1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg dot com, 5 00:00:23,920 --> 00:00:29,960 Speaker 1: and of course on the Bloomberg terminal. There is a 6 00:00:30,080 --> 00:00:33,479 Speaker 1: raging debate in commodities, the same in equities as well. 7 00:00:33,560 --> 00:00:37,159 Speaker 1: Laura Calvacino with us with OURBC. She was superb the 8 00:00:37,240 --> 00:00:41,680 Speaker 1: last time, Susan in framing being in the markets. Laura, 9 00:00:41,760 --> 00:00:44,199 Speaker 1: you saw the events of last week, did you change 10 00:00:44,479 --> 00:00:48,560 Speaker 1: your enthusiasm for equities? You know, it's funny time. I 11 00:00:48,640 --> 00:00:50,560 Speaker 1: actually asked a lot of people a question. I said, 12 00:00:50,560 --> 00:00:52,839 Speaker 1: on the scale of one to tend, how concerned are 13 00:00:52,880 --> 00:00:55,080 Speaker 1: you about what happened in the bond market? And generally 14 00:00:55,120 --> 00:00:57,000 Speaker 1: most people I've talked to said, you know, three, four 15 00:00:57,080 --> 00:00:59,480 Speaker 1: or five somewhere and there, and I think that's probably 16 00:00:59,480 --> 00:01:01,560 Speaker 1: around the ing I was in. I would chalk this 17 00:01:01,760 --> 00:01:04,560 Speaker 1: up to, you know, something that's concerning, something we've got 18 00:01:04,560 --> 00:01:06,240 Speaker 1: to keep an eye on, you know, similar to what 19 00:01:06,280 --> 00:01:09,039 Speaker 1: we saw Frankly with Robin Hood had Reddit um similar 20 00:01:09,080 --> 00:01:10,800 Speaker 1: to what we've seen with the variants. But I would 21 00:01:10,840 --> 00:01:13,319 Speaker 1: say it's not eroding my case for equities yet I 22 00:01:13,319 --> 00:01:14,680 Speaker 1: do think we have to keep an eye on it. 23 00:01:14,720 --> 00:01:18,440 Speaker 1: But still the thesis is intact, did you witness rotation 24 00:01:18,920 --> 00:01:22,959 Speaker 1: or did you witness things coming off the bottom? You 25 00:01:23,040 --> 00:01:25,920 Speaker 1: witnessed rotation initially. And I'll tell you what I didn't 26 00:01:26,000 --> 00:01:29,800 Speaker 1: like on Thursday was we suddenly went from rotation out 27 00:01:29,800 --> 00:01:33,399 Speaker 1: of the old secular growers um into into the cyclicals. 28 00:01:33,440 --> 00:01:36,960 Speaker 1: We kind of had a defensive, kind of anti cyclical, uh, 29 00:01:37,160 --> 00:01:40,000 Speaker 1: classic defensive tone that took hold Thursday. So it was 30 00:01:40,040 --> 00:01:42,280 Speaker 1: it was a jumbled week, to be honest. Every day 31 00:01:42,319 --> 00:01:45,560 Speaker 1: seemed a little bit different. Well, LORI. Last week John 32 00:01:45,600 --> 00:01:48,840 Speaker 1: in particular kept asking the question, has the rally and 33 00:01:48,920 --> 00:01:52,600 Speaker 1: some of the consumer stocks, the small caps, has that 34 00:01:52,720 --> 00:01:56,720 Speaker 1: gone into just recovery and catching up with the other stocks, 35 00:01:56,840 --> 00:02:00,240 Speaker 1: or we actually pricing in reflation and are we actually 36 00:02:00,320 --> 00:02:02,400 Speaker 1: do we have any more to go in that trade? 37 00:02:02,440 --> 00:02:04,560 Speaker 1: Where do you stand on that? You know, it's it's 38 00:02:04,600 --> 00:02:06,920 Speaker 1: funny the piece we put out last Tuesday. I think 39 00:02:06,960 --> 00:02:09,080 Speaker 1: the last line we said we may be embarking just 40 00:02:09,200 --> 00:02:11,440 Speaker 1: in the middle of this of one big catchup trade 41 00:02:11,440 --> 00:02:13,440 Speaker 1: and equity markets are not going to pull back until 42 00:02:13,480 --> 00:02:16,280 Speaker 1: we let that process play out. And I think consumer 43 00:02:16,280 --> 00:02:18,919 Speaker 1: discretionary is a very different beast and small cap than 44 00:02:18,919 --> 00:02:20,840 Speaker 1: it is in large cap. And large cap you have 45 00:02:21,320 --> 00:02:23,720 Speaker 1: more of the share gainers, kind of the longer term 46 00:02:23,760 --> 00:02:26,919 Speaker 1: secular growers. You have some dirtier stuff down in small 47 00:02:26,960 --> 00:02:29,320 Speaker 1: calp things that are a little bit more secularly challenged. 48 00:02:29,600 --> 00:02:32,560 Speaker 1: There is still deep valuation opportunity there. There is a 49 00:02:32,639 --> 00:02:35,320 Speaker 1: lot of hair on it though, um So, I think 50 00:02:35,400 --> 00:02:37,520 Speaker 1: that it's it's a combination of both at this point. 51 00:02:37,520 --> 00:02:40,160 Speaker 1: But I don't think we should underestimate the catchup potential 52 00:02:40,200 --> 00:02:42,480 Speaker 1: because as I talked to investors, a lot of them 53 00:02:42,480 --> 00:02:45,200 Speaker 1: are concerned that reflation has been fully baked in. I 54 00:02:45,200 --> 00:02:47,880 Speaker 1: think you can make that generalization to some extent for 55 00:02:47,919 --> 00:02:49,560 Speaker 1: the broader market, but there are still a lot of 56 00:02:49,560 --> 00:02:52,440 Speaker 1: bits and pieces like the small cap financial, small cap energy, 57 00:02:52,440 --> 00:02:55,560 Speaker 1: small cap, consumer discretionary. Um, we're frankly, you know that 58 00:02:55,639 --> 00:02:58,200 Speaker 1: it just can't possibly be priced in, even on an 59 00:02:58,200 --> 00:03:01,280 Speaker 1: absolute basis. We're only around long term averages on those multiples. 60 00:03:01,280 --> 00:03:04,160 Speaker 1: You're not even elevated. So let's pair these two conversations together, 61 00:03:04,200 --> 00:03:07,200 Speaker 1: the conversation about benchmark yields as well as the catch 62 00:03:07,280 --> 00:03:10,280 Speaker 1: up trade. How much does the catch up trade hinge 63 00:03:10,440 --> 00:03:13,000 Speaker 1: on rates remaining around where they are? In other words, 64 00:03:13,040 --> 00:03:15,760 Speaker 1: how much can rates rise before we end up starting 65 00:03:15,919 --> 00:03:18,000 Speaker 1: starting to talk about the catch up trade looking a 66 00:03:18,000 --> 00:03:21,360 Speaker 1: little different because it's a different backdrop. I think we 67 00:03:21,440 --> 00:03:23,240 Speaker 1: need rates to keep rising, but we need to do 68 00:03:23,280 --> 00:03:26,000 Speaker 1: it in a slower, more orderly fashion. I don't think 69 00:03:26,000 --> 00:03:28,640 Speaker 1: it's the level so much of yields that have spooked investors. 