WEBVTT - Markets, Tech, And Air Travel (Radio) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.599 at Bloomberg dot com slash podcast. All right, let's talk 0:00:22.640 --> 0:00:28.080 to a professional investor now, Steve Wyatt, chief investment strategist 0:00:28.120 --> 0:00:32.279 for b Okay Financial. Steve, You're in Oklahoma, isn't it right? 0:00:32.760 --> 0:00:36.040 And Tulsa, Oklahoma. Tulsa, Oklahoma. So let me just I'm 0:00:36.040 --> 0:00:39.680 gonna assume that you've got an opinion on oil at 0:00:39.800 --> 0:00:41.720 w t I crude oil and a hundred two dollars 0:00:41.720 --> 0:00:45.200 of barrel. What are the smart people in the oil 0:00:45.240 --> 0:00:47.120 biz that you talked to? What are they saying about? 0:00:47.159 --> 0:00:49.639 Where do they think oil is going? You know, it's 0:00:49.680 --> 0:00:52.760 interesting here. Look be Okay Financials, an energy bank, were 0:00:52.760 --> 0:00:57.080 one of the larger banks and the energy business. And frankly, uh, 0:00:57.200 --> 0:00:59.560 not just in Oklahoma, but in Texas as well. We've 0:00:59.600 --> 0:01:02.279 got kind of a love hate relationship with oil prices. 0:01:03.320 --> 0:01:06.440 We don't like it. As consumers when gasoline prices are high, 0:01:06.560 --> 0:01:09.600 just like everybody else. So much of our economy is 0:01:09.640 --> 0:01:13.120 driven by the energy business, employment, personal incomes, a lot 0:01:13.200 --> 0:01:18.160 of people with royalties that as oil prices go up, UH, 0:01:18.240 --> 0:01:21.080 personal incomes are rising in this UH, in this part 0:01:21.080 --> 0:01:23.920 of the in this part of the country, we're still 0:01:24.280 --> 0:01:27.000 i would say constructive on the energy business. There's a 0:01:27.040 --> 0:01:30.119 lot of moving parts there. There's a lot of things 0:01:30.120 --> 0:01:33.400 outside of outside of our control. When you start thinking 0:01:33.440 --> 0:01:35.920 about what's going on with Russia and Ukraine and how 0:01:35.959 --> 0:01:38.959 OPEC is handling some of this UH, and then you've 0:01:38.959 --> 0:01:43.440 got some regulatory issues I'm gonna say issues in Washington 0:01:43.560 --> 0:01:47.120 that almost ironically, if you look at the performance of 0:01:47.160 --> 0:01:51.640 the energy markets, the more restrictive policies have been, the 0:01:51.680 --> 0:01:55.320 better the performance of the energy equities in the price 0:01:55.360 --> 0:01:59.520 of oil. But to the degree that we see ongoing 0:01:59.680 --> 0:02:05.120 demand and for energy both oil and natural gas were constructive, 0:02:05.160 --> 0:02:09.280 we're still constructive. Does it make sense to you, Steve, 0:02:09.440 --> 0:02:12.640 that the US would go all the way over to 0:02:12.760 --> 0:02:16.000 Saudi Arabia and ask them to pump more oil rather 0:02:16.080 --> 0:02:19.000 than just taking a little trip down to Oklahoma in 0:02:19.040 --> 0:02:21.440 Texas and making it easier for our folks to pull 0:02:21.919 --> 0:02:26.079 our own natural resources out of the ground. So one 0:02:26.080 --> 0:02:27.840 of the hard parts of our job is we try 0:02:27.880 --> 0:02:30.680 to be as a political as possible when we're when 0:02:30.720 --> 0:02:33.720 we're answering questions like this. But I didn't say the President. 0:02:33.800 --> 0:02:38.240 I said America just in general, as we think about 0:02:38.360 --> 0:02:42.640 how we move forward from an energy policy standpoint, and 0:02:42.680 --> 0:02:45.200 nobody's pushing back on the fact that the direction that 0:02:45.240 --> 0:02:48.080 we're going is towards more green energy. But as we 0:02:48.120 --> 0:02:52.240 sit here today, Uh, it is hard to understand why 0:02:52.440 --> 0:02:56.120 the administration would find it better to go to OPEC 0:02:56.400 --> 0:03:02.320 or Venezuela or countries to ask them to produce more 0:03:02.400 --> 0:03:05.919 oil when that is a resource that we have domestically. 0:03:05.960 --> 0:03:08.800 We're the largest producer of oil in the in the world. 