1 00:00:00,200 --> 00:00:02,480 Speaker 1: Get the latest news at the click of a button 2 00:00:02,759 --> 00:00:07,640 Speaker 1: inside your car. The new Bloomberg Business App, now featuring 3 00:00:07,680 --> 00:00:11,520 Speaker 1: Apple CarPlay and Android Auto. Listen to all your favorite 4 00:00:11,600 --> 00:00:16,400 Speaker 1: Bloomberg radio stations and podcasts, including Bloomberg Surveillance, plus the 5 00:00:16,480 --> 00:00:20,480 Speaker 1: latest news, all on your dashboard. It's free and easy 6 00:00:20,520 --> 00:00:24,120 Speaker 1: to use. Just download the Bloomberg Business App on your 7 00:00:24,120 --> 00:00:27,880 Speaker 1: smartphone and connect the phone to your car. The Bloomberg 8 00:00:27,920 --> 00:00:31,960 Speaker 1: Business App now with Apple car Play and Android Auto features. 9 00:00:32,400 --> 00:00:36,000 Speaker 1: Download it free in the Apple Store or on Google Play. 10 00:00:36,479 --> 00:00:45,400 Speaker 1: Presented by our sponsor, Interactive Brokers. This is the Bloomberg 11 00:00:45,440 --> 00:00:49,320 Speaker 1: Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and 12 00:00:49,360 --> 00:00:52,800 Speaker 1: Lisa Abramowitz. Join us each day for insight from the 13 00:00:52,840 --> 00:00:58,040 Speaker 1: best and economics, geopolitics, finance and investment. Subscribe to Bloomberg 14 00:00:58,120 --> 00:01:02,680 Speaker 1: Surveillance on demand on app, Spotify and anywhere you get 15 00:01:02,720 --> 00:01:07,200 Speaker 1: your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, 16 00:01:07,600 --> 00:01:09,200 Speaker 1: and the Bloomberg Business App. 17 00:01:09,319 --> 00:01:11,880 Speaker 2: Jitting a manuel jointed to surround a table Chief Equity 18 00:01:12,680 --> 00:01:15,400 Speaker 2: just over at evercor SI jitting Good mornings here, Good morning. 19 00:01:15,480 --> 00:01:18,319 Speaker 2: Have you been participating in this wonderful, beautiful thing that 20 00:01:18,400 --> 00:01:19,479 Speaker 2: is an eight day winning streak. 21 00:01:19,760 --> 00:01:25,160 Speaker 3: Yeah, we have, you know, several weeks ago we just 22 00:01:25,280 --> 00:01:28,000 Speaker 3: felt that when you backed off of that five percent yield, 23 00:01:28,000 --> 00:01:30,240 Speaker 3: And I know we've been talking about it, but it 24 00:01:30,360 --> 00:01:33,240 Speaker 3: is the fact that in this world now for the 25 00:01:33,319 --> 00:01:35,760 Speaker 3: last year and a half, where stocks and bonds have 26 00:01:35,800 --> 00:01:40,479 Speaker 3: been positive correlated, if bond yields go down, stocks go up, 27 00:01:40,560 --> 00:01:44,960 Speaker 3: and backing off of five percent was huge for the psychology. 28 00:01:45,360 --> 00:01:49,160 Speaker 3: And now we've got this unexpected oil price plunge, which 29 00:01:49,840 --> 00:01:52,040 Speaker 3: is even bigger for Cheryl. 30 00:01:51,760 --> 00:01:53,760 Speaker 2: I'm with you. Those two points yesterday stood out for me. 31 00:01:53,800 --> 00:01:55,720 Speaker 2: Break a four to fifty on a ten year break 32 00:01:55,760 --> 00:01:58,320 Speaker 2: of eighty on Brent crude. At what point do these 33 00:01:58,320 --> 00:02:00,520 Speaker 2: correlations start to break the other way? What brings up 34 00:02:00,560 --> 00:02:01,200 Speaker 2: hot that change? 35 00:02:01,280 --> 00:02:04,720 Speaker 3: Well, we are watching that very closely. And guess what, 36 00:02:05,120 --> 00:02:08,799 Speaker 3: the high frequency data is really important because that chart 37 00:02:08,840 --> 00:02:11,000 Speaker 3: you were talking about a few moments ago, with the 38 00:02:11,080 --> 00:02:14,320 Speaker 3: unemployment rate rising from three to four to three nine 39 00:02:14,600 --> 00:02:17,280 Speaker 3: in the past, when that starts to happen, it tends 40 00:02:17,320 --> 00:02:19,800 Speaker 3: to snowball. But where we're going to get the initial 41 00:02:19,840 --> 00:02:22,760 Speaker 3: read on that is that eight thirty jobless claims number 42 00:02:23,000 --> 00:02:26,040 Speaker 3: starts edging over two hundred and fifty thousand, we get 43 00:02:26,040 --> 00:02:28,880 Speaker 3: a little bit cautious. Three hundred thousand is where we 44 00:02:28,919 --> 00:02:31,040 Speaker 3: know the economy is going to turn down. 45 00:02:31,280 --> 00:02:33,720 Speaker 1: I'm supposed to fold in now A question on Ed 46 00:02:33,800 --> 00:02:38,200 Speaker 1: Hyman's Hicksy and Islm theory and his disinflation theory into 47 00:02:38,200 --> 00:02:40,959 Speaker 1: your stock babble, forget about it. I love the single 48 00:02:41,040 --> 00:02:44,520 Speaker 1: sentence you have which pushes against all that malarkey by 49 00:02:44,560 --> 00:02:47,959 Speaker 1: saying price is paramount. Right now, when you talk to 50 00:02:48,160 --> 00:02:51,320 Speaker 1: Ed Hyman, how does a respond to you telling them 51 00:02:51,720 --> 00:02:54,640 Speaker 1: your economics doesn't matter, price is paramount. 52 00:02:54,680 --> 00:02:57,800 Speaker 3: I'll tell you how five weeks ago Ed Heyman started 53 00:02:57,840 --> 00:03:01,839 Speaker 3: putting out in almost daily the act that gasoline lean 54 00:03:01,919 --> 00:03:07,000 Speaker 3: prices started falling as the conflict was erupting. You already 55 00:03:07,040 --> 00:03:12,639 Speaker 3: had the turn in gasoline prices completely, you know, devoid 56 00:03:12,800 --> 00:03:14,160 Speaker 3: of real sort of. 57 00:03:14,560 --> 00:03:19,360 Speaker 1: Prosperity with Hymen's disinflationary tendency or outright deflation in China. 58 00:03:20,919 --> 00:03:24,760 Speaker 3: Look, if you look at the last fifteen years, you've 59 00:03:24,800 --> 00:03:30,040 Speaker 3: had episodic times of that from again. Obviously the financial 60 00:03:30,080 --> 00:03:32,840 Speaker 3: crisis is one of those times. But ultimately what it 61 00:03:32,880 --> 00:03:36,760 Speaker 3: comes back to again for equity investors, for bond investors. 62 00:03:36,760 --> 00:03:39,080 Speaker 3: First of all, the whole idea of getting a real 63 00:03:39,160 --> 00:03:43,400 Speaker 3: return on money in this world now is actually a 64 00:03:43,480 --> 00:03:47,560 Speaker 3: positive for financial assets. It's a positive for capital allocation, 65 00:03:47,920 --> 00:03:51,360 Speaker 3: and long term, it's a positive for growth. And that's 66 00:03:51,640 --> 00:03:54,200 Speaker 3: you know, that's part of the equity investing mindset. 67 00:03:54,320 --> 00:03:56,240 Speaker 4: Do you need a long term view right now or 68 00:03:56,240 --> 00:03:57,480 Speaker 4: do you just trade the short term. 69 00:03:57,640 --> 00:04:00,520 Speaker 3: It's really difficult to have a long term view because 70 00:04:00,760 --> 00:04:04,040 Speaker 3: of what we're talking about the inflection in the economy 71 00:04:04,680 --> 00:04:08,680 Speaker 3: potentially happening. But if you take the super long term view, 72 00:04:09,000 --> 00:04:11,560 Speaker 3: is that even if you get the recession that Ed's 73 00:04:11,600 --> 00:04:13,280 Speaker 3: thinking we're going to get, that it's going to be 74 00:04:13,320 --> 00:04:16,440 Speaker 3: mild in twenty twenty four. What you're left with is 75 00:04:16,440 --> 00:04:20,160 Speaker 3: a labor market that has rebalanced. What you're left with 76 00:04:20,440 --> 00:04:24,080 Speaker 3: is again a real cost of money, better capital allocation, 77 00:04:24,560 --> 00:04:27,919 Speaker 3: and frankly, we've talked about this before, you have new 78 00:04:27,960 --> 00:04:32,280 Speaker 3: technological developments like generative AI that is going to improve 79 00:04:32,320 --> 00:04:35,840 Speaker 3: the productivity of corporate America over the long term. 80 00:04:35,920 --> 00:04:37,800 Speaker 4: One of the main frustrations of this year was that 81 00:04:37,800 --> 00:04:39,520 Speaker 4: pretty much everything everyone said at the beginning of the 82 00:04:39,560 --> 00:04:42,760 Speaker 4: year has proven to be wrong, including that this would 83 00:04:42,760 --> 00:04:45,800 Speaker 4: be the year that tech stocks would fade more meaningfully 84 00:04:45,880 --> 00:04:48,159 Speaker 4: and you start to see a broadening out in the rally. 