70 00:03:28,639 --> 00:03:31,480 Speaker 1: It's just the fact that it seemed to happen in 71 00:03:31,520 --> 00:03:33,839 Speaker 1: such a dramatic fashion. I talked to one investor last 72 00:03:33,840 --> 00:03:35,440 Speaker 1: week who said, you know, this all just feels a 73 00:03:35,520 --> 00:03:38,720 Speaker 1: little weird. And I think when you've got extended valuations 74 00:03:38,760 --> 00:03:40,680 Speaker 1: for the market as a whole, when you've got high 75 00:03:40,680 --> 00:03:44,400 Speaker 1: positioning levels and equities, um, that weirdness, you know, frankly, 76 00:03:44,480 --> 00:03:47,320 Speaker 1: is probably gonna make you know some some eyes really 77 00:03:47,320 --> 00:03:49,680 Speaker 1: focus on some of the risks, perhaps more than they should. 78 00:03:49,680 --> 00:03:50,960 Speaker 1: But I do think at the end of the day, 79 00:03:50,960 --> 00:03:54,640 Speaker 1: we're continuing to see these little wonky things happen um 80 00:03:54,640 --> 00:03:56,960 Speaker 1: And that probably means this last bit of ketchup isn't 81 00:03:57,000 --> 00:03:58,960 Speaker 1: going to be fast and ferocious. It's probably gonna be 82 00:03:58,960 --> 00:04:01,680 Speaker 1: a slower grind with some it's and takes fast and ferocious. 83 00:04:01,680 --> 00:04:03,880 Speaker 1: Tom Kane, here's the statthe mornic. It comes from David 84 00:04:03,920 --> 00:04:06,640 Speaker 1: Coston and Goldman Cyclicals with negative earnings and folding sales 85 00:04:06,680 --> 00:04:11,520 Speaker 1: in half returned drum roll year to date. Let me 86 00:04:11,560 --> 00:04:14,200 Speaker 1: read that one again, Tom, cyclicals with negative earnings and 87 00:04:14,240 --> 00:04:19,080 Speaker 1: folding suns and have returned year to day. It's been 88 00:04:19,120 --> 00:04:21,080 Speaker 1: a story. And then Mr cost in there with the 89 00:04:22,240 --> 00:04:24,760 Speaker 1: believe on SPX and weigh out early on a lot 90 00:04:24,760 --> 00:04:28,080 Speaker 1: of people. Lauri calvacina I just looked at Russell two thousand, 91 00:04:28,200 --> 00:04:31,560 Speaker 1: small camp and its teacher course. The chart is beyond 92 00:04:31,839 --> 00:04:36,320 Speaker 1: elegant in terms of trend. Describe the trend, the ammal 93 00:04:36,440 --> 00:04:39,880 Speaker 1: the power that you see in the Russell two thousand series. 94 00:04:40,880 --> 00:04:42,919 Speaker 1: So it's pretty simple. You know, we go back to 95 00:04:42,920 --> 00:04:45,800 Speaker 1: this catchup analogy. But if you look at relative valuations 96 00:04:45,839 --> 00:04:48,520 Speaker 1: between the Russell two thousand and the SMP, you have 97 00:04:48,560 --> 00:04:50,160 Speaker 1: to clean up the data. There's a lot of dirty 98 00:04:50,200 --> 00:04:51,600 Speaker 1: stuff in the Russell. But if you clean up the 99 00:04:51,680 --> 00:04:53,840 Speaker 1: data a little bit, we were all the way back 100 00:04:53,839 --> 00:04:57,880 Speaker 1: down to tech bubble extremes, essentially all time historic blows 101 00:04:57,880 --> 00:05:01,039 Speaker 1: on that relative valuation multiple. With the meaningful move that 102 00:05:01,080 --> 00:05:03,040 Speaker 1: we've seen, you know, just the last few months since 103 00:05:03,080 --> 00:05:06,159 Speaker 1: the March twenty three lows, small caps are still deeply, 104 00:05:06,200 --> 00:05:09,640 Speaker 1: deeply undervalued versus large They're actually closer to that low 105 00:05:10,000 --> 00:05:11,560 Speaker 1: that they just put in than they are to the 106 00:05:11,600 --> 00:05:13,960 Speaker 1: long term average. There is a lot of runway in 107 00:05:14,000 --> 00:05:17,040 Speaker 1: this trade. Let's talk about participation, Laura, fam I know 108 00:05:17,120 --> 00:05:19,000 Speaker 1: you've got some details and some dates to weigh in 109 00:05:19,000 --> 00:05:22,320 Speaker 1: on how broad based has the participation being in all 110 00:05:22,360 --> 00:05:24,479 Speaker 1: of this, how well allocated of your clients being to 111 00:05:24,520 --> 00:05:26,680 Speaker 1: the stories that have performed so well over the last 112 00:05:26,680 --> 00:05:29,880 Speaker 1: several months. So look, you know we've seen it's hard 113 00:05:29,880 --> 00:05:32,560 Speaker 1: to pass out exactly what it is that's contributed to it. 114 00:05:32,640 --> 00:05:34,640 Speaker 1: But you know, if you look at the year today 115 00:05:34,640 --> 00:05:37,800 Speaker 1: performance stats, active managers on the long only side haven't 116 00:05:37,800 --> 00:05:39,960 Speaker 1: performed all that well, and that comes off of a 117 00:05:40,040 --> 00:05:42,280 Speaker 1: year in which they didn't perform all that well either. 118 00:05:42,320 --> 00:05:44,560 Speaker 1: And this is all looking relative to benchmark, not looking 119 00:05:44,560 --> 00:05:47,520 Speaker 1: in absolute terms, so they've been lagging behind those major indices. 120 00:05:47,880 --> 00:05:49,040 Speaker 1: Um and I want to go back, you know, to 121 00:05:49,160 --> 00:05:51,360 Speaker 1: something you know, you guys mentioned earlier about the low 122 00:05:51,440 --> 00:05:54,120 Speaker 1: quality trade. We did a study showing whether you're looking 123 00:05:54,120 --> 00:05:56,839 Speaker 1: at large cap or small cap on average, low quality 124 00:05:56,880 --> 00:06:00,279 Speaker 1: trades last about twenty five months coming out of sessions. 