WEBVTT - US Consumer Confidence Rises, Super Micro Slips 0:00:02.920 --> 0:00:10.959 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.960 --> 0:00:15.080 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.160 --> 0:00:18.680 Eastern on applecar Play and Android Auto with the Bloomberg 0:00:18.720 --> 0:00:21.919 Business app. You can also listen live on Amazon Alexa 0:00:22.000 --> 0:00:25.320 from our flagship New York station just say Alexa playing 0:00:25.400 --> 0:00:26.680 Bloomberg eleven thirty. 0:00:28.040 --> 0:00:30.960 Let's get back to that consumer confidence number, super strong 0:00:31.000 --> 0:00:32.839 coming in one of three point three. The estmate was 0:00:32.880 --> 0:00:35.400 for one hundred point seven. It's a better view of 0:00:35.440 --> 0:00:37.640 the economy and inflation, it looks like. So we wanted 0:00:37.640 --> 0:00:40.040 to go right to the source. Here, Stephanie Guchard, a 0:00:40.159 --> 0:00:44.519 senior economistic Global Indicators at the Conference board, joining us. Stephanie, 0:00:44.640 --> 0:00:46.800 what led the optimism? 0:00:47.920 --> 0:00:53.200 Well, so let me get this trait. It's an improvement, 0:00:53.400 --> 0:00:57.240 but I wouldn't qualify it as a strong improvement. The 0:00:57.360 --> 0:01:00.880 index is still in this narrow range, right, it has 0:01:00.920 --> 0:01:03.520 been for the past two years. So that's the first 0:01:03.560 --> 0:01:06.840 thing I wanted to say. But if we go into 0:01:06.880 --> 0:01:09.840 the improvement, so what has been driving the improvement is 0:01:11.800 --> 0:01:17.520 more positive views by consumers about business conditions right now 0:01:18.000 --> 0:01:21.000 and business conditions in the future. So this is really 0:01:21.000 --> 0:01:24.839 what us driving has driven the improvement in August. 0:01:25.760 --> 0:01:28.080 And looking at the measure of expectations for the next 0:01:28.120 --> 0:01:30.640 six months, it looks like the increase, so that's an 0:01:30.640 --> 0:01:33.040 eighty two point five from an eighty one point one 0:01:33.280 --> 0:01:36.640 similar increased relative to present conditions. Kind Of, how do 0:01:36.720 --> 0:01:39.839 you view the consumer right now, given you know, six 0:01:39.880 --> 0:01:43.080 months from now we could have three, four, five six 0:01:43.120 --> 0:01:46.080 interest rate cuts and on election in the rearview mirror. 0:01:47.560 --> 0:01:53.160 So consumer feelings about the economy are really mixed. So yes, 0:01:53.520 --> 0:01:56.800 they views about business condition improved, but at the same time, 0:01:56.880 --> 0:01:59.720 if you look into the details, they are getting more 0:02:00.000 --> 0:02:05.440 dicerned about employment both currently and in the future. So 0:02:05.760 --> 0:02:08.240 this is kind of it's really a mixed view about 0:02:08.240 --> 0:02:12.680 the economy. There are still concerned about high prices. At 0:02:12.720 --> 0:02:18.640 the same time, the inflation expectations have declined, the more 0:02:19.000 --> 0:02:22.440 they're expecting rate cuts more than they were a month ago. 0:02:22.560 --> 0:02:25.840 So some things are moving on the positive size and 0:02:25.919 --> 0:02:29.600 something are moving on the less positive sides, especially regarding employment. 0:02:30.040 --> 0:02:31.960 All right, we really appreciate you breaking that down and 0:02:32.040 --> 0:02:34.880 you know, putting it all into perspective for us, particularly 0:02:34.919 --> 0:02:36.440 the job's part, it feels like that's very much what 0:02:36.440 --> 0:02:39.400 the Fed's also worried about. Stephanie Gushard, senior economist Global 0:02:39.400 --> 0:02:42.160 in Caters at the conference board. It's interesting. It's like 0:02:42.160 --> 0:02:44.360 the FED seems to be pivoting to be worried about jobs, 0:02:44.360 --> 0:02:46.360 and it looks like that is very similar now to 0:02:46.560 --> 0:02:47.680 how consumers are feeling. 