85 00:04:48,520 --> 00:04:51,480 Speaker 4: Energy stocks would start to be the true leaders. You 86 00:04:51,760 --> 00:04:54,760 Speaker 4: just actually moved away from an overweight and energy and 87 00:04:54,800 --> 00:04:57,520 Speaker 4: are talking more about generative AI. It seems like the 88 00:04:57,520 --> 00:04:59,839 Speaker 4: theme just keeps on being that the leaders will keep leading. 89 00:05:00,080 --> 00:05:01,920 Speaker 4: Everything else will just have to figure out where they 90 00:05:01,920 --> 00:05:02,240 Speaker 4: fit in. 91 00:05:02,400 --> 00:05:07,720 Speaker 3: Well, look, again, the recession will probably, you know, to 92 00:05:07,760 --> 00:05:10,119 Speaker 3: the extent that it does arrive in the next twelve 93 00:05:10,160 --> 00:05:14,039 Speaker 3: months or so, rationalize some of this, but ultimately what 94 00:05:14,160 --> 00:05:16,800 Speaker 3: it's going to do, and look, part of the consternation 95 00:05:16,839 --> 00:05:20,320 Speaker 3: on equity investors' minds is the fact that the Russell 96 00:05:20,360 --> 00:05:24,360 Speaker 3: two thousand is making new lows. Ultimately, you're going to 97 00:05:24,360 --> 00:05:27,080 Speaker 3: get to a point where there will be an attractive 98 00:05:27,120 --> 00:05:30,320 Speaker 3: price for the other four hundred and ninety three stocks 99 00:05:30,480 --> 00:05:33,400 Speaker 3: away from the Magnificent seven, and you will get to 100 00:05:33,480 --> 00:05:36,719 Speaker 3: an earnings reset. We think that's part of next year's narrative. 101 00:05:36,760 --> 00:05:38,440 Speaker 2: This is the difficult question I think people have got 102 00:05:38,480 --> 00:05:40,880 Speaker 2: to confront at the moment. Do I want to buy 103 00:05:41,440 --> 00:05:43,960 Speaker 2: the recovery to the recession I've not had yet, given 104 00:05:43,960 --> 00:05:45,640 Speaker 2: the damage we've seen in the small camps. You can 105 00:05:45,640 --> 00:05:49,240 Speaker 2: pick up various places to back up the consumer discretionary story. Allines, 106 00:05:49,279 --> 00:05:51,680 Speaker 2: for instance, which have come way off the peak back 107 00:05:51,720 --> 00:05:53,320 Speaker 2: of the summer. Do I want to start picking up 108 00:05:53,320 --> 00:05:55,400 Speaker 2: the pieces going into what could be a slow down 109 00:05:55,400 --> 00:05:55,839 Speaker 2: next year. 110 00:05:56,440 --> 00:05:58,640 Speaker 3: We think you need to be balanced. It's one of 111 00:05:58,680 --> 00:06:02,480 Speaker 3: those things where again, given the lack of visibility into 112 00:06:02,560 --> 00:06:05,440 Speaker 3: next year, what we always say, we've had a very 113 00:06:05,560 --> 00:06:08,479 Speaker 3: nice run in recent weeks, and if you go back 114 00:06:08,520 --> 00:06:10,839 Speaker 3: over the last year, it's been a very nice run 115 00:06:10,880 --> 00:06:13,720 Speaker 3: off the October lows. You need to be comfortable with 116 00:06:13,760 --> 00:06:16,040 Speaker 3: the fact that if the market comes in ten or 117 00:06:16,040 --> 00:06:20,320 Speaker 3: fifteen percent, which it does in any typical year, as 118 00:06:20,360 --> 00:06:23,320 Speaker 3: it did several weeks ago, that you're a buyer of 119 00:06:23,360 --> 00:06:26,279 Speaker 3: the dips and whatever that asset allocation is to you. 120 00:06:26,640 --> 00:06:28,600 Speaker 3: That's the kind of discipline you need to employ. 121 00:06:28,720 --> 00:06:30,800 Speaker 2: Goldman speak to this as well. We've gone through their 122 00:06:30,839 --> 00:06:32,880 Speaker 2: note this morning a few times. It's worth doing it again. 123 00:06:33,000 --> 00:06:36,560 Speaker 2: The hard part's over. More disinflation is in store over 124 00:06:36,600 --> 00:06:39,159 Speaker 2: the next year. On growth, they see limited risk of 125 00:06:39,200 --> 00:06:42,080 Speaker 2: a recession, and they say this on central bank policy. 126 00:06:42,320 --> 00:06:44,960 Speaker 2: Then this is a really really interesting point. An increased 127 00:06:45,000 --> 00:06:49,760 Speaker 2: willingness of central banks to deliver insurance cuts it grows slows. 128 00:06:50,240 --> 00:06:52,760 Speaker 2: Earlier this week, Ben later on this program of E Toro, 129 00:06:53,040 --> 00:06:55,320 Speaker 2: was saying the FED put was back. Lisa and I 130 00:06:55,320 --> 00:06:57,480 Speaker 2: looked at each other and almost spat out our water. 131 00:06:58,160 --> 00:07:01,160 Speaker 2: The FED put is back insures cuts of growth slows. 132 00:07:01,400 --> 00:07:02,799 Speaker 2: Is the old fetch story returning? 133 00:07:03,000 --> 00:07:03,040 Speaker 5: No? 134 00:07:04,160 --> 00:07:04,920 Speaker 2: Why are they wrong? 135 00:07:05,160 --> 00:07:05,240 Speaker 1: No? 136 00:07:07,000 --> 00:07:09,000 Speaker 3: Look, because there is an assumption that there is a 137 00:07:09,040 --> 00:07:14,920 Speaker 3: reflex reaction to a minus GDP quarter. Thankfully we didn't 138 00:07:14,960 --> 00:07:16,880 Speaker 3: see it in twenty twenty two when we had that, 139 00:07:17,000 --> 00:07:20,760 Speaker 3: because if you had interrupted the rate hiking program, you 140 00:07:20,800 --> 00:07:22,760 Speaker 3: wouldn't have gotten to where you are. And you can 141 00:07:23,120 --> 00:07:26,800 Speaker 3: argue both sides of this case, but frankly, for US, 142 00:07:26,960 --> 00:07:30,600 Speaker 3: there is a commitment, given the fact that core PCE 143 00:07:31,120 --> 00:07:34,000 Speaker 3: is still solidly with a three handle, that you just 144 00:07:34,120 --> 00:07:37,280 Speaker 3: can't go down that road unless it really looks like 145 00:07:37,320 --> 00:07:40,200 Speaker 3: there's a severe economic downturn. And we still think there's 146 00:07:40,320 --> 00:07:44,080 Speaker 3: enough savings left over so that won't be the case. 147 00:07:44,200 --> 00:07:47,600 Speaker 2: Judy and awesome as a was Emmanuel have et a court. 148 00:07:51,520 --> 00:07:54,240 Speaker 1: Joining us now to brief off the GOP debate. Last night, 149 00:07:54,760 --> 00:08:00,320 Speaker 1: Gregory Vliate, US policy strategist at AGF Investments. Gregory stood 150 00:08:00,360 --> 00:08:03,640 Speaker 1: on the floor of the GOP convention of two thousand 151 00:08:03,640 --> 00:08:07,720 Speaker 1: and four, and it was a different Republican Party. George 152 00:08:07,720 --> 00:08:12,800 Speaker 1: Bush Junior wanted a more hopeful America. What's going to 153 00:08:12,840 --> 00:08:16,720 Speaker 1: be that slogan this summer for the Republicans? 154 00:08:17,400 --> 00:08:20,480 Speaker 6: Well, I think they'll emphasize the economy. They'll state that 155 00:08:20,520 --> 00:08:23,920 Speaker 6: Biden has not done a good job. Frankly I would disagree, 156 00:08:24,080 --> 00:08:26,400 Speaker 6: but I think that they'll make it more about the 157 00:08:26,440 --> 00:08:29,840 Speaker 6: economy than anything else. The really intriguing issues are abortion 158 00:08:30,120 --> 00:08:35,360 Speaker 6: number one, number two. How much more involved are we 159 00:08:35,440 --> 00:08:37,840 Speaker 6: going to get in Ukraine and Israel? 160 00:08:38,400 --> 00:08:42,520 Speaker 1: What about the idea that they're losing elections, not doing 161 00:08:42,600 --> 00:08:45,280 Speaker 1: as well in certain elections. It going to be the 162 00:08:45,320 --> 00:08:47,760 Speaker 1: mix of that we just saw it can be from 163 00:08:47,880 --> 00:08:52,480 Speaker 1: a year ago, November, etc. How do they start winning again? 