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Speaker 2: So honored, Claudia, some I'm with us with New Century Advises. Claudia,
Speaker 2: I don't think people know who you are. You become
Speaker 2: such a fixture, such a giant of American academics. Let's
Speaker 2: start with the complete intimidation of walking in the door
Speaker 2: at Michigan one day and being greeted by the giants
Speaker 2: of inflation study Matthew Shapiro and Miles Spencer Kimball. What
Speaker 2: was it like working for those two academic beasts on inflation.
Speaker 3: So it is an absolute privilege to work with both
Speaker 3: Matthew and Miles, and I keep there are lessons that
Speaker 3: I learned from them that keep replaying in my head
Speaker 3: even now, Like as we think about these big policy questions,
Speaker 3: what kind of happened to the economy? Matthew is known
Speaker 3: for saying all the time, it's an empirical question, right,
Speaker 3: Like we can have all the theory and we need that.
Speaker 3: But you've got to go look at the data, and
Speaker 3: you've got to look really carefully at it to figure
Speaker 3: out what's going to happen.
Speaker 2: You were right, your initial acclaim was a cute analysis
Speaker 2: of the American consumer. Forget about the distractions Musk, Trump,
Speaker 2: red Sox, Yankees, things that matter, Claudia, sum, what is
Speaker 2: the state of the American consumer?
Speaker 3: The state of the American consumer is still good. I mean,
Speaker 3: I have a long standing mantra of like, don't set
Speaker 3: against the American consumer right when they can spend when
Speaker 3: they can, like this keeps going now, I think we
Speaker 3: can run into some constraints. This year goes on right
Speaker 3: as income slows down, If the jobs aren't as plentiful,
Speaker 3: then the consumer does you know, they are likely to
Speaker 3: pull back some. But it just we're still in a
Speaker 3: place that's you know, relatively solid. But it's more about
Speaker 3: where we're headed right now.
Speaker 4: So, Claudia, today, when we get this job's at data here,
Speaker 4: We've seen some data this week, whether it's jolts or
Speaker 4: ADP or claims, kind of suggest that the labor market's softening.
Speaker 4: But I don't know, it doesn't feel like it's breaking
Speaker 4: here there's any real risk, but that may change in
Speaker 4: three minutes. But how do you kind of you just
Speaker 4: broadly speaking, in this US labor market.
Speaker 3: So I think it's important to remember that when we
Speaker 3: have big shocks in the economy, like you know, the
Speaker 3: policy changes, the terrors immigration that you know, like the
Speaker 3: labor market is not necessarily the first place we see
Speaker 3: at hits. I mean we remember in most recessions, the
Speaker 3: out't clanment rate peaks after the recession is over right,
Speaker 3: it takes time to work its way through. So at
Speaker 3: this point we're looking for subtle signs of softening start
Speaker 3: you know, hours of reduced part time work like, and
Speaker 3: that actually tells us about potentially much bigger weakening as
Speaker 3: we go, you know, on insator this year. So this
Speaker 3: isn't the first place to see it. And frankly, other
Speaker 3: places we would look like business investment or even in
Speaker 3: the prices. We're just starting to see the hints of
Speaker 3: the policy.
Speaker 2: So it's coming, Claudie, I want to get this in
Speaker 2: before the Jazz report. The standard error, the noise around
Speaker 2: this report. Now with immigration changing, is it getting harder
Speaker 2: and harder to guess the numbers or the ten or
Speaker 2: of the two reports.
Speaker 3: Well, this a reality. I mean, immigration is going to
Speaker 3: be an issue. I mean, I think at this point,
Speaker 3: you know, the willingness of people who are in the
Speaker 3: United States, is immigrants to participate in our surveys has
Speaker 3: got to be slipping. And in general, we have seen
Speaker 3: a real distrust of people participating in surveys or maybe
Speaker 3: just not taking the time to participate in surveys if
Speaker 3: we don't have as much information. It's not that there's
Speaker 3: necessarily going to be a bias in the report. It's
Speaker 3: just they're going to be noisier. And we know how much.
Speaker 3: Every first Friday of the month we study the exact number.
Speaker 3: And if they get noisier, we're going to get bounced
Speaker 3: around a lot more in terms of like what's actually happening.
Speaker 2: Claudia sym has said for eighteen months, don't underestimate an
Speaker 2: overused word, a resilient American economic experiment. That's what we
Speaker 2: see within the tar For Claudia, this is a resilient
Speaker 2: labor economy.
Speaker 3: Yes, I would agree, though I would also you know,
Speaker 3: reinforce that the effects of the tariffs are just at
Speaker 3: the right at the beginning. You know, we haven't seen
Speaker 3: the price increases widespread. We haven't seen it. So this
Speaker 3: is a this is a good place, This is the
Speaker 3: labor market's in a good place.
Speaker 2: But it is not.
Speaker 3: This is not the labor market to say twenty twenty
Speaker 3: two that was firing on all cylinders and then was
Speaker 3: being hit with rate increases and high inflation. So you know,
Speaker 3: I think that's encouraging. It is that today's numbers are
Speaker 3: very consistent with a softening, not even you know, the
Speaker 3: other the ekening, but this is not We're not done yet,
Speaker 3: but this is a good is.
Speaker 4: A good day, Claudia. How do you think the Federal
Speaker 4: Reserve FED? Shairman J.
Speaker 5: Powell?
Speaker 4: How do you think the Fed is going to look
Speaker 4: at these numbers?