0:02:47.760 --> 0:02:50.320 Yeah, and it does make sense as she put it, 0:02:50.360 --> 0:02:52.600 that it's kind of mixed read and that's why the 0:02:52.680 --> 0:02:54.919 S and P is still down one to one percent. 0:02:54.960 --> 0:02:57.760 I mean, sure, it's summer Friday vibes on a Tuesday, 0:02:57.760 --> 0:02:58.800 but we're taking it Instriday. 0:02:58.800 --> 0:03:01.800 It is my Friday, so it definitely Friday vibes for me. 0:03:03.400 --> 0:03:07.280 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:03:07.360 --> 0:03:10.440 weekdays at ten am Eastern on Apple Card playing Android 0:03:10.480 --> 0:03:13.560 Auto with the Bloomberg Business app. Listen on demand wherever 0:03:13.639 --> 0:03:17.480 you get your podcasts, or watch us live on YouTube. 0:03:19.280 --> 0:03:21.320 Let's get to some of the market moves here. Super 0:03:21.360 --> 0:03:25.280 micro computer shares just just humbling like crazy today. This 0:03:25.320 --> 0:03:28.760 is after Hindenberg Research said it's short the maker of 0:03:28.880 --> 0:03:32.359 service or of server equipment. We want to get more 0:03:32.400 --> 0:03:36.080 on this with Woujin Hoo Bloomberg Intelligence, a senior technology analyst, 0:03:36.960 --> 0:03:38.680 did you read, Like, what did you make of the report? 0:03:38.760 --> 0:03:41.800 It said it was glaring accounting red flags, evidence of 0:03:41.920 --> 0:03:46.440 undisclosed related party transactions, sanctions and export control failures, and 0:03:46.480 --> 0:03:47.400 customer issues. 0:03:47.480 --> 0:03:50.960 Yikes, there was a lot in there. I'm actually glad 0:03:50.960 --> 0:03:53.480 they sided our report than Jay. 0:03:53.480 --> 0:03:54.080 I didn't know that one. 0:03:54.160 --> 0:03:57.520 Okay, look a lot of the stuff that we've what 0:03:57.600 --> 0:04:00.240 I've read, they're non issues, right. They've been in the 0:04:00.280 --> 0:04:02.200 ten K and the ten Q filings as part of 0:04:02.200 --> 0:04:07.080 the risk and disclosures. They sided the delisting back in 0:04:07.440 --> 0:04:11.400 twenty nineteen. They also cited a related party issues as well, 0:04:11.440 --> 0:04:14.560 and these are all all known. I almost get a 0:04:14.560 --> 0:04:16.159 sense that they're trying to kick a dog while the 0:04:16.200 --> 0:04:20.200 dog is down. A short report because they had gross 0:04:20.200 --> 0:04:25.560 margin issues because of some aggressive pricing and supply chain issues. 0:04:25.600 --> 0:04:29.160 So you know, I do question the timing of this report. 0:04:29.400 --> 0:04:32.360 Yeah, just keeping in mind super Micro from July twelfth 0:04:32.360 --> 0:04:36.479 down more than forty percent. But my question automatically goes 0:04:36.520 --> 0:04:40.440 to there's a difference between known issues and issues that 0:04:40.480 --> 0:04:44.520 people actually factor into their valuation or their expectations, Like, 0:04:44.600 --> 0:04:48.160 does Hindenberg releasing this report in your view make analysts 0:04:48.240 --> 0:04:50.080 maybe revisit the Bear case. 0:04:50.960 --> 0:04:53.600 And that's a great question, Bailey, and I do think so, right, 0:04:53.640 --> 0:04:58.160 because there were some I guess questions in terms of 0:04:58.200 --> 0:05:00.520 who they were selling to in terms of sanction related 0:05:00.680 --> 0:05:05.240 uh parties, Uh, the Russia in particular, and that's going 0:05:05.240 --> 0:05:08.160 to raise yellow flags or red flags of the US government, right, 0:05:08.200 --> 0:05:11.000 And and if that's going to draw a greater scrutiny, 0:05:11.520 --> 0:05:13.960 you never know what might behind that be behind that closet. 0:05:14.320 --> 0:05:16.200 So you said that they cided your research. What what 0:05:16.279 --> 0:05:18.400 else did you guys pick out from like the ten 0:05:18.480 --> 0:05:20.679 K and stuff in terms of their risks for super Micro. 0:05:20.880 --> 0:05:21.080 Yeah. 0:05:21.120 --> 0:05:23.640 Look, one of one of the things that that I 0:05:23.680 --> 0:05:26.960 picked out was the the related parties. 