164 00:08:53,800 --> 00:08:56,560 Speaker 6: Well, I don't think you talk like Ramaswami. I think 165 00:08:56,559 --> 00:08:59,800 Speaker 6: he talked himself off the boat last night. I don't 166 00:08:59,800 --> 00:09:02,360 Speaker 6: see much of a future for him. Probably not much 167 00:09:02,400 --> 00:09:08,080 Speaker 6: of a future for Tim Scott. So it's dwindling. You've 168 00:09:08,080 --> 00:09:11,960 Speaker 6: really only got three challengers. DeSantis, who was okay last 169 00:09:12,040 --> 00:09:15,800 Speaker 6: night but made a strategic error he didn't mention the 170 00:09:15,840 --> 00:09:18,520 Speaker 6: governor of Iowa had endorsed him. I can't believe he 171 00:09:18,520 --> 00:09:21,240 Speaker 6: didn't talk about that. And then you've got Nicky Haley. 172 00:09:21,280 --> 00:09:23,720 Speaker 6: He'll stick around for a while, maybe Chris Christy, but 173 00:09:23,840 --> 00:09:27,640 Speaker 6: we'll begin at twenty twenty four. I think with just 174 00:09:27,720 --> 00:09:31,880 Speaker 6: two challengers to Trump, that would be DeSantis and Haley. 175 00:09:32,080 --> 00:09:33,880 Speaker 4: Do you think either of them have a chance of 176 00:09:33,920 --> 00:09:38,480 Speaker 4: taking Trump off the ticket? Who would either of them? 177 00:09:38,760 --> 00:09:41,600 Speaker 6: Oh? No, not at all. I mean Trump would have 178 00:09:41,640 --> 00:09:46,120 Speaker 6: to do something really egregious, and he's pretty much filled 179 00:09:46,200 --> 00:09:48,720 Speaker 6: the role on that for the last couple of years. 180 00:09:49,000 --> 00:09:52,160 Speaker 6: So no, I don't see anything, you know, barring a 181 00:09:52,160 --> 00:09:55,320 Speaker 6: health issue, that will keep Trump from being the nominee. 182 00:09:55,480 --> 00:09:58,280 Speaker 4: Meanwhile, President Biden is going to meet with the UAW 183 00:09:58,640 --> 00:10:01,240 Speaker 4: leader today and the there's a real question of what 184 00:10:01,400 --> 00:10:04,720 Speaker 4: he can do to shore up the image of bignomics, 185 00:10:04,920 --> 00:10:07,199 Speaker 4: of what's happened in the economy, which some people are 186 00:10:07,200 --> 00:10:11,080 Speaker 4: saying on paper doesn't look so bad, yet in practice, 187 00:10:11,120 --> 00:10:14,240 Speaker 4: has a lot of people feeling like they want something different. 188 00:10:14,960 --> 00:10:17,840 Speaker 6: Well, it's a good question, Liza. I'm told that within 189 00:10:17,880 --> 00:10:21,199 Speaker 6: the White House, Trump Biden is angry, he feels he's 190 00:10:21,200 --> 00:10:23,240 Speaker 6: done a pretty good job in the economy and gets 191 00:10:23,559 --> 00:10:25,920 Speaker 6: no credit. So he's going to hit the road and 192 00:10:26,000 --> 00:10:29,160 Speaker 6: try to make his case. The problem is an awful 193 00:10:29,200 --> 00:10:32,480 Speaker 6: lot of Americans fear that we're not out of the woods, 194 00:10:32,640 --> 00:10:36,960 Speaker 6: and there's still more inflation threats, food, gasoline still to come. 195 00:10:37,480 --> 00:10:40,320 Speaker 1: Greg Valier one oh one. Folks, this is a great 196 00:10:40,400 --> 00:10:42,480 Speaker 1: course to take in politics. You get it off the 197 00:10:42,520 --> 00:10:46,160 Speaker 1: back of a matchbook. You can take Valier one oh one. Greg, 198 00:10:46,320 --> 00:10:49,680 Speaker 1: Your value one oh one is fiscal issues at the 199 00:10:49,760 --> 00:10:52,920 Speaker 1: day of the election don't matter. Are you telling me 200 00:10:52,960 --> 00:10:56,280 Speaker 1: the debt and the deficit don't matter the first Tuesday 201 00:10:56,320 --> 00:10:57,520 Speaker 1: of November. 202 00:10:57,920 --> 00:11:00,760 Speaker 6: Well, when you look at net inter cost, you look 203 00:11:00,800 --> 00:11:04,360 Speaker 6: at borrowing costs, this is becoming a major crisis for 204 00:11:04,400 --> 00:11:07,880 Speaker 6: the bond market, and there's no mood in Congress whatsoever 205 00:11:08,240 --> 00:11:12,240 Speaker 6: to dramatically cut the deficit. However, I think that once 206 00:11:12,280 --> 00:11:15,360 Speaker 6: we get through Labor Day of this coming year, this 207 00:11:15,400 --> 00:11:19,280 Speaker 6: stuff will be irrelevant. I think attitudes harden during the summer. 208 00:11:20,480 --> 00:11:23,600 Speaker 6: If Trump is well ahead, he could pull us out. 209 00:11:23,880 --> 00:11:28,040 Speaker 6: But I have a feeling that Biden will come back. 210 00:11:28,160 --> 00:11:30,320 Speaker 6: I have a feeling that the Democrats all of a 211 00:11:30,320 --> 00:11:33,720 Speaker 6: sudden are motivated because of what happened in Kentucky. 212 00:11:34,040 --> 00:11:36,920 Speaker 1: Is a path of least resistance for the former president. 213 00:11:37,120 --> 00:11:38,600 Speaker 1: Another tax cut. 214 00:11:39,640 --> 00:11:42,200 Speaker 6: That's going to be on the agenda. You're absolutely right, Tom, 215 00:11:42,559 --> 00:11:46,280 Speaker 6: and I think with the Senate probably flipping, in the 216 00:11:46,280 --> 00:11:50,040 Speaker 6: House probably flipping, you're going to have a climate that 217 00:11:50,160 --> 00:11:53,080 Speaker 6: will be ripe for a huge argument on whether we 218 00:11:53,200 --> 00:11:56,600 Speaker 6: extend the Trump tax cuts. I think we will. I 219 00:11:56,600 --> 00:11:59,280 Speaker 6: think Trump will talk about tax cutting even though the 220 00:11:59,320 --> 00:12:00,920 Speaker 6: deficit is enormous. 221 00:12:01,400 --> 00:12:03,800 Speaker 4: Greg, I have to wonder whether this time is different. 222 00:12:03,920 --> 00:12:06,040 Speaker 4: A lot of people come on the show. We'll say 223 00:12:06,200 --> 00:12:09,040 Speaker 4: dysfunction in Washington, DC is the reason why yields have 224 00:12:09,040 --> 00:12:11,160 Speaker 4: been flipping and flopping and going all over the place, 225 00:12:11,480 --> 00:12:13,679 Speaker 4: and then they talk about a potential government shutdown and. 226 00:12:13,600 --> 00:12:14,720 Speaker 7: Say markets won't care. 227 00:12:15,280 --> 00:12:18,640 Speaker 4: Have we reached the point where market dysfunction is going 228 00:12:18,679 --> 00:12:21,560 Speaker 4: to result from political dysfunction in DC in a more 229 00:12:21,600 --> 00:12:22,280 Speaker 4: material way. 230 00:12:23,000 --> 00:12:26,800 Speaker 6: Well, we're going to see probably another alleged crisis on 231 00:12:26,880 --> 00:12:29,760 Speaker 6: November seventeenth if there's no budget. I don't think the 232 00:12:29,800 --> 00:12:32,480 Speaker 6: markets will be all that concerned about it. I do 233 00:12:32,559 --> 00:12:36,000 Speaker 6: worry about the credit agencies, you know, fitch S and 234 00:12:36,080 --> 00:12:40,040 Speaker 6: p downgrading US debt, not just because of the size 235 00:12:40,040 --> 00:12:43,440 Speaker 6: of our debt, but because things are so dysfunctional in 236 00:12:43,480 --> 00:12:44,280 Speaker 6: getting a budget. 237 00:12:44,800 --> 00:12:47,160 Speaker 2: Great to catch up, Greg, appreciate your input. Greg Vally. 238 00:12:47,160 --> 00:13:00,640 Speaker 2: THEFJEFF investment's gone into next year, as Ed. 239 00:13:00,679 --> 00:13:03,920 Speaker 1: Marangi and Emmanuel. So are you a confirmed bull? 240 00:13:04,000 --> 00:13:04,360 Speaker 5: Cameron? 