WEBVTT - Bullish Calls for 2026 Emerge 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.960 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.400 --> 0:00:29.200 Joining us down. I'm really anticipating. 0:00:29.440 --> 0:00:32.360 She doesn't write it out like Cam Dawson joins us 0:00:32.360 --> 0:00:34.840 some new edge this morning. 0:00:34.880 --> 0:00:36.400 You don't do an outlook, do you. 0:00:36.720 --> 0:00:40.120 Oh, we do an outlook, but we publish it in January, 0:00:40.159 --> 0:00:42.680 so we get to look at everybody else's outlooks, see 0:00:42.720 --> 0:00:45.680 where consensus sits, and then make our forecasts. 0:00:46.360 --> 0:00:49.680 Okay, so you know what do you see? 0:00:49.960 --> 0:00:51.600 Well, we see a lot of bullishness. 0:00:51.800 --> 0:00:54.480 You have an environment now where there's not a single 0:00:54.520 --> 0:00:57.520 strategist on the street that is expecting a down year 0:00:57.680 --> 0:01:00.640 in twenty twenty six. Certainly that is as a shift 0:01:00.640 --> 0:01:02.480 from the last couple of years where you had some 0:01:02.560 --> 0:01:07.600 stragglers of bearishness left over after twenty twenty twos week environment. 0:01:08.040 --> 0:01:10.960 But we are an environment in an environment where you're 0:01:11.040 --> 0:01:15.399 still seeing GDP forecasts continue to get revised higher. You're 0:01:15.400 --> 0:01:19.160 seeing EPs forecasts continue to get revised higher, And the 0:01:19.200 --> 0:01:23.240 biggest challenge you have is that valuations are already pricing 0:01:23.280 --> 0:01:25.640 in a lot of good news. So when you look 0:01:25.640 --> 0:01:29.320 at consensus, they're expecting valuations to hold steady and earnings 0:01:29.360 --> 0:01:32.399 to deliver. That does create somewhat of a high bar 0:01:32.640 --> 0:01:33.560 for big, huge. 0:01:33.360 --> 0:01:34.680 Returns in twenty twenty six. 0:01:35.959 --> 0:01:37.800 I'm trying to figure out what is the black swan 0:01:37.840 --> 0:01:40.400 out there that could really crack this market because evaluations 0:01:40.440 --> 0:01:43.520 are high. But I know that high valuations historically do 0:01:43.600 --> 0:01:46.959 not push markets lower. It's usually an event out there 0:01:47.080 --> 0:01:49.080 that says people to look at the market and say, well, 0:01:49.120 --> 0:01:51.200 this is rich, and given what just happened, maybe we 0:01:51.240 --> 0:01:52.760 should take some money off. 0:01:53.080 --> 0:01:56.400 Valuation is a very poor timing tool that has no 0:01:56.520 --> 0:01:59.720 predictive power on one year forward returns, but it does 0:01:59.800 --> 0:02:02.600 have predictive power once you start looking out three, four 0:02:02.600 --> 0:02:05.240 and five years, so you're at an environment or at 0:02:05.280 --> 0:02:07.480 a point where you can say we shouldn't be surprised 0:02:07.480 --> 0:02:10.280 afore it returns are lower over the next three to 0:02:10.360 --> 0:02:12.720 five years than they were over the last five years, 0:02:12.760 --> 0:02:14.720 where they have been extraordinarily strong. 0:02:14.760 --> 0:02:15.360 As far as. 0:02:15.520 --> 0:02:19.560 Catalysts go, valuations are really interesting because it's like that 0:02:19.720 --> 0:02:22.560 old warm buffet phrase of prices what you pay and 0:02:22.680 --> 0:02:25.760 value is what you get. Usually the difference between price 0:02:25.840 --> 0:02:28.880 and value is a certain degree of emotion, meaning there's 0:02:28.880 --> 0:02:32.560 a certain degree of hope and dream within valuations. And 0:02:32.639 --> 0:02:35.239 so if you were to knock something like the AI 0:02:35.360 --> 0:02:38.639 trade and all of that optimism, could that be something 0:02:38.800 --> 0:02:42.800 that sees a broader catalyst as an unwind to overall valuations. 