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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: us live on YouTube.

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Speaker 2: Joining us now she actually understands parabolics are Katie Kaminski

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Speaker 2: joins his chief research strategist, Alpha Simplex. I'm going nuts, Katie,

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Speaker 2: with the doom and gloom. The market's cratering. It's not

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Speaker 2: is it's not cratering. It's not even a correction, right.

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Speaker 3: That's correct. I mean I think there's a lot of

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Speaker 3: concern right now. I mean, look at todate. We don't

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Speaker 3: have any data. Normally today's a fun an FP day.

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Speaker 3: But I think you have seen signals come back a

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Speaker 3: little But I mean we've.

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Speaker 4: Come so far are the trend is very strong.

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Speaker 5: So Katie, let's talk about the equity business. The equity markets.

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Speaker 5: I mean, I guess they, I don't know, stalled a

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Speaker 5: little bit. I guess it's kind of maybe how some

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Speaker 5: people would would characterize it here. But in the absence

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Speaker 5: of some economic data, their earnings have generally been very

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Speaker 5: strong coming off of Wall Street. Here, what do you

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Speaker 5: make in the equity business? Is this just kind of

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Speaker 5: a pause here, or is this something a little bit more.

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Speaker 3: I mean, I think there's a little more concern. It's

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Speaker 3: just generally a valuation question.

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Speaker 4: I mean, when you have.

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Speaker 3: A trend that extends past a certain level, it really

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Speaker 3: suggests that people start to get worried that, you know,

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Speaker 3: they things may be overheated or have gone a little

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Speaker 3: too far, and you don't really have the data to

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Speaker 3: confirm if things aren't a problem. So I think that's

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Speaker 3: that's really where people are starting to think. You know,

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Speaker 3: maybe I take profit, is what I would guess. So

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Speaker 3: I'm definitely saying we're not in a correction yet, but

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Speaker 3: it definitely smells a little bit. It's funny like it.

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Speaker 3: It feels a little like there's some concern.

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Speaker 4: Did you notice this is like the Mit hour.

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Speaker 2: Yes, Katie Kaminsky and Troy Gus back to back, yep.

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Speaker 2: I mean, neither of them have ever laid eyes on Harvard.

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Speaker 2: They just stopped at MIT and kept it there. So Katie,

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Speaker 2: you're in the muddy Charles pub. I mean, this is

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Speaker 2: what you do at MIT. You go to the Muddy

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Speaker 2: Charles pub and somebody says, is the market broken? The

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Speaker 2: answers it's not right.

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Speaker 3: I mean, i'd say the market isn't necessarily broken. We

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Speaker 3: don't have an indication to it. It definitely has extended

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Speaker 3: right now. I don't think there's any sort of obvious signal,

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Speaker 3: but you do see that hesitation in price moves, which

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Speaker 3: starts to get you wondering if you know, maybe we

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Speaker 3: have some sort of correction to kind of deal with

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Speaker 3: this over extension.

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Speaker 4: Katie. How about the US dollar here?

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Speaker 5: I mean, we had a you know, as other risk

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Speaker 5: assets were rebounding from the April lows in the April turmoil, the.

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Speaker 4: Dollar did not.

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Speaker 5: It stayed you know, down you know, eight nine, ten percent.

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Speaker 5: It seems to if nothing else stabilized, maybe even moved

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Speaker 5: up a little bit here.

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Speaker 4: How do you think about the US dollar here? This

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Speaker 4: is a really good question.

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Speaker 3: Looking at trend signals right now, the one area where

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Speaker 3: you're seeing some change and pivot in terms of conviction

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Speaker 3: is you're seeing a little bit more support for a

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Speaker 3: strong dollar. And I've seen that sort of evolving, especially

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Speaker 3: over the last few weeks, so we'll see. I mean,

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Speaker 3: of course, maybe this isn't also an indication that the

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Speaker 3: market is concerned about whether or not we'll get rate cuts,

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Speaker 3: and that is generally pro dollar. But you're right, it

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Speaker 3: has been the strongest theme. There's some pivot now, though.

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Speaker 2: What do trend followers do in a market like this?

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Speaker 2: I mean reminiscence of a stock operator, I think nineteen thirty,

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Speaker 2: I can't remember the year you step aside and just

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Speaker 2: you know, go, go do what you do. Katie, what

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Speaker 2: do you do if your trend followers? Do you participate

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Speaker 2: in the markets or just step away?

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Speaker 6: Well?

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Speaker 3: I think we always participate in the markets, and it's

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Speaker 3: particularly this particular environment because we're thinking about trends in

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Speaker 3: them extending. When you think that trends might be changing,

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Speaker 3: it can be very tricky because we need to measure

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Speaker 3: that evidence that there's actually been a more prolonged change.

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Speaker 3: So I think for us, an extended draw down is

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Speaker 3: something very interesting to us. Just a little reversal is

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Speaker 3: just sort of noise and perhaps irritation, I guess in

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Speaker 3: terms of our signals, Katie.

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Speaker 2: Comminsky with us in Troy Giski, It's m Massachusetts Institute

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Speaker 2: of Technology. Are a good morning ninety two nine FM

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Speaker 2: in Boston PO. I'm looking at a YouTube video of

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Speaker 2: the Muddy Charles plub. I mean, it's the only pub

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Speaker 2: of the world where most of the kids are in there.

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Speaker 2: They're having their beverage of their choice, but they're studying

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Speaker 2: the thermodynamics while they do it.

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Speaker 4: It's a very different school. It is absolutely Hey, Katie,

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Speaker 4: talk to us about gold.

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Speaker 5: We just had a story about Steve Cohen maybe going

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Speaker 5: to sell his gold toilet here, so I got us

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Speaker 5: thinking about gold here. Boy had just an unbelievably strong

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Speaker 5: move up this year. It's pulled back here a little bit.