0:03:09.240 --> 0:03:12.600 We've got a h an industry that has that that 0:03:12.639 --> 0:03:15.440 has you know, built out and put us in a 0:03:15.480 --> 0:03:19.000 position where we could we could be energy and dependent 0:03:19.040 --> 0:03:21.440 if that's what we wanted to do. I understand there's 0:03:21.560 --> 0:03:26.480 uh competing thoughts around the direction that we should be 0:03:26.480 --> 0:03:29.160 going to really more around the timing of how quickly 0:03:29.200 --> 0:03:32.280 we should be moving forward. But yes, it's hard to 0:03:32.360 --> 0:03:36.560 understand why we're not engaging our domestic energy business at 0:03:36.600 --> 0:03:39.120 a different level than what it seems we are hasteve 0:03:39.200 --> 0:03:41.320 you know what I've heard from folks that do follow 0:03:41.360 --> 0:03:44.640 the energy markets globally, they say, you know, the U 0:03:44.720 --> 0:03:47.320 S producers, the shell producers, who have been had such 0:03:47.360 --> 0:03:51.200 tremendous growth over the last twenty years. Uh, They've been 0:03:51.200 --> 0:03:55.000 told by their equity holders, by their bondholders, maybe even 0:03:55.040 --> 0:04:00.280 by their commercial lenders, discipline, do not drill more turned 0:04:00.320 --> 0:04:04.800 that cash to shareholders and creditors. Is that part of 0:04:04.800 --> 0:04:07.920 the issue as well? It certainly is, And and you 0:04:08.000 --> 0:04:10.280 have to look at how again, just go to how 0:04:10.320 --> 0:04:14.720 the industry is actually performing. Uh. Since that shift when 0:04:14.720 --> 0:04:18.080 it was you know, drill, baby, drill, Uh, it has 0:04:18.120 --> 0:04:22.799 been better from an economic standpoint for the holders of 0:04:22.960 --> 0:04:27.240 equity energy equities. Uh, it's been better for the debt 0:04:27.279 --> 0:04:30.679 holders of those energy companies. Energy makes up a pretty 0:04:30.760 --> 0:04:33.560 large portion of the high yield index. And then in 0:04:33.640 --> 0:04:38.040 past periods, Uh, the energy sector has been responsible for 0:04:38.279 --> 0:04:40.520 a lot of the problems in the high market. That's 0:04:40.560 --> 0:04:44.719 just not the case. Again, working for a financial company 0:04:44.760 --> 0:04:47.279 that is in that business, UH, it does not hurt 0:04:47.279 --> 0:04:51.479 our credit profile when we see oil prices um and 0:04:51.600 --> 0:04:55.240 natural gas prices as high as they are. All right, 0:04:55.279 --> 0:04:57.839 talk to us about Oklahoma State football. What's the outlook 0:04:57.880 --> 0:05:01.520 for this coming year? Steve, I have to look, I 0:05:01.560 --> 0:05:03.960 went to Oklahoma State. I played on the tennis team there. 0:05:05.040 --> 0:05:07.520 Interestingly that when I was at Oklahoma State though, to 0:05:07.520 --> 0:05:09.760 tell you just how long ago that was, Jimmy Johnson 0:05:09.839 --> 0:05:14.719 was our head football coach. Um, Look, we've done a 0:05:14.720 --> 0:05:17.960 fabulous job of being relevant for the last fifteen years. 0:05:18.520 --> 0:05:22.719 I think as a as a long time Oklahoma State fan. Uh, 0:05:22.720 --> 0:05:26.320 it's a lesson and expectational management. You never let your 0:05:26.360 --> 0:05:29.279 expectations get away from you on the high side. But 0:05:29.360 --> 0:05:31.640 we've certainly done a good job in the last fifteen 0:05:31.720 --> 0:05:35.480 years or so we being relevant in D one football. Absolutely, 0:05:35.600 --> 0:05:39.320 Oklahoma State Cowboys had some good stuff there. Uh. Steve Wyatt, 0:05:39.360 --> 0:05:42.880 chief investment strategist for be Okay Financial. We were gonna 0:05:42.880 --> 0:05:45.640 talk like broad Marcus b Someone's are talking about energy 0:05:45.720 --> 0:05:48.760 oil and with those folks down there, it's their business 0:05:48.760 --> 0:05:55.520 in Oklahoma and Texas. Uh, they've been quite disciplined. All right, 0:05:55.560 --> 0:05:58.520 let's go technology. I'm loving you know. The SMP went 0:05:58.560 --> 0:06:01.840 down almost almost percent year today, but when you look 0:06:01.880 --> 0:06:05.640 at the tech heavy nastack that's down almost thirty percent 0:06:05.839 --> 0:06:08.120 year today, and