Speaker 3: It takes a little bit of pressure off them because
Speaker 3: again they're what they're waiting to see, and what's going
Speaker 3: to be important for their decision is to see how
Speaker 3: the Terraff induced inflation play out, Like they really need
Speaker 3: some kind of confirmation that that inflation will be temporary.
Speaker 3: And again we're just starting to see those prices increases
Speaker 3: come in, so it's going to be months before we
Speaker 3: see any sign even monthly data of it's trying to
Speaker 3: pull back, and it also gives time for them to see,
Speaker 3: you know, that's a kind of good tear policy around,
Speaker 3: like a low tear policy. So it just gives them
Speaker 3: some breathing space for I think, what was going to
Speaker 3: be there like they're thinking anyways, is I got to
Speaker 3: see this inflation under control.
Speaker 5: Claudia, Thank you so much.
Speaker 2: Claudia Sam with this New Century Advisor is really good
Speaker 2: to have her on today or the Constructive Report again
Speaker 2: her research note get that from New Century Advisors. We
Speaker 2: protect the copyright of all of our guests. Features up
Speaker 2: forty down, features up to forty five. The vix Quiescent
Speaker 2: goes from night what were you twenty, Paul?
Speaker 6: We were twenty, like back on the Red Sox were
Speaker 6: winning right exactly back when Amy was Silverman was booking
Speaker 6: her Taylor Swift tickets right now seventeen point four to
Speaker 6: nine on the VICSA constructive take eels up a.
Speaker 2: Little bit is well, we looked at bonds with priam Isser.
Speaker 2: We have Claudia Sam here acclaimed on American economics and
Speaker 2: now joining us Amy was Silverman RBC Capital Markets, here
Speaker 2: to dovetail in equities, the derivative space, what does it
Speaker 2: say about expectations? The game of it within the algebra
Speaker 2: the quantitative finance is to seek out not an extrapolation,
Speaker 2: but to just what's the expectation. Do you have a
Speaker 2: clue what the expectation is of equity markets by labor day?
Speaker 7: Well, it's interesting because coming into this payrolls it was
Speaker 7: quite benign. So when you looked at the pricing ahead
Speaker 7: of NFP, there wasn't a bet there. Essentially, there wasn't
Speaker 7: a bet that at the money straddle, Tom was coming in,
Speaker 7: you know, very complacent under the normal standard deviation, and
Speaker 7: you know, I think probably given what the market reaction is,
Speaker 7: it'll probably end up being correct. Now that changes out
Speaker 7: to September, so our term structure, those future expectations of
Speaker 7: volatility are a lot higher, and it's essentially saying to me,
Speaker 7: we've can kicked a lot of things. We're in the
Speaker 7: middle of these reprieves. That doesn't mean there isn't going
Speaker 7: to be stuff going on, It's just going to happen later.
Speaker 4: Are your clients are they looking to buy protection here,
Speaker 4: whether it's just tweet protection, I don't know what you
Speaker 4: guys call it, but the volatility just feels like I
Speaker 4: can't predict it at all. Is there something you can
Speaker 4: provide for them on the protection side?
Speaker 7: Well, look, I know Tom likes the Greeks a lot,
Speaker 7: but my bad wall joke is there's another Greek tweet us.
Speaker 7: So just the sensitivity of implied volatility to Donald Trump's
Speaker 7: tweets and you know, my kids will cringe, but look,
Speaker 7: it's a real thing. It really creates volatility potfoles. All
Speaker 7: you need to do is look to last night and
Speaker 7: you can see that idiosyncratic risk in Tesla. You can
Speaker 7: see it in the macro risk and that does not
Speaker 7: go away. I only think that is something that investors
Speaker 7: have to contend with. And the one thing I'll say is, look,
Speaker 7: there is hedging going on, there is demand for that.
Speaker 7: It's in those further tenors. Because once we roll off
Speaker 7: these reprieves, we're still going to have to figure out
Speaker 7: what we do in terms of the market and the
Speaker 7: distribution of fat tails that we see.
Speaker 4: Is it more expensive today to buy protection in the
Speaker 4: options in futures and options markets than it was a
Speaker 4: year ago.
Speaker 7: So look, here's what I'll say a little bit yes,
Speaker 7: But when you kind of look to let's go back
Speaker 7: to Liberation Day, how expensive things have gotten. We've rolled
Speaker 7: off significantly, and I would argue that there has been
Speaker 7: a big change between last year and this year in
Speaker 7: terms of how real people think. Those tariff guardrails have
Speaker 7: been removed. And so if I had to make a
Speaker 7: quick advertising for hedging, I would say it's relatively inexpensive
Speaker 7: considering the tales that could occur if we don't get
Speaker 7: any good resolutions.
Speaker 5: We welcome all of you on your commune to cross
Speaker 5: the nation.
Speaker 2: A jobs report benevolence some say front run by the
Speaker 2: president with a tweet out, an optimistic tweet out before
Speaker 2: the jobs report.
Speaker 5: Thank you Jim Bianco for.
Speaker 2: That perspective from Chicago. That's not my perspective, folks. That
Speaker 2: was James Bianco's tweet that was out on linking the
Speaker 2: President's tweet into this benevolent tone. Futures up forty five
Speaker 2: ivicts seventeen point thirty seven to have priam iSER with this,
Speaker 2: Claudia Sama now Amy wo Silverman had a deriv to
Speaker 2: strategy RBC Capital Markets. Christina Campmanumok, this is the way
Speaker 2: we roll in good conversation for you on YouTube, Ammy Silverman,
Speaker 2: These forget about the moonshe out of Microsoft, which I
Speaker 2: think has been way underreported.