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Speaker 5: What's the trend in gold?

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Speaker 3: Well, the trend in gold has pulled back someone. I mean,

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Speaker 3: maybe this is your top indicator, right.

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Speaker 4: Keep going selling the gold toilet toilet.

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Speaker 3: But you know, you have seen some retraction in that trend.

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Speaker 3: There's been noise and it's been consolidating. So I would

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Speaker 3: say that, you know, there is some evidence that the

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Speaker 3: trend is dissipating something.

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Speaker 2: This is brilliant. Thank you Paul for so much for

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Speaker 2: bringing up Can I go on full Nerd down? Oh yeah, okay,

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Speaker 2: folks your heroes to talk about. Katie will do this

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Speaker 2: and I'll do it even Troy log convexity, Oh boy.

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Speaker 2: So you take whatever you're looking at, you run to

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Speaker 2: a log y axis, and if it's a curve, that

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Speaker 2: means you've got an accelerative tendency up or down, whichever

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Speaker 2: way you're going. So I got log convexity, Katie, and

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Speaker 2: gold is a general rule, does log convexities signal your

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Speaker 2: two late to acquire and that the trades already underway?

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Speaker 3: It is possible because oftentimes trend signals can deteriorate as

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Speaker 3: they become more convex and you do see that sometimes

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Speaker 3: in terms of you know, after you've seen the total

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Speaker 3: extension of a trend, you might see that sort of deterioration.

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Speaker 3: And that's very common in trend signals, that as they

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Speaker 3: over extend, they can deteriorate.

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Speaker 2: Let's continue this NERD discussion, Catherine Cominski with a alf

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Speaker 2: A simplex. So then, Katie, if I'm bold enough to

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Speaker 2: go into a log convex accelerative trade like plant palanteer

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Speaker 2: or like gold, how do you set up a stop

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Speaker 2: loss regime?

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Speaker 3: So that's actually quite tricky, and especially when you're talking

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Speaker 3: about very extended parts of the trend there's just not

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Speaker 3: as much data for that type of that type of move,

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Speaker 3: so people do tend to think about stops or sort

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Speaker 3: of at what price level? This may just sort of

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Speaker 3: be a take profit type of opportunity. I'd say right now,

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Speaker 3: you've definitely could correlate to what we're seeing in the

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Speaker 3: markets right now. That you've seen such extreme trends, particularly

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Speaker 3: for gold and equities, there's some indication that you might

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Speaker 3: want to stop out of this.

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Speaker 2: She gus an a plus stop out of it. I'm

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Speaker 2: looking at a point figure charge. I'm not going to

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Speaker 2: go into this because people are going to drive off

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Speaker 2: the road. But the bottom line is, Katie nailed that

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Speaker 2: there's not enough observable data when you get an accelerative

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Speaker 2: tendency like what we've seen in gold gold.

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Speaker 4: Is that enough dir control? Monica ricks that was too much? Right,

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Speaker 4: too much? Thank you, Monica says, move on gold at

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Speaker 4: four thousand. Rate on that support.

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Speaker 5: Katie, what's the most interesting maybe trend trade you guys

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Speaker 5: are looking at these days?

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Speaker 3: I mean, I think the interesting part is the fact

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Speaker 3: that I'm nervous about a lot of the trends that

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Speaker 3: we have right now, and the only trend that's sort

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Speaker 3: of developing, is this longer dollar theme. We have seen

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Speaker 3: some interesting themes in the precious metals and base metals,

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Speaker 3: but of course November has really sort of turned everything

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Speaker 3: upside down, and you've seen a lot of noise in

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Speaker 3: some of the trends that we had pretty high conviction

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Speaker 3: in going into this month. So i'd say, you know,

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Speaker 3: we're kind of trying to determine if the trends we

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Speaker 3: have are deteriorating, or if the new theme is something

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Speaker 3: like a stronger dollar over the next few weeks, and

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Speaker 3: other potential concerns for the trends we have already.

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Speaker 5: Katie, how about with the on the interest rate side,

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Speaker 5: we've got to fed that seemingly is at the beginning

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Speaker 5: of a easing phase in terms of monetary policy. Is

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Speaker 5: there a way for you guys to think about some

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Speaker 5: trades here in a lower interst rate environment.

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Speaker 4: I mean, I think that's generally the theme that we've seen.

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Speaker 3: The long term theme has to be has been to

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Speaker 3: be long bonds, obviously expecting rates lower. But more recently

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Speaker 3: I've been interested in the cross asset trends that you've seen,

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Speaker 3: where gold kind of pulling back a little bit recently. Also,

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Speaker 3: you know, yields going up a little bit more, you

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Speaker 3: kind of have some concern in the market about that

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Speaker 3: we will get those cuts, but maybe not right away

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Speaker 3: if we don't have the data. So I think that's

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Speaker 3: what we're definitely seeing.

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Speaker 2: So go cross asset compare trend dynamics, technical structure of

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Speaker 2: four hundred and eighty three standard and pores five hundred

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Speaker 2: versus Mag five, Mag six, Mag seven.

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Speaker 4: What's the cross asset.

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Speaker 2: Tension between the market and the glory stocks of AI.

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Speaker 4: Well, I think the big tension.

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Speaker 3: I mean, if you look at the S and P

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Speaker 3: five hundred, roughly forty percent is those ten largest companies

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Speaker 3: a little bit less obviously if you think about the

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Speaker 3: top seven, But you have this massive divergence in terms

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Speaker 3: of the amount of you know, return that you've seen

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Speaker 3: in a small number of stocks, which makes a very

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Speaker 3: narrow rally, which could even make the rally a little

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Speaker 3: bit more susceptible to just the idiosyncratic nature of his

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Speaker 3: seven stock portfolio. So I think for me, you'll see

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Speaker 3: very big differences between those trends, and you'll be more

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Speaker 3: concerned about a very narrow trend that doesn't represent as

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Speaker 3: diversified of a portfolio.

