48,560 --> 00:17:51,720 Speaker 1: done to that area. Um. The other component that sticks 318 00:17:51,760 --> 00:17:55,040 Speaker 1: out is whether you're looking at it on a dollar 319 00:17:55,680 --> 00:17:58,320 Speaker 1: or local basis. And so when I look at a 320 00:17:58,359 --> 00:18:01,879 Speaker 1: lot of them, a lot of the developed market indexes 321 00:18:01,920 --> 00:18:05,159 Speaker 1: on a dollar basis, they are pretty similar to to 322 00:18:05,240 --> 00:18:07,359 Speaker 1: the declines in the US a little bit less so 323 00:18:07,520 --> 00:18:10,359 Speaker 1: because of the value bias they have. Um. Some of 324 00:18:10,400 --> 00:18:14,360 Speaker 1: the international markets have more energy and commodity exposure. That's 325 00:18:14,359 --> 00:18:17,240 Speaker 1: been a great place to be this year. Those those 326 00:18:17,240 --> 00:18:21,719 Speaker 1: stocks are benefiting. So there's some tail winds from UH 327 00:18:21,840 --> 00:18:28,120 Speaker 1: both being valued exposed internationally with more energy exposure, and 328 00:18:28,160 --> 00:18:32,280 Speaker 1: then the strength of the dollar. His his kind of 329 00:18:32,480 --> 00:18:35,560 Speaker 1: you know, at least on a local currency basis, made 330 00:18:35,560 --> 00:18:38,560 Speaker 1: those indexes look look better than what I think they 331 00:18:38,680 --> 00:18:41,960 Speaker 1: really are at the end of the day. UM. I 332 00:18:42,359 --> 00:18:46,439 Speaker 1: I kind of hint to your question. The US is, 333 00:18:46,840 --> 00:18:50,680 Speaker 1: in our view, the best place to be when uncertainty 334 00:18:50,760 --> 00:18:53,359 Speaker 1: is high and volatility is high. And I think the 335 00:18:53,440 --> 00:18:57,280 Speaker 1: US market from that perspective, outside of the growth component 336 00:18:57,480 --> 00:19:00,760 Speaker 1: is acting a little bit more defensively. UM and I 337 00:19:01,280 --> 00:19:05,480 Speaker 1: in our own allocations were overweight the US. We're underweight 338 00:19:06,080 --> 00:19:10,240 Speaker 1: Europe because we see we see higher odds of a 339 00:19:10,320 --> 00:19:14,560 Speaker 1: recession there. Um. You know, the energy prices are crippling 340 00:19:14,680 --> 00:19:17,639 Speaker 1: a lot of consumers over in Europe right now. And 341 00:19:17,680 --> 00:19:20,960 Speaker 1: then in Asia it's been zero COVID policy around China. 342 00:19:21,119 --> 00:19:23,680 Speaker 1: So those have been big head winds for for those 343 00:19:23,680 --> 00:19:26,679 Speaker 1: two regions this year. Yeah. Yeah, it's a it's a 344 00:19:26,680 --> 00:19:30,040 Speaker 1: great point about the currency adjusted returns, and you know 345 00:19:30,119 --> 00:19:34,200 Speaker 1: that the flip side of that, um Uh, that strong 346 00:19:34,240 --> 00:19:36,800 Speaker 1: dollar is obviously a week euro, but by the week yen, 347 00:19:36,920 --> 00:19:40,160 Speaker 1: it's really cut a lot of people's attention uh this year. 348 00:19:40,200 --> 00:19:43,600 Speaker 1: You know, such an important currency as a gauge of 349 00:19:43,680 --> 00:19:46,640 Speaker 1: risk sentiment, or used to be anyway, I guess it's 350 00:19:46,640 --> 00:19:49,080 Speaker 1: going in the other direction now. But what what do 351 00:19:49,119 --> 00:19:50,800 Speaker 1: you make of this yen? You know, have you given 352 00:19:50,880 --> 00:19:53,000 Speaker 1: much thought to the end weakness and and any sort 353 00:19:53,000 --> 00:19:55,960 Speaker 1: of signal that it's sending about UM risk assets and 354 00:19:56,280 --> 00:19:59,399 Speaker 1: markets globally. Yeah, yeah, I mean I've I've looked at 355 00:19:59,440 --> 00:20:02,440 Speaker 1: it over the last a couple of days or more recently, 356 00:20:03,000 --> 00:20:06,280 Speaker 1: UM and you're right. I mean, you're you're The currencies 357 00:20:06,320 --> 00:20:08,120 Speaker 1: move for a lot of different reasons and a lot 358 00:20:08,160 --> 00:20:10,640 Speaker 1: of different um and they can be very volad though, 359 00:20:11,000 --> 00:20:13,000 Speaker 1: and I think the US has kind of the U 360 00:20:13,080 --> 00:20:16,480 Speaker 1: S dollars kind of come back a little bit versus 361 00:20:16,520 --> 00:20:19,520 Speaker 1: the end and versus the Euro more recently, and I 362 00:20:19,560 --> 00:20:23,320 Speaker 1: think it's just a resetting in the dollar. I I 363 00:20:24,040 --> 00:20:28,320 Speaker 1: the strength in the US dollar is really driven by 364 00:20:28,359 --> 00:20:30,960 Speaker 1: this expectation that the FED is going to have to 365 00:20:31,000 --> 00:20:34,440 Speaker 1: be ultra aggressive, and as we get more economic data 366 00:20:34,440 --> 00:20:37,080 Speaker 1: over the coming weeks and coming months, I think it 367 00:20:37,160 --> 00:20:40,280 Speaker 1: might look like they might not have to be as aggressive. 