0:02:42.800 --> 0:02:44.320 It's a good watch item for twenty six. 0:02:45.080 --> 0:02:45.840 Technology. 0:02:45.880 --> 0:02:48.919 AI have been the driver of this market for several 0:02:49.000 --> 0:02:51.480 years now. Can we expect that to be the case 0:02:51.480 --> 0:02:52.160 in twenty. 0:02:51.919 --> 0:02:53.640 Six It all depends on earnings. 0:02:53.880 --> 0:02:55.960 One of the reasons why we have seen such a 0:02:56.160 --> 0:02:59.600 powerful degree of outperformance and narrowness of the market is 0:02:59.639 --> 0:03:02.440 because earnings have been narrow. The most startling stat is 0:03:02.480 --> 0:03:05.200 that over the last three years, you've seen the mag 0:03:05.240 --> 0:03:09.040 seven grow earnings by two hundred percent, but the equal 0:03:09.040 --> 0:03:11.720 weight has only grown earnings by sixteen percent. 0:03:12.080 --> 0:03:13.760 Thank you so much for Rina sof I thought it 0:03:13.800 --> 0:03:16.000 was I thought Barons did a great job this weekend. 0:03:16.320 --> 0:03:19.440 Besides the foreheads for cam Dawson and Barons, I thought 0:03:19.480 --> 0:03:21.480 the Barons did a great job parsing is this is 0:03:21.520 --> 0:03:24.119 something Gina Martin Adams really would. 0:03:23.919 --> 0:03:26.079 Push as well. So why is it en? Now? 0:03:26.400 --> 0:03:28.480 I just heard you model out, you know, on a 0:03:28.560 --> 0:03:33.040 cautious strategy like way, single digit performance next year, it's 0:03:33.120 --> 0:03:34.920 not going to be as good. What's a what's the 0:03:35.160 --> 0:03:39.400 w what's the wei go? Paul taught me this functions? 0:03:39.440 --> 0:03:43.920 Sure wei. You know we're up seventeen sixteen percent, SPX, 0:03:44.200 --> 0:03:47.640 NASDA COP up twenty percent, So you model out single 0:03:47.720 --> 0:03:50.200 digit and like you said, we've gotten it wrong for 0:03:50.240 --> 0:03:51.360 three years? 0:03:51.880 --> 0:03:52.400 Why now? 0:03:52.680 --> 0:03:53.000 Why no? 0:03:53.160 --> 0:03:56.120 I think that that there's a lot of expectation that 0:03:56.160 --> 0:03:58.840 you're going to see a deceleration in MAG seven and 0:03:58.880 --> 0:04:03.640 an acceleration and everything else, and that has been an 0:04:03.760 --> 0:04:05.760 area where there's been a lot of surprise. So the 0:04:05.840 --> 0:04:08.160 reason why MAG seven has performed so well is because 0:04:08.160 --> 0:04:10.560 it keeps surprising to the upside. And then the reason 0:04:10.560 --> 0:04:12.840 why eagleweight has been so weak is it keeps surprising 0:04:12.880 --> 0:04:14.080 to the downside. 0:04:14.160 --> 0:04:15.360 So I think that in. 0:04:15.400 --> 0:04:17.200 Order for this to be something more than just a 0:04:17.200 --> 0:04:19.440 flash in the pan rotation, you have to see those 0:04:19.480 --> 0:04:20.559 earnings deliver. 0:04:20.760 --> 0:04:22.440 I was on the phone with Michael Barr this weekend 0:04:22.440 --> 0:04:24.760 as he was losing the house and the Detroit Lions 0:04:24.760 --> 0:04:27.240 of Paul. I'm looking, I said, I got a look 0:04:27.240 --> 0:04:29.680 at the date, January thirteenth of next year. 0:04:30.160 --> 0:04:33.040 Yeah, which is not that far away. JP Morgan Earnings. 0:04:33.200 --> 0:04:35.880 Yeah, we're going to you know, the belief of the 0:04:35.920 --> 0:04:39.360 bulls futures up thirty one, Paul. 0:04:39.320 --> 0:04:43.920 We're going to do it again. Worry angst OMG were 0:04:44.000 --> 0:04:47.880 three four weeks away. JP Morgan, January thirteenth. Hello. 0:04:48.320 --> 0:04:51.120 Are there some sectors, Cameron that maybe screen well for 0:04:51.200 --> 0:04:54.680 you these days? Outside of technology? I mean, I'm sure 0:04:54.680 --> 0:04:57.440 people come out to you and say, I'm I'm long tech, 0:04:57.520 --> 0:04:58.920 I get it, I get out again. But where else 0:04:58.960 --> 0:04:59.760 should I be looking? 