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Speaker 4: You want to get one more in you sure, absolutely so, Katie.

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Speaker 4: We're pretty much through.

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Speaker 5: I guess about ninety percent of the S and P

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Speaker 5: five hundred has already reported earnings. We've had some pretty

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Speaker 5: darn good earnings here. How does earnings trends factor into

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Speaker 5: your work?

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Speaker 4: So, I mean we definitely look at earnings.

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Speaker 3: Earnings create nice I mean what you're exactly pointing out

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Speaker 3: that earnings have driven positive trice momentum, and we've seen

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Speaker 3: that recently. But now with sort of earning season kind

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Speaker 3: of coming someone to an end and very limited data,

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Speaker 3: it is hard, I think for the markets to distill

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Speaker 3: without that fundamental data to kind of determine what the

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Speaker 3: valuation of these companies really should be in the backdrop

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Speaker 3: of the US economy and companies.

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Speaker 4: As a whole. Can I can I ask a rude question?

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Speaker 2: I mean, it's rude, Friday, I mean, Katie, can I ask,

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Speaker 2: like you know, a rude question?

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Speaker 7: But go for it.

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Speaker 2: If you're if you're at MIT, okay, and you've got

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Speaker 2: a degree in a PhD in electrical engineering, do you

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Speaker 2: animals look down on the chemes and the mechanical engineers

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Speaker 2: is Troy Gyski like positively nineteenth century because he's chemical

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Speaker 2: engineering instead of a double E.

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Speaker 4: I mean, that's a good question.

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Speaker 3: I think we're all trying a micropasm of like a

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Speaker 3: high school, right, So you got your chemy's and your

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Speaker 3: your mechys and you have your ees and yeah, we're

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Speaker 3: all hanging out and maybe different parts of the you know,

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Speaker 3: the money, Charles, I guess.

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Speaker 4: Katie, thank you so much. This is good. Katie Comisky, thank.

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Speaker 2: You, thank you, thank you, Alpha Simplexer some really sophisticated

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Speaker 2: stuff for Global Wall Street.

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Speaker 4: Stay with those.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live

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Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on

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Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We need to talk to people, not rumor, not innuendo,

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Speaker 2: not the politics of the moment, but just an adult.

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Speaker 4: He's with King and Spaulding with his public service to

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Speaker 4: the nation.

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Speaker 2: Ryan Majurus joins us right now all sorts of good work,

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Speaker 2: including Assistant Secretary Enforcement and Compliance IT Commerce.

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Speaker 4: What does the media?

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Speaker 2: Ryan most get wrong about the Supreme Court analysis of tariffs.

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Speaker 8: Well, great to be with you, and you know, I

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Speaker 8: would say, similar to the Great Game seven we had

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Speaker 8: two weeks ago, this is going to have a lot

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Speaker 8: of twist and turns before we at the end. You know,

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Speaker 8: a lot of the there's a lot of skepticism the

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Speaker 8: administration is going to prevail.

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Speaker 4: If I put my betting money on it, I think

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Speaker 4: they will not prevail.

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Speaker 8: But the Challenger has faced a lot of difficult questions

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Speaker 8: as well, particularly this notion that AIPA allows you to

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Speaker 8: do all of these things that allows you to block

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Speaker 8: imports sank folks, So why can't it allow you to

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Speaker 8: adjust imports through tariffs? And I think the challengers got

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Speaker 8: themselves tied up in knots trying to cover that.

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Speaker 2: You know, we looked at the surveillance rolodex one one

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Speaker 2: keeps the surveillance rolodex. Yes, do you realize how many

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Speaker 2: the percentage of people that don't know what I'm.

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Speaker 5: Doing and want no it has no clue.

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Speaker 2: We gott the rolodex Ryan, and we said, find someone

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Speaker 2: who's actually read section three oh one or section one

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Speaker 2: twenty two. Does the president in the administration have a

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Speaker 2: convenient out if they lose the Supreme Court.

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Speaker 8: Yes, they do. I think they have multiple options they

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Speaker 8: can consider. So they may consider Section three thirty eight,

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Speaker 8: which is from the Smooth Holly era.

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Speaker 4: It's never been tested. Thank god I read that one.

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Speaker 4: That'll keep US entertained. I think they're more likely to pivot.

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Speaker 8: As you noted to section three oh one that was

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Speaker 8: used for the China tariffs.

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Speaker 4: They're very enduring.

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Speaker 8: I mean, we've had China tariffs in place under that

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Speaker 8: law for eight years.

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Speaker 4: It's very broad.

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Speaker 8: I actually think they'll use a provision, as you noted,

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Speaker 8: section one twenty two, which is a balance of payments

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Speaker 8: focused law, because it all allow them to put in

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Speaker 8: place fifteen percent tariffs for one hundred and fifty days.

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Speaker 8: There's no reason from my perspective, they can't do that

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Speaker 8: and at the same time launch a whole bunch of

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Speaker 8: three oh one investigations against our trading partners.

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Speaker 5: Ryan, you spent a little more than two years at

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Speaker 5: the US Department Commerce. Is this tariff policy a sound policy?

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Speaker 5: Across the board? These tariffs? Is it a sound policy?

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Speaker 4: Do you believe? So? You know they're trying to hit

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Speaker 4: it some core ideas.

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Speaker 8: Again, they're trying to return manufacturing to the US and

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Speaker 8: deal with persistent unfair trade.

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Speaker 4: We've doubled for decades. We need to reckon with those issues.

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Speaker 5: And so you think, do you think there's persistent unfair

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Speaker 5: trade against the United States for decades?

