WEBVTT - Single Best Idea with Tom Keene: Mike Wilson & Darrell Cronk

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea and the single best idea is we

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<v Speaker 2>understand it's a grind. We do economics, finance, investment, and

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<v Speaker 2>international relations. There's high points, there's big interviews and all that,

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<v Speaker 2>but part of it is just going from conversation to

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<v Speaker 2>conversation with the many different opinions about where the market's going.

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<v Speaker 2>We pay a little attention to who gets things right,

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<v Speaker 2>but we really pay attention and study who got things wrong.

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<v Speaker 2>It's something we're constantly dealing with and today was just

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<v Speaker 2>an absolutely vintage day of different opinions. Anastasia Amorosa with

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<v Speaker 2>us from Partners Group, many many others. Mike Wilson stopped

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<v Speaker 2>by from Morgan Stanley. He was a Pinata two years

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<v Speaker 2>ago on should you be in the market not be

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<v Speaker 2>in the market. He sees a new bull market here,

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<v Speaker 2>Wilson of Morgan Stanley.

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<v Speaker 1>As usual, the markets get ahead of this and what

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<v Speaker 1>the markets are anticipating now, the bond market and the

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<v Speaker 1>equity markets that the Fed will be cutting sometime in

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<v Speaker 1>the next you know, two to six months, and you know,

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<v Speaker 1>even our house call, I mean our house calls for

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<v Speaker 1>no cuts this year, but then they have seven cuts

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<v Speaker 1>next year. I mean, that's like wildly bullish for equities. Okay,

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<v Speaker 1>so you know it's you almost had the perfect setup, Tom,

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<v Speaker 1>because what you have now is lagging economic data, which

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<v Speaker 1>is what the FED uses to make decisions, and you

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<v Speaker 1>have you already have the equity market and earning visions

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<v Speaker 1>telling you what's going to happen. So you know, they're

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<v Speaker 1>looking backwards and they're going to be looking at lagging

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<v Speaker 1>labor data, you know, and then of course lagging inflation data,

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<v Speaker 1>which should come down ultimately later this year next year,

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<v Speaker 1>and they're going to cut into that and but the

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<v Speaker 1>but you know, there's not going to be a knock

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<v Speaker 1>on negative effect for earnings revisions in the way that

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<v Speaker 1>people kind of assume when you get that sort of

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<v Speaker 1>decline in labor data. In fact, I would argue, because

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<v Speaker 1>it's gradual that we're going to see revisions go up,

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<v Speaker 1>because you know, when companies reduce headcount, it actually accrues

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<v Speaker 1>to margins.

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<v Speaker 2>Mike Wilson, there, Morgan Stanley, that's a very important observation.

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<v Speaker 2>Have we even framed out the caution that we'll see

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<v Speaker 2>in September thirty ending quarter Q three and as we

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<v Speaker 2>go to the beginning of the year's earning season, call

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<v Speaker 2>it you know, October sixteen, seventeenth, eighteenth and tech earnings

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<v Speaker 2>October thirty, whatever those dates are. It's just fascinating to

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<v Speaker 2>see if we get the reticence again, no growth, low

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<v Speaker 2>single digit growth, mid single digit growth. Oops, once again

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<v Speaker 2>a better than good quarter. Joining us Darryl Krunk from

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<v Speaker 2>Wills Fargo. He's really really good at historic perspective. Just

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<v Speaker 2>can't say enough about the joy the density of his excellence.

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<v Speaker 2>Here's Daryl Krunk of Wills Fargo.

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<v Speaker 3>I am elated about earnings, right, I mean, so we've

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<v Speaker 3>been waiting through twenty three twenty four earning SketchUp with

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<v Speaker 3>multiple expansion. I mean remember and recall first quarter earnings

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<v Speaker 3>S and B seven percent revenue growth, fifteen percent earnings.

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<v Speaker 3>This morning we're tracking six percent revenue growth, ten percent earnings.

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<v Speaker 2>Right.

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<v Speaker 3>I will take that all day long.

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<v Speaker 2>Right.

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<v Speaker 3>The margins are still holding up, so you're not seeing

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<v Speaker 3>the erosion in margin deterioration that everybody was concerned about

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<v Speaker 3>with higher prices. In the pass through effects yet of tariffs.

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<v Speaker 3>Maybe they come in the back half of the year

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<v Speaker 3>where we would stay away from We've just been bearish

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<v Speaker 3>on small caps for a long time. I mean, it's

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<v Speaker 3>interesting if you go back three years from right now

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<v Speaker 3>and I invested in a money market fund at four percent,

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<v Speaker 3>I outperformed small caps over the last three years.

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<v Speaker 2>Joel Crack. There, it's an important observation there. It's done

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<v Speaker 2>money market We ever heard that from Russ Kostriche today

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<v Speaker 2>and Matt Brill as well. This idea of get the coupon,

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<v Speaker 2>get some total return, the low yield days are over,

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<v Speaker 2>and the total return, the risk adjusted total return rather

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<v Speaker 2>in bonds is something to study, to study as well

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<v Speaker 2>in our podcasts across the nation on Apple podcasts and Spotify.

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<v Speaker 2>Joe Wisenthal Tracy Alloway number one for Apple podcasts yesterday

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<v Speaker 2>off their magnificent New York Times article that's odd lots.

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<v Speaker 2>We're on YouTube podcasts at single best idea