368 00:20:40,560 --> 00:20:42,560 Speaker 1: So you're going to see the dollar on a trade 369 00:20:43,160 --> 00:20:45,879 Speaker 1: trade weighted basis kind of start to move back down. 370 00:20:46,200 --> 00:20:48,400 Speaker 1: Things like the end will strengthen a little bit more, 371 00:20:48,480 --> 00:20:51,440 Speaker 1: the Euro will strengthen a little bit more. UM. We'll 372 00:20:51,440 --> 00:20:54,280 Speaker 1: see if that shows up in the data, but I 373 00:20:54,320 --> 00:20:56,879 Speaker 1: think it's just a little bit of normalization over a 374 00:20:56,960 --> 00:20:59,200 Speaker 1: pretty big move in the dollar verse the end and 375 00:20:59,320 --> 00:21:01,760 Speaker 1: Euro over the last several week. And you mentioned China, 376 00:21:01,840 --> 00:21:03,080 Speaker 1: and I wanted to ask you about how are you 377 00:21:03,119 --> 00:21:06,879 Speaker 1: thinking about China because on the podcast and broadly speaking, 378 00:21:07,080 --> 00:21:08,840 Speaker 1: I feel like There's been a lot of discussion about 379 00:21:08,840 --> 00:21:12,280 Speaker 1: whether or not China is investable versus uninvestable, And I 380 00:21:12,280 --> 00:21:15,040 Speaker 1: know we've had some developments there this week where it 381 00:21:15,080 --> 00:21:17,200 Speaker 1: looks like they're being a little a little bit more 382 00:21:17,280 --> 00:21:19,800 Speaker 1: lenient maybe towards some of their tech companies and some 383 00:21:19,880 --> 00:21:22,800 Speaker 1: other developments around video games and so on. So how 384 00:21:22,840 --> 00:21:26,399 Speaker 1: are you thinking about China? Yeah, China, you know, the 385 00:21:26,680 --> 00:21:30,560 Speaker 1: second largest economy. They're they're they're significant and a lot 386 00:21:30,600 --> 00:21:34,639 Speaker 1: of different ways, both for heres domestically in terms of 387 00:21:34,680 --> 00:21:37,960 Speaker 1: what we can produce and be shipped here, but then 388 00:21:38,119 --> 00:21:41,880 Speaker 1: just are just our relations with China, So both from 389 00:21:41,920 --> 00:21:46,600 Speaker 1: a political and economic standpoint, they are very very important. 390 00:21:46,920 --> 00:21:50,600 Speaker 1: I think from an economic standpoint right now, zero COVID 391 00:21:50,640 --> 00:21:55,600 Speaker 1: policy is wreaked a little bit of additional uh I 392 00:21:55,880 --> 00:22:00,760 Speaker 1: created additional problems for the global economy that zero COVID 393 00:22:00,840 --> 00:22:05,760 Speaker 1: policies shutting down Shanghai and Beijing. Um, you know, Shanghai 394 00:22:05,840 --> 00:22:10,760 Speaker 1: is a significant port city, and so getting items and 395 00:22:10,840 --> 00:22:13,600 Speaker 1: goods out of that city have been very very difficult. 396 00:22:13,960 --> 00:22:17,119 Speaker 1: Keeping up with production schedules have been very very difficult 397 00:22:17,440 --> 00:22:20,360 Speaker 1: for US companies and global companies. And it looks like 398 00:22:20,880 --> 00:22:23,080 Speaker 1: maybe this month, that's going to start to change and 399 00:22:23,119 --> 00:22:25,120 Speaker 1: they're gonna start to open up a little bit more. 400 00:22:25,480 --> 00:22:28,720 Speaker 1: But it's it's very hard to get confidence in in 401 00:22:28,760 --> 00:22:32,400 Speaker 1: the policies because they can change so quickly. And so 402 00:22:32,560 --> 00:22:36,040 Speaker 1: what I think a lot of these US companies are 403 00:22:36,080 --> 00:22:39,240 Speaker 1: starting to do is how do we think about sourcing? 404 00:22:39,280 --> 00:22:43,720 Speaker 1: How do we think about um putting? You know, Mike 405 00:22:43,800 --> 00:22:46,639 Speaker 1: mentioned this just in time, Well, just in time works 406 00:22:47,000 --> 00:22:50,600 Speaker 1: if the supply chain is even and you can count 407 00:22:50,600 --> 00:22:53,280 Speaker 1: on it through you know all the different spots. And 408 00:22:53,320 --> 00:22:58,040 Speaker 1: I think we found during the pandemic and obviously different 409 00:22:58,040 --> 00:23:00,480 Speaker 1: policies coming from China is that might not be able 410 00:23:00,480 --> 00:23:04,440 Speaker 1: to rely on that. And so moving forward, companies that 411 00:23:04,520 --> 00:23:08,399 Speaker 1: can source closer to to where their products are are consumed. 412 00:23:08,960 --> 00:23:12,440 Speaker 1: Companies are starting to decide to maybe make those investments 413 00:23:12,520 --> 00:23:15,199 Speaker 1: and and and make those changes. And in terms of 414 00:23:15,320 --> 00:23:19,640 Speaker 1: China from a stock trader's perspective, From a stock perspective, 415 00:23:20,080 --> 00:23:23,280 Speaker 1: it is difficult to invest in that region right now 416 00:23:23,520 --> 00:23:27,439 Speaker 1: when the policies seem very uncertain. Um they don't seem 417 00:23:27,440 --> 00:23:31,119 Speaker 1: consistent right now. You know, China is about growth and 418 00:23:31,160 --> 00:23:37,280 Speaker 1: it's about zero COVID, and both of those are sometimes contradictory. Um. 419 00:23:37,320 --> 00:23:39,560 Speaker 1: You know, messages, and so you don't know day to 420 00:23:39,680 --> 00:23:43,120 Speaker 1: day what message is going to carry the most weight. 