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Speaker 4: Absolutely? From China?

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Speaker 8: Excuse I mean, we faced unfair dumping, excess capacity, global

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Speaker 8: distortions for decades.

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Speaker 4: And the problem is that issues.

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Speaker 5: Around our economy versus everybody else in the world. Ryan,

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Speaker 5: do you really believe.

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Speaker 8: That, I deeply believe we face these challenges that The

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Speaker 8: problem now though, is that this may be an over

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Speaker 8: correction on the problem, and the stock market and the

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Speaker 8: overall economy is not acting as a check to this,

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Speaker 8: and we'll have to see if that.

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Speaker 4: Bears out as we go forward. Wow, all right, Ryan,

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Speaker 4: So where do we go from here?

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Speaker 5: If the Supreme Court does maybe rule a little bit

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Speaker 5: against the US administration here, how aggressive can the administration

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Speaker 5: be and try to find some other avenues to try

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Speaker 5: to enforce some of these trade policies.

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Speaker 4: So here's the way I would think about it.

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Speaker 8: You know, a lot of folks may think if the

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Speaker 8: tariffs are struck down, our trading partners who cut deals

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Speaker 8: are going to come to the administration and say, your

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Speaker 8: tariffs were struck down.

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Speaker 4: We want a new deal.

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Speaker 8: I think the administration can credibly come in and say,

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Speaker 8: we have used Section three oh one in the past.

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Speaker 8: It's been battle tested in the courts. We've had significant

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Speaker 8: tariffs in place against China for eight years, and we

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Speaker 8: can do that against you as well. And so I

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Speaker 8: actually think these negotiated deals are probably here to stay.

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Speaker 8: My personal view is, regardless of the result, we're going

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Speaker 8: to see tariffs continue. The big challenge is going to

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Speaker 8: be what happened to folks who paid the tariffs, because

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Speaker 8: we're going to have a big problem there.

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Speaker 4: Okay, right, we.

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Speaker 2: Got to wrap this up, and I want to get

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Speaker 2: you on in the coming weeks because I just think,

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Speaker 2: you know, the balance you're bringing here is great.

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Speaker 4: Mckinnley did tariffs. The day before is assassinated.

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Speaker 2: He gave a speech in Buffalo and said I was

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Speaker 2: wrong and pulled away from tariffs. Are we going to

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Speaker 2: get to a point where, whether it's President Trump or

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Speaker 2: the next president is to go.

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Speaker 4: Oops, this is not working. We certainly could hit that moment.

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Speaker 8: I personally think right now, AI is shadowing issues in

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Speaker 8: the economy, and I think you know, at the end

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Speaker 8: of the day, their hope is they can raise the

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Speaker 8: real medium wage of American workers. But if folks are

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Speaker 8: paying more for the goods they need every day, you

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Speaker 8: know that calculus is going to weigh out.

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Speaker 4: And this has been great.

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Speaker 2: Ryan Majers, thanks for the Friday brief. International Trade Team

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Speaker 2: mcking and Spauling, LLP, and of Courses Public Service to

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Speaker 2: the Nation, Office of US Trade Representative Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

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Speaker 1: with the Bloomberg Business app. You can also listen live

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Speaker 1: on Amazon Alexa from our flagship New York station, Just

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Speaker 1: say Alexa Play Bloomberg eleven thirty.

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Speaker 2: Joining us now from Course ten at MIT Troit at Gayski.

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Speaker 4: I just want to digress here.

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Speaker 2: I mean, it's a lot of fun between Kemy and

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Speaker 2: Ee at a place like MIT, Jim caron out at

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Speaker 2: Celtech and the others. What was it like your first

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Speaker 2: day in the introduction to chemical How over your head

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Speaker 2: were you well?

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Speaker 6: Tal I'm I guess I'm proud enough at this stage

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Speaker 6: in my life to admit that my first chemical engineering

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Speaker 6: class was Thermodotamics and fluid mechanics, and literally the first

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Speaker 6: fluid mechanics test. I got an eighteen in E seed, right,

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Speaker 6: and I studied my rear off for it, and so

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Speaker 6: it was like holy cow.

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Speaker 4: But the mean was a thirty one. So I didn't

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Speaker 4: feel like such a loser.

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Speaker 2: It's just a window into the academics of what Michael

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Speaker 2: Bloomberg and Tom Secundo's brilliant invented. Here that story that

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Speaker 2: you just heard in the day now of great inflation,

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Speaker 2: I got it.

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Speaker 9: D plus, I said, I got a G plus in

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Speaker 9: physics under Samanskin and aerospace engineering and Rebecca Struick and Boulder.

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Speaker 4: And my father goes, well, I'm disappointing. You don't want

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Speaker 4: to let your dad down, right, It was just unbelievable.

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Speaker 4: Speak of the D plus.

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Speaker 2: Now, which is the Bear crew, your shop, the bear

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Speaker 2: You've got.

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Speaker 4: To push against the Bear crew right now into this weekend.

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Speaker 4: What do you say to them?

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Speaker 6: Yeah, look, I think fundamentally you talked about technicals a

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Speaker 6: lot with your electrical engineering guests before No offense to

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Speaker 6: that discipline. But you know, we're Chevy's right, Tom, your

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Speaker 6: dad was obviously. But you know, on the fundamentals right now,

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Speaker 6: it's really a collision course between the tremendous AI spends

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Speaker 6: that are going on, of which in Nvidia and hardware

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Speaker 6: huge beneficiaries, and the concern over whether those can be

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Speaker 6: sustained by cash flows going forward. So we would think

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Speaker 6: we're in more of a consolidation period and the trend

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Speaker 6: will re emerge over time. But make no mistake, you know,

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Speaker 6: at this particular point it's unlikely we have material upside

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Speaker 6: into next week. It's going to take several weeks for consolidation,

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Speaker 6: and then the fundamentals, when in Video's earnings come out,

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Speaker 6: should reassert themselves.