Speaker 5: Here in Q two.
Speaker 2: The absolute arc is retails on board, retails in the market,
Speaker 2: and institution CTAs all the other fancy phrases you have
Speaker 2: in your world are running around their heads cut off.
Speaker 2: What's a company like in institutional conversations right now?
Speaker 7: Look, if you had to pit retail against institutional, I
Speaker 7: would say they probably won round one in terms of
Speaker 7: they didn't degross, they didn't de risk, they were steadily
Speaker 7: buying that dip and they have been rewarded.
Speaker 2: Now.
Speaker 7: It's just different, right because when you're an institutional investor,
Speaker 7: you've got to meet that benchmark for quarter end, for
Speaker 7: a year end. You don't have that simper long horizon.
Speaker 7: It's a different game. It's not fair, and that's why
Speaker 7: I think that demand for longer term hedging comes into play.
Speaker 7: But look, Tom, I think there's a real risk of
Speaker 7: a right tail crash. That has been true since post COVID.
Speaker 5: What does that mean. That's jargon.
Speaker 7: It just means this idea that if mag seven rips,
Speaker 7: if you have that benchmark concentration and it runs away
Speaker 7: from you as an institutional master, you have to catch up.
Speaker 7: You have to.
Speaker 2: Okay the Poe The reason I set all this up, folks,
Speaker 2: because she's so damn good at this.
Speaker 8: The answer is, Paul, you know you lived it. June thirty.
Speaker 8: June is busted out all over. We're twenty five days
Speaker 8: away from our lawn only by side and all the
Speaker 8: way over to rock and leverage. CTAs have to show
Speaker 8: their cards. What's a frenzy going to be on the
Speaker 8: path to June thirty end a quarter?
Speaker 7: So I'd watch some signals in the market here. I
Speaker 7: would watch for what that call option demand is. If
Speaker 7: it starts to outweigh the put option demand either in
Speaker 7: your meg seven names and your SMP and your cues,
Speaker 7: that starts this right tail chase, which we've seen over
Speaker 7: and over again since the post COVID period. You saw
Speaker 7: it after that low in libration day, right, everyone who
Speaker 7: degrows had to jump in the pool really quickly. We
Speaker 7: have found when we back tested over time, when that
Speaker 7: momentum starts, it takes a while for it to fade,
Speaker 7: and those dynamics are really real.
Speaker 4: On balance. Are your clients are they net bullish or
Speaker 4: kind of a net bearish, or are they just trying
Speaker 4: to just headguway all the risks they can.
Speaker 7: I would say, if I had to, you know, gun
Speaker 7: to my head, I would say, they're still very.
Speaker 1: Cautious, okay.
Speaker 7: And that's why I called it a right tail in
Speaker 7: the sense that it's a hedge to the upside.
Speaker 6: Right.
Speaker 7: When we look into the options market, we actually see
Speaker 7: a lot of call buying and FXI the China ETF,
Speaker 7: and EEM the merging market's ETF. I don't think that's
Speaker 7: expressing a super bullish view on China. It's the worry
Speaker 7: that if we suddenly get a resolution over the weekend,
Speaker 7: that tweet a bomb turns on again. They have to
Speaker 7: go into that chase. They have that benchmark concentration.
Speaker 2: Legendary academics at New York University. One final question here,
Speaker 2: we're trying to get Christina KATMANI up here in a
Speaker 2: moment incredibly important and I go to NYU for this,
Speaker 2: the idea that you have to rehadge out if we
Speaker 2: get a right tail shift and all of a sudden,
Speaker 2: your world has to catch up to June thirty and
Speaker 2: beyond we get you have to rehedge out there. What's
Speaker 2: it doesn't that create almost a circuitous momentum of bye
Speaker 2: bye bye. Isn't that the heart of the matter.
Speaker 7: Yeah, you know, people like to call it the gamma hammer,
Speaker 7: and I have.
Speaker 8: That gamma hammer open for Pantera.
Speaker 7: Yes, I do continue, And you know, I think that
Speaker 7: to some degree, this this risk of rerolling that strikes
Speaker 7: is something investors always contend with. But I think that's
Speaker 7: why we've seen duration trinkage, Tom. I think that's why
Speaker 7: we've seen more zero date X pre trading because of
Speaker 7: these data points kind of creating the cycle. You can't
Speaker 7: get ahead.
Speaker 5: Of Amy with Silverman. Thank you, thank you, thank you
Speaker 5: so much.
Speaker 2: She's the RBC Capital Markets and we thank her for
Speaker 2: jobs day perspective. She's from Villanova University, potentially working at
Speaker 2: the Vatican.
Speaker 5: Here we'll see this straighten out.
Speaker 2: Their bond portfolio or sitting on the Knicks bench the
Speaker 2: power of Villaines.
Speaker 5: The coach exits.
Speaker 2: I mean, I don't think she went a head coach
Speaker 2: Christina cat Manny with this new assistant coach for the
Speaker 2: New York next here in Global Debt and Senior portrait.
Speaker 2: If you were seriously, if you're advising with the celebration
Speaker 2: of Pope Leo, the fourteenth. If you're advising the Vatican
Speaker 2: right now about clip the coupon, I'm serious, clip the
Speaker 2: coupon or total return short term for Pope Leo's ten years,
Speaker 2: let's bring it into three years. Is it a total
Speaker 2: return space or a coupon space.