you think about the nastack tech stocks, 0:06:08.160 --> 0:06:11.680 they've really lead this market since a great financial crisis, 0:06:11.680 --> 0:06:14.960 but certainly under performing year to date this year. Let's 0:06:15.000 --> 0:06:16.560 get a little bit of a preview because we're gonna 0:06:16.600 --> 0:06:19.039 have some tech earnings really in earnest start next week. 0:06:19.040 --> 0:06:22.120 We've got uh Netflix after the close tonight, Ivana the 0:06:22.240 --> 0:06:26.800 Lefska founder and chief investment officer of Spear invest joins us. 0:06:27.040 --> 0:06:31.600 Ivana again the underperformance attech this year, Um, what's your 0:06:31.680 --> 0:06:34.760 view of the tech space here? Is there still? Is 0:06:34.760 --> 0:06:40.480 this still a core part of people's portfolio? Should it be? Well, 0:06:40.560 --> 0:06:43.479 I believe it's should Then I believe this major pubek 0:06:43.640 --> 0:06:48.160 presents a really good, attractive, really attractive entry point. If 0:06:48.160 --> 0:06:52.240 you look at tech the under performance with them not 0:06:52.480 --> 0:06:55.320 that being down. If you look at the big innovators 0:06:55.360 --> 0:06:58.360 in the space, they're down significantly more than that. So 0:06:58.880 --> 0:07:03.679 we didn't arcovery universe. Companies that have delivered on earnings 0:07:03.720 --> 0:07:07.839 and had solid outlooks are still down. Some companies that 0:07:07.880 --> 0:07:10.880 had some hiccups are down seventy and you have somewhere 0:07:10.880 --> 0:07:13.840 like the business model is in question that are down, 0:07:14.920 --> 0:07:17.440 So we think the sweet spot is to look into 0:07:18.120 --> 0:07:21.440 this area of stocks that are actually performing pretty well. 0:07:21.520 --> 0:07:24.520 The fundamentals are strong, but you can still get these 0:07:24.520 --> 0:07:28.160 stops cheaper compared to what you could have gotten a 0:07:28.240 --> 0:07:33.120 year ago. How else do you divide the technology sector 0:07:33.280 --> 0:07:38.680 other than you know innovators UM or by sort of 0:07:38.760 --> 0:07:41.880 executing on business strategy in terms of you know, the 0:07:41.920 --> 0:07:46.000 products they make or the services they provide. So we 0:07:46.280 --> 0:07:49.920 are we've focused on industrial technology. The way we look 0:07:49.920 --> 0:07:55.120 at technology more broadly is either consumer driven names or 0:07:55.560 --> 0:08:01.240 industrial or enterprise driven companies. So in the last text cycle, 0:08:01.360 --> 0:08:03.280 we saw a lot of in the innovation in the 0:08:03.320 --> 0:08:08.480 consumer space where you had between streaming social media. Those 0:08:08.480 --> 0:08:12.080 were really the big companies that drove the the drove 0:08:12.160 --> 0:08:16.520 the text cycle. Going forward, we think industrial and enterprise 0:08:16.560 --> 0:08:20.120 technology will be the big driver of the of the 0:08:20.160 --> 0:08:23.320 next cycle. We think a lot of the innovation in 0:08:23.400 --> 0:08:26.640 tech has been around data, how to use data, how 0:08:26.680 --> 0:08:30.160 to store it in the cloud, how to secure it well, 0:08:31.080 --> 0:08:33.280 and then how to use it and use processes like 0:08:33.360 --> 0:08:37.480 ai UM. So we think we're just at the cost 0:08:37.760 --> 0:08:40.959 of UM where we can start using some of these 0:08:40.960 --> 0:08:46.839 technologies into mainstream businesses or traditional businesses like autos aerospace, 0:08:47.320 --> 0:08:50.199 and there is a real potential to transform this entire 0:08:50.280 --> 0:08:53.840 end market. So on that end, Ivanna a lot of 0:08:53.840 --> 0:08:56.920 folks when they're talking about the future, the next three 0:08:57.000 --> 0:08:59.959 or five years of where investors should really think about 0:09:00.040 --> 0:09:03.000 the text act, they say cyber security. How do you 0:09:03.040 --> 0:09:05.960 think about cybersecurity? What what's your view on that space 0:09:06.000 --> 0:09:07.600 and and how do you think is the best way 0:09:07.600 --> 0:09:12.920 to play it. So we're really excited about cybersecurity. It's 0:09:13.080 --> 0:09:17.040 the most it's the largest team within within our portfolio. 