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Speaker 5: So we're pretty much done with the earningss cycle. Eleven

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Speaker 5: twelve percent EPs growth not too bad, not too bad?

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Speaker 5: Is that enough to support this market?

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Speaker 2: Oh?

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Speaker 4: This is brilliant. This is the heart of the matter.

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Speaker 4: I can't I just this is the heart of the

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Speaker 4: matter exactly. So what do you take away from those earnings? Yeah?

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Speaker 6: So, look, I think we came out of Liberation Day

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Speaker 6: and there was a lot of dooms day in the economy.

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Speaker 6: A lot of dooms day on earnings, you know, the

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Speaker 6: AI spends just to put them in perspective, are going

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Speaker 6: to contribute an additional fifty to seventy five basis points

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Speaker 6: to a thirty trillion plus US economy alone. That is

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Speaker 6: a tremendous amount of cash flow coursing through a subset

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Speaker 6: of companies. So it's very unlikely that these historic earnings

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Speaker 6: decline to a more normalized pace anytime soon, and that

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Speaker 6: should continue.

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Speaker 4: To power upside.

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Speaker 6: You know, the question is always for investors is assuming

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Speaker 6: you're not going to put all your capital in.

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Speaker 4: Six or five stocks, what else.

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Speaker 6: Can you do that can compete or how can you

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Speaker 6: replace cash and fixed income in your portfolio?

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Speaker 5: So what are we doing here in terms of trying

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Speaker 5: to maybe diversify our portfolio a little bit? Because I

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Speaker 5: think all of us, whether we like it or not,

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Speaker 5: we're long these big tech stocks and our mutual funds

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Speaker 5: and our four oh one k's and things like that,

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Speaker 5: and in a portfolio, if you want performance, a portfolio

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Speaker 5: manager needs to be in these names.

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Speaker 4: Is it worth trying to diversify?

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Speaker 6: Yeah, So I think we all know even if the

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Speaker 6: world does, then you can go through horrific mark to

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Speaker 6: market periods like we did in twenty two. There can

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Speaker 6: be an exogenous shocks, So it's highly unlikely a consultant

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Speaker 6: or financial advisor will allow a client to be one

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Speaker 6: hundred percent in five stocks or or just the cues,

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Speaker 6: for instance. So from a diversification standpoint, what else can

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Speaker 6: you invest in that can compete over time with less volatility?

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Speaker 6: Middle market private actually would be one example. If you're

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Speaker 6: looking to replace cash, which you need, liquidity liquid multi

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Speaker 6: strategy funds would be another. And then of course, if

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Speaker 6: you're looking for an income boost as yields continue to drop,

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Speaker 6: you know, private credit despite all the headlines these days,

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Speaker 6: but you guys probably get quite aggressively.

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Speaker 4: Looks like a place where you can continue to pick

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Speaker 4: up excess shield What about.

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Speaker 2: Take it bigger and broad it here the idea that

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Speaker 2: people are going AI, you know, I say to people

442
00:21:56,480 --> 00:21:59,360
Speaker 2: AI is sort of like the railroads of the nineteenth century.

443
00:21:59,480 --> 00:22:02,720
Speaker 2: There's going to be one iteration, two iterations, three iterations.

444
00:22:03,200 --> 00:22:04,520
Speaker 4: What's your ex I mean?

445
00:22:04,520 --> 00:22:08,000
Speaker 2: Think of Eric Brynjolson, Up, my dear, what's your ex

446
00:22:08,200 --> 00:22:09,439
Speaker 2: axis on AI?

447
00:22:09,600 --> 00:22:10,320
Speaker 4: Are you looking out?

448
00:22:10,640 --> 00:22:13,160
Speaker 2: Don't give me this one week quarter bear the next

449
00:22:13,200 --> 00:22:16,600
Speaker 2: cover of Barons. Are you looking at three years or

450
00:22:16,720 --> 00:22:17,359
Speaker 2: thirty years?

451
00:22:17,480 --> 00:22:21,160
Speaker 6: I think it's you know, in different stages three, five, seven,

452
00:22:21,320 --> 00:22:23,960
Speaker 6: nine and even further. All Right, and if you think

453
00:22:24,000 --> 00:22:27,000
Speaker 6: of just simplistically bringing it back to market technicals, there's

454
00:22:27,040 --> 00:22:30,800
Speaker 6: been a lot of bemoaning of market cap concentration, but

455
00:22:30,840 --> 00:22:33,040
Speaker 6: I don't think we've seen anything yet. Right, We're gonna

456
00:22:33,040 --> 00:22:36,240
Speaker 6: be here in three or four years, and market cap

457
00:22:36,320 --> 00:22:41,080
Speaker 6: concentration will become even greater. In terms of productivity enhancement,

458
00:22:41,480 --> 00:22:44,320
Speaker 6: I mean that still remains the outlying question, Right, is

459
00:22:44,359 --> 00:22:47,159
Speaker 6: there enough of an ROI C enough of a productivity boost?

460
00:22:47,680 --> 00:22:52,280
Speaker 6: But given the ridiculous levels of spends, and assuming that

461
00:22:52,280 --> 00:22:54,800
Speaker 6: those that are doing it have IQ's well over one hundred,

462
00:22:55,119 --> 00:22:57,880
Speaker 6: you know, they certainly believe that the productivity enhancement will

463
00:22:57,880 --> 00:22:59,920
Speaker 6: be worth these records span.

464
00:23:01,119 --> 00:23:03,960
Speaker 5: So outside of you know, the big tech equity trade,

465
00:23:03,960 --> 00:23:05,200
Speaker 5: how about in a fixed income space?