241 00:13:04,920 --> 00:13:07,640 Speaker 8: I think that given the setup into your end, we 242 00:13:07,760 --> 00:13:11,319 Speaker 8: can expect some kind of Santa claus rally just because 243 00:13:11,520 --> 00:13:14,080 Speaker 8: of tax loss dynamics into the end of the year. 244 00:13:14,559 --> 00:13:17,480 Speaker 8: The largest weights in the index are up the most 245 00:13:17,559 --> 00:13:20,240 Speaker 8: this year, which means that you don't have eager sellers 246 00:13:20,280 --> 00:13:23,920 Speaker 8: to recognize tax games. This is very different than last year, 247 00:13:23,960 --> 00:13:25,720 Speaker 8: where the largest weights in the index were down a 248 00:13:25,720 --> 00:13:28,760 Speaker 8: lot people sold them and you effectively puked into the 249 00:13:28,840 --> 00:13:32,319 Speaker 8: end of the year. What it's the proverbial puke into 250 00:13:32,320 --> 00:13:32,920 Speaker 8: the end of the year? 251 00:13:33,040 --> 00:13:36,160 Speaker 1: Okay, thank you? Can we say that on radio? We 252 00:13:36,320 --> 00:13:41,840 Speaker 1: just did, Cameron seriously our Warner Brothers discovery yesterday. Puke 253 00:13:41,960 --> 00:13:45,000 Speaker 1: as you call it. Okay, how does that handle by 254 00:13:45,040 --> 00:13:45,880 Speaker 1: tax saw selling? 255 00:13:46,400 --> 00:13:48,840 Speaker 8: Well? I think that it will magnify as we go 256 00:13:48,920 --> 00:13:50,400 Speaker 8: into the end of the year. You look at the 257 00:13:50,440 --> 00:13:53,280 Speaker 8: areas that are down the most. This is small caps, 258 00:13:53,320 --> 00:13:56,600 Speaker 8: This is cyclicals, This is healthcare some of your defensives. 259 00:13:56,760 --> 00:13:59,200 Speaker 8: These are the areas where people are looking for tax 260 00:13:59,240 --> 00:14:02,400 Speaker 8: sace harvesting opportunities. The key point though, is that they're 261 00:14:02,440 --> 00:14:04,880 Speaker 8: smaller weights in the index or they're not part of 262 00:14:04,920 --> 00:14:05,600 Speaker 8: the index. 263 00:14:05,800 --> 00:14:07,120 Speaker 7: So when we just look. 264 00:14:07,000 --> 00:14:09,080 Speaker 8: At the S and P five hundred, that could be 265 00:14:09,120 --> 00:14:10,800 Speaker 8: something that supports it into end year. 266 00:14:11,040 --> 00:14:12,720 Speaker 2: So help me here. Am I buying the index the 267 00:14:12,800 --> 00:14:14,400 Speaker 2: S and P five hundred? And am I looking for 268 00:14:14,440 --> 00:14:17,320 Speaker 2: buying opportunities in small camps? The financials, things that have struggled? 269 00:14:17,320 --> 00:14:17,880 Speaker 2: What am I doing? 270 00:14:18,120 --> 00:14:20,280 Speaker 8: I think that you have to look for opportunities and 271 00:14:20,320 --> 00:14:22,680 Speaker 8: things that have struggled as you go into twenty twenty four, 272 00:14:23,040 --> 00:14:26,360 Speaker 8: because we know that pain trades usually are reversal trades 273 00:14:26,360 --> 00:14:29,600 Speaker 8: in leadership and just at the point where everybody throws 274 00:14:29,600 --> 00:14:31,840 Speaker 8: in the towel and says, well, you can't own anything 275 00:14:31,840 --> 00:14:34,360 Speaker 8: but the magnificent seven. These are the names that give 276 00:14:34,400 --> 00:14:36,240 Speaker 8: you optionality on AI and they have. 277 00:14:36,240 --> 00:14:37,360 Speaker 7: The best earnings growth. 278 00:14:37,440 --> 00:14:41,320 Speaker 8: Everybody crowds into them, that's typically the moment that that's 279 00:14:41,360 --> 00:14:43,200 Speaker 8: when they start to lag. And so I think we 280 00:14:43,320 --> 00:14:46,720 Speaker 8: have to have the imagination that other things could do 281 00:14:46,840 --> 00:14:49,360 Speaker 8: well in twenty twenty four. Other than just the narrow 282 00:14:49,440 --> 00:14:51,040 Speaker 8: leadership that we've had this year. 283 00:14:50,880 --> 00:14:53,560 Speaker 2: The Tilson Slock of Apollo's writing questions for us this morning. 284 00:14:53,600 --> 00:14:56,280 Speaker 2: This is the question he's asking in its most recent note. 285 00:14:56,560 --> 00:14:59,520 Speaker 2: Everyone who's bullish on equities and lower rated credit should 286 00:14:59,520 --> 00:15:01,920 Speaker 2: ask them sound where they think the labor market will 287 00:15:01,960 --> 00:15:04,200 Speaker 2: be in three months. With the Fed on hold and 288 00:15:04,200 --> 00:15:07,200 Speaker 2: not showing any signs of cutting anytime soon, what's your 289 00:15:07,240 --> 00:15:08,920 Speaker 2: labor market bed With that in mind. 290 00:15:09,240 --> 00:15:11,840 Speaker 8: We are having the ultimate debate is if we're seeing 291 00:15:11,880 --> 00:15:15,520 Speaker 8: normalization or we're seeing weakening. And the challenge is that 292 00:15:15,560 --> 00:15:18,760 Speaker 8: normalization is usually the gateway drug two weakening, meaning that 293 00:15:18,800 --> 00:15:20,920 Speaker 8: you see a little easing that turns into a lot 294 00:15:20,920 --> 00:15:24,840 Speaker 8: of easing. But we're not yet seeing definitive data yet 295 00:15:24,920 --> 00:15:27,760 Speaker 8: to say that the uplift we've had in unemployment is 296 00:15:27,800 --> 00:15:30,720 Speaker 8: going to barrel higher. The key thing to remember, though, 297 00:15:30,760 --> 00:15:34,120 Speaker 8: the Fed itself in its SEP the Summary Economic Projections 298 00:15:34,200 --> 00:15:37,320 Speaker 8: has unemployment going to four point one percent next year 299 00:15:37,800 --> 00:15:41,200 Speaker 8: and they're not forecasting a recession. So that's going to 300 00:15:41,240 --> 00:15:43,000 Speaker 8: be a key question of if we get that four 301 00:15:43,040 --> 00:15:46,160 Speaker 8: point one percent, does that justify them easing policy? 302 00:15:46,360 --> 00:15:48,600 Speaker 4: Is it okay to sort of say we don't care 303 00:15:48,680 --> 00:15:52,320 Speaker 4: for now. Down the line, whatever happens will happen. In 304 00:15:52,360 --> 00:15:53,800 Speaker 4: the meantime, we can dance in the head of a 305 00:15:53,840 --> 00:15:57,440 Speaker 4: pin with oil prices coming off, yield coming lower, and 306 00:15:57,680 --> 00:15:59,280 Speaker 4: risk appetite still available. 307 00:15:59,560 --> 00:16:01,960 Speaker 8: Yeah, because if we think going into CPI next week, 308 00:16:02,040 --> 00:16:05,000 Speaker 8: remember that gasoline prices are down ten percent over the 309 00:16:05,040 --> 00:16:07,800 Speaker 8: month of October. That's very different over the summer months 310 00:16:07,840 --> 00:16:10,360 Speaker 8: where gas prices were up a lot. It pinched consumer 311 00:16:10,400 --> 00:16:13,200 Speaker 8: spending maybe a little bit at the margin. So that 312 00:16:13,320 --> 00:16:17,200 Speaker 8: does create this beneficial environment. But I think it's important 313 00:16:17,240 --> 00:16:20,960 Speaker 8: to remember twenty twenty two, we priced in the earnings recession. 314 00:16:21,000 --> 00:16:23,520 Speaker 8: In twenty twenty three, twenty three, we priced in the 315 00:16:23,560 --> 00:16:26,360 Speaker 8: earnings recovery in twenty four. What are we going to 316 00:16:26,360 --> 00:16:28,480 Speaker 8: price in twenty twenty four as we looked at twenty 317 00:16:28,520 --> 00:16:31,760 Speaker 8: twenty five, are we still confident that this entire economic 318 00:16:32,480 --> 00:16:36,080 Speaker 8: setup can remain very strong, that unemployment won't be an issue, 319 00:16:36,080 --> 00:16:37,600 Speaker 8: consumer spending can remain. 320 00:16:37,440 --> 00:16:40,600 Speaker 4: Robust Given the lack of certainty around some of the outcomes, 321 00:16:40,640 --> 00:16:44,200 Speaker 4: the potential outcomes with the economy, How nimble are you 322 00:16:44,240 --> 00:16:46,840 Speaker 4: remaining How are you remaining nimble? To be able to 323 00:16:46,840 --> 00:16:47,600 Speaker 4: adjust quickly. 324 00:16:47,800 --> 00:16:50,600 Speaker 8: I think we have to remain completely nimble. We saw 325 00:16:50,600 --> 00:16:52,800 Speaker 8: that over thet last couple of weeks where we went 326 00:16:52,840 --> 00:16:56,560 Speaker 8: from deeply oversold to deeply over to getting close to 327 00:16:56,600 --> 00:17:00,760 Speaker 8: being overbought. It means that technicals become really important. We 328 00:17:00,840 --> 00:17:03,880 Speaker 8: can't get too lodged into narratives because narratives would have 329 00:17:03,920 --> 00:17:06,280 Speaker 8: told you everything's ending back a couple of weeks ago. 330 00:17:06,359 --> 00:17:06,920 Speaker 7: Be scared. 