0:05:27.240 --> 0:05:27.400 Right. 0:05:27.839 --> 0:05:30.720 Two of their suppliers, Uh, the CEOs of two of 0:05:30.720 --> 0:05:36.159 the suppliers are the CEO brothers of the super Micro CEO, right, 0:05:37.080 --> 0:05:39.880 And that's something that I'm not thrilled about quite frankly. 0:05:39.920 --> 0:05:42.120 You would like a little bit of diversity in terms 0:05:42.160 --> 0:05:45.800 of the supply chain versus some of an episistic relationship. 0:05:46.320 --> 0:05:50.360 And you know, uh, that's the big glurring one. But 0:05:50.400 --> 0:05:52.800 also they've had accounting issues in the past which prompted 0:05:52.839 --> 0:05:55.800 the uh, the delisting the hope is is that with 0:05:55.960 --> 0:05:58.159 the CFO that they have currently, they've cleaned all of 0:05:58.160 --> 0:05:58.680 that mess up. 0:05:59.000 --> 0:06:02.400 Well, because if it feels like in super Micro obviously 0:06:02.440 --> 0:06:04.880 everyone knows in video, but this is a stock that 0:06:05.160 --> 0:06:08.479 from over three years is up fifteen hundred percent, went 0:06:08.520 --> 0:06:11.720 from you know, one point six billion to a peak 0:06:11.760 --> 0:06:14.400 at fifty eight billion. Like when these companies go from 0:06:14.520 --> 0:06:18.159 small cap to large cap, it feels like incorrect me 0:06:18.200 --> 0:06:21.960 if I'm wrong. It feels like investors sometimes gloss over 0:06:22.200 --> 0:06:25.640 diving in Dick's disclosures and just kind of take them 0:06:25.640 --> 0:06:27.560 as a component, yes and B five hundred and let 0:06:27.560 --> 0:06:28.520 that be their investment. 0:06:28.640 --> 0:06:31.400 Well, well, let me take that a stuff further. When 0:06:31.560 --> 0:06:33.960 when you go for a management team from a small 0:06:34.000 --> 0:06:38.919 cap management team to and SAP five hundred listed company, 0:06:39.040 --> 0:06:41.919 you know, you're you're still in your preteen years, and 0:06:41.960 --> 0:06:43.159 all of a sudden you have to act like a 0:06:43.200 --> 0:06:43.640 grown up. 0:06:44.160 --> 0:06:45.800 Right, that's so brilliant analogy. 0:06:45.960 --> 0:06:47.279 Right, So when you have that like a grown up, 0:06:47.320 --> 0:06:49.160 the management team have to act like a grown up, 0:06:49.160 --> 0:06:52.600 the irt IR has to act a little bit more professionally, 0:06:53.160 --> 0:06:55.800 would sense. And then look, you you have a broader 0:06:55.920 --> 0:06:58.240 range of investors that are looking at the company right now. 0:06:58.600 --> 0:07:01.320 I'm not saying that they didn't do the work right, 0:07:02.600 --> 0:07:06.280 but there probably was some momentum in there, because. 0:07:06.040 --> 0:07:07.960 I do want to call out. So super micro nine 0:07:07.960 --> 0:07:11.320 buys nine holds one cell. That's nineteen analysts with the 0:07:11.360 --> 0:07:14.080 biggest shops on the street covering it. You look back 0:07:14.120 --> 0:07:17.760 in twenty twenty one, five buys, it was Northland, Loop Capital, 0:07:17.800 --> 0:07:23.400 SUSQUEHANNASCJS and vertical groups. So to your point, your management 0:07:23.640 --> 0:07:26.400 growing up, and also I imagine the street following has 0:07:26.440 --> 0:07:30.200 to get caught up to speed on a stock very quickly. Yes, right, 0:07:31.200 --> 0:07:33.920 does that enable some of these things to maybe be 0:07:34.160 --> 0:07:34.880 glossed over? 0:07:35.560 --> 0:07:38.080 And I will tell you if I see if I 0:07:38.080 --> 0:07:40.440 saw some of the research reports for this past earning 0:07:40.480 --> 0:07:43.520 season after they had that gross morgin, let's just say hiccup. 