466
00:23:05,240 --> 00:23:07,840
Speaker 4: I mean, are we taking credit risk here in this market?

467
00:23:07,880 --> 00:23:09,199
Speaker 4: Do you think? Yeah? I think you have to be

468
00:23:09,240 --> 00:23:11,520
Speaker 4: really careful in liquid credit? Right? I mean, Tom, you know,

469
00:23:11,880 --> 00:23:12,760
Speaker 4: credit spreads are.

470
00:23:12,680 --> 00:23:16,080
Speaker 6: Near the record heights after adjusting for default trailing twelve

471
00:23:16,080 --> 00:23:18,920
Speaker 6: month default, Right, in high yields a little under three percent,

472
00:23:19,280 --> 00:23:21,359
Speaker 6: you only pick up about eighty one hundred based points

473
00:23:21,359 --> 00:23:23,760
Speaker 6: above risk free, so if you if you need a

474
00:23:23,800 --> 00:23:28,080
Speaker 6: yield pickup, you still have the illiquided premium. In private credit,

475
00:23:28,880 --> 00:23:31,280
Speaker 6: what we're looking in more vanilla fixed income is tied

476
00:23:31,280 --> 00:23:35,000
Speaker 6: to agency mortgages, where refives will remain low. You know,

477
00:23:35,000 --> 00:23:37,840
Speaker 6: over eighty percent of the country has a mortgage at

478
00:23:37,840 --> 00:23:41,080
Speaker 6: six percent or below, seventy percent five percent or below.

479
00:23:41,560 --> 00:23:44,040
Speaker 6: Very hard for us to see how you could possibly

480
00:23:44,119 --> 00:23:47,240
Speaker 6: get that without another QII right to kick off another

481
00:23:47,280 --> 00:23:50,280
Speaker 6: REFI boom. And then you know, other areas we're looking

482
00:23:50,320 --> 00:23:52,399
Speaker 6: at and have been focused on liquid markets have been

483
00:23:52,440 --> 00:23:55,720
Speaker 6: merger arbitrage, where obviously the regulatory regime is much more friendly,

484
00:23:55,800 --> 00:23:59,080
Speaker 6: yet spreads are at average high or average levels. And

485
00:23:59,119 --> 00:24:02,680
Speaker 6: then lastly convert commtible bond arbitrage, which plays into convexity

486
00:24:02,680 --> 00:24:05,080
Speaker 6: tom one of your favorite terms. There's a lot of

487
00:24:05,080 --> 00:24:07,320
Speaker 6: relative value in that market and a tremendous amount of

488
00:24:07,320 --> 00:24:10,440
Speaker 6: issuance which continues to drive relative performance.

489
00:24:10,600 --> 00:24:13,960
Speaker 2: Thirty seconds on convexity run it over to what MIT's

490
00:24:14,000 --> 00:24:18,200
Speaker 2: glory is, which is solow growth economics. Yes, Simon Johnson

491
00:24:18,240 --> 00:24:22,080
Speaker 2: with a Nobel prize here. We have no clue where

492
00:24:22,080 --> 00:24:26,120
Speaker 2: our productivity structure is right now, our three racial productivity,

493
00:24:26,240 --> 00:24:27,920
Speaker 2: we have no idea where we are.

494
00:24:28,760 --> 00:24:30,560
Speaker 4: It's very foggy. Tom. You're right.

495
00:24:30,600 --> 00:24:34,520
Speaker 6: I mean there's expectations of productivity enhancement. But I will say,

496
00:24:34,760 --> 00:24:36,719
Speaker 6: you know, when you think about the new environment we're

497
00:24:36,760 --> 00:24:41,320
Speaker 6: in of constrained labor markets, constrained immigration. Not a political statement,

498
00:24:41,320 --> 00:24:44,520
Speaker 6: of course, you know, whenever you have labor constraints, you

499
00:24:44,560 --> 00:24:48,320
Speaker 6: tend to get productivity booms and productivity enhancements. And relative

500
00:24:48,400 --> 00:24:50,679
Speaker 6: to the rest of the world, our productivity has been

501
00:24:50,680 --> 00:24:54,480
Speaker 6: growing far far faster, for far far longer, even prior

502
00:24:54,560 --> 00:24:56,560
Speaker 6: to the massive AI investments we've been making.

503
00:24:56,800 --> 00:24:59,520
Speaker 2: Okay, I got eighteen seconds. Did you tell your parents

504
00:24:59,520 --> 00:25:00,359
Speaker 2: you got an eineteen?

505
00:25:01,920 --> 00:25:03,800
Speaker 6: I think in that point I was two in secure,

506
00:25:03,880 --> 00:25:04,720
Speaker 6: but I told him I did.

507
00:25:04,920 --> 00:25:07,600
Speaker 4: I did very toorally. I'm being a feature there on

508
00:25:07,640 --> 00:25:08,560
Speaker 4: the single best idea.

509
00:25:08,600 --> 00:25:11,399
Speaker 2: What enjoy folks from MIT Good Morning ninety two nine

510
00:25:11,440 --> 00:25:15,400
Speaker 2: FM in Boston, and he is with Future Standard truck

511
00:25:15,440 --> 00:25:17,560
Speaker 2: guy Escape her chief market.

512
00:25:17,720 --> 00:25:19,640
Speaker 4: Strategists stay with us.

513
00:25:19,880 --> 00:25:37,400
Speaker 2: More from Bloomberg Surveillance coming up after this.

514
00:25:30,160 --> 00:25:34,080
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

515
00:25:34,119 --> 00:25:37,520
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

516
00:25:37,560 --> 00:25:40,520
Speaker 1: with the Bloomberg Business App. You can also listen live

517
00:25:40,600 --> 00:25:44,680
Speaker 1: on Amazon Alexa from our flagship New York station, Just say.