125 00:06:00,320 --> 00:06:02,599 Speaker 1: We're only about halfway through that. Now, that's a big 126 00:06:02,640 --> 00:06:05,080 Speaker 1: problem for long only active managers says they don't like 127 00:06:05,160 --> 00:06:06,840 Speaker 1: to own that stuff. When they go out and talk 128 00:06:06,880 --> 00:06:09,640 Speaker 1: to their clients. Nobody wants to say, hey, I have 129 00:06:09,760 --> 00:06:12,920 Speaker 1: this really low quality portfolio, invest with me. I mean, 130 00:06:12,960 --> 00:06:14,760 Speaker 1: it's just not what they do, and to be fair 131 00:06:14,800 --> 00:06:17,359 Speaker 1: to them, that's not what outperforms over time. But we 132 00:06:17,480 --> 00:06:20,039 Speaker 1: do have these very powerful melt ups in those bits 133 00:06:20,080 --> 00:06:22,320 Speaker 1: and pieces of the market. Um and you know, by 134 00:06:22,360 --> 00:06:24,680 Speaker 1: some by some accounts, were probably only halfway through that. 135 00:06:24,760 --> 00:06:27,520 Speaker 1: So that's the pain trade right now. People keep saying 136 00:06:27,520 --> 00:06:30,600 Speaker 1: the markets detached from fundamentals. It's detached from the fundamentals 137 00:06:30,600 --> 00:06:32,520 Speaker 1: that they want to own over the longer term. Not 138 00:06:32,560 --> 00:06:35,440 Speaker 1: necessarily the improving fundamentals we're seeing coming off the bottom 139 00:06:35,480 --> 00:06:38,560 Speaker 1: the melt up would imply increasing participation. So Laurie, you're 140 00:06:38,560 --> 00:06:40,560 Speaker 1: tuning us just to put a bow on all of 141 00:06:40,640 --> 00:06:44,880 Speaker 1: this that, even if it sounds really really consensus. We 142 00:06:44,960 --> 00:06:46,919 Speaker 1: haven't seen the allocations of this story. A lot of 143 00:06:46,920 --> 00:06:50,000 Speaker 1: people have still missed down these games here today. I 144 00:06:50,040 --> 00:06:52,120 Speaker 1: think that's fair, And you know, I've told some investors 145 00:06:52,120 --> 00:06:54,600 Speaker 1: there's a consensus to be fair on the cell side, 146 00:06:54,600 --> 00:06:56,440 Speaker 1: and you guys know me well, I never liked being 147 00:06:56,480 --> 00:06:58,560 Speaker 1: part of that consensus, but I took a close look 148 00:06:58,600 --> 00:07:00,120 Speaker 1: at it. When I came back, I didn't think that 149 00:07:00,160 --> 00:07:03,840 Speaker 1: it was wrong, and I saw the room from evaluation opportunity. Again, 150 00:07:03,880 --> 00:07:06,599 Speaker 1: from a thematic perspective, I think the problem is that 151 00:07:06,640 --> 00:07:08,880 Speaker 1: there's not a unicorn consensus on the cell side and 152 00:07:08,920 --> 00:07:10,840 Speaker 1: the BY side. The BY side has been fighting this. 153 00:07:11,080 --> 00:07:13,000 Speaker 1: They're catching up. There's a pain trade in place, and 154 00:07:13,000 --> 00:07:16,040 Speaker 1: they are scrambling to reposition. And that's why you're seeing 155 00:07:16,080 --> 00:07:18,560 Speaker 1: on some of these down days in the NASDACK and 156 00:07:18,600 --> 00:07:21,720 Speaker 1: the tech stocks, they're having to sell the old fundamental story. 157 00:07:21,760 --> 00:07:24,840 Speaker 1: They just haven't gotten on board with the new fundamentals yet. Laurie, 158 00:07:25,000 --> 00:07:26,840 Speaker 1: we can't let to go without talking about the game 159 00:07:26,880 --> 00:07:30,520 Speaker 1: stop phenomenon and some of the technical oddities, particularly in 160 00:07:30,560 --> 00:07:33,200 Speaker 1: the small cap space. I was struck by a story 161 00:07:33,280 --> 00:07:35,320 Speaker 1: that came out over the weekend about Cathy Wood of 162 00:07:35,480 --> 00:07:39,680 Speaker 1: Arc Investment that talked about how much concentration her bets have. 163 00:07:39,920 --> 00:07:42,600 Speaker 1: Basically that she owns more than ten percent of at 164 00:07:42,680 --> 00:07:45,680 Speaker 1: least twenty nine companies, and it actually accounts for much 165 00:07:45,720 --> 00:07:48,320 Speaker 1: more than that if you include the holdings of a 166 00:07:48,360 --> 00:07:52,360 Speaker 1: related investment firm. How much does this create an idiosyncratic 167 00:07:52,480 --> 00:07:55,960 Speaker 1: risk that's very difficult to model. Look, I think this 168 00:07:56,040 --> 00:07:58,520 Speaker 1: is all, you know, very very challenging, especially from an 169 00:07:58,520 --> 00:08:01,400 Speaker 1: active manager perspective, because you know, some of these retail 170 00:08:01,520 --> 00:08:03,600 Speaker 1: names people are not necessarily going to want to own 171 00:08:03,640 --> 00:08:05,560 Speaker 1: some of the art names. Um. You know, some of 172 00:08:05,600 --> 00:08:07,400 Speaker 1: them have been more popular, some of them have been 173 00:08:07,440 --> 00:08:09,280 Speaker 1: less popular. We actually took a look at that in 174 00:08:09,280 --> 00:08:12,360 Speaker 1: our latest hedge fund filing analysis. Um But I think 175 00:08:12,680 --> 00:08:14,800 Speaker 1: at the end of the day, it's just another sort 176 00:08:14,800 --> 00:08:17,080 Speaker 1: of thing you can put put in that category of 177 00:08:17,160 --> 00:08:19,480 Speaker 1: weird oddities in the market that we have this kind 178 00:08:19,480 --> 00:08:22,240 Speaker 1: of this new hot category of e t s. Investors 179 00:08:22,240 --> 00:08:24,320 Speaker 1: don't own all the bits and pieces they own some 180 00:08:24,400 --> 00:08:27,000 Speaker 1: I think investors frankly are not quite entirely sure what 181 00:08:27,080 --> 00:08:28,800 Speaker 1: to make of that phenomenon, But we do get a 182 00:08:28,840 --> 00:08:31,240 Speaker 1: ton of questions on it. Laurie always good to see. 183 00:08:31,400 --> 00:08:34,040 Speaker 1: Thanks for being with us, especially early. Laurie Camvasina of 184 00:08:34,040 --> 00:08:43,320 Speaker 1: Obviously Capital Markets. Donathan god have joined us now Credit 185 00:08:43,360 --> 00:08:45,880 Speaker 1: Sweet chief US equity strategist, John Good to see you, sir, 186 00:08:46,080 --> 00:08:49,080 Speaker 1: grant to catch up. Yields are higher, yields are rough 187 00:08:49,120 --> 00:08:50,760 Speaker 1: for good reasons. You talked about this in the last 188 00:08:50,760 --> 00:08:52,240 Speaker 1: couple of weeks and run through the research with you 189 00:08:52,280 --> 00:08:54,240 Speaker 1: and the team that this market can do well when 190 00:08:54,320 --> 00:08:56,360 Speaker 1: yields are higher. That we need to find a point 191 00:08:56,360 --> 00:08:59,079 Speaker 1: on that, John, after Deprice sanction of Thursday, your thoughts please, sir, 192 00:09:00,040 --> 00:09:02,000 Speaker 1: well me. There's there's a few things. First of all, 193 00:09:02,280 --> 00:09:04,320 Speaker 1: you have to look at the full cost of capital, 194 00:09:04,360 --> 00:09:07,800 Speaker 1: which not only includes treasury yields but also credit spreads. 