Speaker 9: I mean it's a little bit of both.
Speaker 7: Right.
Speaker 9: I think we're no longer. We're no longer in a
Speaker 9: world where global that global debt everywhere is at zero
Speaker 9: and rates are at zero and you have to be
Speaker 9: in tens in the US to get two percent, right,
Speaker 9: Like you can have front end paper in the US,
Speaker 9: whether that's high grad high quality corporates, two to five years,
Speaker 9: whether it's bills, whether it's treasuries, and having some portfolio
Speaker 9: if that makes sense, and same thing. Look at rest
Speaker 9: of the world, there's yield to be had.
Speaker 5: Yeah.
Speaker 4: I mean again, your title is Global Debt Senior portfolio manager.
Speaker 4: Where outside the US, you guys see opportunities.
Speaker 5: Yeah.
Speaker 9: So when we look at it again, our general preference
Speaker 9: has been to own duration in the front end of
Speaker 9: the curve globally, so call it in that two to
Speaker 9: five year sector. And I think certainly through April, as
Speaker 9: we have had all of this uncertainty and tumult and
Speaker 9: Liberation Day, and what's going on with tariffs and kind
Speaker 9: of the fiscal concerns, and these questions of oh, like
Speaker 9: the ten years not acting as kind of that anchor.
Speaker 9: What has five year duration in Europe has? So I
Speaker 9: think again front end and then to be invested out
Speaker 9: the curve. It's a question of where do you get
Speaker 9: enough yield, and I think they're in the long end
Speaker 9: of Japan. You've seen some steepness. There's a few places.
Speaker 2: The President's tweet, a jobs report, Navarro's comments on a
Speaker 2: Chinese meeting. In seven days, kat Manny lifts the market
Speaker 2: up forty five, up fifty on futures and the yield space,
Speaker 2: Paul moves, we're up to three basis points and now
Speaker 2: the ten year yield four point four or five percent,
Speaker 2: we're up six basis points, five basis points out the.
Speaker 5: Curve, yep move into markets. Credit risk.
Speaker 4: How much credit risk are you guys come to taking
Speaker 4: these days?
Speaker 9: So we have some but again, when we look across
Speaker 9: our three levers that we can pull FX, rates and credit,
Speaker 9: it's probably our least favorite because credit spreads are still
Speaker 9: tight historically, and look we're not at a point that
Speaker 9: we're very concerned about imminent recession, severe recession. We're not
Speaker 9: at so, and we don't have like an immediate funding
Speaker 9: wall for corporations, but level spreads are tight. So again
Speaker 9: this kind of two to five year short paper high quality,
Speaker 9: there's value there. Otherwise, I think all of these economic
Speaker 9: kind of driving forces, FX is the clearest channel of
Speaker 9: where they impact it. So that's kind of probably our
Speaker 9: favorite lever. And then this is a bit in the middle.
Speaker 4: Well, you mentioned FX. I mean the dollar's been just
Speaker 4: hasn't had any rebound like other risks of US stocks
Speaker 4: have rebounded, the dollars not. What is that, oh you guys?
Speaker 4: Or hows it informed your bond?
Speaker 5: Yeah?
Speaker 3: Suction?
Speaker 9: So I think it really is a broader story. And
Speaker 9: the question is is this a real regime shift for
Speaker 9: the dollar in our view? As it is, and even
Speaker 9: when you've seen almost a ten percent kind of broad
Speaker 9: dollar move year to date, again we still think that
Speaker 9: can you have another ten to fifteen percent dollar down move? Yes?
Speaker 9: Is that a one month number? No? Of course not.
Speaker 9: It's probably a theme that's here to stay because you
Speaker 9: take a step back and you say, what's twenty twenty five.
Speaker 9: We've broken kind of this multilateral trading system globally that's
Speaker 9: been the base case for the last fifty years. You've
Speaker 9: broken up kind of the global security order of the
Speaker 9: US being the backstop there, and so you have things
Speaker 9: like German fiscal and all of these big changes. And
Speaker 9: even if you the courts say tariffs can't happen, or
Speaker 9: we are pausing on tariffs like the genies out of
Speaker 9: the bottle, and the rest of the world has to
Speaker 9: think of what is with the uncertainty of policy, what
Speaker 9: is the risk premium that there needs to be to
Speaker 9: own the dollar in a tire?
Speaker 2: So where to Paul's earlier question, quickly we're running out
Speaker 2: of time. Where geographically is the best opportunity to capture coupon?
Speaker 2: Is it guilts? Is it German industrial paper? Is it
Speaker 2: something I don't know about? I mean, where is that
Speaker 2: global yield? I need a coupon opportunity?
Speaker 9: Yeah, I think it's like there are Barbell places right,
Speaker 9: Like there's certainly a place in a portfolio for this
Speaker 9: front end US paper. I think out the curve in
Speaker 9: the UK, there is some opportunity in the long end
Speaker 9: of gilts and you have a steep curve there, and
Speaker 9: then you look at things like bank paper in Europe
Speaker 9: or again like there's some high quality corporate paper in
Speaker 9: Europe that known Australia government bombs and semi there's value there.
Speaker 5: They're called kangaroos. Yep, exactly.
Speaker 2: That won't make it real.
Speaker 5: Christina, thank you so much. It's brilliant.