518
00:25:44,560 --> 00:25:46,760
Speaker 4: Alexa Play Bloomberg eleven thirty.

519
00:25:47,280 --> 00:25:50,719
Speaker 2: The Newspapers, Lisa Matteo, Please, what do you have?

520
00:25:50,880 --> 00:25:52,320
Speaker 7: All right? When you go to the movies, do you

521
00:25:52,359 --> 00:25:54,879
Speaker 7: prefer imax? That's the question. Do you go to the

522
00:25:54,920 --> 00:25:55,840
Speaker 7: big sometimes?

523
00:25:55,880 --> 00:25:58,320
Speaker 4: Absolutely? You know, like that it's gonna be big action

524
00:25:58,640 --> 00:26:01,040
Speaker 4: or that kind of thing.

525
00:26:00,320 --> 00:26:01,840
Speaker 7: Like when you go see like F one, you know,

526
00:26:01,880 --> 00:26:02,760
Speaker 7: like the big.

527
00:26:03,200 --> 00:26:04,760
Speaker 5: When I saw the Bruce movie last week, and I

528
00:26:04,840 --> 00:26:07,399
Speaker 5: made it a point to go to Adobe.

529
00:26:06,840 --> 00:26:09,400
Speaker 4: I missed. What's the review of the Bruce.

530
00:26:09,960 --> 00:26:12,840
Speaker 5: Well, I'm a diehard Burst, so it's excellent for me.

531
00:26:12,920 --> 00:26:15,840
Speaker 5: I loved it and I saw it in the Adobe Theater,

532
00:26:15,880 --> 00:26:17,760
Speaker 5: which is Adobe Sound, and that was kind of cool.

533
00:26:17,800 --> 00:26:20,920
Speaker 7: So yeah, I like pay up for Yeah, that's the question.

534
00:26:20,960 --> 00:26:24,000
Speaker 7: Will you pay up? And apparently everyone in Hollywood wants

535
00:26:24,040 --> 00:26:27,399
Speaker 7: their movies on these super sized screens. The box off

536
00:26:27,400 --> 00:26:30,040
Speaker 7: of a business suffering, right, fewer hits, more flops, but

537
00:26:30,200 --> 00:26:33,239
Speaker 7: Imax says domestic total ticket sales are up only two

538
00:26:33,280 --> 00:26:36,520
Speaker 7: point six percent this year from twenty twenty four. Imaxes

539
00:26:36,520 --> 00:26:40,280
Speaker 7: are up sixteen percent. It's here of domestic global tickets

540
00:26:40,359 --> 00:26:43,440
Speaker 7: record highs. I mean what is interesting is it's changing

541
00:26:43,880 --> 00:26:46,840
Speaker 7: movie releases. So for example, this month's remake You Had

542
00:26:46,840 --> 00:26:48,639
Speaker 7: The Running Man, right, it was supposed to be released

543
00:26:48,640 --> 00:26:52,399
Speaker 7: on Friday today, but Paramount postponed it because they wanted

544
00:26:52,440 --> 00:26:54,760
Speaker 7: to lock in the IMAX screens because they were taken

545
00:26:54,760 --> 00:26:56,600
Speaker 7: already by predator bedlands.

546
00:26:57,359 --> 00:26:58,680
Speaker 4: So it's starting to.

547
00:26:58,720 --> 00:27:02,200
Speaker 7: Change the way movies movie studios think about releases too.

548
00:27:02,000 --> 00:27:04,399
Speaker 7: On that effect, aside from just you know, the consumer

549
00:27:04,440 --> 00:27:05,800
Speaker 7: who's just going to see the movie.

550
00:27:05,640 --> 00:27:08,600
Speaker 2: Because has been just nuts on, it's just been out

551
00:27:08,600 --> 00:27:09,360
Speaker 2: all outstanding.

552
00:27:09,520 --> 00:27:09,720
Speaker 4: Yep.

553
00:27:10,000 --> 00:27:14,000
Speaker 2: He worked through the economics of the sphere in Las Vegas, right,

554
00:27:14,720 --> 00:27:16,720
Speaker 2: and like you know, just showing movies.

555
00:27:16,760 --> 00:27:17,680
Speaker 4: There's a way to go there.

556
00:27:17,720 --> 00:27:19,960
Speaker 7: Ye it is. The Wizard of is killing it over there,

557
00:27:20,119 --> 00:27:20,359
Speaker 7: it is.

558
00:27:20,440 --> 00:27:23,040
Speaker 4: I MAX stock up thirty this year. Pretty good.

559
00:27:23,080 --> 00:27:23,920
Speaker 7: See not bad?

560
00:27:24,240 --> 00:27:24,600
Speaker 6: Matched?

561
00:27:24,800 --> 00:27:27,480
Speaker 7: Okay? Okay, were you a fan of Breaking Bad? Did

562
00:27:27,480 --> 00:27:28,360
Speaker 7: you see the series?

563
00:27:28,480 --> 00:27:29,280
Speaker 4: You were? Okay?

564
00:27:29,440 --> 00:27:32,280
Speaker 7: So they had the you know, the the creator behind.

565
00:27:32,280 --> 00:27:35,639
Speaker 7: It has a new show called Pluribus, and everyone was waiting.

566
00:27:35,760 --> 00:27:39,080
Speaker 7: It debuted last night okay on Apple TV, so much

567
00:27:39,119 --> 00:27:43,399
Speaker 7: so that it crashed for users in the US and Canada.

568
00:27:43,440 --> 00:27:45,800
Speaker 7: The first two episodes were released last night after you

569
00:27:45,800 --> 00:27:49,679
Speaker 7: know ten pm Wall Street watch you Yeah, apparently so,

570
00:27:49,960 --> 00:27:54,520
Speaker 7: I mean thirteen thousand reports on down detector apples did

571
00:27:54,520 --> 00:27:55,040
Speaker 7: announced it.