195 00:09:07,800 --> 00:09:10,040 Speaker 1: And if you look at high yield spreads, since the 196 00:09:10,200 --> 00:09:14,240 Speaker 1: fires are announcement, they are down more than treasury yields 197 00:09:14,280 --> 00:09:17,120 Speaker 1: are up. That's the big story. The cost of corporate 198 00:09:17,160 --> 00:09:21,200 Speaker 1: borrowing over the last four months continues to actually improve 199 00:09:21,600 --> 00:09:24,240 Speaker 1: even though treasury yields are higher. And that's the misstory. 200 00:09:24,840 --> 00:09:26,480 Speaker 1: John glib I want to go back to the heart 201 00:09:26,520 --> 00:09:29,480 Speaker 1: of your distinctive call with equity optimism, and that is 202 00:09:29,520 --> 00:09:32,960 Speaker 1: you believe tech will still participate. You have heard countless 203 00:09:33,000 --> 00:09:36,440 Speaker 1: people sell say sell the big tech, Sell the big tech. 204 00:09:36,720 --> 00:09:40,840 Speaker 1: It's yesterday's story. Give us that distinction. Well, first of all, Tom, 205 00:09:40,880 --> 00:09:45,280 Speaker 1: we're neutral weight on tech because we do think that 206 00:09:45,360 --> 00:09:47,320 Speaker 1: this is all gonna be the first We think the 207 00:09:47,320 --> 00:09:50,400 Speaker 1: the opening is going to be much bigger than people think. 208 00:09:50,720 --> 00:09:54,200 Speaker 1: Our our call is is really around corporate profits and 209 00:09:54,240 --> 00:09:57,079 Speaker 1: you want to buy operating leverage. You want companies that 210 00:09:57,200 --> 00:10:01,480 Speaker 1: jump the most in a UM approving economy, and tech 211 00:10:01,520 --> 00:10:04,280 Speaker 1: does okay, but it doesn't do well as banks, which 212 00:10:04,320 --> 00:10:07,240 Speaker 1: is our favorite group, or industrials and materials and energy. 213 00:10:07,559 --> 00:10:09,280 Speaker 1: So we think that they'll be in the game, but 214 00:10:09,320 --> 00:10:11,320 Speaker 1: we do not think they'll be leading this. One thing 215 00:10:11,360 --> 00:10:13,720 Speaker 1: that I was struck by, Jonathan, is that you raised 216 00:10:13,720 --> 00:10:17,559 Speaker 1: your up You phrased your forecast for the SMP on February. 217 00:10:17,920 --> 00:10:21,280 Speaker 1: You had previously raised your forecast on January seven. It 218 00:10:21,320 --> 00:10:24,280 Speaker 1: seems to be this moving target. What has surprised you 219 00:10:24,440 --> 00:10:27,600 Speaker 1: so much in terms of strength that has prompted you 220 00:10:27,840 --> 00:10:31,160 Speaker 1: to raise your forecasts twice in two months. Yeah, I 221 00:10:31,160 --> 00:10:35,520 Speaker 1: mean it's the earnings outlook is just is just crazy. 222 00:10:35,559 --> 00:10:37,800 Speaker 1: But I just could be a couple of examples um 223 00:10:37,840 --> 00:10:41,280 Speaker 1: in the fourth quarter. We beat the estimates. We the 224 00:10:41,400 --> 00:10:45,240 Speaker 1: the the actual results by seventeen percent. Now, typically a 225 00:10:45,320 --> 00:10:48,720 Speaker 1: company will beat by three percent or four percent. Seventeen 226 00:10:48,800 --> 00:10:52,800 Speaker 1: percent means that everybody's numbers had to be adjusted because 227 00:10:52,800 --> 00:10:55,280 Speaker 1: you're jumping off point just got a lot higher. That's 228 00:10:55,360 --> 00:10:58,720 Speaker 1: number one. Number two is if you look at really 229 00:10:58,800 --> 00:11:01,520 Speaker 1: is a few really important groups. Higher interest rate, very 230 00:11:01,559 --> 00:11:04,800 Speaker 1: big positive for financials. Higher oil and copper. Do you 231 00:11:04,800 --> 00:11:08,200 Speaker 1: know the oil and copper um If things go as expected, 232 00:11:08,559 --> 00:11:13,760 Speaker 1: that they will be up fifty percent versus twenty versus. 233 00:11:14,440 --> 00:11:18,120 Speaker 1: That's enormous for industrial materials and energy, and that stuff 234 00:11:18,160 --> 00:11:21,240 Speaker 1: matters a lot. So those are some of the incremental things. 235 00:11:21,240 --> 00:11:23,720 Speaker 1: But it wasn't that we think pe multiples are gonna 236 00:11:23,720 --> 00:11:26,000 Speaker 1: be the story in the next twelve months. Is all 237 00:11:26,040 --> 00:11:29,480 Speaker 1: corporate profits. Lesta coming in halt on a monthday morning, 238 00:11:30,440 --> 00:11:33,959 Speaker 1: just taken out John Colub for race this price target twice. No. 239 00:11:34,160 --> 00:11:36,640 Speaker 1: I was trying to highlight the moving nature of this 240 00:11:36,720 --> 00:11:39,600 Speaker 1: economy and this market, how difficult it is to predict, 241 00:11:39,800 --> 00:11:42,079 Speaker 1: and Jonathan, it has been. It has been very transparent 242 00:11:42,080 --> 00:11:45,240 Speaker 1: about it. Jonathan, Kudos to you for acknowledging what you 243 00:11:45,280 --> 00:11:48,200 Speaker 1: haven't necessarily been able to pinpoint immediately banks have been flaunt. 244 00:11:48,240 --> 00:11:49,760 Speaker 1: I think we're still up fifteen and a half percent 245 00:11:49,800 --> 00:11:52,079 Speaker 1: on the SMP year today on the banks. John, it's 246 00:11:52,080 --> 00:11:54,079 Speaker 1: been a great, great trade. You need to talk a 247 00:11:54,080 --> 00:11:55,800 Speaker 1: distinction for us if you count at this point already 248 00:11:55,800 --> 00:11:57,839 Speaker 1: between who wins the early stage of the recovery and 249 00:11:57,840 --> 00:12:00,360 Speaker 1: who wins the cycle. And to go back to Tom's point, 250 00:12:01,080 --> 00:12:03,400 Speaker 1: that secular growth story, the big tech play, is that 251 00:12:03,480 --> 00:12:06,880 Speaker 1: still to cycle winning for you, John, I mean, if 252 00:12:06,880 --> 00:12:09,199 Speaker 1: you have if you have a five year or ten 253 00:12:09,280 --> 00:12:13,560 Speaker 1: year view BI tech BI secular growth winners and just 254 00:12:13,640 --> 00:12:16,400 Speaker 1: ignore this. This is this is a nine month trade 255 00:12:17,320 --> 00:12:20,080 Speaker 1: or something like that in terms of the cyclical leadership. 