421 00:23:43,200 --> 00:23:46,480 Speaker 1: So right now I think it's very hard to to 422 00:23:46,480 --> 00:23:50,160 Speaker 1: to go into China and invest um in that region 423 00:23:50,200 --> 00:23:53,280 Speaker 1: with confidence. That may change over the course of the 424 00:23:53,320 --> 00:23:55,800 Speaker 1: next few months, but right now it's one of the 425 00:23:55,840 --> 00:23:58,480 Speaker 1: big reasons why we're underweight is there's just a there's 426 00:23:58,520 --> 00:24:01,680 Speaker 1: a mixed message on policy. See between what the government 427 00:24:01,760 --> 00:24:04,159 Speaker 1: wants to do with growth and what they want to 428 00:24:04,200 --> 00:24:09,560 Speaker 1: do with stamping out inflation, stamping out COVID. We not 429 00:24:09,720 --> 00:24:12,800 Speaker 1: a just in time delivery. That's also my strategy. Whenever 430 00:24:12,840 --> 00:24:15,280 Speaker 1: anyone asked me to write something, I make sure I 431 00:24:15,320 --> 00:24:18,880 Speaker 1: get it in this this is true. Yeah, you don't 432 00:24:18,880 --> 00:24:20,479 Speaker 1: want to get it into earlier then they have too 433 00:24:20,560 --> 00:24:22,600 Speaker 1: much time to mess with it. So give him get 434 00:24:22,600 --> 00:24:28,920 Speaker 1: it to them right if the deadlines for yeah, I'll 435 00:24:28,920 --> 00:24:35,080 Speaker 1: do that. Putting in writing there's there there. I'm gonna 436 00:24:35,080 --> 00:24:37,639 Speaker 1: write a book about the benefits of procrastination. There are 437 00:24:37,680 --> 00:24:40,600 Speaker 1: many many that's that's a topic for a future podcast. 438 00:24:40,640 --> 00:24:43,480 Speaker 1: But you know, after any the other big elephant in 439 00:24:43,480 --> 00:24:46,280 Speaker 1: the room is you know, we've got treasury yields perking 440 00:24:46,359 --> 00:24:50,000 Speaker 1: up again. Uh tenure yield in the US popping above 441 00:24:50,119 --> 00:24:54,040 Speaker 1: three percent again this week, you know, the solt and 442 00:24:54,160 --> 00:24:57,199 Speaker 1: Treasury's kind of you know, seem to make a U 443 00:24:57,280 --> 00:24:59,800 Speaker 1: turn or at least slow down after we got above 444 00:24:59,840 --> 00:25:02,720 Speaker 1: three percent in the ten year before. How are you 445 00:25:02,760 --> 00:25:04,840 Speaker 1: thinking about bonds? Is it? You know? Is it more 446 00:25:04,880 --> 00:25:08,440 Speaker 1: attractive to talocate maybe a bigger than your your typical 447 00:25:08,480 --> 00:25:11,679 Speaker 1: forty percent or whatever your target allocation is to two 448 00:25:11,720 --> 00:25:14,080 Speaker 1: treasuries when we've got a three percent yield? I know 449 00:25:14,200 --> 00:25:17,760 Speaker 1: want to I know, on an inflation adjusted real rate basis, 450 00:25:17,800 --> 00:25:21,280 Speaker 1: it's still deeply underwater with an inflation at eight percent, 451 00:25:21,359 --> 00:25:23,880 Speaker 1: but you know, assuming the Fed gets it back there 452 00:25:23,960 --> 00:25:27,080 Speaker 1: by hell or high water closer to the target. Is 453 00:25:27,080 --> 00:25:30,280 Speaker 1: is this uh something on client's minds? Is it? Is 454 00:25:30,320 --> 00:25:34,920 Speaker 1: it something? You know? Our bonds a bargain again for once? Yeah, 455 00:25:35,000 --> 00:25:37,480 Speaker 1: I'm telling you you're it's like your rudder Global Asset 456 00:25:37,520 --> 00:25:40,919 Speaker 1: Allocation Committee's mind because we're having the same discussion about 457 00:25:41,040 --> 00:25:43,640 Speaker 1: fixed income right now with a with a ten year 458 00:25:44,080 --> 00:25:49,640 Speaker 1: at or above for um, that's a pretty attractive yield. 459 00:25:49,680 --> 00:25:51,360 Speaker 1: Let me think about it. We we've been an environment 460 00:25:51,640 --> 00:25:54,600 Speaker 1: you know, there is no alternative to equities, and now 461 00:25:55,000 --> 00:25:58,560 Speaker 1: maybe there is an alternative to equities. And so we've 462 00:25:58,600 --> 00:26:01,880 Speaker 1: been as a committee, as a as a global ast 463 00:26:01,920 --> 00:26:06,320 Speaker 1: allocation committee, we've been the most underweight fixed income we've 464 00:26:06,359 --> 00:26:11,679 Speaker 1: been ever over the last probably twelve months or so, 465 00:26:12,280 --> 00:26:14,760 Speaker 1: and so now we're starting to have conversations with the 466 00:26:14,840 --> 00:26:18,560 Speaker 1: yield moving up, is this the time to start rebuilding 467 00:26:19,000 --> 00:26:23,399 Speaker 1: that fixed income base? And mentioned the sixty forty portfolio. UM, 468 00:26:23,680 --> 00:26:27,480 Speaker 1: I think you do want to start considering looking at 469 00:26:27,520 --> 00:26:32,400 Speaker 1: bonds as a longer term ballance in your portfolio. That 470 00:26:32,480 --> 00:26:35,520 Speaker 1: hasn't