0:05:00.279 --> 0:05:04.240 There has been this dynamic that you might call inattentive blindness, 0:05:04.400 --> 0:05:07.960 the idea because people have been focused on just one thing, 0:05:07.960 --> 0:05:10.279 which has been AI and tech. There was a lot 0:05:10.320 --> 0:05:14.520 of good things happening outside of just those areas. So 0:05:14.880 --> 0:05:16.640 look at some of the strength that we've seen in 0:05:16.680 --> 0:05:18.760 some healthcare names, look at some of the strength that 0:05:18.800 --> 0:05:20.240 we're seeing in some of the materials. 0:05:20.279 --> 0:05:24.159 But here's the question. Do you buy things that. 0:05:24.160 --> 0:05:28.080 Are over sold in uptrends like a tech or do 0:05:28.120 --> 0:05:30.920 you buy something that has overboughten a downtrend like a 0:05:30.960 --> 0:05:34.040 healthcare betting on a more sustatial trend change. 0:05:34.600 --> 0:05:35.640 This is really well said. 0:05:36.240 --> 0:05:40.039 Which one do you tilt to in terms of optimum 0:05:40.080 --> 0:05:42.800 outcome of twelve months, eighteen months, three years out? 0:05:42.960 --> 0:05:45.280 I think the prudent thing to do is make sure 0:05:45.320 --> 0:05:47.760 that you start to get closer to neutral. And that 0:05:47.920 --> 0:05:51.080 is the least exciting answer that we can give. But 0:05:51.120 --> 0:05:54.920 most people, given the run that we've had, very overweight tech. 0:05:55.080 --> 0:05:56.520 I thought it was a really rich weekend. There's a 0:05:56.560 --> 0:05:59.320 lot of intellectual work out there. Kim Dawson with a 0:05:59.400 --> 0:06:03.159 speaking of quality, effort and Newish wealth, thrilled that she 0:06:03.160 --> 0:06:06.120 could be with here to get us started strong. 0:06:06.160 --> 0:06:08.480 Whole bunch of other people coming up today as well. 0:06:08.520 --> 0:06:12.520 Air built chunas on ETFs unless the Odolongus hasn't been 0:06:12.520 --> 0:06:13.839 in an agen, so he'll be in here. 0:06:14.200 --> 0:06:17.159 The eight o'clock hour Camp. Paul A Monica killed it 0:06:17.240 --> 0:06:17.880 this weekend. 0:06:18.279 --> 0:06:22.400 Looking at ETFs and factor ETFs, I think of you, 0:06:22.560 --> 0:06:25.400 I think of Liz Anne Saunders and other strategist Brian 0:06:25.480 --> 0:06:28.520 levitt Over and investco factors are everything. 0:06:28.960 --> 0:06:31.400 Does it make sense the bet on momentum? 0:06:31.440 --> 0:06:34.960 Does it make sense as Lamonica brilliantly said to bet On, 0:06:35.120 --> 0:06:37.640 revenue is a factor factor. 0:06:37.680 --> 0:06:42.280 ETFs have been incredibly disappointing this year if you look 0:06:42.400 --> 0:06:45.880 at things like quality factor ETFs, and there's a lot 0:06:45.880 --> 0:06:49.000 of different ways to define quality. Yeah, all of those 0:06:49.040 --> 0:06:53.719 ETFs have substantially underperformed the market. And of course we 0:06:53.760 --> 0:06:55.279 can look to things and say, oh, well, it's just 0:06:55.320 --> 0:06:58.279 concentration in mag seven and the leadership is so narrow, 0:06:58.400 --> 0:07:01.120 but there seems to be a knee to rethink some 0:07:01.279 --> 0:07:04.680 of the way that these ETFs are constructed, potentially making 0:07:04.720 --> 0:07:07.920 them a bit more intelligent and how they define those factors, 0:07:08.279 --> 0:07:11.320 because we've been looking at those factor ETFs going gosh, 0:07:11.320 --> 0:07:13.480 this performance is extraordinarily disappointing. 0:07:13.880 --> 0:07:16.440 This morning, to get you started for a busy, busy week, 0:07:16.560 --> 0:07:19.400 Cameron Dawson with this new edge of Wealth Manager, Good 0:07:19.400 --> 0:07:22.560 morning across the nation, the way you listen to us, 0:07:22.560 --> 0:07:26.400 and good morning on YouTube. Subscribe to Bloomberg Podcasts. We're 0:07:26.600 --> 0:07:30.880 finishing your strong with Bloomberg Podcasts on YouTube. 