0:09:17.160 --> 0:09:21.360 We have a publicly listed dts UH Spear Alpha with 0:09:21.440 --> 0:09:25.120 the ticker SPRX, and cybersecurity is one of the largest 0:09:25.240 --> 0:09:30.960 teams within that that that portfolio. We love the space 0:09:31.040 --> 0:09:35.440 for several several reasons. One of them is as architectures 0:09:35.480 --> 0:09:40.160 have changed and data is no longer centralized. People are 0:09:40.440 --> 0:09:44.720 using either multiple devices or they're using data that store 0:09:44.720 --> 0:09:48.160 at the cloud or at multiple clouds. So this change 0:09:48.200 --> 0:09:53.200 in architecture requires completely different cybersecurity solutions then you would 0:09:53.240 --> 0:09:56.640 have needed several years ago. So there are several of 0:09:56.720 --> 0:10:00.199 the space is pretty fragmented. There's several different areas that 0:10:00.360 --> 0:10:04.960 we like and we focus on that have over growth 0:10:05.280 --> 0:10:08.880 of just the end market. Endpoint security is one of them. 0:10:09.320 --> 0:10:13.160 Here we like companies like crowd strikes. Another area is 0:10:13.240 --> 0:10:16.920 securing workloads to the cloud and within the clouds. Here 0:10:16.960 --> 0:10:20.000 a name is z scaler. And then for people that 0:10:20.120 --> 0:10:23.120 want to play a more platform approach, power out on 0:10:23.200 --> 0:10:26.360 networks is a good way to play where they play 0:10:26.440 --> 0:10:31.840 both on the endpoint UM and the traditional firewall firewall products. 0:10:32.840 --> 0:10:35.760 What about AI UM it's something we hear so much 0:10:35.800 --> 0:10:40.280 about and you know, investors put so much faith in it. Obviously, 0:10:40.400 --> 0:10:42.559 eventually the machines are going to turn against us and 0:10:42.600 --> 0:10:44.480 then you'll feel guilty about all the money you made. 0:10:44.520 --> 0:10:48.439 But is it a good place to go into right now? Well, yes, 0:10:48.559 --> 0:10:51.120 So it's very interesting because it's been a team for 0:10:51.280 --> 0:10:53.959 us over the past few years, but we really didn't 0:10:54.000 --> 0:10:57.440 have any significant investments and as there weren't any ways 0:10:57.480 --> 0:11:01.360 to play that scale. And over the last year we've 0:11:01.400 --> 0:11:04.600 seen a lot of developments where AI is becoming at 0:11:04.640 --> 0:11:09.439 the core of many processes. So even if back to cybersecurity, 0:11:09.679 --> 0:11:11.520 even if you look at cybersecurity, a lot of the 0:11:11.600 --> 0:11:15.400 new products are AI based. So crowds rate products are 0:11:15.480 --> 0:11:18.920 AI and machine learning based the scalers products same thing. 0:11:19.120 --> 0:11:23.920 So it's really gaining mainstream adoption. And this is just 0:11:24.120 --> 0:11:27.719 for running like, uh, processes that you wouldn't necessarily be 0:11:27.800 --> 0:11:32.000 able to even do manually, right. Uh, This algorithms can 0:11:32.080 --> 0:11:34.600 pick up on a NORMALI is by just by training 0:11:34.760 --> 0:11:37.000 training the model. So we think the A is going 0:11:37.040 --> 0:11:42.080 to gain adoption to even more mainstream like autonomous driving. 0:11:42.160 --> 0:11:45.839 We still believe that's several years away because it is 0:11:45.920 --> 0:11:50.319 a pretty complex problem, but we do see AI is 0:11:50.400 --> 0:11:55.280 gaining pretty uh, pretty broad adoption. AVNA just real quick 0:11:55.320 --> 0:11:59.400 thirty seconds. Bloomberg Broker story yesterday that Apple may slow 0:11:59.520 --> 0:12:02.600 some higher ring in certain businesses and that we've seen 0:12:02.640 --> 0:12:05.080 that from other companies. We've seen that from other companies. 