331 00:17:07,280 --> 00:17:10,200 Speaker 8: Now the narratives are saying everything is fantastic. The thing 332 00:17:10,320 --> 00:17:12,600 Speaker 8: is that we are at resistance when we look at 333 00:17:12,600 --> 00:17:15,600 Speaker 8: technical levels forty four hundred very important for the s 334 00:17:15,640 --> 00:17:18,080 Speaker 8: and P five hundred four and a half percent very 335 00:17:18,080 --> 00:17:22,120 Speaker 8: important support for the tenure. How we interact with those 336 00:17:22,200 --> 00:17:24,919 Speaker 8: resistance and support levels will be very indicative of the 337 00:17:24,960 --> 00:17:25,919 Speaker 8: next couple of months. 338 00:17:26,040 --> 00:17:29,080 Speaker 1: Speak to the people who listened to you and said, Okay, 339 00:17:29,119 --> 00:17:31,240 Speaker 1: I'm really nervous, but I'm going to participate in this 340 00:17:31,400 --> 00:17:35,800 Speaker 1: market and they own tech which literally on an hourly basis, 341 00:17:36,160 --> 00:17:39,159 Speaker 1: has a bid right now. What's the character of that 342 00:17:39,359 --> 00:17:41,560 Speaker 1: bid on the Magnificent seven. 343 00:17:41,960 --> 00:17:45,280 Speaker 8: Well, it's extraordinarily strong. But then think about the difference 344 00:17:45,320 --> 00:17:48,640 Speaker 8: in the setup going into twenty twenty two Magnificent seven 345 00:17:48,720 --> 00:17:51,480 Speaker 8: earnings had been cut by about twenty percent over the 346 00:17:51,480 --> 00:17:54,240 Speaker 8: course of the year. Now going into twenty twenty three, 347 00:17:54,280 --> 00:17:57,239 Speaker 8: over the course of twenty three, Magnificent seven earnings had 348 00:17:57,280 --> 00:18:01,120 Speaker 8: been revised higher by sixty seventy percent sent on average 349 00:18:01,440 --> 00:18:04,120 Speaker 8: because of the better growth that they've had. So it's 350 00:18:04,160 --> 00:18:06,800 Speaker 8: a much higher bar and I think that's where the 351 00:18:06,840 --> 00:18:09,800 Speaker 8: discipline is is not trying to extrapolate too much of 352 00:18:09,800 --> 00:18:13,040 Speaker 8: the experience of twenty three, get too crowded, and instead 353 00:18:13,040 --> 00:18:15,919 Speaker 8: look for opportunities and areas that might be more left behind. 354 00:18:16,080 --> 00:18:18,480 Speaker 4: You've been talking, Cameron about how difficult it is to 355 00:18:18,480 --> 00:18:19,600 Speaker 4: follow the mood because it. 356 00:18:19,600 --> 00:18:22,520 Speaker 7: Swings so massively from week to week. 357 00:18:22,600 --> 00:18:25,360 Speaker 4: How much has the move that we've seen in yields 358 00:18:25,560 --> 00:18:29,040 Speaker 4: underpinned your conviction that you can lean into the rally 359 00:18:29,080 --> 00:18:30,000 Speaker 4: heading into your end. 360 00:18:30,720 --> 00:18:32,119 Speaker 7: It certainly has helped. 361 00:18:32,240 --> 00:18:34,840 Speaker 8: We've seen it play out in the valuation and now 362 00:18:34,920 --> 00:18:38,480 Speaker 8: valuations are back to about eighteen and a half time's earnings. 363 00:18:38,720 --> 00:18:42,280 Speaker 8: The question is is that the right valuation even given 364 00:18:42,280 --> 00:18:44,600 Speaker 8: where yields are at four and a half percent, where 365 00:18:44,600 --> 00:18:48,000 Speaker 8: that equity risk premium is The challenge with valuations though, 366 00:18:48,040 --> 00:18:50,960 Speaker 8: is they are terrible timing tools and that they have 367 00:18:51,160 --> 00:18:52,600 Speaker 8: no predictive power. 368 00:18:52,320 --> 00:18:53,800 Speaker 7: On a one year forward basis. 369 00:18:54,040 --> 00:18:55,760 Speaker 8: So we can look at the market and say, hey, 370 00:18:55,760 --> 00:18:58,960 Speaker 8: it's expensive here, expensive there, but that may not actually 371 00:18:59,040 --> 00:19:02,560 Speaker 8: show up in price action for two, three, four years. 372 00:19:02,800 --> 00:19:05,600 Speaker 8: And that's where that discipline of not chasing very high 373 00:19:05,680 --> 00:19:08,679 Speaker 8: valuations comes in. When you have a longer holding period, you. 374 00:19:08,720 --> 00:19:12,040 Speaker 2: Go breaking news TK on donuts? Is that where you 375 00:19:12,040 --> 00:19:14,000 Speaker 2: want to go? DONI plural don't I? 376 00:19:14,280 --> 00:19:18,280 Speaker 1: Yeah? Yeah, longer going far away the way a prime 377 00:19:18,320 --> 00:19:21,920 Speaker 1: broker attracted a hedge fund. We can get you shares 378 00:19:21,960 --> 00:19:26,000 Speaker 1: of krispy Kreme short. There's a in the East Coast, 379 00:19:26,040 --> 00:19:29,000 Speaker 1: particularly in the krispy Kreme's more southern thing, and they're 380 00:19:29,040 --> 00:19:32,080 Speaker 1: a different don I than what you get from Dunkin Donuts, 381 00:19:32,720 --> 00:19:35,359 Speaker 1: which is, you know, there's cultures here. John, It's like 382 00:19:35,440 --> 00:19:39,200 Speaker 1: it's like Greg's, but it's like American. Okay, all of 383 00:19:39,280 --> 00:19:42,600 Speaker 1: a sudden, krispy Kreme nice video on radio. You are 384 00:19:42,680 --> 00:19:46,000 Speaker 1: missing the making of the Magnificent. And the answer here 385 00:19:46,160 --> 00:19:49,640 Speaker 1: is krispy Kreme is looking for a partnership with McDonald's. 386 00:19:49,680 --> 00:19:51,760 Speaker 1: John Tower out with this and it's a mixed story 387 00:19:51,800 --> 00:19:54,480 Speaker 1: of Ibada out there. But John Tower, a city group 388 00:19:54,520 --> 00:19:58,040 Speaker 1: says first bite on d n ut. It's a McDonald's 389 00:19:58,040 --> 00:19:59,160 Speaker 1: partnership that we may see. 390 00:19:59,200 --> 00:20:01,040 Speaker 2: Do you know what you don't know? And I know 391 00:20:01,119 --> 00:20:03,159 Speaker 2: this story already because Bramo shared it with me before 392 00:20:03,560 --> 00:20:07,639 Speaker 2: Bramo breaking into the news industry and Fargo years and 393 00:20:07,720 --> 00:20:14,480 Speaker 2: years ago for the first Crispy Kreme shop tre Tree story, 394 00:20:14,600 --> 00:20:16,120 Speaker 2: true story. 395 00:20:16,200 --> 00:20:18,080 Speaker 7: I covered it and people lined up. 396 00:20:18,320 --> 00:20:21,439 Speaker 4: They camped out overnight to get the first Krispy krama. 397 00:20:21,480 --> 00:20:23,280 Speaker 2: I went to interview that. You can't imagine that Bramo 398 00:20:23,400 --> 00:20:29,920 Speaker 2: was what Bradma was like in local news, right, just 399 00:20:29,960 --> 00:20:30,720 Speaker 2: get into a fluff. 400 00:20:31,440 --> 00:20:32,880 Speaker 7: It was like, it's an investive piece. 401 00:20:32,920 --> 00:20:33,600 Speaker 2: What are they doing with that? 402 00:20:33,680 --> 00:20:35,440 Speaker 7: Money? 403 00:20:35,640 --> 00:20:36,640 Speaker 2: Is unreal? 404 00:20:36,920 --> 00:20:40,439 Speaker 1: Bramo and Farco, Yeah, I'm enough of a dunkin donut, 405 00:20:40,480 --> 00:20:43,440 Speaker 1: which Krispy Kreme is just two sugary and sweet. Like 406 00:20:43,680 --> 00:20:46,679 Speaker 1: camera doesn't help us out here, Krispy Kreamer duncan, he's. 407 00:20:46,600 --> 00:20:47,399 Speaker 7: Never had a donut. 408 00:20:47,440 --> 00:20:50,760 Speaker 8: There is nothing better than a hot, fresh Krispy Kreme 409 00:20:50,840 --> 00:20:53,080 Speaker 8: donut straight from the friar. 410 00:20:53,880 --> 00:20:54,760 Speaker 7: Nothing better, all right? 