256 00:12:20,360 --> 00:12:22,920 Speaker 1: But it's gonna be really really powerful. The question we're 257 00:12:22,920 --> 00:12:25,480 Speaker 1: getting from people is it too soon? You know? Is 258 00:12:25,480 --> 00:12:28,000 Speaker 1: it overready? How much of this price into the market? 259 00:12:28,360 --> 00:12:31,720 Speaker 1: And at least I think that the key here is 260 00:12:31,760 --> 00:12:34,440 Speaker 1: that that we think that the reopening is not even 261 00:12:34,440 --> 00:12:38,600 Speaker 1: in the market yet. This value trade is still relatively new, 262 00:12:39,160 --> 00:12:43,800 Speaker 1: and in fact, those cyclical companies are really cheap compared 263 00:12:43,840 --> 00:12:45,959 Speaker 1: to the rest of the market because they had lagged 264 00:12:46,040 --> 00:12:49,760 Speaker 1: for so long. So yeah, but but if your point, 265 00:12:50,080 --> 00:12:53,080 Speaker 1: if you have a five year outlook, you definitely want 266 00:12:53,080 --> 00:12:56,480 Speaker 1: to be playing those secular winners in in tech areas. John, 267 00:12:56,600 --> 00:13:00,240 Speaker 1: what portion of cash is looking for a warm spot 268 00:13:00,360 --> 00:13:02,520 Speaker 1: in the equity markets? Do you look at it is 269 00:13:02,920 --> 00:13:06,120 Speaker 1: traditional or is it a smaller amount because of these 270 00:13:06,200 --> 00:13:10,079 Speaker 1: unusual times? You know, Tom, I don't spend a lot 271 00:13:10,120 --> 00:13:12,880 Speaker 1: of time looking at this, and I'll tell you why. Um, 272 00:13:12,920 --> 00:13:18,240 Speaker 1: the incremental buyer of the market is not a you know, 273 00:13:18,360 --> 00:13:20,679 Speaker 1: it is not an individual investor, as much as we're 274 00:13:20,720 --> 00:13:24,120 Speaker 1: talking a lot about individual investors. It's a hedge fund 275 00:13:24,520 --> 00:13:29,960 Speaker 1: that incrementally increases their leverage and the ability for the 276 00:13:30,040 --> 00:13:34,040 Speaker 1: market to move on basis points of extra hedge fund 277 00:13:34,120 --> 00:13:37,839 Speaker 1: leverage is the is the the big issue here and 278 00:13:37,880 --> 00:13:40,600 Speaker 1: that has uh, you know, even when you look at 279 00:13:40,640 --> 00:13:43,280 Speaker 1: all the issues with some of these short squeezes, that 280 00:13:43,360 --> 00:13:47,040 Speaker 1: hedge fund leverage came down, it just popped right back 281 00:13:47,120 --> 00:13:50,480 Speaker 1: up to where it was. John, just find a question then, 282 00:13:50,480 --> 00:13:53,000 Speaker 1: how much fasibility do you have with the prime brokerage team. 283 00:13:53,200 --> 00:13:55,440 Speaker 1: Do you get a feel for how allocated people are 284 00:13:55,480 --> 00:13:59,480 Speaker 1: to this? Um? Yeah, and we we do, And I 285 00:13:59,520 --> 00:14:01,800 Speaker 1: mean is there's there's just a very small handful of 286 00:14:01,800 --> 00:14:04,280 Speaker 1: big pride broker's credace with one of the top in 287 00:14:04,320 --> 00:14:05,880 Speaker 1: the world. We do have a good sense of that 288 00:14:05,960 --> 00:14:08,800 Speaker 1: training activity. It seems like there's a fair bit of 289 00:14:08,800 --> 00:14:12,200 Speaker 1: of additional upside. Give an example, you know, hedge funds 290 00:14:12,240 --> 00:14:14,600 Speaker 1: are not overweight banks yet, even though when you talk 291 00:14:14,679 --> 00:14:16,760 Speaker 1: to guys like me, we're all screaming the banks are 292 00:14:17,000 --> 00:14:20,240 Speaker 1: the most attractive group in the marketplace. There's still overweight 293 00:14:20,320 --> 00:14:23,680 Speaker 1: technology groups, less so in areas like metal and mining 294 00:14:23,720 --> 00:14:26,720 Speaker 1: and some of these other you know, heavy deep cyclicals. 295 00:14:26,840 --> 00:14:29,480 Speaker 1: So from that perspective, it gives me a lot of 296 00:14:29,560 --> 00:14:33,720 Speaker 1: encouragement that this trade is nowhere near over. John writes, 297 00:14:33,760 --> 00:14:35,840 Speaker 1: to catch up, you look at well, very relaxed. Jonathan 298 00:14:35,840 --> 00:14:44,720 Speaker 1: got of the day chief US Equity Strategistics, Right news. 299 00:14:44,800 --> 00:14:48,240 Speaker 1: John mentions on the pandemic, it is good news. Jennifer 300 00:14:48,320 --> 00:14:51,520 Speaker 1: Nutso joins us with JOHNS Hopkins, and she's particularly good 301 00:14:51,920 --> 00:14:55,680 Speaker 1: at the epidemiology of all this and the trends of 302 00:14:55,720 --> 00:14:59,960 Speaker 1: our epidemiology. Dr nuts So, I see a linear trend 303 00:15:00,040 --> 00:15:03,120 Speaker 1: in deaths. I see a linear trend in the hospitalizations. 304 00:15:03,520 --> 00:15:06,800 Speaker 1: Where is your tip point now on that trend we're 305 00:15:06,880 --> 00:15:10,640 Speaker 1: out there is the good point for Jennifer Neudze, Well, 306 00:15:10,760 --> 00:15:12,720 Speaker 1: the good point is nobody getting to the hospital and 307 00:15:12,760 --> 00:15:15,360 Speaker 1: nobody dying. Unfortunately, we're not there yet, um, but we're 308 00:15:15,360 --> 00:15:18,760 Speaker 1: getting close. I mean, these vaccines are really extraordinary, and 309 00:15:18,800 --> 00:15:22,040 Speaker 1: we've gotten quite lucky to have now three vaccines that 310 00:15:22,080 --> 00:15:23,840 Speaker 1: are going to be able to keep people out of 311 00:15:23,840 --> 00:15:26,680 Speaker 1: the hospital and keep people from dying. So we should 312 00:15:26,800 --> 00:15:29,400 Speaker 1: see that, um, you know, I think in the coming months. 313 00:15:29,440 --> 00:15:31,520 Speaker 1: I'm quite excited that the limiting step right now is 314 00:15:31,560 --> 00:15:34,560 Speaker 1: just getting them into arms. Okay, four thousand deaths and 315 00:15:34,560 --> 00:15:37,120 Speaker 1: then one series I looked at, we're a two thousand 316 00:15:37,200 --> 00:15:41,480 Speaker 1: deaths now and even seeing better statistics nicely below two thousand. 