0:12:05.640 --> 0:12:08.120 Do you get a sense of Silicon Valley is kind 0:12:08.160 --> 0:12:11.880 of gearing up for a recession? Yeah? Absolutely. I mean 0:12:12.000 --> 0:12:14.959 at this point we are at a at a point 0:12:15.040 --> 0:12:18.880 where recession is almost a foregone conclusion. Um, We're we 0:12:19.000 --> 0:12:21.720 trucked a lot of industrial data points and things really 0:12:21.840 --> 0:12:26.640 became really really turned even since since March, we started 0:12:26.679 --> 0:12:31.160 seeing the trucking market soft and consumer discretionary softened and 0:12:31.320 --> 0:12:35.760 that's really now just been affecting the broad at the 0:12:35.840 --> 0:12:38.960 broader market. So things have just spread to like manufacturing, 0:12:39.440 --> 0:12:42.160 things have spread to technology. So we're gonna see this 0:12:42.280 --> 0:12:46.079 from everybody. Microsoft said that they're gonna slow hiring the 0:12:46.720 --> 0:12:49.640 same things they're slow and hiring. All right, Evanna, thank 0:12:49.640 --> 0:12:51.920 you so much for joining us. Ivana Delevska foundery, chief 0:12:51.960 --> 0:12:55.520 investment officer of Spear invest getting a update on all 0:12:55.600 --> 0:13:01.360 things technology. I want to check in with Liz McCormick. 0:13:01.559 --> 0:13:04.800 She's Chief corresponding Global macro Markets for Bloomberg News and 0:13:04.880 --> 0:13:09.280 a proud bachelor's and NBA graduate from the State University 0:13:09.320 --> 0:13:12.839 of New Jersey. That would be Rutgers. Uh, Liz, some 0:13:13.000 --> 0:13:15.559 smart people tell me I need to pay attention to 0:13:15.679 --> 0:13:18.800 this yield curve, this two year ten year thing, which 0:13:18.840 --> 0:13:22.280 I think is inverted. Is that something you worry about? 0:13:22.400 --> 0:13:25.079 Is that something that you and the smart people in 0:13:25.080 --> 0:13:28.480 the credit markets think about. Well, it seems like and 0:13:28.600 --> 0:13:32.199 go are you um? It seems like definitely. You know, 0:13:32.320 --> 0:13:36.160 the yield curve when it gets inverted always is kind 0:13:36.200 --> 0:13:39.760 of in the focus, right because you know, historically and 0:13:40.080 --> 0:13:41.559 you know a lot of the research was done on 0:13:41.600 --> 0:13:44.520 the broad curve three month rades versus tenure, which isn't 0:13:44.559 --> 0:13:47.160 inverted yet, but the two year tenure, like you said, 0:13:47.559 --> 0:13:50.719 drives a lot of focus. It builds on these recession 0:13:50.800 --> 0:13:54.600 fears because inverting curves have been linked to recession. So yeah, 0:13:54.600 --> 0:13:56.840 I don't think you could ignore it, whether you might 0:13:56.920 --> 0:13:59.080 want to or not. But yeah, it's kind of adding 0:13:59.200 --> 0:14:01.160 to you know, a lot of the comments were seeing 0:14:01.200 --> 0:14:05.000 that the Fed might tighten us into a recession, tighten 0:14:05.080 --> 0:14:07.199 us into a recession. But we've got about I think 0:14:07.240 --> 0:14:09.280 a week and a half till or no, wait now, 0:14:09.400 --> 0:14:13.080 seven days I'm sorry, right, Tuesday, seven eight days until 0:14:13.600 --> 0:14:16.760 the Federal Reserve next Federal Reserve meeting. Liz, there's this 0:14:16.880 --> 0:14:19.200 big debate about seventy five or a hundred at the moment. 0:14:19.440 --> 0:14:21.680 How much more of a difference does a hundred really 0:14:21.720 --> 0:14:24.720 make relative to seventy five? As we know Governor Chris Waller, 0:14:25.000 --> 0:14:27.280 I think it was last week that Mike McKee interviewed him, 0:14:27.600 --> 0:14:30.480 said seventy five is still a lot. Do we really 0:14:30.520 --> 0:14:33.920 need that extra five? Right? And I thought that was 0:14:33.960 --> 0:14:37.040 an interesting point he made, like kind of in a way, 0:14:38.560 --> 0:14:40.080 what does it matter? I mean, I think it's more 0:14:40.160 --> 0:14:43.640 psychological because I think he's right. Obviously, seventy five and 0:14:43.720 --> 0:14:46.200 two in a row. You know, they just did seventy 0:14:46.240 --> 0:14:48.360 five in June, which was the huge move they haven't 0:14:48.400 --> 0:14:51.520 didn't hadn't done since night before. So I think he's right. 