Speaker 2: Christina Cameni with us with Invesco here out of Villanova
Speaker 2: and the Course.
Speaker 5: With Invesco.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 5: I'm gonna name some names, Sia.
Speaker 2: They're three Dreep with a hat trick, Webov, Taniga zeisstron
Speaker 2: Ju Tom I think it's Tom Ju and Travis Axelrod.
Speaker 2: That's the management of Tesla around one other guy. When
Speaker 2: musk Get's done with his must Trump battle and he
Speaker 2: goes back to Tesla, what does he go back to
Speaker 2: in terms of running a business?
Speaker 5: Dan I's with us, web Bush great to be here.
Speaker 10: Look and obviously a twilight Zone day, you know, the
Speaker 10: last twenty four hours. I mean, look to me, the
Speaker 10: whole vision of Tesla, it's about autonomous.
Speaker 2: It all starts, okay, but you didn't answer my question.
Speaker 2: He goes out to Austin, Texas. What's there to pick
Speaker 2: up the pieces?
Speaker 10: Well, I mean, if you look the engineer, I would argue,
Speaker 10: the best engineers in the world. If you look at
Speaker 10: Tesla's SpaceX, I mean it's foundational. I think around the
Speaker 10: world in terms of the best engineering and when it
Speaker 10: comes to scale and scope, from Fremont to Tesla to
Speaker 10: what we have in China to everything else, Tesla continues
Speaker 10: to be unmatched. And I just view everything that they've
Speaker 10: seen from a demand perspective is a near term narrative
Speaker 10: of the story that will be short lived because the
Speaker 10: future the value I believe it's a trillion dollars of
Speaker 10: value and for autonomous alone, that is the focus from USK,
Speaker 10: that is the focus for Tesla.
Speaker 4: Just remind us Dan, what is the dependence of tes
Speaker 4: so the company on government support? Just freshless kind of
Speaker 4: how that relationship is, because I think people are concerned
Speaker 4: that maybe that relationship could be at risk and it
Speaker 4: could have impact some of the economics.
Speaker 10: When I think there's obviously regulatory credits that they lose
Speaker 10: and if you go back, not as much today, but
Speaker 10: that was a huge part of their profits early on.
Speaker 10: I think the bigger thing is around the tax credits
Speaker 10: in terms of seventy five hundred hours that in the
Speaker 10: bill does proposed that essentially would disappear. That probably hurts
Speaker 10: demand We'll say, let's say five seven, potentially ten percent
Speaker 10: in terms of you know, a typical customer that might
Speaker 10: not do an Evy and might not do a Tesla.
Speaker 5: But when you look at.
Speaker 10: The government some of the Trump sort of threats, that
Speaker 10: is much more around space Ax than Tesla in terms
Speaker 10: of some of those concerns.
Speaker 4: So we assume that Elon Musk is he's out of dose,
Speaker 4: he's out of government, he's back to work. What does
Speaker 4: that mean for Tesla? Have you heard any reporting or
Speaker 4: have you heard from your context about is he back
Speaker 4: on the floor, is he back in design discussions, what's
Speaker 4: going on?
Speaker 10: He's been back on the factory. I mean the point
Speaker 10: is like this is something where they need their leader
Speaker 10: back in their biggest asset, and that's Musk. And I
Speaker 10: think you'll see despite what we've seen the last twenty
Speaker 10: four hours that you will see a driven Musk and
Speaker 10: we're gonna look in the next six, nine, twelve months
Speaker 10: and it's going to be I think, a huge chapter
Speaker 10: of growth.
Speaker 5: One more question in this silliness.
Speaker 2: I want to get to the importance of Apple on Monday,
Speaker 2: elon Musk from where you sit.
Speaker 5: I don't want any of this tabloid New York Post crap.
Speaker 5: I want to know, do you.
Speaker 2: Feel that the allegations of drug use intrude on him
Speaker 2: giving optimum performance to Tesla?
Speaker 10: Look, I mean it's my own view is like with Musk,
Speaker 10: it always comes obviously a lot of baggage, but that's
Speaker 10: also that's not something I think Moose investors really that
Speaker 10: shy away from. I think they focus on Musk as
Speaker 10: an engineer, focus on must really as a as a politicians.
Speaker 2: You need a surprise out of Coupertino. Here, you're going up,
Speaker 2: You've got you know, you have a leer, you don't
Speaker 2: have a gulf stream.
Speaker 5: You're not yet just there.
Speaker 2: Well, when you go for the ETF goes public, you know,
Speaker 2: you get up with the six help me here with
Speaker 2: Apple here coming up?
Speaker 10: Look, I think Monday and we'll be there it's a
Speaker 10: very important DAYLOP for WWC, the Developer Conference for Apple
Speaker 10: the yearly one. The reason it's so important, and you
Speaker 10: know we've talked about on the show a bunch, is
Speaker 10: that you go back to a year ago the AI
Speaker 10: vision Apple Intelligence. Clearly they were late and a why
Speaker 10: that really never came to fruit. But the developers are
Speaker 10: the hearts and lungs of Apple. They basically they need
Speaker 10: when it comes to iOS, when it comes to the
Speaker 10: future role show developers, when it comes to AI, this
Speaker 10: is the platform that you're going to build on.
Speaker 5: Let's get up front on this.
Speaker 2: They have an agreement with Google on search right, Yes,
Speaker 2: everyone's happy, except for regulators, et cetera.