317 00:15:41,840 --> 00:15:44,640 Speaker 1: What is the significance of getting to the next thousand, 318 00:15:44,680 --> 00:15:47,760 Speaker 1: to have nine fifty deaths? What does that mean for 319 00:15:47,840 --> 00:15:53,600 Speaker 1: American society? I mean it's extraordinary. I mean deaths is 320 00:15:53,640 --> 00:15:56,960 Speaker 1: too much still, um, but it is extraordinary given where 321 00:15:56,960 --> 00:15:59,320 Speaker 1: we were, which was one day we you know, searched 322 00:15:59,320 --> 00:16:03,160 Speaker 1: past five thousand deaths. So it's important to kind of 323 00:16:03,200 --> 00:16:05,200 Speaker 1: look back and remember how bad it has been, but 324 00:16:05,240 --> 00:16:07,680 Speaker 1: also recognize that we still have a long road ahead 325 00:16:07,720 --> 00:16:10,240 Speaker 1: of us, and it will start to get slower in 326 00:16:10,360 --> 00:16:13,080 Speaker 1: terms of the reduction and deaths, because one of the 327 00:16:13,080 --> 00:16:15,200 Speaker 1: things we did was cover the groups that are most 328 00:16:15,280 --> 00:16:17,560 Speaker 1: likely to die, like nursing home patients, which account for 329 00:16:17,560 --> 00:16:20,440 Speaker 1: a third of death. So that quick progress um is 330 00:16:20,480 --> 00:16:24,360 Speaker 1: important um, but that pace won't probably last for all 331 00:16:24,400 --> 00:16:27,240 Speaker 1: of it. Dr Nutso yesterday Anthony Fauci said that he 332 00:16:27,280 --> 00:16:30,160 Speaker 1: expects at school aged children will start to be vaccinated, 333 00:16:30,160 --> 00:16:33,240 Speaker 1: perhaps at the beginning of next year. Can we get 334 00:16:33,320 --> 00:16:37,800 Speaker 1: to hurt immunity before school aged children can get vaccinated? Yeah, 335 00:16:37,840 --> 00:16:40,040 Speaker 1: I mean herd immunity is a really funny thing. It's 336 00:16:40,040 --> 00:16:43,240 Speaker 1: actually a really complicated topic, and it depends on where 337 00:16:43,280 --> 00:16:46,320 Speaker 1: you live and how much um natural immunity there is, 338 00:16:46,400 --> 00:16:48,360 Speaker 1: how much vaccine is being rolled out, and also how 339 00:16:48,440 --> 00:16:50,920 Speaker 1: much of people interact with each other. So I'm actually 340 00:16:50,920 --> 00:16:53,680 Speaker 1: confident that we'll see a you know, a sustained decline 341 00:16:53,720 --> 00:16:57,000 Speaker 1: in cases before we see that happen. We know kids 342 00:16:57,080 --> 00:16:58,840 Speaker 1: can get the virus, they could spread it, but not 343 00:16:58,960 --> 00:17:01,440 Speaker 1: quite as well as a al so I think by 344 00:17:01,480 --> 00:17:03,480 Speaker 1: fault things should look a lot better than they are 345 00:17:03,560 --> 00:17:05,960 Speaker 1: right now. There's also a question, and Anthony Fauci really 346 00:17:06,000 --> 00:17:08,359 Speaker 1: pushed back on this sort of all clear that seemed 347 00:17:08,359 --> 00:17:11,680 Speaker 1: to be gaining consensus that if you get a vaccine, 348 00:17:11,720 --> 00:17:14,159 Speaker 1: you will not be able to spread the virus. He 349 00:17:14,160 --> 00:17:16,480 Speaker 1: seemed to say, you know, we don't know that for sure, 350 00:17:16,600 --> 00:17:19,600 Speaker 1: you still could. What do you think about that given 351 00:17:19,640 --> 00:17:22,880 Speaker 1: sort of the conflicting data that we've heard. Sure, so 352 00:17:23,200 --> 00:17:26,199 Speaker 1: we've heard some data that actually makes me optimistic that 353 00:17:26,240 --> 00:17:28,840 Speaker 1: we will see a reduction and transmission. I don't think 354 00:17:28,920 --> 00:17:31,119 Speaker 1: we can say, I don't think we've seen that with 355 00:17:31,119 --> 00:17:33,480 Speaker 1: with a lot um of the data that we have 356 00:17:33,560 --> 00:17:36,159 Speaker 1: so far, that it will completely prevent transmission. But a 357 00:17:36,200 --> 00:17:38,639 Speaker 1: reduction and transmission is a win as far as I'm concerned. 358 00:17:38,680 --> 00:17:41,439 Speaker 1: I mean, really, we've already defanged the virus by taking 359 00:17:41,440 --> 00:17:43,560 Speaker 1: off the table um, you know, for the most part 360 00:17:43,720 --> 00:17:46,960 Speaker 1: deaths and hospitalizations, and if we can also reduce cases, 361 00:17:47,000 --> 00:17:49,480 Speaker 1: that would be great. And John, what's so interesting here 362 00:17:49,560 --> 00:17:52,520 Speaker 1: is the optimism of Dr nutso versus a three week 363 00:17:52,600 --> 00:17:56,200 Speaker 1: proposed lockdown in Paris, or the challenges that we see 364 00:17:56,240 --> 00:17:58,880 Speaker 1: within the British press. I mean, different gap has never 365 00:17:58,920 --> 00:18:00,960 Speaker 1: been wide a different well, it's on the continent in 366 00:18:01,080 --> 00:18:03,439 Speaker 1: the euro Zone where everybody struggled to roll out this vaccine. 367 00:18:03,440 --> 00:18:05,440 Speaker 1: So Jennifer, let's finish there on some good news around 368 00:18:05,440 --> 00:18:07,520 Speaker 1: the United States. We came into the new year. If 369 00:18:07,560 --> 00:18:08,880 Speaker 1: there was one worry, I think a lot of people 370 00:18:08,880 --> 00:18:11,320 Speaker 1: worried about supply. Can we just park that worry now? 371 00:18:11,480 --> 00:18:12,720 Speaker 1: I look at some of the numbers and it just 372 00:18:12,720 --> 00:18:14,800 Speaker 1: feels like supplies just not going to be an issue 373 00:18:14,800 --> 00:18:18,040 Speaker 1: at all in this country. Yeah. I mean it's still 374 00:18:18,080 --> 00:18:19,639 Speaker 1: an issue in the sense that you know, people like 375 00:18:19,680 --> 00:18:21,439 Speaker 1: me who are in a priority group can't get it. 376 00:18:21,520 --> 00:18:25,560 Speaker 1: But it's getting better and I am hopeful for the future. 377 00:18:25,640 --> 00:18:27,080 Speaker 1: And then we'll have to deal with how do we 378 00:18:27,080 --> 00:18:29,360 Speaker 1: actually get it into arms. They'll be some bumps there. 