0:14:51.840 --> 0:14:54.320 I mean, I think it's it would just kind of 0:14:54.720 --> 0:14:57.480 a hundred BIPs would just kind of slap the market, 0:14:57.560 --> 0:15:00.960 like we are so all in on inflation. So the 0:15:01.040 --> 0:15:03.440 FED is saying, not that people don't think they're doing 0:15:03.520 --> 0:15:06.920 that now, but I think, you know, in the bag 0:15:07.000 --> 0:15:09.160 of Paneta did a hundred, which some people were joking 0:15:09.200 --> 0:15:11.600 kind of grease the reels for the Fed. But I 0:15:11.760 --> 0:15:14.120 do think that, you know, the pricing is getting more 0:15:14.280 --> 0:15:16.720 like seventy five is looking like the things, So now 0:15:16.800 --> 0:15:19.480 a hundred would be a little surprong, So that doesn't 0:15:19.520 --> 0:15:22.160 like to surprise people. So it seems like people are 0:15:22.240 --> 0:15:26.920 leaning back to seventy five. What's the dollar telling us, Liz, 0:15:26.960 --> 0:15:28.760 I'm looking at the d X Y index. It's as 0:15:28.840 --> 0:15:30.720 high as it's been in you know, since like twenty 0:15:30.880 --> 0:15:34.080 years ago. Um, I can't hear a bear case for 0:15:34.120 --> 0:15:37.400 the dollar out there. How do you and some of 0:15:37.440 --> 0:15:39.360 the smart folks out there that you talked to, How 0:15:39.400 --> 0:15:42.000 are you thinking about that U s. Dollar? Well, you know, 0:15:42.160 --> 0:15:45.240 the dollar has been a real headache for many nations, 0:15:45.360 --> 0:15:48.760 you know, like especially emerging economies which anytime the feed 0:15:48.880 --> 0:15:51.680 is aggressively tightening, even if they're trying to keep up, 0:15:52.280 --> 0:15:55.040 you know, there's a negative knock on to them and 0:15:55.200 --> 0:15:57.840 that they've seen their currencies really weak and even forget 0:15:58.240 --> 0:16:00.480 velve economies. Look at the Euro which just you know 0:16:00.640 --> 0:16:04.240 rising today but you know recently went through parody. Um 0:16:04.360 --> 0:16:06.560 So a lot of these countries which are trying to 0:16:06.640 --> 0:16:10.280 combat inflation, and weaker currencies creates important inflation. So it's 0:16:10.320 --> 0:16:13.520 a headache for them. Um. The FED also, I mean, 0:16:13.840 --> 0:16:15.760 you know, strong dollar. You might think that's great for 0:16:15.840 --> 0:16:19.040 the US, but you know, the Fed to a point, 0:16:19.320 --> 0:16:22.200 it helps tighten financial conditions. So the FED is trying 0:16:22.320 --> 0:16:25.200 to kind of get their calculus right of how much 0:16:25.320 --> 0:16:28.440 to live rates. They got the q T going, you know, 0:16:28.480 --> 0:16:31.680 they want to tighten financial conditions and they have. But 0:16:31.840 --> 0:16:34.280 the dollar, if it just keeps plowing on, that does 0:16:34.320 --> 0:16:37.680 speed things. You know that that's into their models. But yeah, 0:16:37.720 --> 0:16:40.200 I mean, I don't know, I think the people long dollars, 0:16:40.280 --> 0:16:43.880 we're really happy, right, Um, those who bought bonds in 0:16:43.960 --> 0:16:47.160 the US from foreign countries have done well because you know, 0:16:47.280 --> 0:16:49.360 let's just assume that even they're flat on their bonds, 0:16:49.440 --> 0:16:52.200 they convert those dollars back to their home currency. That's 0:16:52.200 --> 0:16:54.360 an advantage. So there's people who have one from that. 0:16:54.480 --> 0:16:57.480 But it is creating some kind of more fundamental headaches 0:16:57.520 --> 0:17:01.600 for some nations. Fundamental head aches for some nations, including 0:17:01.840 --> 0:17:04.200 the entire euro Area, which brings us to the e 0:17:04.320 --> 0:17:07.000 c B. I believe they're meeting on Thursday. There are 0:17:07.080 --> 0:17:09.720 calls out here for not a basis point hike, but 0:17:09.840 --> 0:17:13.639 a fifty basis point hike. This week, Liz can explain 0:17:13.680 --> 0:17:18.880 to our international audience the significance of that fifty Well, yeah, 0:17:19.000 --> 0:17:21.920 you know, the ECB has been, you know, flower to 0:17:22.080 --> 0:17:25.280 move than such like the FED. As far as rates, Um, 0:17:25.359 --> 0:17:27.359 that's one thing that hurt the euro But you know, 0:17:27.840 --> 0:17:30.760 Christine Lagarde had laid out in the last meeting that hey, 0:17:30.880 --> 0:17:33.240 kind of preset we're gonna raise rates. We were looking 0:17:33.280 --> 0:17:35.680 for about twenty five basis points, and of course we 0:17:35.760 --> 0:17:39.040 gave some caveats of data changes, but for them to 0:17:39.280 --> 0:17:42.240 kind of jump on these kind of more aggressive bandwagon 0:17:42.440 --> 0:17:44.159 like seems to be leaked, but at least some of 0:17:44.240 --> 0:17:46.359 the hawks at the ECB, you know, that would be 0:17:46.600 --> 0:17:49.160 a big move. I mean, number one, it would show 0:17:49.359 --> 0:17:53.120 that central bank is really, really, you know, focused on inflation, 0:17:53.600 --> 0:17:55.800 you know, more than maybe some people thought, or you know, 0:17:55.840 --> 0:17:58.800 it's willing to be more aggressive. Um. It also might 0:17:58.920 --> 0:18:00.880 help some of these display alreadies. You know, we've seen 0:18:00.880 --> 0:18:04.679 the euro rally today off those expectations, the markets pricing 0:18:04.680 --> 0:18:08.439 about as does the ECB do twenty five or fifty 0:18:08.480 --> 0:18:11.720 basis points um, but would kind of bring them more 0:18:11.800 --> 0:18:13.600 in line. Of course, the b o J is a 0:18:13.640 --> 0:18:16.000 whole separate story, but with a lot of central banks 0:18:16.040 --> 0:18:18.720 that are tightening quite aggressively. You mentioned it be a 0:18:18.800 --> 0:18:20.360 j and I just want to get your thoughts there. 0:18:20.400 --> 0:18:23.040 I mean, we we don't talk about Japan that much 0:18:23.080 --> 0:18:26.720 relative to Europe these days. But what can the bo 0:18:26.800 --> 0:18:28.880 J do? What do you think? What are they signaling 0:18:29.000 --> 0:18:33.840 right now? Well, it seems like they're single signaling that 0:18:33.960 --> 0:18:36.359 they're going to keep their policies that they've been on 0:18:36.440 --> 0:18:39.160 the dobsh side. There they have yeel curve control going 0:18:39.240 --> 0:18:41.680 on which they're targeting the tenure yield to not go 0:18:41.840 --> 0:18:45.240 above a quarter percentage point over there, and there was 0:18:45.320 --> 0:18:47.560 a lot of speculation for a while. Of course, the 0:18:47.760 --> 0:18:50.119 end has been very weak that the b o j 0:18:50.320 --> 0:18:52.359 may have to give this up. It's costing them too 0:18:52.480 --> 0:18:55.040 much to defend this as rates are rising all over, 0:18:55.119 --> 0:18:58.240 they have a weaker currency. But it seems like people 0:18:58.320 --> 0:19:00.200 are starting to say, well, it seems for an the 0:19:00.240 --> 0:19:02.040 Bank of Japan was going to leave this. You know, 0:19:02.119 --> 0:19:05.800 they wanted inflation for a long long time. Now there's 0:19:05.880 --> 0:19:08.600 beings some so I think most economists think they'd be 0:19:08.680 --> 0:19:11.800 hard pressed to reverse course now, even though the you know, 0:19:11.880 --> 0:19:15.200 they're most of their peers are tightening um. But you know, 0:19:15.840 --> 0:19:18.639 they've been wanting this two percent inflation level, so you know, 0:19:18.920 --> 0:19:20.840 to have a little bit of hot inflation is not 0:19:21.000 --> 0:19:23.200 so bad for them, and at least it seems to 0:19:23.240 --> 0:19:26.640 be the consensus view. Alright, good stuff, Liz McCormick. Appreciate 0:19:26.880 --> 0:19:30.080 getting your thoughts as always. Liz McCormick, Chief Correspondent, Global 0:19:30.280 --> 0:19:38.879 Macro Markets for Bloomberg News. Okay, all right, let's talk technology. 