0:07:30.920 --> 0:07:31.840 Please subscribe. 0:07:31.880 --> 0:07:34.760 You go out there, you search your Paul Sweeney and 0:07:34.800 --> 0:07:37.480 then yes, folks, somebody just emailed it. We'll talk to 0:07:37.520 --> 0:07:40.520 Sweeney about the ski conditions. I promise we'll get to that. 0:07:40.760 --> 0:07:44.200 But on YouTube, subscribe to Bloomberg Podcasts. 0:07:43.680 --> 0:07:46.600 Cameron fixed income mark and we're looking at the iend 0:07:46.600 --> 0:07:49.400 go function on the Bloomberg terminal, the Bloomberg Index browser. 0:07:49.840 --> 0:07:54.040 Welly fixed income high single digit returns twenty twenty five 0:07:54.080 --> 0:07:56.400 across the board like sixty to forty work issues. 0:07:56.440 --> 0:07:57.800 YEA, so fast, I certainly did. 0:07:57.880 --> 0:08:01.080 So what are we thinking about the fictionome marketing twenty six. 0:08:01.200 --> 0:08:03.640 Yeah, we wouldn't be surprised if you continue to see 0:08:03.680 --> 0:08:06.880 this volatility within fixed income. Remember, we came into the 0:08:06.960 --> 0:08:09.480 year with somewhat higher yields, and so there was room 0:08:09.520 --> 0:08:11.760 for downside. But if we continue to chop around in 0:08:11.760 --> 0:08:14.800 this range for yields, it means that maybe the best 0:08:14.840 --> 0:08:17.040 of the return that we get is just the cupon, 0:08:17.360 --> 0:08:20.360 which suggests that maybe not the most exciting returns. But 0:08:20.400 --> 0:08:22.400 I think that the key point is that we do 0:08:22.520 --> 0:08:25.560 expect fixed income to play its role in sixty forty 0:08:25.640 --> 0:08:27.880 if we were to see a weaker growth environment in 0:08:27.880 --> 0:08:30.880 twenty twenty six, meaning that we don't think we're going 0:08:30.920 --> 0:08:33.480 to see at this time a big surge in inflation, 0:08:33.720 --> 0:08:37.400 which means that fix income can be a hedge within portfolios. 0:08:37.640 --> 0:08:38.880 If growth were to weaken. 0:08:39.000 --> 0:08:42.920 Your charm is you have been invested through thick and thin. 0:08:43.800 --> 0:08:47.280 The successful strategist say, you have to participate. There's a 0:08:47.320 --> 0:08:51.760 debate about how you participate, but you participate. So I'm 0:08:51.800 --> 0:08:55.320 looking here. I went back and looked Paul early April. Yeah, 0:08:55.400 --> 0:08:58.800 the world was going to end for Apple. They were done, 0:08:59.280 --> 0:09:02.679 They were finished. Wi mister cook was a failure. All 0:09:02.760 --> 0:09:04.360 that Paul taught me. 0:09:04.320 --> 0:09:04.840 This, folks. 0:09:05.040 --> 0:09:08.680 The description screen in the Bloomberg Apple twelve months return 0:09:08.760 --> 0:09:12.680 up thirteen percent and up a gajillion percent from the 0:09:12.720 --> 0:09:13.880 bottom in April. 0:09:14.400 --> 0:09:16.760 How do our listeners and viewers. 0:09:16.960 --> 0:09:21.160 Use strategy to avoid the fears that we saw in 0:09:21.320 --> 0:09:22.800 early April of Apple. 0:09:23.080 --> 0:09:26.640 I love the concept of fear as an emotion in 0:09:26.720 --> 0:09:30.800 an individual, it can be incredibly blinding. However, if you 0:09:30.840 --> 0:09:34.599 can measure fear in aggregate, it is the most illuminating 0:09:34.640 --> 0:09:37.920 thing possible, meaning that if we can see when everybody 0:09:37.920 --> 0:09:41.040 else is afraid, it shows you when ford returns are 0:09:41.040 --> 0:09:44.640 getting better. So we measure things that capture fear, like 0:09:44.720 --> 0:09:47.840 the percentage of names making new twenty day lows, or 0:09:48.000 --> 0:09:54.359 things like overall breadth within markets, put call ratios ideas 0:09:54.440 --> 0:09:57.800 that when you see fear spike, even though it feels 0:09:58.040 --> 0:10:01.360 terrible to be allocating capital to markets, it usually is 0:10:01.400 --> 0:10:05.160 a time where Ford returns are improving substantially. So we 0:10:05.240 --> 0:10:08.320 measure fear as a way to keep us from making 0:10:08.320 --> 0:10:10.480 poor decisions, which tend to happen at those times. 