really worked this year. UM stocks and bonds have 471 00:26:35,520 --> 00:26:37,760 Speaker 1: been correlated at the same time as as interest rates 472 00:26:37,800 --> 00:26:41,760 Speaker 1: have been moving higher. However, I do think we're approaching 473 00:26:41,800 --> 00:26:44,760 Speaker 1: the higher end of the tenure right now. We could 474 00:26:44,800 --> 00:26:47,640 Speaker 1: go a little bit higher, but I do think inflation 475 00:26:47,720 --> 00:26:49,720 Speaker 1: is going to moderate lower through the course of the year. 476 00:26:50,040 --> 00:26:51,640 Speaker 1: I do think the feed is going to be able 477 00:26:51,680 --> 00:26:55,240 Speaker 1: to slow the pace of their rate increases, and I 478 00:26:55,280 --> 00:27:00,560 Speaker 1: think the tenure will find a new equilibrium somewhere around 479 00:27:00,640 --> 00:27:02,720 Speaker 1: three percent. To be a little bit higher, could be 480 00:27:02,760 --> 00:27:05,840 Speaker 1: a little bit lower, Which means if you're underweight bonds 481 00:27:05,920 --> 00:27:08,199 Speaker 1: right now, you may want to lock in some of 482 00:27:08,240 --> 00:27:10,560 Speaker 1: these yields. You may want to lock in I would 483 00:27:10,600 --> 00:27:14,040 Speaker 1: keep the quality high. I would look at it. If 484 00:27:14,040 --> 00:27:16,240 Speaker 1: you were underweight government bonds right now, maybe you look 485 00:27:16,280 --> 00:27:18,560 Speaker 1: at some of the treasuries, maybe look at tips to 486 00:27:18,760 --> 00:27:21,879 Speaker 1: to kind of help with inflation. You still want to 487 00:27:21,880 --> 00:27:24,239 Speaker 1: look at high quality corporate bonds because you know, they 488 00:27:24,320 --> 00:27:26,600 Speaker 1: got a little bit of a spread on top of 489 00:27:26,600 --> 00:27:28,800 Speaker 1: those treasuries. And you know, I think the fall rates 490 00:27:28,800 --> 00:27:32,560 Speaker 1: are gonna be pretty low for for investment grade credit, 491 00:27:32,880 --> 00:27:35,359 Speaker 1: and so yeah, I think this is the time you 492 00:27:35,480 --> 00:27:38,639 Speaker 1: if you're underweight and you've been avoiding bonds, you at 493 00:27:38,680 --> 00:27:40,840 Speaker 1: least want to start putting the shopping list together. And 494 00:27:40,840 --> 00:27:42,760 Speaker 1: you still want to you want to have strategy for 495 00:27:42,880 --> 00:27:46,159 Speaker 1: maybe getting back to a neutral stance. Maybe it's a 496 00:27:46,200 --> 00:27:48,399 Speaker 1: little bit early, but you want to start thinking about 497 00:27:48,400 --> 00:27:50,920 Speaker 1: that right now with these yields. High yield still a 498 00:27:50,920 --> 00:27:53,760 Speaker 1: little dicey at this point. Yeah, you know, I mean, 499 00:27:53,880 --> 00:27:57,600 Speaker 1: I like we have allocations to high yield um. You know, 500 00:27:57,760 --> 00:28:00,480 Speaker 1: we're underweight those areas just because we want to be 501 00:28:00,520 --> 00:28:05,080 Speaker 1: a little bit more conservative around our allocations. UM. But 502 00:28:05,200 --> 00:28:08,040 Speaker 1: I do think, you know, we'll have to see I mean, 503 00:28:08,080 --> 00:28:11,320 Speaker 1: I know a lot of companies were able to extend 504 00:28:11,560 --> 00:28:15,080 Speaker 1: their their credit UM, and you know they haven't had 505 00:28:15,080 --> 00:28:17,640 Speaker 1: to go back to the funding markets because they've locked 506 00:28:17,640 --> 00:28:21,199 Speaker 1: in some of these lower yields. We'll see when there 507 00:28:21,240 --> 00:28:23,720 Speaker 1: was DAT, when those DAT instruments come up, if they 508 00:28:23,720 --> 00:28:25,800 Speaker 1: can go get the financing. I think it's a tougher 509 00:28:25,880 --> 00:28:28,600 Speaker 1: environment right now, So I would rather just hang out 510 00:28:28,600 --> 00:28:32,280 Speaker 1: in investment grade and wait for that smoke clear. And 511 00:28:32,320 --> 00:28:34,679 Speaker 1: you mentioned a few times that there's some areas of 512 00:28:34,720 --> 00:28:36,600 Speaker 1: interest to you, So I wanted to ask you what 513 00:28:36,640 --> 00:28:40,760 Speaker 1: you're telling clients who do want to put money to work. Yeah, great, 514 00:28:40,800 --> 00:28:45,040 Speaker 1: great question. Um. You know, I think with inequity you 515 00:28:45,080 --> 00:28:47,280 Speaker 1: want to do a couple of things. UM. I think 516 00:28:47,280 --> 00:28:50,040 Speaker 1: you want to look and this is across the spectrum, 517 00:28:50,080 --> 00:28:53,360 Speaker 1: so sectors, regions doesn't really matter. UM. You want to 518 00:28:53,400 --> 00:28:57,000 Speaker 1: make sure that the investments that you're buying are high 519 00:28:57,040 --> 00:29:00,640 Speaker 1: end qualities. You want to make sure that the stocks 520 00:29:00,760 --> 00:29:04,200 Speaker 1: or funds that you're you're investing in are focused on 521 00:29:04,320 --> 00:29:07,800 Speaker 1: companies that have visible profit streams UM, they have