Speaker 5: Why don't they do an agreement?
Speaker 2: Drop a bombshell Monday on Gemini on Google Gemini, I
Speaker 2: don't get it.
Speaker 10: Look, I think a lot of these things. I think
Speaker 10: there's so many things that are on the table potentially
Speaker 10: in terms of what they could announce and even what
Speaker 10: they could start to show breadcrumbs about when you're perplexity
Speaker 10: and some others. In other words, the big issue for
Speaker 10: Apple right now is that they know the regulators. Indeed,
Speaker 10: you know, if you think about do OJ and others
Speaker 10: that they're into the cop in the spider web of
Speaker 10: They need to be careful too in terms of partnerships.
Speaker 10: They need to make sure that they don't continue to
Speaker 10: sort of go down the path that everything they do
Speaker 10: is going to get fought. And I think that's why
Speaker 10: Google is going to continue to be a huge partner
Speaker 10: of theirs.
Speaker 5: Email comes in here, missus King emails in.
Speaker 2: Is Dan wearing real snow milk?
Speaker 5: Did you spill something?
Speaker 10: Yes? That that is and that she nailed it.
Speaker 9: She nailed it.
Speaker 5: For those of you on radio, it's a certain look.
Speaker 2: Is this going to be a collab or is anything
Speaker 2: we want to announce it?
Speaker 10: F I mean, we'll have more coming out in the summer,
Speaker 10: but we will where the summer be having a clothing clab.
Speaker 5: Which clab?
Speaker 10: Yeah, it's gonna be a Dan Ives collection. And I'm
Speaker 10: gonna make sure Keen. I'm gonna make sure we have
Speaker 10: one for Keen and and and one for Paul and
Speaker 10: one for.
Speaker 5: All the clab collabs are two x. None of it
Speaker 5: would fit us. Oh, they barely get into lease.
Speaker 4: Come on for the cool kids, Dan, real quick there,
Speaker 4: I'm looking at Apple. Do you when you talk to
Speaker 4: your institutional investors around the world. Did they ever say
Speaker 4: May the stock is down twenty percent this year, It's
Speaker 4: flat over the last twelve months. I'm frustrated, which you know,
Speaker 4: we rarely have that kind of discussion with Apple, But
Speaker 4: are you having a discussions that plays up.
Speaker 10: There's a lot of frustration because really it's kind of
Speaker 10: been a treadmill and it's been an underperformer. But but I,
Speaker 10: just like I have for decades, walk investers through. You
Speaker 10: have to be able to see the free cash flow,
Speaker 10: you have to be able to understand the install base.
Speaker 10: You have to seventy percent of the world's on access
Speaker 10: in AI device through Apple.
Speaker 5: Then we keep you on for another hour, but it's
Speaker 5: jobs day. We don't care. Dan, I thank you so much.
Speaker 2: WebBook Congratulations on a newly minted ETF.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Cockplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station.
Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 2: Right now a perfect time to speak to Kelly Cox,
Speaker 2: chief market strategists at Ridholts Wealth Management, Kelly, guess the
Speaker 2: anguish of those in cash right now? Is it a
Speaker 2: normal OMG I'm missing out or is there something unusual.
Speaker 5: Into the end of the quarter.
Speaker 11: Well, they're getting four percent right now if they've if
Speaker 11: they've done some searching, So I can't I can't imagine
Speaker 11: the English is too bad, especially because you missed the
Speaker 11: April volatility. But Tom, I've been shocked by how resilient
Speaker 11: the stock market has been. I mean, the stock market
Speaker 11: has always been resilient, but there hasn't really there hasn't
Speaker 11: been that economic confirmation to really make me feel better
Speaker 11: about this rebound.
Speaker 10: Kelly.
Speaker 4: One of the drivers of this, obviously, of the markets
Speaker 4: in general, are earnings growth, and I think there's some
Speaker 4: concern out there about earning trowth. We see earnings estimates
Speaker 4: come down. Have they come down enough or are they
Speaker 4: still a risk as more and more of these tariffs
Speaker 4: kind of find their way into the economy.
Speaker 11: Well, it's interesting because companies had a really good first
Speaker 11: quarter on the surface, and SMP earnings grew almost fourteen percent,
Speaker 11: and that was a good six or seven percentage points
Speaker 11: above what analysts expected at the beginning of the season.
Speaker 11: But the guidance that we got, which you know, you guys,
Speaker 11: you guys have talked to me enough, you know that
Speaker 11: I'm always talking about the guidance and looking ahead, the
Speaker 11: guidance was pretty weak. We saw some companies withdraw we
Speaker 11: saw the biomodal guidance, and we saw earnings revisions for
Speaker 11: the year continuously cut and cut and cut. So now
Speaker 11: earning growth is expected to be around seven percent for
Speaker 11: the year, and I got to think that there are
Speaker 11: a lot there's a wide disparity that could sit on
Speaker 11: either side of that number because we certainly we just
Speaker 11: simply don't know where trade policy could be. It's probably
Speaker 11: not going to be as bad as what we first
Speaker 11: thought it would be on April second, but it still
Speaker 11: doesn't feel like analysts know how to quite deal with
Speaker 11: the trade policy impact on profits.
Speaker 4: Given that maybe some of the earnings uncertainty hear if
Speaker 4: no other reasons, then we just don't know what trade
Speaker 4: policy will be. Are there certain sectors or certain areas
Speaker 4: you guys feel more comfortable maybe just parking some money.