379 00:18:29,359 --> 00:18:31,400 Speaker 1: They will also be the bumps of people who may 380 00:18:31,440 --> 00:18:33,600 Speaker 1: not want the vaccine and very much should get it 381 00:18:33,640 --> 00:18:35,960 Speaker 1: because they they are vulnerable. So we still have some 382 00:18:36,040 --> 00:18:38,480 Speaker 1: challenges ahead of us, but overall, I think it's looking 383 00:18:38,480 --> 00:18:40,400 Speaker 1: a lot better than where we were this time last year. 384 00:18:40,400 --> 00:18:41,639 Speaker 1: Got to the hold up now, do you see it 385 00:18:41,720 --> 00:18:43,359 Speaker 1: is a logistical one or do you see it as 386 00:18:43,400 --> 00:18:45,480 Speaker 1: one that comes down to acceptance as we get further 387 00:18:45,520 --> 00:18:48,240 Speaker 1: down the line. I think we're gonna still deal with 388 00:18:48,280 --> 00:18:50,399 Speaker 1: both for for quite a while. Um. Right now, the 389 00:18:50,400 --> 00:18:53,880 Speaker 1: predominant challenge is logistical and um, you know, not enough 390 00:18:53,920 --> 00:18:56,399 Speaker 1: vaccineers to get into arms and not enough vaccines. The 391 00:18:56,480 --> 00:18:59,280 Speaker 1: vaccines we're gonna have an increasing abundance and then we'll 392 00:18:59,320 --> 00:19:03,440 Speaker 1: have to think about the vaccinators and then uh, willingness 393 00:19:03,480 --> 00:19:05,480 Speaker 1: to get it has always been an issue. But as 394 00:19:05,560 --> 00:19:09,040 Speaker 1: the demand is able to be met more greatly, we 395 00:19:09,080 --> 00:19:13,119 Speaker 1: will see more, um more prominently the hesitation issue. That 396 00:19:13,160 --> 00:19:15,159 Speaker 1: will also that we need to address. Don't do we 397 00:19:15,160 --> 00:19:17,360 Speaker 1: appreciate you wrong gun contribution to this probably Fran thanks 398 00:19:17,400 --> 00:19:19,040 Speaker 1: for being with us this morning. Jennifer Neat said that 399 00:19:19,080 --> 00:19:28,080 Speaker 1: having of Johns Halkins, thank you. Right down to Washington. 400 00:19:28,119 --> 00:19:29,680 Speaker 1: Here we go to Greg ll of a g F 401 00:19:29,800 --> 00:19:32,080 Speaker 1: looking at the moment that is out there, Greg, I 402 00:19:32,080 --> 00:19:34,480 Speaker 1: want to go back to Pure Research twelve months ago 403 00:19:34,920 --> 00:19:37,679 Speaker 1: where they measured the liberals in America and came up 404 00:19:37,720 --> 00:19:41,760 Speaker 1: with a very liberal liberal combination of forties seven percent 405 00:19:41,960 --> 00:19:45,800 Speaker 1: of the Democratic Party. I believe that means a majority 406 00:19:45,840 --> 00:19:50,200 Speaker 1: of Democrats are not liberals. How does President Biden deal 407 00:19:50,280 --> 00:19:53,960 Speaker 1: with that with a new animosity. It's a really big 408 00:19:54,000 --> 00:19:56,480 Speaker 1: story time and we saw over the weekend to fight 409 00:19:56,520 --> 00:19:58,920 Speaker 1: on minimum wage. It's it's not going to be in 410 00:19:58,960 --> 00:20:03,200 Speaker 1: this one point nine trillion dollars stimulus bill. I think 411 00:20:03,200 --> 00:20:06,120 Speaker 1: it hasn't been vetted. A lot of modern Democrats don't 412 00:20:06,119 --> 00:20:09,040 Speaker 1: like it. This is the first of many big fights 413 00:20:09,080 --> 00:20:11,399 Speaker 1: that will pit the center against the left. What does 414 00:20:11,440 --> 00:20:16,920 Speaker 1: the sensitivity, Greg Villier of six votes, six districts difference 415 00:20:17,040 --> 00:20:21,320 Speaker 1: in the House in the push by progressives by liberals 416 00:20:21,600 --> 00:20:24,800 Speaker 1: to bring Mr Biden to the left. Yeah, there's not 417 00:20:24,880 --> 00:20:27,720 Speaker 1: a lot of wiggle room. Absolutely, And I think in 418 00:20:27,800 --> 00:20:30,120 Speaker 1: the House and in the Senate talk of a big 419 00:20:30,160 --> 00:20:32,520 Speaker 1: new tax hike. I guess Elizabeth Warren is out with 420 00:20:32,560 --> 00:20:35,440 Speaker 1: something this morning. It's not going to fly. I mean, 421 00:20:35,480 --> 00:20:37,879 Speaker 1: the Democrats in the House worry that they could lose 422 00:20:37,880 --> 00:20:40,560 Speaker 1: the House in two if they go too far to 423 00:20:40,600 --> 00:20:43,040 Speaker 1: the left. All right, So let's talk about that bill 424 00:20:43,080 --> 00:20:45,719 Speaker 1: that you're talking about. The Senator Warrent introduced this morning. 425 00:20:45,960 --> 00:20:49,480 Speaker 1: She was proposing, along with Representative Jay Paul, two percent 426 00:20:49,560 --> 00:20:52,480 Speaker 1: annual tax on the net worth of households and trust 427 00:20:52,520 --> 00:20:55,080 Speaker 1: between fifty million and one billion dollars. What is the 428 00:20:55,119 --> 00:20:58,439 Speaker 1: likelihood what is the chance of this actually getting passed 429 00:20:58,480 --> 00:21:02,119 Speaker 1: into policy? Close to zero? I wouldn't say it's exactly zero. 430 00:21:02,160 --> 00:21:04,359 Speaker 1: But I'd say it's pretty close. It's a it's a 431 00:21:04,400 --> 00:21:07,399 Speaker 1: good argument. She can go out and say we're progressive, 432 00:21:07,480 --> 00:21:10,959 Speaker 1: we we favor these people who don't make that much money. 433 00:21:11,000 --> 00:21:14,560 Speaker 1: But you don't have the votes for something that radical. Okay, 434 00:21:14,600 --> 00:21:16,439 Speaker 1: maybe not that radical, But are there the votes to 435 00:21:16,520 --> 00:21:20,240 Speaker 1: raise taxes and some other capacity later in the year. Yeah, 436 00:21:20,320 --> 00:21:22,240 Speaker 1: that's a good question. And I think later in the year, 437 00:21:22,280 --> 00:21:24,720 Speaker 1: as we look at an infrastructure bill, there may be 438 00:21:24,880 --> 00:21:29,879 Speaker 1: some increased in corporate taxes up from to maybe on 439 00:21:29,960 --> 00:21:33,440 Speaker 1: the very wealthy, but some huge wealth tax I think 440 00:21:33,480 --> 00:21:35,800 Speaker 1: has very very little chance. Come on, great, let's go that. 441 00:21:35,880 --> 00:21:37,880 Speaker 1: Do you think we can actually get an infrastructure bill 442 00:21:37,960 --> 00:21:43,120 Speaker 1: past anytime soon? Yeah? I do. When people say Jonathan that, well, 443 00:21:43,160 --> 00:21:45,560 Speaker 1: it's two trillion dollars a more. It's over ten years, 444 00:21:45,560 --> 00:21:48,840 Speaker 1: so it's not like it's all in one year. I 445 00:21:48,880 --> 00:21:51,040 Speaker 1: think it's going to be tough. But they have another 446 00:21:51,080 --> 