0:07:43.560 --> 0:07:47.360 Theoretically right, the commentary behind that was a lot more 0:07:47.400 --> 0:07:51.440 critical than somebody who may have been let's just say, 0:07:51.800 --> 0:07:55.120 an avid supporter of super micro over prior to the 0:07:55.120 --> 0:07:56.000 big AI boom. 0:07:56.040 --> 0:07:58.800 I think the preteen adult thing is like perfect analogy, 0:07:58.840 --> 0:08:00.360 and I think that that just sums it all up. 0:08:01.080 --> 0:08:02.920 And for a question, because I know you can't actually 0:08:02.920 --> 0:08:04.800 answer it. But how much more downside do you think 0:08:04.800 --> 0:08:07.560 that there is? Based on the fundamentals? Like, where's a 0:08:07.600 --> 0:08:08.880 good way to think about it? 0:08:09.040 --> 0:08:13.040 So I'll answer it in this way. Yes, if I 0:08:13.080 --> 0:08:16.800 look at the valuation of the stock right now, right, 0:08:17.280 --> 0:08:22.559 we're talking about zero point three times forward sales, I 0:08:22.680 --> 0:08:25.720 you know, give given the AI momentum. Typically I like 0:08:25.840 --> 0:08:29.640 one time's forward sales. But historically they've traded at points 0:08:29.720 --> 0:08:34.040 seventy five forward sales, so they're playing their their value 0:08:34.040 --> 0:08:35.679 at a discount to the historic evaluation. 0:08:36.080 --> 0:08:37.960 That's a great answer to that question. I love that. 0:08:38.040 --> 0:08:39.679 All right, Booge, thanks a lot. Also, good to see 0:08:39.679 --> 0:08:41.160 you in studio. I think it's been a minute, all right. 0:08:41.200 --> 0:08:45.960 Ujinho joining us from Bloomberg Intelligence. He is a senior 0:08:46.000 --> 0:08:48.880 technology analyst over there talking about Hindenburg research report that 0:08:49.000 --> 0:08:52.800 quoted Wu Jinho's research in Bloomberg Intelligence. Let's not forget that, 0:08:53.240 --> 0:08:54.959 so get your information there first. 0:08:56.559 --> 0:09:01.160 You're listening to the Bloomberg Intelligence Podcast live weekdays at 0:09:01.200 --> 0:09:04.560 ten am Eastern on applecar Play and Android Auto with 0:09:04.600 --> 0:09:07.440 a Bloomberg Business at You can also listen live on 0:09:07.520 --> 0:09:10.800 Amazon Alexa from our flagship New York station. Just say 0:09:10.880 --> 0:09:13.199 Alexa play Bloomberg eleven thirty. 0:09:14.960 --> 0:09:17.200 You got the equity market doing a whole lot of nothing. 0:09:17.880 --> 0:09:20.439 Volume also quite light as well. What do you do 0:09:20.480 --> 0:09:22.880 when you wind up having Nvidia and you also have 0:09:22.880 --> 0:09:25.000 the jobs at a next Friday and liquidity is going 0:09:25.040 --> 0:09:26.720 to be super late at the same time. All right, 0:09:26.760 --> 0:09:29.680 let's get a professional view Kathy and Whistle Managing director 0:09:29.800 --> 0:09:33.320 Morgan Stanley Private Wealth Management joins us. Now, Kathy your 0:09:33.360 --> 0:09:35.840 private wealth management right, like, you're looking for the longer term. 0:09:35.880 --> 0:09:38.000 You're not a trader yet. How are you looking at 0:09:38.000 --> 0:09:41.679 the results on four to twenty on Wednesday afternoon when 0:09:41.760 --> 0:09:42.600 Nvidia comes out. 0:09:44.559 --> 0:09:47.080 Thanks for having me, Bailey, great to be with you both. 0:09:47.600 --> 0:09:50.640 I would say, look at anytime you've got a company 0:09:50.760 --> 0:09:54.200 that has or you know, any sort of companies that 0:09:54.280 --> 0:09:57.240 have an edge in their industry, you have to consider 0:09:57.280 --> 0:10:00.280 that for the long term as well. So I would 0:10:00.320 --> 0:10:02.679 say in terms of you know, people who are holding 0:10:02.720 --> 0:10:05.760 the types of stocks are coming out with earnings today 0:10:05.800 --> 0:10:09.600 that might have you know, special access to parts of 0:10:09.600 --> 0:10:14.240 the market, or you know, you know, like a technology 0:10:14.280 --> 0:10:15.400 that other companies do not. 0:10:15.800 --> 0:10:16.720 You have to that's. 0:10:16.520 --> 0:10:19.640 Important and listen if you own it or any company 0:10:19.640 --> 0:10:22.080 in an IRA or returnment account, it's easy to sell 0:10:22.120 --> 0:10:24.760 it and take your games off the table because you 0:10:24.800 --> 0:10:26.400 don't have any tax consequences. 