0:10:12.200 --> 0:10:14.960 Yeah, apple off the bottom in the spring, the world's 0:10:15.000 --> 0:10:18.160 going to end up seven zeros seventy percent. 0:10:18.280 --> 0:10:18.880 Look at that. 0:10:20.520 --> 0:10:24.240 We've seen retail investors come in and buy the dips. 0:10:25.120 --> 0:10:26.960 What dips we've had, we haven't in too many dips, 0:10:26.960 --> 0:10:29.040 but when there's a dip, the retails come in and 0:10:29.120 --> 0:10:31.559 bought What does that tell you out there? I mean, 0:10:31.880 --> 0:10:33.120 you talk to a lot of these folks. 0:10:33.400 --> 0:10:36.560 Yeah, there's a lot of appetite to continue to allocate 0:10:36.600 --> 0:10:37.120 to stocks. 0:10:37.120 --> 0:10:37.960 And you can see it. 0:10:38.080 --> 0:10:41.079 Fineral margin loan balances have been jumping out to us, 0:10:41.320 --> 0:10:44.880 growing forty percent over the last six months. And I 0:10:44.880 --> 0:10:48.440 think the contrast between the retail investor who has been. 0:10:48.320 --> 0:10:51.280 Buying dips and the institutional. 0:10:50.520 --> 0:10:54.640 Investor who hasn't, because ever since the April low, you 0:10:54.800 --> 0:10:58.000 actually have seen institutional investors, based on the Deutsche Bank 0:10:58.080 --> 0:11:01.480 survey not even get back to overweight, So it means 0:11:01.480 --> 0:11:04.079 that a large cohort of this investor, Yes, they've been 0:11:04.120 --> 0:11:06.480 buying some, but not to the degree that you would 0:11:06.559 --> 0:11:09.040 expect that you would normally see. 0:11:08.880 --> 0:11:10.480 Given the strength we've seen in market. 0:11:10.600 --> 0:11:14.320 So retail investors have been right and institutional investors have 0:11:14.400 --> 0:11:15.360 been more on the sidelines. 0:11:16.120 --> 0:11:18.400 What are we doing here with gold? I mean, I 0:11:18.400 --> 0:11:20.880 think we're hitting a new record again today here? I mean, 0:11:21.520 --> 0:11:24.679 do your clients ask you about gold all the time? 0:11:24.760 --> 0:11:25.320 All the time? 0:11:25.440 --> 0:11:29.240 Look, we call gold a psychological commodity because it allows 0:11:29.280 --> 0:11:32.800 you to get some kind of comfort with things like 0:11:32.880 --> 0:11:36.880 fears about currency debasement. But the technicals are the technicals. 0:11:37.080 --> 0:11:40.280 The uptrend is still very much intact. It is incredibly 0:11:40.360 --> 0:11:43.839 overbought on a weekly basis, meaning it's moved up very far, 0:11:44.000 --> 0:11:47.120 very fast. But we've been calling gold Chuck Norris, which 0:11:47.160 --> 0:11:49.760 means that it's just been invincible and nothing can hurt it. 0:11:49.800 --> 0:11:52.440 The trend is really powerful, but keep an eye on 0:11:52.440 --> 0:11:55.760 the tacticals. The narratives will remain, but gold could go 0:11:55.800 --> 0:11:56.720 into a constulidation. 0:11:57.080 --> 0:12:00.920 Lisa, should we have gold called the rock? That would 0:12:00.920 --> 0:12:05.280 work out? Rock? See that as well? Is there a 0:12:05.360 --> 0:12:06.480 legit commodity boom. 0:12:06.520 --> 0:12:10.160 I noticed with gold oil not part anticipating, But I'm sorry, 0:12:10.200 --> 0:12:13.640 there's a legit commodity boom. Is that an expectation out 0:12:13.679 --> 0:12:15.600 front of a recovering Asian? 