411 00:20:54,880 --> 00:20:55,639 Speaker 2: The scripting at me. 412 00:20:56,040 --> 00:20:58,520 Speaker 1: In the control room shot there. Please let's make sure 413 00:20:58,720 --> 00:21:01,480 Speaker 1: we're running at nine o'clock today. Look for Cameron Dawson 414 00:21:01,760 --> 00:21:08,720 Speaker 1: had Krispy Creekdnie. What you need to know is it's 415 00:21:08,800 --> 00:21:13,000 Speaker 1: April of twenty eleven. There was a show then Game 416 00:21:13,040 --> 00:21:16,879 Speaker 1: of Thrones Winter Is Coming was the first episode. And 417 00:21:16,920 --> 00:21:20,280 Speaker 1: that's where we are right now. With the screaming success 418 00:21:20,320 --> 00:21:25,240 Speaker 1: in days of Blue Eye Samurai on Netflix. I'm watching it. 419 00:21:25,560 --> 00:21:28,800 Speaker 1: I can't say enough about the shocking beauty of it. 420 00:21:28,800 --> 00:21:32,920 Speaker 1: It is overwhelming, how it is game changing for streaming. 421 00:21:33,359 --> 00:21:37,400 Speaker 1: Keitha Raganathan knows this. She's US media analyst at Bloomberg Intelligence. 422 00:21:37,840 --> 00:21:40,879 Speaker 1: And I would suggest Disney knows this as well. Githa 423 00:21:41,080 --> 00:21:44,080 Speaker 1: boyd A's Disney need a Blue Eye Samurai. 424 00:21:45,800 --> 00:21:48,320 Speaker 5: They certainly do. And that's one thing Tom that Bob 425 00:21:48,400 --> 00:21:51,840 Speaker 5: Iger really emphasized yesterday. He said he is looking to 426 00:21:52,040 --> 00:21:55,760 Speaker 5: reinvent the studio. Those are the words he used, and 427 00:21:55,800 --> 00:21:59,720 Speaker 5: he really emphasized quality over quantity. So you spoke about 428 00:21:59,720 --> 00:22:02,600 Speaker 5: how spectacular Blue Eyed summariz that's exactly what Disney is 429 00:22:02,640 --> 00:22:05,800 Speaker 5: going to go after. You know, they talked about, you know, 430 00:22:05,840 --> 00:22:08,960 Speaker 5: the studio having some kind of franchise fatigue. Too many 431 00:22:09,000 --> 00:22:12,920 Speaker 5: TV series created for the streaming service. They're really kind 432 00:22:12,920 --> 00:22:15,760 Speaker 5: of streaming down or cutting down, I would say, pairing 433 00:22:15,840 --> 00:22:18,479 Speaker 5: down on a lot of the content costs. You know, 434 00:22:18,640 --> 00:22:21,399 Speaker 5: Lisa was talking about where those savings are going to 435 00:22:21,440 --> 00:22:24,119 Speaker 5: come from, a lot of that is them just really 436 00:22:24,160 --> 00:22:26,520 Speaker 5: cutting down on content costs. So they took down content 437 00:22:26,520 --> 00:22:29,600 Speaker 5: costs from thirty billion to twenty seven billion. For fiscal 438 00:22:29,600 --> 00:22:32,880 Speaker 5: twenty twenty three, they're taking that down further to twenty 439 00:22:32,880 --> 00:22:35,800 Speaker 5: five billion, and that is where you get that big, 440 00:22:35,880 --> 00:22:39,080 Speaker 5: big free cash flow number for them as well. Eight 441 00:22:39,119 --> 00:22:41,439 Speaker 5: billion dollars is what they're projecting for twenty twenty four, 442 00:22:41,480 --> 00:22:43,240 Speaker 5: or sixty percent increase from this year. 443 00:22:43,320 --> 00:22:45,639 Speaker 1: Now I get it, it's anime, it's animation, but the 444 00:22:45,680 --> 00:22:49,040 Speaker 1: basic idea is blue Eyed Samurai is is non diversity 445 00:22:49,520 --> 00:22:53,000 Speaker 1: as we could get in twenty twenty three. Is Disney 446 00:22:53,040 --> 00:22:55,919 Speaker 1: moving on from the tone and temperament of the last 447 00:22:55,920 --> 00:22:59,200 Speaker 1: three or four years. Is Eiger going back to something 448 00:22:59,560 --> 00:23:01,199 Speaker 1: or new to something different? 449 00:23:02,080 --> 00:23:04,679 Speaker 5: I think it's a it's a combination of everything, a 450 00:23:04,720 --> 00:23:06,760 Speaker 5: tom because you know, he needs to go back to 451 00:23:06,800 --> 00:23:09,080 Speaker 5: the drawing board. He knows that there hasn't really been 452 00:23:09,119 --> 00:23:13,520 Speaker 5: a new Star Wars or a lucasfilm movie since twenty nineteen. Obviously, 453 00:23:13,560 --> 00:23:16,360 Speaker 5: the Marvels is in its next kind of iteration, if 454 00:23:16,359 --> 00:23:18,040 Speaker 5: you will. So there's a lot of things that he 455 00:23:18,040 --> 00:23:19,879 Speaker 5: needs to do. But the biggest thing I think for 456 00:23:19,920 --> 00:23:22,000 Speaker 5: them for the Disney studio, and this has kind of 457 00:23:22,000 --> 00:23:24,520 Speaker 5: been a little bit shocking. And you bring up animation, 458 00:23:24,560 --> 00:23:26,439 Speaker 5: and that's a really good point because a lot of 459 00:23:26,480 --> 00:23:30,879 Speaker 5: their recent animated movies have actually not performed as well 460 00:23:30,920 --> 00:23:32,679 Speaker 5: as you know, some of us would have expected. And 461 00:23:32,720 --> 00:23:34,760 Speaker 5: the Pixar has kind of been, you know, has had 462 00:23:34,840 --> 00:23:37,080 Speaker 5: kind of this string of misfires, if you will. And 463 00:23:37,119 --> 00:23:39,560 Speaker 5: the studio that is really kind of giving them a 464 00:23:39,680 --> 00:23:43,240 Speaker 5: run for the money is Universal with Illumination. We had, 465 00:23:43,359 --> 00:23:46,080 Speaker 5: you know, you have Super Mario, you had Minions, all 466 00:23:46,119 --> 00:23:49,280 Speaker 5: of these animated movies from Universal doing really really well. 467 00:23:49,320 --> 00:23:51,439 Speaker 5: So Disney obviously going back to the drawing board and 468 00:23:51,560 --> 00:23:54,880 Speaker 5: kind of doing a lot of rethinking and as Bob 469 00:23:54,880 --> 00:23:57,480 Speaker 5: Iger said, reinventing the whole franchise. 470 00:23:57,560 --> 00:23:59,720 Speaker 2: If Bob Biker was the movie is this nightmare the 471 00:23:59,720 --> 00:24:03,760 Speaker 2: same quote, that's that's a great knocking. 472 00:24:05,280 --> 00:24:08,200 Speaker 5: Well. I mean, he tried his best. And if there 473 00:24:08,240 --> 00:24:10,160 Speaker 5: is you know, any person for the job, any person 474 00:24:10,200 --> 00:24:13,040 Speaker 5: who can actually fix and rebuild Disney. I think it 475 00:24:13,080 --> 00:24:15,280 Speaker 5: definitely is Bob Biger and he, you know, kind of 476 00:24:15,320 --> 00:24:18,879 Speaker 5: delivered signature Bob Biger kind of news yesterday. You know, 477 00:24:18,960 --> 00:24:21,280 Speaker 5: lots of good news, lots of nuggets of you know, 478 00:24:21,800 --> 00:24:25,720 Speaker 5: lots of nuggets of good good, you know, optimistic news 479 00:24:25,720 --> 00:24:28,080 Speaker 5: for investors to kind of hang on to. Obviously, there 480 00:24:28,160 --> 00:24:30,320 Speaker 5: is a lot of work that remains to be done, 481 00:24:30,720 --> 00:24:33,320 Speaker 5: but we do know that there are some real growth 482 00:24:33,720 --> 00:24:36,320 Speaker 5: drivers for Disney. Whether it's the parks business that is 483 00:24:36,400 --> 00:24:39,920 Speaker 5: seventy percent of Disney's operating income, you know, throwing out 484 00:24:39,920 --> 00:24:43,520 Speaker 5: about ten billion dollars in operating profits and cash flow. 485 00:24:44,160 --> 00:24:46,800 Speaker 5: So that definitely is is a huge growth pillar for 486 00:24:46,880 --> 00:24:48,919 Speaker 5: the company. And then of course it is streaming and 487 00:24:48,960 --> 00:24:51,320 Speaker 5: how they're kind of going to manage that whole business. 488 00:24:51,320 --> 00:24:52,680 Speaker 5: You know, we know that they're in the process of 489 00:24:52,720 --> 00:24:55,880 Speaker 5: consolidating Hulu. You know, the big question is how they're 490 00:24:55,880 --> 00:24:58,879 Speaker 5: going to manage the esp and transition. And you know, 491 00:24:58,920 --> 00:25:02,200 Speaker 5: whether that then that Disney bundle, the streaming bundle, really 492 00:25:02,240 --> 00:25:06,120 Speaker 5: becomes the competitor, a true competitor to Netflix. 