Speaker 11: Well it red holds. We really like value. We especially
Speaker 11: like it because our investors are investing for five years,
Speaker 11: ten years, decades down the road, and we want them
Speaker 11: to have the smoothest ride possible. Because we're all human,
Speaker 11: we're trying to sleep at night, so we generally lean
Speaker 11: towards value. But we think right now is actually a
Speaker 11: smart time to lean away from those sectors with high expectations.
Speaker 11: I know this is a hard thing to say, but
Speaker 11: Tech is at the top of that list. You know,
Speaker 11: obviously Tech is being thrown around by a number of
Speaker 11: different factors right now, especially this morning. I mean, look
Speaker 11: at Tesla, but Tech, I think people forget is one
Speaker 11: of the highest exposed sectors when it comes to international
Speaker 11: revenue and cost of goods exposure. And you know, if
Speaker 11: you have restrictive trade policy there, then you know Tech
Speaker 11: is probably going to get hit one way or the other.
Speaker 5: Say there, Kelly, We're going to come back to you.
Speaker 2: We need to get the markets open right now. We
Speaker 2: do a data check, Kelly Cox. Look, equity bonds, currencies
Speaker 2: come out of these with Verry Redults at Redults Wealth Management,
Speaker 2: So too, do we futures up.
Speaker 5: Fifty seven right now?
Speaker 2: It's a one percent move the vics from that twenty
Speaker 2: weeks ago.
Speaker 5: The angst comes.
Speaker 2: Into a hugely bull market seventeen point one four on
Speaker 2: the Vixy yield space up off the jobs report, but
Speaker 2: then velocity to a higher yield four point ninety three
Speaker 2: percent in the thirty year bond four point four to
Speaker 2: six percent, make it four point four to seven percent
Speaker 2: of the ten year yield, the ten year real yield
Speaker 2: two point one three percent.
Speaker 5: We stagger to the open.
Speaker 8: We staggered with John Tucker, all right.
Speaker 12: Right at the get go, we are higher down Jones
Speaker 12: Industrial average up three hundred and twenty three points, arise
Speaker 12: about eight tenths of a percent, the S and P
Speaker 12: five hundred and fifty three points higher, That is a
Speaker 12: nine tenths of a percent right now. All eleven major
Speaker 12: industry groups in the S and P five hundred are higher.
Speaker 12: The NASTAC one hunter get in the first trades there
Speaker 12: one percent higher, up two hundred and twenty two points.
Speaker 12: Most actively traded in the early going shares of Tesla
Speaker 12: right now four percent higher, followed by Nvidia up just
Speaker 12: about two percent, and Graham Holdings the third most actively
Speaker 12: traded stock that is three percent higher. And that is
Speaker 12: your opening bill report. We check the markets for you
Speaker 12: all day long right here on Bloomberg Radio. I'm John Tucker.
Speaker 12: That is your Bloomberg Business Flash Paul and Tom.
Speaker 2: John Tucker, Thanks so much. Kelly co with this with
Speaker 2: Ruhold's Wealth Management. Kelly, are we in a bull market?
Speaker 2: I just said that, and somebody said a note in
Speaker 2: and said time, it's not a bull market. Kelly Cox,
Speaker 2: Are we in a bull market? Oh?
Speaker 8: Yeah, it's the right person.
Speaker 11: Because I argue with my colleagues about this all the time.
Speaker 11: I take the investor's point of view. I look at
Speaker 11: it on a closing basis, and when it comes to
Speaker 11: when it comes to closing prices, the S and P
Speaker 11: has not yet fallen twenty percent from a high. Now
Speaker 11: you could say intra day that happened, because it did.
Speaker 11: But I still think we're in a bull market. I'm
Speaker 11: not exactly excited and you know, really really optimistic about
Speaker 11: the future, but we are still in a bull market,
Speaker 11: and I think as long as we are, you do
Speaker 11: have to wonder if stocks can climb a wall of
Speaker 11: worry here.
Speaker 4: So, Kelly, what do you think of the are you
Speaker 4: guys trying in your portfolio? Are you trying to structure
Speaker 4: in a slower economy with some of your positioning here,
Speaker 4: or maybe something even worse, or are you just saying,
Speaker 4: you know what, we're going to look through all this
Speaker 4: near term noise and think about the next five to
Speaker 4: ten years.
Speaker 11: Well, we're doing the latter. We're looking through all this noise.
Speaker 10: You know.
Speaker 11: We generally, I kind of go back to what I
Speaker 11: was saying a few minutes ago, how we build portfolios
Speaker 11: aim towards stability and consistency. In a way, those portfolios
Speaker 11: actually do look like the kind of portfolio you want
Speaker 11: in a time like this, when job growth is slowing,
Speaker 11: when the economy is weakening, when there are a lot
Speaker 11: of reasons to be nervous out there. We lean into quality.
Speaker 11: We lean into volume, sorry, not volume value, you know.
Speaker 11: We we try to structure portfolios that can get you
Speaker 11: a consistent rate of return. So right now, we're really
Speaker 11: proud of our international exposure. We're glad international stocks are working,
Speaker 11: and you know, quite frankly, we're glad the stock market
Speaker 11: is working. It's just a time to be very mindful
Speaker 11: of risks and manage those risks.
Speaker 2: And twenty nine points we quote the Dow for Barry
Speaker 2: red Hols just Tesla up to twelve points, make it
Speaker 2: thirteen points. Come off. Let me get that low yesterday.