0:10:26.600 --> 0:10:28.280 You really have to think about that when you. 0:10:28.280 --> 0:10:32.080 Own it in an individual account. So that's something that 0:10:32.120 --> 0:10:33.880 we think about when we're thinking about our clients with 0:10:33.920 --> 0:10:36.560 their long term view and also how to leg out 0:10:36.559 --> 0:10:39.040 of positions as well as leg into positions. 0:10:39.600 --> 0:10:42.679 Well, how are you positioning for an advising clients to 0:10:42.760 --> 0:10:45.920 position for this AI wave When we look at obviously 0:10:46.080 --> 0:10:49.800 Nvidia the most important company in the US market, if 0:10:49.800 --> 0:10:52.920 not the global market. But we have super Micro, we 0:10:52.960 --> 0:10:56.160 have arm we have Broadcom, you name it that are 0:10:56.320 --> 0:11:00.920 either beneficiaries or have some exposure to a print that 0:11:01.240 --> 0:11:02.880 not only will move the stock in the market, but 0:11:03.000 --> 0:11:04.040 all of these peers. 0:11:05.520 --> 0:11:05.840 Yeah. 0:11:05.880 --> 0:11:08.400 So for companies that I think are going to, you know, 0:11:08.480 --> 0:11:11.400 do well for the long term and have a competitive edge, 0:11:11.840 --> 0:11:14.959 I would say holding it in retirement accounts is probably 0:11:14.960 --> 0:11:17.040 a better way to go at the moment because of 0:11:17.080 --> 0:11:20.880 the large tax implications when and if you need to take. 0:11:20.679 --> 0:11:22.920 It out, you shouldn't be a trader. You shouldn't be 0:11:22.960 --> 0:11:23.559 going in and out. 0:11:23.559 --> 0:11:25.640 People don't realize what that does in terms of the 0:11:25.720 --> 0:11:29.520 tax impact and how it affects your overla over all 0:11:29.600 --> 0:11:32.920 profit margins. So in terms of that, yeah, I want 0:11:32.960 --> 0:11:35.640 clients to have access to AI, and it's not just 0:11:35.720 --> 0:11:38.400 the companies that are providing AI, but it's the companies 0:11:38.440 --> 0:11:41.120 that are using AI as well. Right now, the market 0:11:41.240 --> 0:11:43.360 has you know, had quite a run up, and we 0:11:43.400 --> 0:11:45.120 want to be more cautious. We're a little bit more 0:11:45.200 --> 0:11:48.360 underweight on equities as a whole, and we're also you know, 0:11:48.400 --> 0:11:51.800 trying to keep people away from the quote unquote over 0:11:52.720 --> 0:11:55.880 indulging in you know, the top seven or ten stocks 0:11:55.920 --> 0:11:57.719 that are out there. But at the same time, it's 0:11:57.840 --> 0:12:00.000 very hard to do when we see some of these 0:12:00.080 --> 0:12:03.040 companies running up. So it's a balancing act and it's 0:12:03.080 --> 0:12:05.920 important to really think about how that affects, you know, 0:12:05.960 --> 0:12:08.199 your full portfolio and not just one part of it. 0:12:08.240 --> 0:12:10.280 I always say never put more than five percent of 0:12:10.280 --> 0:12:13.720 your assets into one holding anyway, So you want to 0:12:13.720 --> 0:12:16.640 really be that you're not overextended in any one stock. 0:12:16.920 --> 0:12:19.120 So you mentioned that it's not like you were crazy 0:12:19.160 --> 0:12:22.040 invested in the equity market. What is your allocation right now? 0:12:23.360 --> 0:12:25.719 Well, you know, I don't take clients out of their 0:12:25.760 --> 0:12:28.320 equities that are in there for the long term unless 0:12:28.320 --> 0:12:31.640 there's a specific reason why we're doing so. So I'm 0:12:31.640 --> 0:12:35.400 typically looking for clients to have fifty to sixty percent 0:12:35.440 --> 0:12:38.840 in equities, to have twenty percent to twenty five percent 0:12:39.040 --> 0:12:44.200 in you know, taxble accounts, municial bonds typically, and the 0:12:44.240 --> 0:12:47.319 balance in some sort of alternative investment. There's a lot 0:12:47.320 --> 0:12:51.199 of liquid investments alternative investments available now to clients, and 0:12:51.280 --> 0:12:53.720 I've you know, heard a few times today people talking 0:12:53.760 --> 0:12:56.120 about the bank stocks and you know banks in general, 0:12:56.200 --> 0:12:59.600 and basically with all of the regulations that are out there, 0:12:59.640 --> 0:13:02.000 we're seeing a lot in the private market come in 0:13:02.080 --> 0:13:04.679 and take over for some of that credit access. 