0:12:15.880 --> 0:12:18.000 Yeah, a bone to pick because everybody looks at the 0:12:18.000 --> 0:12:21.079 b COMM Index, the commodity index and say, look, how 0:12:21.120 --> 0:12:22.360 we're in a commodity boom. 0:12:22.400 --> 0:12:24.120 A lot of that is gold. Look at the b. 0:12:24.240 --> 0:12:29.199 Common Industrial Commodities Index. You're seeing some movement higher. 0:12:28.840 --> 0:12:30.880 In that. 0:12:32.440 --> 0:12:38.000 Show I is the ticker, but it's important to see 0:12:38.040 --> 0:12:41.400 that you have seen some movement higher. However, it's certainly 0:12:41.440 --> 0:12:43.920 not breaking out nearly to the extent that the BCom 0:12:43.960 --> 0:12:46.240 benefiting from gold has See. 0:12:46.200 --> 0:12:49.040 What's the symbol? I got b COMM. 0:12:49.040 --> 0:12:53.440 I can do that be com ion b com. Every 0:12:53.480 --> 0:12:54.240 day's a school day. 0:12:54.400 --> 0:12:54.839 Every day. 0:12:55.120 --> 0:12:59.760 School day was the curling class you hated, sit in 0:12:59.760 --> 0:13:01.280 the front row every time. 0:13:01.520 --> 0:13:03.839 Okay, oh that's it. The bloomer. All right, I got you. 0:13:04.400 --> 0:13:06.079 I'm glad somebody's got you. I got you. 0:13:06.160 --> 0:13:08.880 I mean fifty yeah, all right, I mean commodities are 0:13:08.920 --> 0:13:09.600 just been ripping it. 0:13:09.600 --> 0:13:12.480 So there you go. We learned something new. Can look 0:13:12.520 --> 0:13:12.839 it up? 0:13:13.320 --> 0:13:13.880 All right? 0:13:14.559 --> 0:13:18.280 Oh, Tom, secundo's I'm learning to excuse me. We'll get 0:13:18.320 --> 0:13:20.960 to what would you write that down? Please use this 0:13:21.160 --> 0:13:25.520 terminal seminar cam. DAWs still getting a terminal seminary cam. 0:13:25.559 --> 0:13:28.800 Thank you, Thank you so much greatly. I appreciate you 0:13:28.880 --> 0:13:29.280 coming in. 0:13:29.520 --> 0:13:30.240 Stay with us. 0:13:30.480 --> 0:13:33.679 More from Bloomberg Surveillance coming up after this. 0:13:40.920 --> 0:13:44.520 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:13:44.600 --> 0:13:47.760 weekday afternoons from seven to ten am Eastern Listen on 0:13:47.840 --> 0:13:51.240 Apple Karplay and Android Auto with the Bloomberg Business app, 0:13:51.400 --> 0:13:52.640 or watch us live. 0:13:52.520 --> 0:13:55.079 On YouTube Ulus your Day launches. He is head of 0:13:55.120 --> 0:13:58.120 asset Allocation at Investco, joining us live here in our 0:13:58.120 --> 0:14:01.640 Bloomberg Interactive Broker studio. Uless you I mean, no matter 0:14:01.640 --> 0:14:03.640 where I allocated money in twenty twenty five, I did 0:14:03.640 --> 0:14:08.080 pretty well. Stocks up double digits, bonds up high single digits, 0:14:08.520 --> 0:14:11.400 commodities through the roof. If your long gold or silver 0:14:11.440 --> 0:14:13.439 or any of that type of stuff. What's the twenty 0:14:13.440 --> 0:14:16.120 twenty six outlock makes you think about where to allocate 0:14:16.160 --> 0:14:16.840 money these days? 0:14:16.920 --> 0:14:17.439 Good morning? 0:14:17.480 --> 0:14:20.280 Yes, you summarized twenty twenty five perfectly right. We were 0:14:20.360 --> 0:14:22.040 only a couple of years ago. We were talking about 0:14:22.040 --> 0:14:24.560 the death of the sixty forty, and here here we are. 0:14:24.600 --> 0:14:28.560 The sixty forty is back twenty twenty six. We expect 0:14:29.000 --> 0:14:31.840 still an environment where you need to be long risk assets. 