Speaker 2: I could do this with the Bloomberg Professional Service to
Speaker 2: seventy four, and we're now racking to ninety seven.
Speaker 4: I'm looking at the Internet Circle Internet Group CrCL up
Speaker 4: another eighteen percent today. Stock was up one hundred and
Speaker 4: sixty percent yesterday, and it's IPO. I don't know what
Speaker 4: this signals. I mean, I'd like to think it signals
Speaker 4: the IPO market maybe is better in better shape than
Speaker 4: we thought. CALLI when when you see a stock like
Speaker 4: Circle Internet or just anything but an IPO that trades
Speaker 4: up so much, what do you guys make of that?
Speaker 11: Well, it at least shows the animal spirits are here.
Speaker 11: And I'm again a little confused as to why there
Speaker 11: are such strong animal spirits right now. I mean, maybe
Speaker 11: that's just the resiliency of the retail investor, or, of
Speaker 11: the everyday investor who you know still feels like they're
Speaker 11: at a good place with their finances, job markets weakening.
Speaker 11: But it's it's clearly having it's clearly a little more
Speaker 11: bifurcated than we think. I don't think this lasts very long,
Speaker 11: especially with so much business uncertainty out there, but for
Speaker 11: now the IPO window is open and investors are liking it.
Speaker 5: Kelly, Thank you.
Speaker 2: Kelly Cox has short notice the real Who's Wealth Management?
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg Terminal.
Speaker 2: I don't know why, but May and June and maybe
Speaker 2: it's the ferment of the moment of Washington, the war
Speaker 2: in Ukraine. The quality of the writing now across all
Speaker 2: politics is exceptional. I've been remiss in not bringing you
Speaker 2: the great voices out there. Jennifer Harris, out of Wake Forest,
Speaker 2: is one of the great thinkers about getting beyond the
Speaker 2: politics that we used to know. She joins us now
Speaker 2: it is a piercing essay and foreign affairs magazine, the
Speaker 2: post neoliberal imperative. Jennifer honored to have you with us here.
Speaker 2: What's a neoliberal? Define that?
Speaker 13: Sure, it's an imperfect term, essentially referring to the economic
Speaker 13: recipe that has prevailed really across the political spectrum since
Speaker 13: Reagan arrived on the scene. So a deep confidence in
Speaker 13: markets to allocate capital effectively and a corresponding skepticism about
Speaker 13: the ability of government to sort of shape markets that
Speaker 13: you know, catches out in policy terms towards deregulation, you know,
Speaker 13: freer trade, free movement, accounty in.
Speaker 2: The political battle of twenty six twenty eight. I haven't
Speaker 2: said this Yetpon, I'm depressed of thirty two.
Speaker 5: That's Michael Barr.
Speaker 2: We can still be working at.
Speaker 5: Thirty two now, probably will, Okay.
Speaker 2: Jennifer, I'm depressed in the political battle our two presidential generations.
Speaker 2: Is there any understanding of what a new Washington consensus
Speaker 2: looks like?
Speaker 13: I think there is. I mean, I think we've really
Speaker 13: been working on the next script, so to speak, the
Speaker 13: next consensus about what makes for good economic policy. Since
Speaker 13: Trump's arrival on the scene in twenty sixteen, right, he
Speaker 13: upended a whole lot of these sort of nostrums or
Speaker 13: pieces of conventional wisdom about what makes for good economic policy.
Speaker 13: And you saw a fair bit of consensus across both
Speaker 13: right and left on rethinking trade, on a new willingness
Speaker 13: to embrace industrial policy, on you know, sort of a
Speaker 13: different philosophy around antitrust, and I think at least on
Speaker 13: the left and maybe on the right, rethinking monetary policy.
Speaker 13: We saw the Phillips curve essentially break over the last
Speaker 13: couple of years, a sense that we may not have
Speaker 13: to manufactures in order to get inflation down. So, you know,
Speaker 13: I think that you see the seeds of rethinking on
Speaker 13: both right and left. That's what journalists like Dave Wonhard
Speaker 13: at New York Times has called a new centrism. So
Speaker 13: I think you do see signal amidst the beluminous noise,
Speaker 13: let's say, of Washington.
Speaker 4: The President Trump and his followers seemed to have really
Speaker 4: taken over the GOP as we all grew up with.
Speaker 2: It.
Speaker 4: Is that something that can outlive President Trump? Do you think?
Speaker 13: I do you think so anything? It's a generation shift.
Speaker 13: Look at a lot of you know, under forty under
Speaker 13: forty five staffers on the right, organizations like American Compass,
Speaker 13: they are actually out there pushing for revenue increases in
Speaker 13: the current tax fight, which is the last time I checked.
Speaker 13: Not Paul Ryan's a Republican Party and not not anything
Speaker 13: that Grover Norquist is in out there comfortable with. And yeah,
Speaker 13: it's really part of the debate and do I think
Speaker 13: it's going to prevail this time. No, But just the
Speaker 13: fact that we're having that kind of to be on
Speaker 13: writ of center, you know, and as these high stakes
Speaker 13: questions are really getting called, I think is testament to
Speaker 13: the sea change and thinking.
Speaker 2: Jennifer, Thank you so much, Jennifer Harris, writing and Foreign
Speaker 2: Foreign Affairs co chair build US and of course your
Speaker 2: former public city of the service to the nation with
Speaker 2: the National Security at Council.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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