0:13:04.760 --> 0:13:05.920 So it's interesting too. 0:13:06.960 --> 0:13:09.640 And when you talk about some of those alternative investments 0:13:10.240 --> 0:13:11.800 a little bit more detail on that. Are you talking 0:13:11.800 --> 0:13:16.319 about like you know, privately funded companies investing in hedge funds? 0:13:16.360 --> 0:13:17.679 Like what are those opportunities? 0:13:17.760 --> 0:13:17.880 Like? 0:13:18.480 --> 0:13:21.440 No, different opportunities for different different people, different you know, 0:13:21.520 --> 0:13:25.280 levels of sophistication and also of wealth. So you want 0:13:25.280 --> 0:13:28.120 to make sure that you're targeting your asset allocation and 0:13:28.160 --> 0:13:32.800 the actual implementation according to that client's particular situation. But 0:13:32.960 --> 0:13:36.480 generally speaking, I would say, I'm talking about private equity, 0:13:36.520 --> 0:13:41.920 private markets, you know, different types of private credit, and 0:13:42.240 --> 0:13:46.360 there's ways for clients. They've democratized it in a sense 0:13:46.400 --> 0:13:50.800 alternative investments, and they've brought the industry has created investments 0:13:50.840 --> 0:13:53.800 that are now accessible to clients that were not accessible 0:13:53.840 --> 0:13:57.240 to three four years ago. So that's very interesting and 0:13:57.280 --> 0:14:01.560 it's a great way for individuals to add differentiation into 0:14:01.600 --> 0:14:04.559 their portfolio non correlated assets. And I'm a big fan 0:14:04.600 --> 0:14:04.800 of that. 0:14:05.800 --> 0:14:07.680 When you take a look at what the Fed Willer 0:14:07.720 --> 0:14:12.520 won't do, do you care in your investor allocation whether 0:14:12.520 --> 0:14:14.600 it's twenty five or fifty in September, and whether it's 0:14:14.600 --> 0:14:16.400 seventy five or one hundred this year, or is the 0:14:16.400 --> 0:14:18.319 moment for you just when they start doing it. 0:14:19.560 --> 0:14:21.200 No, I care ahead of the game. 0:14:21.600 --> 0:14:24.680 I think that perception is really baked into the numbers, 0:14:25.040 --> 0:14:27.720 and if you don't start making some moves ahead of 0:14:27.760 --> 0:14:32.200 the decisions, you'll probably miss out on a big opportunity. 0:14:32.240 --> 0:14:36.080 And for example, municipal bonds still look really attractive right here. 0:14:36.520 --> 0:14:38.040 At some point they're. 0:14:37.840 --> 0:14:40.880 Going to become less and less attractive as those rate 0:14:40.960 --> 0:14:46.040 cuts start to happen. So for clients with cash, I 0:14:46.080 --> 0:14:49.680 am putting them in municipal bonds, not legging in, and 0:14:49.960 --> 0:14:52.960 trying to get them in as thoughtfully and as quickly 0:14:53.000 --> 0:14:55.400 as possible, because I think that's a great opportunity for 0:14:55.440 --> 0:14:56.320 clients right now. 0:14:57.040 --> 0:14:58.800 Do you think the market's ahead of its skis when 0:14:58.800 --> 0:15:01.600 we're looking at six cuts being priced in between now 0:15:01.640 --> 0:15:02.080 in March? 0:15:03.960 --> 0:15:06.440 It's possible, it will be interesting. I think that. 0:15:07.840 --> 0:15:09.760 I think we're definitely getting cuts. You know, this year 0:15:09.800 --> 0:15:12.560 we're getting we are expecting cuts this year. We're expecting 0:15:12.600 --> 0:15:13.240 about three. 