0:14:32.720 --> 0:14:36.160 Let's keep it simple. We have easing of monetary policy, 0:14:36.480 --> 0:14:40.680 expansionary fiscal policy, and inflation is in check above the 0:14:40.680 --> 0:14:43.960 fat target, but is coming down. That is a mini 0:14:44.000 --> 0:14:47.720 Goldilock scenario right where typically assets do very well. Growth 0:14:47.800 --> 0:14:50.840 not too hot, not too cold. Put keep the risk on. 0:14:51.280 --> 0:14:51.600 Now. 0:14:52.000 --> 0:14:56.760 AI technology is of course the risky part of the 0:14:56.800 --> 0:15:00.960 market in terms of the outcomes. The uncertain is widening 0:15:01.600 --> 0:15:04.000 with respect to the certainty of that payout. We have 0:15:04.520 --> 0:15:11.240 excessive cup expending. Expected earnings growth is now the lowest 0:15:11.440 --> 0:15:15.360 in four years. So for us, the safest way to 0:15:15.400 --> 0:15:20.400 stay invested is to rotate into value, into mid caps 0:15:20.480 --> 0:15:21.680 and international markets. 0:15:21.760 --> 0:15:23.920 Is there such a thing as tech value? 0:15:26.080 --> 0:15:28.760 Actually, the mag seven when you compare it to the 0:15:28.880 --> 0:15:31.840 other pockets of tech, is where the valuations. Yes, at 0:15:31.880 --> 0:15:37.000 twenty six PE the NASDAK today is excessive, but it's 0:15:37.040 --> 0:15:39.800 nothing like the eighty by its. 0:15:39.680 --> 0:15:43.920 Like buying international pay for twenty years. 0:15:43.680 --> 0:15:47.800 It's a good analogy, but the point is this is 0:15:47.840 --> 0:15:50.320 really an environment where we're beginning to see the long 0:15:50.400 --> 0:15:53.840 waited broadening out of participation. You see it also in 0:15:53.880 --> 0:15:57.600 earnings revisions for the first time now all over the 0:15:57.680 --> 0:16:00.640 last twelve months, we're beginning to see earnings revisions in 0:16:00.720 --> 0:16:03.960 development markets outside of the US and emerging markets turning 0:16:04.040 --> 0:16:06.960 positive on a twelve month four basis. So we're beginning 0:16:06.960 --> 0:16:09.720 to see that convergence. So in our opinion, there is 0:16:09.800 --> 0:16:12.520 going to be convergence in the performance of equity sectors 0:16:12.880 --> 0:16:17.880 and styles and also between regions. So staying are located 0:16:17.960 --> 0:16:23.760 overweight equities, underway fixed income, and maintaining a neutral duration posture. 0:16:23.800 --> 0:16:27.760 We are not concerned about that about yields in the US. 0:16:27.880 --> 0:16:31.680 So US versus non US, How should we think about that? 0:16:31.680 --> 0:16:33.160 If I want to go outside the US, am I 0:16:33.200 --> 0:16:36.760 looking at developed markets emerging markets? I've heard a lot 0:16:36.760 --> 0:16:39.320 more discussion about emerging markets over the past six and 0:16:39.400 --> 0:16:40.360 nine months and a half in a. 0:16:40.280 --> 0:16:43.920 While, we find the case for both, with emerging markets 0:16:43.960 --> 0:16:46.560 probably the leading the charge between the two. What are 0:16:46.560 --> 0:16:50.520 the drivers here? We continue to see with high conviction 0:16:50.600 --> 0:16:54.840 and environment of dollar depreciation, dollar depreciation will will favor 0:16:54.880 --> 0:16:58.760 international markets broadly, but with emerging markets in particular, there 0:16:58.800 --> 0:17:02.800 is a rerating fundamentals because as the dollar goes down, 0:17:02.840 --> 0:17:06.320 the level of liabilities for these markets, as they're mostly 0:17:06.359 --> 0:17:12.000 dollar liabilities, goes down. So boost from a currency perspective 0:17:12.000 --> 0:17:14.680 and boost from a fundamental perspective. So we like emerging 0:17:14.720 --> 0:17:17.800 market equities. We like emerging markets local debt, and emerging 0:17:17.840 --> 0:17:19.040 markets our currency debt. 0:17:19.280 --> 0:17:21.840 Let's say gell honest with this, he is with invescos 0:17:21.840 --> 0:17:23.320 we talk about these markets. 0:17:23.359 --> 0:17:24.679 The markets lift this morning. 