00:21:54,280 Speaker 1: shot at this budget reconciliation. They get to do it 447 00:21:54,320 --> 00:21:56,960 Speaker 1: twice this year. Once is in the next two weeks 448 00:21:56,960 --> 00:21:59,760 Speaker 1: on the COVID bill. No, I think they'll have one 449 00:21:59,760 --> 00:22:01,640 Speaker 1: more chance later in the year. I do think we'll 450 00:22:01,640 --> 00:22:04,439 Speaker 1: get infrastructure. What will be tough about it, considering that 451 00:22:04,480 --> 00:22:06,679 Speaker 1: everyone who comes on this program on either side of 452 00:22:06,680 --> 00:22:10,080 Speaker 1: the House, that's the same thing they wanted. Greg, Yeah, 453 00:22:10,240 --> 00:22:13,080 Speaker 1: they they do. I think there's a strong need for 454 00:22:13,400 --> 00:22:17,360 Speaker 1: you know, bridges, highways, dam's telecom, all all of that stuff, 455 00:22:17,680 --> 00:22:20,680 Speaker 1: and they're willing to spend the money. I personally think 456 00:22:21,080 --> 00:22:23,360 Speaker 1: they're spending too much money. I think one point nine 457 00:22:23,359 --> 00:22:25,960 Speaker 1: trillion is too much. I think we're going to overheat 458 00:22:26,000 --> 00:22:29,040 Speaker 1: the economy. But it's going to happen great vill Yeah, 459 00:22:29,040 --> 00:22:30,520 Speaker 1: you and I are the only ones in the room 460 00:22:30,560 --> 00:22:33,600 Speaker 1: that remember the phrase blue dog. What is the linkage 461 00:22:33,600 --> 00:22:38,080 Speaker 1: of moderate Democrats to the moderate senator from West Virginia 462 00:22:38,560 --> 00:22:41,480 Speaker 1: and then over to moderate Republicans. Is there a new club? 463 00:22:41,600 --> 00:22:43,960 Speaker 1: Is there a new get together? We don't know about. 464 00:22:44,480 --> 00:22:47,520 Speaker 1: It's a pretty lonely club time. There are some people 465 00:22:47,520 --> 00:22:50,200 Speaker 1: who would agree that you can't spend this kind of money. 466 00:22:50,320 --> 00:22:53,440 Speaker 1: Obviously Joe Manchin is the leader of this group from 467 00:22:53,520 --> 00:22:55,720 Speaker 1: West Virginia. But I think there are a lot of 468 00:22:55,760 --> 00:22:59,719 Speaker 1: Democrats and in private who think one point nine trillion 469 00:22:59,800 --> 00:23:02,760 Speaker 1: is too much, and there are many Most Republicans think 470 00:23:02,840 --> 00:23:05,480 Speaker 1: one point nine trillion is too much. Maybe it goes 471 00:23:05,520 --> 00:23:08,000 Speaker 1: down to one seven and when we get the final 472 00:23:08,040 --> 00:23:09,600 Speaker 1: bill in two weeks. But this is going to be 473 00:23:09,640 --> 00:23:12,600 Speaker 1: a lot of money. I remember when people were talking 474 00:23:12,640 --> 00:23:15,119 Speaker 1: about how the more radical wings of both the Republican 475 00:23:15,160 --> 00:23:18,399 Speaker 1: and Democratic parties had more cloud and we certainly have 476 00:23:18,520 --> 00:23:21,879 Speaker 1: seen that in the years in the recent past. Do 477 00:23:21,920 --> 00:23:23,560 Speaker 1: you think going forward it will be the same. Do 478 00:23:23,600 --> 00:23:25,960 Speaker 1: you think that we're going to see the Democratic Party 479 00:23:26,000 --> 00:23:29,639 Speaker 1: schew more heavily toward the left side and the Republican 480 00:23:29,680 --> 00:23:32,199 Speaker 1: Party schew more heavily towards Trump in a sort of 481 00:23:32,240 --> 00:23:35,200 Speaker 1: more populous tone. Well, rhetorically they will, and we saw 482 00:23:35,560 --> 00:23:37,560 Speaker 1: in the last week a real anger on the part 483 00:23:37,600 --> 00:23:40,320 Speaker 1: of progressive because Biden wouldn't go along with a fifty 484 00:23:40,720 --> 00:23:43,680 Speaker 1: dollar student loan exemption. So it would be a lot 485 00:23:43,680 --> 00:23:46,280 Speaker 1: of talk about that. But let me just make this 486 00:23:46,560 --> 00:23:49,800 Speaker 1: point quickly. I think that Biden himself will be the 487 00:23:49,880 --> 00:23:53,720 Speaker 1: key player. He's not a radical, I call him progressive 488 00:23:53,840 --> 00:23:57,720 Speaker 1: light uh, and he's an institutionalist, and I think that 489 00:23:57,800 --> 00:24:01,240 Speaker 1: he will come down on the side of moderate rather 490 00:24:01,280 --> 00:24:03,440 Speaker 1: than radical. Great, before we let you go, I asked 491 00:24:03,480 --> 00:24:06,400 Speaker 1: this question to Kevin Sirelli, a chief Washington corresponded Danny 492 00:24:06,480 --> 00:24:09,480 Speaker 1: DC A little bit earlier about an arago actually about 493 00:24:09,480 --> 00:24:12,280 Speaker 1: whether the divisions within the president's party are getting bigger 494 00:24:12,359 --> 00:24:15,359 Speaker 1: or whether we're just highlighting the more. What's your take, Greg, 495 00:24:15,400 --> 00:24:18,920 Speaker 1: you live and breathe it. I think most Republicans in private, 496 00:24:18,960 --> 00:24:20,800 Speaker 1: if you gave him truth serum, would say they'll be 497 00:24:20,840 --> 00:24:23,440 Speaker 1: happy to get rid of him. I mean he did 498 00:24:23,520 --> 00:24:26,359 Speaker 1: lose the White House, House and Senate, and people don't 499 00:24:26,359 --> 00:24:30,800 Speaker 1: forget that. Jeff Investment's chief US policy strategist on the 500 00:24:30,800 --> 00:24:33,680 Speaker 1: path forward and the how Tom keane that we can 501 00:24:33,680 --> 00:24:37,240 Speaker 1: get an infrastructure plan a bill pass sometime soon in 502 00:24:37,280 --> 00:24:41,560 Speaker 1: this country. This is the Bloomberg Surveillance Podcast. Thanks for listening. 503 00:24:41,920 --> 00:24:45,280 Speaker 1: Join us live weekdays from seven to ten AMI Eastern. 504 00:24:45,520 --> 00:24:49,560 Speaker 1: I'm Bloomberg Radio, and on Bloomberg Television each day from 505 00:24:49,600 --> 00:24:54,879 Speaker 1: six to nine am for insight from the best in economics, finance, investment, 506 00:24:55,040 --> 00:25:00,119 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 507 00:25:00,160 --> 00:25:03,920 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on 508 00:25:04,040 --> 00:25:10,280 Speaker 1: the terminal. I'm Tom keene In. This is Bloomberg m