0:15:13.080 --> 0:15:13.800 Cuts this year. 0:15:14.640 --> 0:15:17.040 And then I would say I would just take a 0:15:17.080 --> 0:15:19.760 pause and see what's going on in the reaction, you 0:15:19.800 --> 0:15:22.480 know what the Fed is saying. But it is likely 0:15:22.560 --> 0:15:26.160 that we could have those cuts as well. And again 0:15:26.200 --> 0:15:29.840 with the economic environment, political environment, everything that's going on, 0:15:30.000 --> 0:15:32.440 there's a lot of stake in terms of your personal 0:15:32.480 --> 0:15:35.800 portfolio and your individual wealth, and we really want to 0:15:35.800 --> 0:15:38.080 be mindful and thoughtful about that for clients and make 0:15:38.120 --> 0:15:40.680 sure we're addressing it and we're discussing it. 0:15:41.160 --> 0:15:43.800 When you're talking to clients right now, what are they 0:15:43.840 --> 0:15:45.800 asking in relation to the election? 0:15:47.880 --> 0:15:50.760 Just basically, is there a way to position the portfolio 0:15:50.960 --> 0:15:53.960 one way or another based on like what the potential 0:15:53.960 --> 0:15:58.320 outcome would be. And I think you know, certainly overall 0:15:59.480 --> 0:16:02.200 clients are invested like clients are invested, and we don't 0:16:02.240 --> 0:16:04.560 want to make any huge moves ahead of the election. 0:16:05.280 --> 0:16:07.240 We can make some thoughtful moves. 0:16:08.240 --> 0:16:11.960 I think minimizing tax impact for clients at any time, 0:16:12.120 --> 0:16:15.480 regardless of who's running the country or what the economic 0:16:15.480 --> 0:16:18.280 position is is a great idea. So menis are a 0:16:18.360 --> 0:16:22.280 great idea right now using you know, direct indexing, where 0:16:22.360 --> 0:16:26.960 you have portfolios that are trying to minimize tax impact 0:16:27.120 --> 0:16:29.720 by you know, sort of buying and selling and matching 0:16:29.720 --> 0:16:33.080 those off throughout the year in order to minimize gains 0:16:33.080 --> 0:16:35.360 going forward. I think that's also a great way to 0:16:35.400 --> 0:16:38.760 help clients get a little bit more alpha in their portfolio. 0:16:39.480 --> 0:16:41.520 And the last thing I would say too is there's 0:16:41.760 --> 0:16:45.560 you know, there's going to potentially be some tax changes 0:16:46.360 --> 0:16:48.640 sunsetting of some tax laws that. 0:16:48.600 --> 0:16:50.240 Occurred a few years ago. 0:16:50.440 --> 0:16:53.280 And if you have an estate or you know net 0:16:53.320 --> 0:16:56.880 worth over you know, five six seven million dollars, you 0:16:56.920 --> 0:16:58.800 want to you might want to start thinking about some 0:16:59.520 --> 0:17:03.840 speaking your estate planning attorney about some trust you know, 0:17:03.960 --> 0:17:05.120 sort of implementation. 0:17:05.920 --> 0:17:07.680 And to bring it back to the equity market. Since 0:17:07.680 --> 0:17:09.960 I'm a I'm a big stocks guy, that's what I do. 0:17:10.880 --> 0:17:14.720 I'm like talking about tax and trust and you're like equities, man, Like. 0:17:14.680 --> 0:17:18.320 What about the lines that go up and down? You 0:17:18.359 --> 0:17:21.840 talk about taking a measured approach. Are there industries sectors 0:17:21.880 --> 0:17:25.320 that you see more kind of fairly valued or at 0:17:25.400 --> 0:17:28.000 least more of a better buying opportunity instead of chasing 0:17:28.000 --> 0:17:29.120 some of those growth e tech names. 0:17:30.480 --> 0:17:31.240 Yeah, I do. 0:17:31.480 --> 0:17:35.720 I think basically, anytime you look at different companies, you know, 0:17:35.800 --> 0:17:37.119 growth at a reasonable price. 0:17:37.200 --> 0:17:38.400 So you want to look at. 0:17:38.280 --> 0:17:40.760 The valuations of a company and see whether or not, 0:17:41.119 --> 0:17:43.840 you know, it's overpriced for what they're earning at the moment. 0:17:44.280 --> 0:17:49.560 But we like healthcare, we like financials, we like you know, 0:17:49.640 --> 0:17:52.720 consumer So there's other areas that you can look at, 0:17:52.800 --> 0:17:57.800 I would say, dividend paying growth a reasonable price, and 0:17:58.480 --> 0:17:59.440 income producing. 