0:17:25.119 --> 0:17:27.560 Just a quick data check here features up thirty two 0:17:27.640 --> 0:17:32.280 the Vicks a sixteen level paud I noting fifty seven 0:17:32.320 --> 0:17:35.600 handle on American oil and Brent was sixty dollars a 0:17:35.600 --> 0:17:39.600 barrel now sixty one dollars a barrel down, fractioning gold 0:17:39.840 --> 0:17:44.440 a moonshot of forty two dollars four three seven one. 0:17:44.800 --> 0:17:47.480 Wow yeah on gold. Paul Swiney with a let's see 0:17:47.840 --> 0:17:48.320 the dollar. 0:17:49.800 --> 0:17:52.040 The dollar has not bounced back like we saw the 0:17:52.040 --> 0:17:55.159 stock market bounce back and some some other asset classes 0:17:55.160 --> 0:17:57.800 bounce back from the tariff induced sell off earlier in here. 0:17:58.840 --> 0:18:00.919 Why do you think the dollar is Is this was 0:18:00.920 --> 0:18:03.879 a dollar just maybe overbought earlier in the year, or 0:18:03.960 --> 0:18:05.480 is this something more fundamental. 0:18:05.720 --> 0:18:08.040 I think you're highlighting to me the most fascinating the 0:18:08.119 --> 0:18:11.400 coupling in asset performance that happened this year. To your point, 0:18:12.400 --> 0:18:15.320 it's indicative, you know, when we had the tariff scare 0:18:15.480 --> 0:18:20.760 and the big beautiful bill, fiscal expansion, the concern around 0:18:20.800 --> 0:18:24.520 desustainability for the US, the path of least resistance, the 0:18:24.640 --> 0:18:29.640 finance excess spending is a weaker dollar rather than rising 0:18:29.720 --> 0:18:36.720 bond yields. Right, So it is indicative of euro, the Yen, 0:18:37.040 --> 0:18:39.919 and many of these currencies still being cheap relative to 0:18:39.960 --> 0:18:43.720 the dollar by our evaluation metrix. One point thirty on 0:18:43.800 --> 0:18:46.639 the euro is not an aggressive call. Let's not forget 0:18:46.640 --> 0:18:48.720 that the euro was at one forty in the midst 0:18:48.760 --> 0:18:50.160 of the European debt crisis. 0:18:50.280 --> 0:18:52.320 Can I do an audible sure, got to do an 0:18:52.320 --> 0:18:53.639 audible Let the longest. 0:18:53.920 --> 0:18:57.199 Well, what's amazing to me is in many frameworks, Italy 0:18:57.280 --> 0:19:00.119 is in better shape than France. Well, first time I 0:19:00.160 --> 0:19:02.640 met you was in Aperol, sprits on the seventh floor, 0:19:02.760 --> 0:19:05.720 terrorist at the Hassler. Okay, help me here. Is it 0:19:05.840 --> 0:19:09.040 France is doing poor? Or is Italy finally getting its 0:19:09.040 --> 0:19:09.600 act together? 0:19:09.840 --> 0:19:15.080 There's been a convergence Italy has been benefiting tremendously from 0:19:15.080 --> 0:19:18.760 the COVID support the fiscal package from the European Union 0:19:18.800 --> 0:19:21.919 following the COVID support, the money is being well spent 0:19:22.160 --> 0:19:26.359 and directed to the appropriate sectors of the economy. And France, 0:19:26.760 --> 0:19:29.480 just to pick one, as you mentioned, has seen some 0:19:29.720 --> 0:19:36.160 more headwinds to to structural challenges. So the convergence is real. 0:19:36.480 --> 0:19:39.440 Italy has been performing well. The challenge will be will 0:19:39.480 --> 0:19:43.000 the credit will the private sector sustain that rebound that 0:19:43.119 --> 0:19:45.479 was induced by public spending Ulussia? 0:19:45.560 --> 0:19:46.120 Thank you so much. 0:19:46.240 --> 0:19:48.960 Let's you the longest with us year with Invesco here, 0:19:49.160 --> 0:20:00.400 stay with us. More from Bloomberg Surveillance coming up after this. 0:20:00.400 --> 0:20:04.280 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:20:04.320 --> 0:20:07.320 starting at seven am Eastern on Apple, Cocklay and Android 0:20:07.359 --> 0:20:10.399 Auto with the Bloomberg Business App. You can also listen 0:20:10.480 --> 0:20:13.760 live on Amazon Alexa from our flagship New York station, 0:20:14.280 --> 0:20:16.960 Just say Alexa play Bloomberg eleven thirty. 0:20:17.119 --> 0:20:19.920