clean 522 00:29:07,840 --> 00:29:12,080 Speaker 1: balance sheades UM, they have strong cash flow, They have 523 00:29:12,200 --> 00:29:16,640 Speaker 1: definable products and industries that they can UM, you know 524 00:29:16,720 --> 00:29:19,840 Speaker 1: kind of count on in an uncertain environment. UM. And 525 00:29:19,920 --> 00:29:23,520 Speaker 1: I think a dividend yield is an extra bonus right 526 00:29:23,560 --> 00:29:27,800 Speaker 1: when when returns are compressed or when the market is 527 00:29:27,880 --> 00:29:31,320 Speaker 1: in a downtrend, that yield becomes a greater part of 528 00:29:31,360 --> 00:29:33,880 Speaker 1: your total return. So you want to make you want 529 00:29:33,880 --> 00:29:37,360 Speaker 1: to focus right now on companies that are either growing 530 00:29:37,400 --> 00:29:40,760 Speaker 1: their dividend or have a reasonably stable dividend that you 531 00:29:40,800 --> 00:29:43,440 Speaker 1: don't have to worry about. UM. I think if you 532 00:29:43,480 --> 00:29:45,920 Speaker 1: want to go a little bit further, UM, I do 533 00:29:46,000 --> 00:29:50,120 Speaker 1: think opportunities are being created in high quality technology. So 534 00:29:50,480 --> 00:29:55,160 Speaker 1: where we've seen a lot of valuation destruction has been 535 00:29:55,320 --> 00:29:59,560 Speaker 1: in high growth tech, consumer discretion and those names I 536 00:29:59,600 --> 00:30:03,160 Speaker 1: mentioned for that they're there, their valuations are based on 537 00:30:03,200 --> 00:30:05,640 Speaker 1: earnings in the future. UM. I think a lot of 538 00:30:05,720 --> 00:30:08,600 Speaker 1: damage has been done in those areas, and so I 539 00:30:08,640 --> 00:30:12,760 Speaker 1: would look to things like information technology and in those 540 00:30:12,880 --> 00:30:17,120 Speaker 1: quality companies within that sector as an area to start 541 00:30:17,680 --> 00:30:21,360 Speaker 1: at least opportunistically buy either dollar cost averaging and what 542 00:30:21,520 --> 00:30:25,520 Speaker 1: you own UM rebalancing portfolios and maybe using that as 543 00:30:25,560 --> 00:30:28,600 Speaker 1: an opportunity to pick up some of those areas. But 544 00:30:28,760 --> 00:30:32,080 Speaker 1: that's where I would be focused. High quality companies across 545 00:30:32,080 --> 00:30:36,600 Speaker 1: sectors and regions, dividends big time plus and then UM, 546 00:30:36,640 --> 00:30:39,120 Speaker 1: I think there's some opportunities being created in technology. And 547 00:30:39,120 --> 00:30:43,280 Speaker 1: then lastly, UM health Care is one of the sectors 548 00:30:43,320 --> 00:30:46,080 Speaker 1: that were overweight right now because it can act defensively 549 00:30:46,760 --> 00:30:49,160 Speaker 1: because it has value based companies in there that pay 550 00:30:49,200 --> 00:30:52,160 Speaker 1: good dividends, and it also has some growth components like 551 00:30:52,240 --> 00:30:56,320 Speaker 1: biotech that have been really hammered recently. So it acts 552 00:30:56,440 --> 00:31:00,280 Speaker 1: as this defensive slash growth sector and so it's not 553 00:31:00,400 --> 00:31:04,840 Speaker 1: as expensive as consumer staples and utilities, but it also 554 00:31:04,880 --> 00:31:07,239 Speaker 1: gives you a growth component in there. So those are 555 00:31:07,360 --> 00:31:09,840 Speaker 1: the sectors that we that we like right now. Yeah, 556 00:31:09,840 --> 00:31:13,400 Speaker 1: it's been fascinating to see sort of the shuffling of 557 00:31:13,440 --> 00:31:16,000 Speaker 1: the components of the growth and value indexes. Now, you know, 558 00:31:16,040 --> 00:31:18,760 Speaker 1: you've got a lot of energy companies in the growth indexes, 559 00:31:18,800 --> 00:31:23,800 Speaker 1: which uh, you know seems seems seems surprising based on history. 560 00:31:23,840 --> 00:31:28,400 Speaker 1: But good stuff, Anthony. I gotta give Anthony props because, uh, 561 00:31:28,880 --> 00:31:31,600 Speaker 1: listeners don't know. We record this over zoom and I'm 562 00:31:31,600 --> 00:31:34,080 Speaker 1: looking over his shoulder and he does have Bloomberg TV 563 00:31:34,200 --> 00:31:37,440 Speaker 1: on his TV behind him, not some soap, not he 564 00:31:37,440 --> 00:31:42,560 Speaker 1: could be watching some soap opera. It's it's on here 565 00:31:42,600 --> 00:31:46,120 Speaker 1: every day. I'll take you ready for it, right right? 566 00:31:46,640 --> 00:31:49,040 Speaker 1: Markets have been pretty dramatic, so you know, maybe we're 567 00:31:49,040 --> 00:31:52,959 Speaker 1: getting some of those soap oper viewers that change the channel. 568 00:32:08,080 --> 00:32:11,480 Speaker 1: Appreciate your insights, Anthony, But now comes the real test. 569 00:32:11,560 --> 00:32:14,240 Speaker 1: We're gonna switch gears to the craziest things we saw 570 00:32:14,400 --> 00:32:18,280 Speaker 1: in markets this week. So, uh, this is where you'll 571 00:32:18,400 --> 00:32:22,479 Speaker 1: you'll really be graded on on the value of your 572 00:32:22,480 --> 00:32:24,960 Speaker 1: crazy thing. How about you, what's the craziest thing. My 573 00:32:25,040 --> 00:32:27,320 Speaker 1: craziest thing actually might make you a little bit depressed? 