572
00:27:55,040 --> 00:27:58,160
Speaker 4: It's slow horses, Okay, it gets better and better.

573
00:27:58,480 --> 00:27:59,919
Speaker 7: See, you got to stick with it. I gotta get

574
00:28:00,040 --> 00:28:01,520
Speaker 7: Apple TV now. I don't know.

575
00:28:01,560 --> 00:28:05,160
Speaker 2: I don't know, but my socks look like Jackson Lambs

576
00:28:06,160 --> 00:28:09,200
Speaker 2: sy That was said tersely.

577
00:28:09,640 --> 00:28:12,040
Speaker 7: So plus yeah, but it's interesting. So what does this

578
00:28:12,119 --> 00:28:14,879
Speaker 7: say for like future shows? Big shows? Is this going

579
00:28:14,920 --> 00:28:15,600
Speaker 7: to keep happening?

580
00:28:15,920 --> 00:28:17,960
Speaker 4: Sporting an NFL Live?

581
00:28:18,200 --> 00:28:21,320
Speaker 7: Yeah, yeah, it happens. It happens. Remember the boxing match

582
00:28:21,320 --> 00:28:25,359
Speaker 7: on Netflix that totally crashed? Sorry, okay, I want to

583
00:28:25,400 --> 00:28:27,200
Speaker 7: go to this one now. If you remember the story, Tom,

584
00:28:27,200 --> 00:28:28,440
Speaker 7: I don't know if you were here about the ten

585
00:28:28,440 --> 00:28:32,040
Speaker 7: million dollar gold toilet. Okay, so up for sale at Southby's.

586
00:28:32,080 --> 00:28:33,960
Speaker 7: It's going up for sale on the eighteenth. There was

587
00:28:34,000 --> 00:28:36,720
Speaker 7: never any word about who owned it. It was kind

588
00:28:36,760 --> 00:28:39,400
Speaker 7: of kept secret. But the new York Times sources are

589
00:28:39,440 --> 00:28:43,800
Speaker 7: telling them it's Mets owner Steve Cohen. He purchased it.

590
00:28:43,880 --> 00:28:46,480
Speaker 7: I'm not making Mets toilet jokes. Nope, not going there.

591
00:28:46,920 --> 00:28:51,240
Speaker 7: Eighteen carrot flushable sculpture by Marizzio Catalani. Brought it back

592
00:28:51,280 --> 00:28:54,680
Speaker 7: in twenty seventeen from an art gallery. So November eighteen

593
00:28:54,920 --> 00:28:57,760
Speaker 7: it's going. It starts a ten million dollars the bedding.

594
00:28:58,000 --> 00:29:02,360
Speaker 4: So if I had the banana behind me with same guy,

595
00:29:02,920 --> 00:29:05,400
Speaker 4: I gotta go get some porcelain wonder from a home

596
00:29:05,480 --> 00:29:06,880
Speaker 4: depot and bring it in.

597
00:29:07,400 --> 00:29:10,040
Speaker 7: Well, you mentioned, here's a fun fact for you. One

598
00:29:10,080 --> 00:29:13,680
Speaker 7: of those toilets can buy you one hundred thousand toilets

599
00:29:13,720 --> 00:29:14,400
Speaker 7: from home depot.

600
00:29:14,640 --> 00:29:17,800
Speaker 4: There you go, news you can use thirty seconds. What

601
00:29:17,840 --> 00:29:21,400
Speaker 4: do you got? That's it. That's what we got for today.

602
00:29:21,440 --> 00:29:24,560
Speaker 5: I like, I mean, he's just I don't know what

603
00:29:24,600 --> 00:29:25,920
Speaker 5: he bought it for, but if he sells it for

604
00:29:25,960 --> 00:29:27,680
Speaker 5: ten million, I'm guessing he's gonna make a.

605
00:29:27,680 --> 00:29:30,680
Speaker 4: Nice Yeah, just like a good hedge fund manager should.

606
00:29:30,680 --> 00:29:32,280
Speaker 5: And it does work as a toilet in case we're

607
00:29:32,320 --> 00:29:33,880
Speaker 5: just so, maybe he can use that on a reliever.

608
00:29:34,320 --> 00:29:35,080
Speaker 4: Take the proceeds.

609
00:29:35,080 --> 00:29:41,320
Speaker 2: I was going to say, over one Sodos that would

610
00:29:41,320 --> 00:29:44,680
Speaker 2: be yeah one. So with the Mets is just like

611
00:29:44,840 --> 00:29:45,520
Speaker 2: an American.

612
00:29:45,640 --> 00:29:48,360
Speaker 4: I don't know. I have to talk to mister get Richer.

613
00:29:49,440 --> 00:29:51,440
Speaker 4: He's a you know, thanks for listening to Steve Cohn.

614
00:29:51,560 --> 00:29:54,080
Speaker 2: You gotta come on the show, talk a little baseball

615
00:29:54,120 --> 00:29:56,080
Speaker 2: here and talk about what you've you've.

616
00:29:55,960 --> 00:29:59,560
Speaker 4: Learned doing this. Listen to tell you thank you so much.

617
00:29:59,760 --> 00:30:04,640
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apples, Spotify,

618
00:30:04,760 --> 00:30:09,040
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

619
00:30:09,160 --> 00:30:12,640
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the

620
00:30:12,720 --> 00:30:16,760
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

621
00:30:16,800 --> 00:30:20,160
Speaker 1: can also watch us live every weekday on YouTube and

622
00:30:20,360 --> 00:30:22,080
Speaker 1: always on the Bloomberg terminal