0:19:38.920 --> 0:19:41.120 I'm looking at the you know, the SMP. We're down 0:19:41.280 --> 0:19:44.320 almost almost year to day. But when you look at 0:19:44.359 --> 0:19:48.440 the tech heavy nastack that's down almost thirty percent year 0:19:48.520 --> 0:19:50.520 to date. And you think about the nastack tech stocks, 0:19:50.520 --> 0:19:54.000 they've really lead this market since a great financial crisis, 0:19:54.080 --> 0:19:57.360 but certainly under performing year to date this year. Let's 0:19:57.400 --> 0:19:58.960 get a little bit of a preview because we're gonna 0:19:58.960 --> 0:20:01.400 have some tech earnings really in earnest start next week. 0:20:01.440 --> 0:20:04.800 We've got uh Netflix after the close tonight, Ivana the left, 0:20:05.160 --> 0:20:09.159 founder and chief investment officer of Spear invest joins us. 0:20:09.440 --> 0:20:14.000 Ivana again the underperformance attack this year, Um, what's your 0:20:14.040 --> 0:20:17.119 view of the tech space here? Is there still? Is 0:20:17.160 --> 0:20:22.840 this still a core part of people's portfolio? Should it be? Well? 0:20:22.960 --> 0:20:25.880 I believe it should. Then I believe this major pubic 0:20:26.000 --> 0:20:29.400 presents a really good, attractive, it really attractive entry point. 0:20:30.359 --> 0:20:34.760 If you look at tech the underperformance with them now 0:20:34.880 --> 0:20:37.679 that being down, if you look at the big innovators 0:20:37.720 --> 0:20:40.639 in the space, they're down significantly more than that. So 0:20:41.280 --> 0:20:45.720 within our coverage universe, companies that have delivered on earnings 0:20:46.119 --> 0:20:50.200 and had solid outlooks are still down. Some companies that 0:20:50.280 --> 0:20:53.240 had some hiccups are down seventy and you have somewhere 0:20:53.280 --> 0:20:55.680 like the business model is in questions that are down. 0:20:57.320 --> 0:21:00.439 So we think the sweet spot is to look into uh, 0:21:00.520 --> 0:21:03.800 this area of stocks that are actually performing pretty well. 0:21:03.880 --> 0:21:06.880 The fundamentals are strong, but you can still get these 0:21:06.880 --> 0:21:10.520 stops cheaper compared to what you could have gotten a 0:21:10.640 --> 0:21:15.479 year ago. How else do you divide the technology sector 0:21:15.640 --> 0:21:21.040 other than you know, innovators UM or by sort of 0:21:21.160 --> 0:21:24.240 executing on business strategy in terms of you know, the 0:21:24.320 --> 0:21:28.200 products they make or the services they provide. So we 0:21:28.640 --> 0:21:32.280 are we've focused on industrial technology. The way we look 0:21:32.320 --> 0:21:37.480 at technology more broadly is either consumer driven names or 0:21:37.960 --> 0:21:43.600 industrial or enterprise driven companies. So in the last text cycle, 0:21:43.760 --> 0:21:45.600 we saw a lot of in the innovation in the 0:21:45.720 --> 0:21:50.840 consumer space where you had between streaming social media. Those 0:21:50.880 --> 0:21:54.600 were really the big companies that drove that drove the 0:21:54.680 --> 0:21:59.520 text cycle. Going forward, we think industrial and enterprise technology 0:21:59.640 --> 0:22:03.200 will be the big driver of the of the next cycle. 0:22:04.119 --> 0:22:06.240 We think a lot of the innovation in tech has 0:22:06.280 --> 0:22:09.480 been around data, how to use data, how to store 0:22:09.480 --> 0:22:13.520 it in the cloud, how to secure it well, and 0:22:13.600 --> 0:22:16.920 then how to use it and use processes like ai UM. 0:22:17.400 --> 0:22:21.120 So we think we're just at the cost of um 0:22:21.400 --> 0:22:24.480 where we can start using some of these technologies into 0:22:24.960 --> 0:22:30.000 mainstream businesses or traditional businesses like autos aerospace, and there 0:22:30.119 --> 0:22:33.159 is a real potential to transform this entire end market. 0:22:34.080 --> 0:22:37.200 So on that end, Ivanna a lot of folks when 0:22:37.240 --> 0:22:39.399 they are talking about the future, the next three or 0:22:39.440 --> 0:22:42.440 five years of where investors should really think about the 0:22:42.520 --> 0:22:45.560 text act, they say cyber security. How do you think 0:22:45.600 --> 0:22:48.879 about cybersecurity? What's your view on that space, and how 0:22:48.920 --> 0:22:50.359 do you think is the best way to play it. 0:22:51.920 --> 0:22:56.800 So we're really excited about cybersecurity. It's the most it's 0:22:56.840 --> 0:22:59.840 the largest team within within our portfolio. We have a 0:23:00.000 --> 0:23:05.040 publicly list todts uh Sphere Alpha with the ticker SPRX, 0:23:05.480 --> 0:23:08.359