574 00:32:28,480 --> 00:32:32,280 Speaker 1: I think I started. I've been depressed ever since I 575 00:32:32,360 --> 00:32:38,880 Speaker 1: realized you d thinking, but my craziest Yeah, so that 576 00:32:39,600 --> 00:32:42,120 Speaker 1: the craziest thing we'll make you depressed, I think. Because 577 00:32:42,120 --> 00:32:45,600 Speaker 1: it has to do with the podcasting world. So it 578 00:32:45,600 --> 00:32:50,520 Speaker 1: turns out there's this whole slew of white noise podcasts. 579 00:32:51,120 --> 00:32:53,280 Speaker 1: I don't know if you saw this story, but you 580 00:32:53,280 --> 00:32:56,080 Speaker 1: know they sort of have mysterious backgrounds. Um, there's this 581 00:32:56,200 --> 00:33:00,520 Speaker 1: great Bloomberg story about this. And even like trying to 582 00:33:00,520 --> 00:33:02,600 Speaker 1: reach out some of these companies has been really hard 583 00:33:02,680 --> 00:33:05,200 Speaker 1: because you don't know who that you know, you don't 584 00:33:05,200 --> 00:33:07,760 Speaker 1: know who's running them, etcetera, etcetera. But there is this 585 00:33:07,800 --> 00:33:10,440 Speaker 1: one guy who I believe he was living in the 586 00:33:10,480 --> 00:33:15,120 Speaker 1: Florida Keys maybe and basically he started putting out white 587 00:33:15,200 --> 00:33:19,280 Speaker 1: Noise podcasts and so many people are listening to them 588 00:33:19,280 --> 00:33:24,479 Speaker 1: that he's actually making eighteen thousand dollars a month just 589 00:33:24,720 --> 00:33:28,760 Speaker 1: from streams of his White Noise podcasts. So he's getting 590 00:33:28,800 --> 00:33:32,760 Speaker 1: something like I think the story said fifty listeners per 591 00:33:32,920 --> 00:33:40,080 Speaker 1: day for white Noise, for white Noise eight thousand a month. 592 00:33:40,680 --> 00:33:44,040 Speaker 1: I don't know, Da, you should have brought this up. 593 00:33:44,040 --> 00:33:47,080 Speaker 1: They're going to might, I mean might get more listeners 594 00:33:49,640 --> 00:33:54,600 Speaker 1: probably maybe if we talk really quietly, we can be like, 595 00:33:55,120 --> 00:33:57,600 Speaker 1: you know, you can have a thirty minute moment of 596 00:33:57,640 --> 00:34:03,040 Speaker 1: silence or something every every every week. So that's pretty well. 597 00:34:03,080 --> 00:34:05,240 Speaker 1: That is a true Florida man story. If if I've 598 00:34:05,240 --> 00:34:07,280 Speaker 1: ever ever heard of one? What good is ahead? Hey 599 00:34:07,840 --> 00:34:10,680 Speaker 1: he figured it out. Maybe White Noise will join my 600 00:34:10,800 --> 00:34:16,839 Speaker 1: professional uh network on lincol good luck if yeah, probably not? 601 00:34:16,920 --> 00:34:19,520 Speaker 1: Probably not. How about you, Anthon? Do you see anything 602 00:34:19,560 --> 00:34:24,879 Speaker 1: crazy this week? Uh? Yeah? Mine mine is not as interesting. Uh. 603 00:34:24,960 --> 00:34:28,720 Speaker 1: But Earning's estimates have actually gone up for the SMP 604 00:34:28,840 --> 00:34:33,040 Speaker 1: five hundred this year. I I think that is crazy 605 00:34:33,400 --> 00:34:36,280 Speaker 1: given a lot of the news items that we're seeing 606 00:34:36,320 --> 00:34:38,800 Speaker 1: from companies right now over the last week or so. 607 00:34:38,800 --> 00:34:41,200 Speaker 1: So in the fact that earnings estimates you know, popped 608 00:34:41,360 --> 00:34:43,759 Speaker 1: a little bit higher over the last week, tells me 609 00:34:44,120 --> 00:34:49,200 Speaker 1: analysts having fully kind of reset to this new uh, 610 00:34:49,480 --> 00:34:53,120 Speaker 1: this new paradigm, and so that that's to me that 611 00:34:53,120 --> 00:34:55,359 Speaker 1: that just doesn't make sense right now. And I think 612 00:34:55,360 --> 00:34:57,200 Speaker 1: that's why we're going to see over the next couple 613 00:34:57,239 --> 00:35:00,399 Speaker 1: of weeks analysts have to bring in those earnings sestiments. Yeah, 614 00:35:00,400 --> 00:35:02,800 Speaker 1: it is. It is pretty amazing. And I haven't I 615 00:35:02,840 --> 00:35:05,279 Speaker 1: haven't dug into the data too deeply, but you know, 616 00:35:05,320 --> 00:35:07,960 Speaker 1: when you see these repeated cuts from the likes of 617 00:35:08,040 --> 00:35:10,600 Speaker 1: Target and whatnot, I wonder if there's just so many 618 00:35:10,880 --> 00:35:13,600 Speaker 1: companies pulling their guidance, you know, you always kind of 619 00:35:13,680 --> 00:35:15,879 Speaker 1: I'm always kind of skeptical that analysts are sort of 620 00:35:16,040 --> 00:35:19,719 Speaker 1: you know, following the outlooks from the companies themselves. But 621 00:35:20,080 --> 00:35:23,920 Speaker 1: maybe there's just so many being pulled, or so much 622 00:35:24,000 --> 00:35:26,640 Speaker 1: uncertainty about it at all that you know better better 623 00:35:26,760 --> 00:35:28,840 Speaker 1: or keep them as is a raise. I don't know, 624 00:35:28,880 --> 00:35:31,399 Speaker 1: I don't know, it's a fascinating thing though, giving all 625 00:35:31,480 --> 00:35:35,160 Speaker 1: the all the macro doom and gloom that the generally 626 00:35:35,239 --> 00:35:38,439 Speaker 1: late I mean analysts are generally late kind of play. 627 00:35:38,520 --> 00:35:40,640 Speaker 1: So that that and usually when you see a big 628 00:35:40,680 --> 00:35:43,520 Speaker 1: down shift in the market, it takes about five or 629 00:35:43,560 --> 00:35:46,640 Speaker 1: six weeks for analysts to kind of gauge that, you know, 630 00:35:46,680 --> 00:35:49,120 Speaker 1: they might have to bring in their earnings. But just 631 00:35:49,400 --> 00:35:51,920 Speaker 1: one quick point on this is that you know, you 632 00:35:51,920 --> 00:35:55,440 Speaker 1: would have thought they would have brought their their expectations 633 00:35:55,480 --> 00:35:59,239 Speaker 1: in in the first quarter as companies were kind of communicy, 634 00:35:59,320 --> 00:36:01,839 Speaker 1: starting to com indicate that there were some issues. All 635 00:36:01,880 --> 00:36:04,160 Speaker 1: they did was just push out their numbers into Q 636 00:36:04,400 --> 00:36:07,720 Speaker 1: three and Q four, So they kept their overall numbers 637 00:36:07,800 --> 00:36:10,480 Speaker 1: the same, but just pushed it out where you would 638 00:36:10,520 --> 00:36:14,839 Speaker 1: get their earnings growth in later quarters. They're running out 639 00:36:14,840 --> 00:36:17,480 Speaker 1: of real estate in my in my view, yeah, right, 640 00:36:18,280 --> 00:36:21,520 Speaker 1: I believe in just in time estimates. Maybe that's it. 641 00:36:21,640 --> 00:36:25,799 Speaker 1: I I give my SMP target on December thirty one, 642 00:36:26,360 --> 00:36:30,480 Speaker 1: an three o'clock. That's It's I could get paid to do. 643 00:36:30,600 --> 00:36:36,799 Speaker 1: That would be great, But yeah, it is a head scotcher, though, 644 00:36:36,840 --> 00:36:39,399 Speaker 1: I agree. So that's that's that's crazy enough. Well, well, 645 00:36:39,920 --> 00:36:43,839 Speaker 1: Dot Anthony. I'll, uh, all right, I'm gonna I want 646 00:36:43,840 --> 00:36:49,319 Speaker 1: to talk about the most expensive automobile that's ever sold. Uh. 647 00:36:49,320 --> 00:36:52,560 Speaker 1: This is a great story by our our own columnist, 648 00:36:52,719 --> 00:36:55,839 Speaker 1: Hannah Elliott Um. I will admit I'm a little late 649 00:36:55,880 --> 00:36:58,080 Speaker 1: on this. This the sale occurred in May, but she 650 00:36:58,160 --> 00:37:00,680 Speaker 1: wrote a story just this past week about it. First 651 00:37:00,719 --> 00:37:03,440 Speaker 1: I'm hearing about it. And her story is interesting because 652 00:37:03,520 --> 00:37:07,360 Speaker 1: it's it's all about the difficulties of ensuring the world's 653 00:37:07,360 --> 00:37:12,480 Speaker 1: most expensive car, because you know, carriers are very reluctant 654 00:37:12,520 --> 00:37:16,359 Speaker 1: to to be the one to ensure it. So it's 655 00:37:16,360 --> 00:37:23,360 Speaker 1: a nineteen fifty five Mercedes Benz three D SLR woln 656 00:37:23,480 --> 00:37:25,919 Speaker 1: Halt Coupe. I'm not sure if I'm saying that right, 657 00:37:26,600 --> 00:37:35,200 Speaker 1: but ninety Mercedes Benz SLRN halt coup whether or not 658 00:37:35,280 --> 00:37:37,279 Speaker 1: I'm saying that correct, and at the I regret to 659 00:37:37,280 --> 00:37:39,800 Speaker 1: inform you that you are now contestant on the prices 660 00:37:39,960 --> 00:37:44,080 Speaker 1: right along with vill Donna, and I need your best 661 00:37:44,120 --> 00:37:48,160 Speaker 1: guests on what this car sold for. One of two 662 00:37:48,920 --> 00:37:51,879 Speaker 1: still in existence. The other one belongs to the Mercedes 663 00:37:51,920 --> 00:37:54,360 Speaker 1: Benz Museum. This one was actually sold at the museum. 664 00:37:54,400 --> 00:37:56,279 Speaker 1: I'm not sure if they they owned it or not, 665 00:37:56,320 --> 00:38:00,799 Speaker 1: but you started. I always have to go no, I 666 00:38:00,840 --> 00:38:04,040 Speaker 1: know so little about cars. We have to give the 667 00:38:04,360 --> 00:38:09,000 Speaker 1: guests the courtesy of of of bidding one dollar if 668 00:38:09,040 --> 00:38:11,720 Speaker 1: you go high. Yeah, I'm really bad at this. I'm 669 00:38:12,440 --> 00:38:14,120 Speaker 1: I'm bad at this game, and I know so little 670 00:38:14,160 --> 00:38:16,919 Speaker 1: about cars. So I'm gonna go. You got bad at you. 671 00:38:16,920 --> 00:38:19,319 Speaker 1: You've got them on the nose a few times, I know, 672 00:38:19,440 --> 00:38:22,920 Speaker 1: but like three out of ten times. So um, okay, 673 00:38:22,960 --> 00:38:27,360 Speaker 1: I'm gonna go with five hundred thousand dollars. Five hundred 674 00:38:27,400 --> 00:38:32,279 Speaker 1: thousand dollars. You believe the world's most expensive car is 675 00:38:32,320 --> 00:38:41,319 Speaker 1: a five hundred thousand dollar automobile. One of two? Your 676 00:38:41,360 --> 00:38:48,480 Speaker 1: bid is that her official. I will give her one 677 00:38:48,520 --> 00:38:50,360 Speaker 1: more chance, give her one more chance. Really, you know, 678 00:38:50,400 --> 00:38:52,359 Speaker 1: I could be you know, I could be tricking you too. 679 00:38:52,400 --> 00:38:56,200 Speaker 1: I don't I don't know. I'll go with nine hundred thousand, 680 00:38:57,239 --> 00:39:01,719 Speaker 1: nine hundred and nine thousand, uh A three at nineteen 681 00:39:01,840 --> 00:39:06,080 Speaker 1: fifty five, So how many that's sixty five year old 682 00:39:06,120 --> 00:39:09,439 Speaker 1: car or something like that. Death don't check my math. 683 00:39:11,000 --> 00:39:15,160 Speaker 1: Mercedes Benz three s l R EULN halt coop. I 684 00:39:15,160 --> 00:39:16,799 Speaker 1: will say it's a beautiful car. I'm not a big 685 00:39:16,840 --> 00:39:19,279 Speaker 1: car guy, but this thing is quite beautiful. It's got 686 00:39:19,280 --> 00:39:22,520 Speaker 1: the wing doors that opened on the side, very chromy. 687 00:39:23,400 --> 00:39:26,359 Speaker 1: What do you think, uh, Antony. Yeah, So there's only 688 00:39:26,400 --> 00:39:29,200 Speaker 1: two of these cars in existence, and this is the 689 00:39:29,239 --> 00:39:32,520 Speaker 1: most expensive car in the world. It was the most 690 00:39:32,239 --> 00:39:35,800 Speaker 1: expensive car sold at auction in the world. I imagine 691 00:39:36,040 --> 00:39:39,520 Speaker 1: Ellen probably has a car that you can we're a 692 00:39:39,520 --> 00:39:41,680 Speaker 1: bit space with that maybe work more, but we don't 693 00:39:41,719 --> 00:39:47,239 Speaker 1: know about that. But but one million dollars, that's how 694 00:39:47,280 --> 00:39:49,799 Speaker 1: you play the game. That's why, that's how you play 695 00:39:49,840 --> 00:39:54,640 Speaker 1: the game. One hundred and forty two million dollars amazing, 696 00:39:55,360 --> 00:40:00,040 Speaker 1: that's my god. But my favorite part is is the 697 00:40:00,120 --> 00:40:02,799 Speaker 1: struggle to get insurance word and they estimate there they 698 00:40:02,840 --> 00:40:05,799 Speaker 1: can't find anyone in the insurance world to actually give 699 00:40:05,800 --> 00:40:09,160 Speaker 1: a quote for the insurance on this on this thing. 700 00:40:09,400 --> 00:40:12,600 Speaker 1: But um, one person said at least a hundred thousand 701 00:40:12,920 --> 00:40:15,480 Speaker 1: a year for a car of that. It depends. Wait, 702 00:40:15,560 --> 00:40:18,239 Speaker 1: what's what's the deductible on a hundred forty two million 703 00:40:18,239 --> 00:40:24,120 Speaker 1: dollar car? I don't know. They said, yes, it's amazing, 704 00:40:24,160 --> 00:40:27,920 Speaker 1: isn't it. And then let's see, the previous one was 705 00:40:27,960 --> 00:40:31,400 Speaker 1: some kind of Ferrari. I think it was a let's see, 706 00:40:32,719 --> 00:40:36,320 Speaker 1: she's got it in here. It was a two fifty 707 00:40:36,440 --> 00:40:41,360 Speaker 1: g t O Ferrari, but less than a So if 708 00:40:41,400 --> 00:40:44,640 Speaker 1: there are any insurance breakers out there willing to write 709 00:40:44,640 --> 00:40:48,120 Speaker 1: a policy for a hundred and forty two million dollar car, 710 00:40:48,160 --> 00:40:50,600 Speaker 1: I gotta say my dad was an insurance guy. He'd 711 00:40:50,600 --> 00:40:53,040 Speaker 1: be having nightmares about this. I think I don't think 712 00:40:53,040 --> 00:40:57,759 Speaker 1: you'd go anywhere near it anyway. I think that is 713 00:40:57,800 --> 00:40:59,640 Speaker 1: all the time we have, Anthony Bread to catch up 714 00:40:59,640 --> 00:41:02,960 Speaker 1: with you. Uh. Enjoyed your insights, and hopefully we can 715 00:41:03,000 --> 00:41:05,640 Speaker 1: talk again soon. Thank you for joining us. Thank you. 716 00:41:13,960 --> 00:41:16,000 Speaker 1: What Goes Up will be back next week and so 717 00:41:16,120 --> 00:41:18,400 Speaker 1: then you can find us on the Bloomberg Terminal, website 718 00:41:18,440 --> 00:41:21,839 Speaker 1: and app or wherever you get your podcast. We love 719 00:41:21,840 --> 00:41:23,640 Speaker 1: it if you took the time to rate and review 720 00:41:23,680 --> 00:41:26,719 Speaker 1: the show on Apple Podcasts, so more listeners can find us, 721 00:41:27,320 --> 00:41:29,520 Speaker 1: and you can find us on Twitter. Follow me at 722 00:41:29,560 --> 00:41:33,960 Speaker 1: Rea Anonymous. Bill Donna Hira is at Bildonna Hira. You 723 00:41:34,000 --> 00:41:38,600 Speaker 1: can also follow Bloomberg Podcasts at Podcasts. What Goes Up 724 00:41:38,680 --> 00:41:41,680 Speaker 1: is produced by Stacy Wong. The head of Bloomberg podcast 725 00:41:41,719 --> 00:42:00,319 Speaker 1: is Francesco Leavie, thanks for listening. See you next time, Bo.