493 00:25:06,359 --> 00:25:10,760 Speaker 4: Is rebuilding a euphemism for shutting it down in terms 494 00:25:10,800 --> 00:25:15,080 Speaker 4: of streamlining certain businesses and getting off selling the rest 495 00:25:15,080 --> 00:25:15,360 Speaker 4: of it. 496 00:25:16,760 --> 00:25:19,680 Speaker 5: Yeah, so he seemed to actually walk back a little 497 00:25:19,680 --> 00:25:22,320 Speaker 5: bit of you know, the linear TV commentary. I know 498 00:25:22,359 --> 00:25:24,919 Speaker 5: we've talked a lot about ABC and some of the 499 00:25:24,960 --> 00:25:28,720 Speaker 5: other networks kind of being up for sale, but he 500 00:25:28,800 --> 00:25:31,920 Speaker 5: also did say that there is a huge cost opportunity 501 00:25:31,960 --> 00:25:34,439 Speaker 5: when it comes to you know, those linear networks, and 502 00:25:34,440 --> 00:25:36,760 Speaker 5: so they've actually, you know, the Charter deal that they 503 00:25:36,800 --> 00:25:40,080 Speaker 5: recently inked was was kind of a catalyst for them 504 00:25:40,480 --> 00:25:43,439 Speaker 5: kind of you know, shutting down a lot of you know, 505 00:25:43,480 --> 00:25:46,359 Speaker 5: the smaller networks networks that they are that they don't 506 00:25:46,400 --> 00:25:48,600 Speaker 5: consider core, and I think that's what they're going to do. 507 00:25:48,640 --> 00:25:51,919 Speaker 5: They are definitely going to streamline the business. You're absolutely right, Lisa. 508 00:25:52,200 --> 00:25:54,920 Speaker 5: I'm not sure when or how the sale is necessarily 509 00:25:54,960 --> 00:25:57,400 Speaker 5: going to happen, but he did Eigers seem to suggest 510 00:25:57,400 --> 00:26:00,760 Speaker 5: that even if a sale doesn't happen right away, there 511 00:26:00,800 --> 00:26:02,760 Speaker 5: are a lot of synergies and there are a lot 512 00:26:02,760 --> 00:26:06,359 Speaker 5: of cost efficiencies that they can hopefully extract over the 513 00:26:06,400 --> 00:26:07,080 Speaker 5: next few months. 514 00:26:07,119 --> 00:26:08,800 Speaker 2: Okay, so this one's a tough one to answer, but 515 00:26:08,840 --> 00:26:11,320 Speaker 2: explore the question with us if you can. Tom mentioned 516 00:26:11,520 --> 00:26:14,680 Speaker 2: who's buying. If they're selling, who's buying Where did the 517 00:26:14,680 --> 00:26:16,440 Speaker 2: buyers come from? 518 00:26:17,080 --> 00:26:19,399 Speaker 5: So it could be private equity. I mean we know 519 00:26:19,440 --> 00:26:22,000 Speaker 5: that there have there has been interest from certain parties 520 00:26:22,000 --> 00:26:24,919 Speaker 5: Byron Island, but Byron Allen was one who kind of 521 00:26:24,960 --> 00:26:28,439 Speaker 5: made a bid for for you know, the ABC and 522 00:26:28,480 --> 00:26:32,080 Speaker 5: some of the networks. You know, again, private equity would 523 00:26:32,080 --> 00:26:35,040 Speaker 5: always is interested in, you know, the TV assets because 524 00:26:35,040 --> 00:26:38,000 Speaker 5: they do. Yes, it is an industry that is in 525 00:26:38,080 --> 00:26:39,720 Speaker 5: secular decline, but at the end of the day, it 526 00:26:39,760 --> 00:26:42,440 Speaker 5: does throughout a lot of cash and that is valuable. 527 00:26:43,520 --> 00:26:45,280 Speaker 5: So yeah, again it's a little bit of a wait 528 00:26:45,320 --> 00:26:47,479 Speaker 5: and watch. I mean there have been there has been 529 00:26:47,480 --> 00:26:49,720 Speaker 5: some chatter about whether the leagues would be interested in 530 00:26:49,800 --> 00:26:51,760 Speaker 5: kind of going and getting a broadcast asset. I mean 531 00:26:51,960 --> 00:26:54,960 Speaker 5: broadcast assets like ABC don't come up for sale very often, 532 00:26:55,080 --> 00:26:57,119 Speaker 5: so you know, maybe it is something that that the 533 00:26:57,200 --> 00:27:00,680 Speaker 5: league and a leak can potentially consider for reach interesting. 534 00:27:00,840 --> 00:27:03,760 Speaker 2: Gaitha, appreciate the update. You'll valuable. We appreciate your time. 535 00:27:03,800 --> 00:27:05,520 Speaker 2: Geithor Reconnaz and the have Bloomberg Intelligence. 536 00:27:15,680 --> 00:27:18,000 Speaker 4: Ellen Wall joining us now Senior Fellow at the Atlantic 537 00:27:18,000 --> 00:27:21,320 Speaker 4: Council and author of Saudi Inc. Ellen to that point, 538 00:27:22,440 --> 00:27:25,680 Speaker 4: Saudi's energy minister came out and said, it has nothing 539 00:27:25,720 --> 00:27:28,040 Speaker 4: to do with demand, This is just price manipulation. 540 00:27:28,320 --> 00:27:30,760 Speaker 7: Demand is still very strong. What did you make of that? 541 00:27:31,840 --> 00:27:34,199 Speaker 9: Well, I think that he always has a bone to 542 00:27:34,240 --> 00:27:37,560 Speaker 9: pick with the as he called him, the speculators, So 543 00:27:37,560 --> 00:27:40,959 Speaker 9: I'm not surprised to see him talking about how, you know, 544 00:27:41,000 --> 00:27:43,120 Speaker 9: this is all a financial thing and it's all due 545 00:27:43,119 --> 00:27:47,040 Speaker 9: to speculators and it's not a you know, supply demand issue. 546 00:27:47,400 --> 00:27:50,320 Speaker 9: But I think, you know, obviously there's always you know, 547 00:27:50,359 --> 00:27:52,680 Speaker 9: speculation in the market, and we did see a whole 548 00:27:52,680 --> 00:27:57,800 Speaker 9: lot of fund managers dumping oil off the futures this 549 00:27:57,840 --> 00:27:58,680 Speaker 9: past week. 550 00:27:58,520 --> 00:28:00,159 Speaker 10: So I'm sure he's focused on that. 551 00:28:00,280 --> 00:28:04,439 Speaker 9: But the fact remains that the market is reacting to 552 00:28:04,560 --> 00:28:08,720 Speaker 9: what it thinks is lower demand from China, and whether 553 00:28:08,800 --> 00:28:11,400 Speaker 9: or not that's actually true, I think remains to be seen. 554 00:28:11,440 --> 00:28:14,720 Speaker 9: It's always difficult to gauge what exactly is going on 555 00:28:14,880 --> 00:28:18,440 Speaker 9: in China. What the market's reacting to was news that 556 00:28:19,200 --> 00:28:23,680 Speaker 9: refining margins are soft, and you know, Chinese refineries aren't 557 00:28:23,680 --> 00:28:26,919 Speaker 9: making as much, and so you know they're interpreting that 558 00:28:26,960 --> 00:28:30,359 Speaker 9: as weak demand. Now, how does that translate into whether 559 00:28:30,520 --> 00:28:34,840 Speaker 9: China reduces its imports, and there was some indication that 560 00:28:34,880 --> 00:28:37,880 Speaker 9: they are going to be reducing oil imports. In fact, 561 00:28:37,960 --> 00:28:40,320 Speaker 9: one of the interesting things that we've seen is that 562 00:28:41,560 --> 00:28:46,000 Speaker 9: Iranian oil exports in September and October have been lower 563 00:28:46,200 --> 00:28:48,640 Speaker 9: than they were in August. They hit a big high 564 00:28:48,840 --> 00:28:52,080 Speaker 9: in August, but now we're seeing declines and there's some 565 00:28:52,080 --> 00:28:54,840 Speaker 9: speculation that may be due to the sanctions enforcement, but 566 00:28:55,160 --> 00:28:58,440 Speaker 9: it's much more likely due to declining demand from China. 567 00:28:58,800 --> 00:28:59,560 Speaker 10: And we've got. 568 00:28:59,520 --> 00:29:02,240 Speaker 9: Saudi y A holding a million barrels a day off 569 00:29:02,240 --> 00:29:04,760 Speaker 9: the market. I do think Saudi Arabia is in the 570 00:29:04,800 --> 00:29:08,719 Speaker 9: best position to be able to gauge Chinese demand, and 571 00:29:08,760 --> 00:29:11,840 Speaker 9: it may be that this Chinese demand is looking a 572 00:29:11,840 --> 00:29:15,440 Speaker 9: bit soft now. But you know, Abdozi's been someone is 573 00:29:15,480 --> 00:29:18,080 Speaker 9: looking at the longer picture and the longer game, and 574 00:29:18,120 --> 00:29:20,480 Speaker 9: he sees that that is strong well. 575 00:29:20,480 --> 00:29:23,240 Speaker 1: And with great respect to your book, which is definitive, 576 00:29:23,560 --> 00:29:26,080 Speaker 1: we can take these tensions at least back to the 577 00:29:26,120 --> 00:29:30,760 Speaker 1: Saudi Yemeni War of nineteen thirty four. The Ibn Saud 578 00:29:30,880 --> 00:29:35,160 Speaker 1: family has dealt with this for pushing one hundred years 579 00:29:35,200 --> 00:29:38,720 Speaker 1: the distance to the south. Give us the modern treatment 580 00:29:39,280 --> 00:29:43,479 Speaker 1: of how Riodd and Jiada look at Yemen today. 