0:17:59.800 --> 0:18:00.479 It's interesting. 0:18:00.480 --> 0:18:02.119 I know you like stocks and we all do. We 0:18:02.160 --> 0:18:05.480 love equities. We're owners, right, not owners. But at the 0:18:05.520 --> 0:18:08.160 end of the day, there could be some really interesting 0:18:08.200 --> 0:18:10.600 opportunities in the fixed in code market as well. 0:18:11.040 --> 0:18:12.479 Don't dismiss that. 0:18:12.560 --> 0:18:14.760 Don't discount that, all right, Kathy, thanks a lot. We 0:18:14.800 --> 0:18:17.359 really appreciate it Kathy and Whistle, Managing director at Morgan 0:18:17.440 --> 0:18:21.879 Stanley Private Wealth Management, with her outlook on the market. 0:18:23.119 --> 0:18:26.960 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:18:27.040 --> 0:18:29.720 weekdays at ten am Eastern on fo car Play and 0:18:29.720 --> 0:18:32.800 Android Auto with the Bloomberg Business App. Listen on demand 0:18:32.800 --> 0:18:37.160 wherever you get your podcasts, or watch us live on YouTube. 0:18:38.040 --> 0:18:40.000 One of the top stories of the day is also 0:18:40.080 --> 0:18:42.639 Eli Lilly now selling some zepbound bials at a fifty 0:18:42.680 --> 0:18:46.080 percent discount to the shots. Michael Shatz, Bloomberg Intelligence Senior 0:18:46.320 --> 0:18:49.919 Pharma biotech analysts, can we just make help me understand 0:18:49.960 --> 0:18:52.920 why this is easier for Eli Lilly to produce than 0:18:52.960 --> 0:18:53.920 the actual shots? 0:18:55.680 --> 0:18:58.400 Absolutely, I mean the announcement state doesn't really come as 0:18:58.400 --> 0:19:00.679 a supply surprise on the aack of you know, the 0:19:00.720 --> 0:19:04.159 type supply. So yeah, they're providing a valve for relation. 0:19:04.240 --> 0:19:06.199 It's something that they've talked about, you know, for a 0:19:06.200 --> 0:19:08.760 while now on their calls. Now, the reason why these 0:19:08.760 --> 0:19:11.160 are easier to produce produce is you know, the fill 0:19:11.200 --> 0:19:14.200 and finished capacity, So the capacity needed to actually put 0:19:14.200 --> 0:19:16.520 the drug in the pens and the capacity needed to 0:19:16.520 --> 0:19:21.359 manufacture at the pens of the subcutaneous ejection. So overall, 0:19:21.359 --> 0:19:23.200 I think, you know, the move is you know positive 0:19:23.200 --> 0:19:29.040 for Lily clearly broaden's access or patients access you know 0:19:29.160 --> 0:19:36.520 to ze bound and also from you know, compounding pharmacy standpoint. 0:19:36.720 --> 0:19:39.600 The fact that the improved supply means that could you know, 0:19:39.720 --> 0:19:43.680 possibly combat you know, competition from you know, companies such 0:19:43.680 --> 0:19:45.160 as Hymns, Hymns and Hers. 0:19:45.640 --> 0:19:48.080 Yeah, Lily not so subtly saying that they want to 0:19:48.119 --> 0:19:51.320 aim to protect patients from quote, counterfeit, fake unsafe for 0:19:51.480 --> 0:19:55.560 untested knockoffs. So how does that impact kind of the 0:19:55.640 --> 0:19:59.080 business and demand If we're seeing a cheaper version being 0:19:59.119 --> 0:20:01.000 sold and maybe try and to court some of those 0:20:01.520 --> 0:20:05.560 Hymns and Hers g LP one users, how does that 0:20:05.600 --> 0:20:08.119 impact kind of the total addressable market and expectations for 0:20:08.480 --> 0:20:09.760 sales of zepp out. 0:20:10.800 --> 0:20:12.840 Well, I think if there's you know, if there's a 0:20:12.920 --> 0:20:18.560 branded bile formulation out there and there's obviously guarantees around 0:20:18.680 --> 0:20:20.600 kind of purity, et cetera, I think that's going to 0:20:20.640 --> 0:20:24.240 be the preferred choice. The fact that you're introducing these 0:20:24.720 --> 0:20:27.840 valves into the market would suggest that you know, some 0:20:27.920 --> 0:20:32.320 of that supply burden and supply shortage which is needed 0:20:32.320 --> 0:20:36.040