WEBVTT - Single Best Idea with Tom Keene: Stuart Kaiser & Stephen Stanley

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, single best Idea and

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<v Speaker 1>we welcome all of you. Of course, big big week

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<v Speaker 1>here earning start tomorrow. We'll have full coverage of the

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<v Speaker 1>major bank earnings and so much other news flow as well.

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<v Speaker 1>We thank Rob Carroll and particularly our Bloomberg meteorologist every

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<v Speaker 1>time he's on. I learned of the geography, the topology,

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<v Speaker 1>the weather of this disaster in l A great set

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<v Speaker 1>of guests today. We started early today with Stuart Kaiser,

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<v Speaker 1>a city group always looking at equities. Some enthusiasm there,

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<v Speaker 1>but then we talked to Stuart Kaiser about yield.

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<v Speaker 2>If you think of the term structure, we would say

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<v Speaker 2>the two year yield is about Fed policy. The third

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<v Speaker 2>year yield there's more about inflation. The tenure yield and

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<v Speaker 2>our view reflects more growth expectations. So the fact that

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<v Speaker 2>the tenure has moved, yes, it's a bit of a

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<v Speaker 2>risk because it's moved quick. You would be a lot

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<v Speaker 2>of that's coming from the growth side of things, payrolls

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<v Speaker 2>last week in particular, And in that sense it's not

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<v Speaker 2>necessarily as bad for equity markets as a lot of

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<v Speaker 2>people are concerned about.

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<v Speaker 1>Stuart Kaiser, City Group and again looking at the equity market,

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<v Speaker 1>so you notice the pullback and maybe with a yield,

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<v Speaker 1>still some enthusiasm for earnings. And again we dive into

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<v Speaker 1>that earning season tomorrow, and not just about the banks.

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<v Speaker 1>It will be an eventful three four in even five

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<v Speaker 1>weeks as well. We talked to Stephen Stanley. He's at Santander.

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<v Speaker 1>He is an award winning economist, really really good at

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<v Speaker 1>the granular nature. Here's Stephen Stanley on the American economy.

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<v Speaker 3>I think that the economy is likely to be slower

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<v Speaker 3>in the near term, and I think the easy explanation

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<v Speaker 3>for that is that businesses are uncertain. We've got a

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<v Speaker 3>lot of policy questions to be resolved, and so I

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<v Speaker 3>think a lot of businesses that probably, even though they've

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<v Speaker 3>we've seen business optimism pick up, I think businesses are

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<v Speaker 3>sitting on the sidelines waiting to see So I think

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<v Speaker 3>for me, the first half of twenty twenty five should

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<v Speaker 3>be the slowest period, and then as we get certainty

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<v Speaker 3>on policy, I think things start to pick up again.

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<v Speaker 3>The question really is are we getting a slow down

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<v Speaker 3>in the labor market. Last Friday's numbers would say no.

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<v Speaker 3>You know, I would argue that we're still slowly seeing

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<v Speaker 3>job growth moderate. I do think the unemployment rate will

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<v Speaker 3>tick up a little bit in twenty twenty five, and

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<v Speaker 3>that gives the Fed a little bit of a reason

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<v Speaker 3>maybe to move closer to their view.

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<v Speaker 1>We're neutralists, Stephen stain there, and I really can't say

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<v Speaker 1>enough about oppression and talk less of is business investment.

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<v Speaker 1>The core equation is why or our output equals C

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<v Speaker 1>plus I plus G and then the trade on the

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<v Speaker 1>back end, so that's consumption plus investment plus the government

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<v Speaker 1>a part and then net exports as well, which is

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<v Speaker 1>exports minus imports. And all of this is important but

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<v Speaker 1>less talked about, particularly in financial media, is the eye

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<v Speaker 1>is investment? Off the top of my head, it makes

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<v Speaker 1>up I think it's eleven percent of the economy. Maybe

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<v Speaker 1>it's more. I stand corrected if I'm wrong, But Stephen

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<v Speaker 1>Stanley saying that's one of his wild cards for the

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<v Speaker 1>first half of twenty twenty five. What will be the

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<v Speaker 1>appetite of business to move forward in the first half

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<v Speaker 1>of the year. We thank you for your listen on

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<v Speaker 1>our morning commute and on YouTube. Subscribe to Bloomberg Podcast

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<v Speaker 1>on YouTube podcasts. This is single best idea,