581 00:29:44,800 --> 00:29:47,920 Speaker 10: Yemen is basically a thorn in their side right now. 582 00:29:48,040 --> 00:29:53,000 Speaker 10: They don't like the Houthies, any group like the Houthies 583 00:29:53,560 --> 00:29:54,760 Speaker 10: has Bulah Hamas. 584 00:29:54,960 --> 00:29:57,240 Speaker 9: All of those groups, while well, you might think that 585 00:29:57,360 --> 00:30:03,080 Speaker 9: ideologically there are similarities and matchups there, they are essentially 586 00:30:03,120 --> 00:30:06,320 Speaker 9: a threat to the Saudi monarchy. The Saudi monarchy is like, 587 00:30:07,320 --> 00:30:10,600 Speaker 9: you know, they're they're like the stated old you know, 588 00:30:10,720 --> 00:30:13,800 Speaker 9: conservative guy who always votes the same way and always 589 00:30:13,800 --> 00:30:17,160 Speaker 9: says the same thing for breakfast. You know, they're they're 590 00:30:16,920 --> 00:30:19,920 Speaker 9: the status quo. And any group that's looking to change 591 00:30:19,920 --> 00:30:23,480 Speaker 9: the status quo, even if there are similarities in terms 592 00:30:23,480 --> 00:30:29,080 Speaker 9: of say religious extremism or religious ideology, that's seen as 593 00:30:29,080 --> 00:30:33,320 Speaker 9: a threat. And what's a bit disturbing is that despite 594 00:30:33,920 --> 00:30:38,360 Speaker 9: prolonged military campaigns by the Saudis and the UAE, they 595 00:30:38,360 --> 00:30:41,440 Speaker 9: haven't been able to dislodge the Whoi's from Yemen. 596 00:30:41,520 --> 00:30:43,880 Speaker 10: In fact, if anything, they're more entrenched. 597 00:30:43,920 --> 00:30:46,719 Speaker 9: And so I do think that given the fact that 598 00:30:46,720 --> 00:30:49,720 Speaker 9: the who these are at least claiming to be involved 599 00:30:49,720 --> 00:30:53,360 Speaker 9: in the Israel Hamas conflict, you'll be interesting to see 600 00:30:53,400 --> 00:30:56,520 Speaker 9: if the Saudis maybe use this as an excuse to 601 00:30:56,880 --> 00:30:59,240 Speaker 9: really try to get them out of Yemen once and 602 00:30:59,280 --> 00:31:03,240 Speaker 9: for all, or if they'll be a bit embarrassed by 603 00:31:03,280 --> 00:31:04,640 Speaker 9: somebody else taking them out. 604 00:31:05,000 --> 00:31:08,600 Speaker 1: And then the conservative guy, as you call Saudi Arabia 605 00:31:09,240 --> 00:31:12,840 Speaker 1: their treatment of the shades of Palestine, how do you 606 00:31:12,880 --> 00:31:14,280 Speaker 1: interpret that, doctor Wald? 607 00:31:15,200 --> 00:31:17,440 Speaker 9: Now that that is a big question, because what we've 608 00:31:17,480 --> 00:31:21,280 Speaker 9: got on one hand is King Salmon, who is nominally 609 00:31:21,600 --> 00:31:25,240 Speaker 9: the king of Saudi Arabia, and he is vehemently I 610 00:31:25,280 --> 00:31:29,480 Speaker 9: mean vehemently anti Israel pro Palestinian. 611 00:31:29,680 --> 00:31:31,600 Speaker 10: I mean, this is a guy who thinks. 612 00:31:31,360 --> 00:31:33,840 Speaker 9: That, you know, the Mossad was responsible for nine to 613 00:31:33,880 --> 00:31:37,840 Speaker 9: eleven and has said so, you know, in public on television. 614 00:31:38,200 --> 00:31:41,560 Speaker 9: So he is a huge barrier to any kind of 615 00:31:41,840 --> 00:31:47,120 Speaker 9: reprochement between Saudi Arabia and Israel. That being said, his son, 616 00:31:47,240 --> 00:31:50,800 Speaker 9: who's really doing most of the ruling, the day to 617 00:31:50,880 --> 00:31:56,520 Speaker 9: day ruling, seems much more inclined to use rapprochemant with 618 00:31:56,600 --> 00:31:58,880 Speaker 9: Israel as a way to get what he wants or 619 00:31:58,920 --> 00:32:01,360 Speaker 9: what he thinks he needs from the United States. 620 00:32:01,680 --> 00:32:03,240 Speaker 10: And in fact, it seemed like that. 621 00:32:03,240 --> 00:32:07,120 Speaker 9: Was about to be a very successful deal before this 622 00:32:07,200 --> 00:32:10,240 Speaker 9: latest conflict derailed all that, and I don't think that 623 00:32:10,360 --> 00:32:14,280 Speaker 9: the general battle, you know, the general lines that are 624 00:32:14,360 --> 00:32:15,719 Speaker 9: drawn here are going to change. 625 00:32:16,400 --> 00:32:19,280 Speaker 10: But I do think, you know, if if King Solomon 626 00:32:19,480 --> 00:32:20,640 Speaker 10: wasn't wasn't. 627 00:32:20,440 --> 00:32:24,520 Speaker 9: There, I think we'd see a much faster progression towards 628 00:32:25,080 --> 00:32:28,320 Speaker 9: Saudi Israeli normalization. I don't think we're going to see 629 00:32:28,360 --> 00:32:31,680 Speaker 9: quite with the UAE or Jordan has But I do 630 00:32:31,760 --> 00:32:35,000 Speaker 9: think that that he that that NBS sees it as 631 00:32:35,240 --> 00:32:37,840 Speaker 9: a beneficial thing or at least a really. 632 00:32:37,600 --> 00:32:41,600 Speaker 11: Good UH tool to get other things that he needs, 633 00:32:41,800 --> 00:32:47,640 Speaker 11: like support for obtaining nuclear power and military pact with 634 00:32:47,680 --> 00:32:48,520 Speaker 11: the United States. 635 00:32:48,800 --> 00:32:51,000 Speaker 4: Just real quick here, how does Saudi Arabia view the 636 00:32:51,000 --> 00:32:53,600 Speaker 4: production in the US. It's gotten to a record level 637 00:32:53,760 --> 00:32:55,720 Speaker 4: and made all of these concerns about demand. 638 00:32:56,800 --> 00:32:59,080 Speaker 9: I think that they they have kind of come to 639 00:32:59,160 --> 00:33:01,680 Speaker 9: terms with the fact that the US is going to produce, 640 00:33:01,720 --> 00:33:04,240 Speaker 9: with the US is going to produce, and there really 641 00:33:04,280 --> 00:33:06,160 Speaker 9: isn't much they can do about it. I think they 642 00:33:06,200 --> 00:33:11,400 Speaker 9: were probably pretty pleased to see that there's more consolidation 643 00:33:11,640 --> 00:33:13,959 Speaker 9: in the oil industry. I think that they see that 644 00:33:14,120 --> 00:33:18,440 Speaker 9: as good for production and for companies who are looking 645 00:33:18,440 --> 00:33:21,760 Speaker 9: at the signs of supply and demand and aren't just pumping, pumping, 646 00:33:21,840 --> 00:33:24,360 Speaker 9: pumping just to stay ahead the way that we saw 647 00:33:24,520 --> 00:33:27,880 Speaker 9: in twenty fifteen, twenty sixteen, and so I think that 648 00:33:27,920 --> 00:33:30,040 Speaker 9: they see this as you know, this is where it 649 00:33:30,120 --> 00:33:33,200 Speaker 9: is right now, and it's not always necessarily going to 650 00:33:33,240 --> 00:33:33,959 Speaker 9: be this high. 651 00:33:34,200 --> 00:33:36,880 Speaker 1: Ell in a wonderful brief, particularly those comments on Yemen. 652 00:33:36,960 --> 00:33:40,120 Speaker 1: Thank you so much, Ellen Wald. Atlanta Council can't say 653 00:33:40,240 --> 00:33:45,680 Speaker 1: enough about Saudi inc. It is absolutely definitive. Subscribe to 654 00:33:45,720 --> 00:33:49,720 Speaker 1: the Bloomberg Surveillance podcast on Apple, Spotify and anywhere else 655 00:33:49,960 --> 00:33:54,040 Speaker 1: you get your podcasts. Listen live every weekday starting at 656 00:33:54,080 --> 00:33:59,240 Speaker 1: seven am Eastern Bloomberg dot Com, the iHeartRadio app tune In, 657 00:33:59,560 --> 00:34:02,600 Speaker 1: and the Blue Bomberg Business app. You can watch us 658 00:34:02,680 --> 00:34:06,760 Speaker 1: live on Bloomberg Television and always. I'm the Bloomberg Terminal. 659 00:34:07,160 --> 00:34:11,360 Speaker 1: Thanks for listening. I'm Tom Keen, and this is Bloomberg